派克漢尼汾 (PH) 2020 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to Parker-Hannifin's Fiscal 2020 Third Quarter Conference Call and Webcast. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions)

女士們、先生們，感謝大家的支持，並歡迎參加派克漢尼汾 2020 財年第三季電話會議和網路廣播。 （操作員指示）請注意，今天的會議正在錄製中。 （操作員說明）

I would now like to hand the conference over to your host, Chief Financial Officer, Cathy Suever. Madam, please go ahead.

現在我想將會議交給主持人、財務長 Cathy Suever。女士，請繼續。

Thank you, Latif. Good morning. Welcome to Parker-Hannifin's Third Quarter Fiscal Year '20 Earnings Release Teleconference. Joining me today are Chairman and Chief Executive Officer, Tom Williams; and President and Chief Operating Officer, Lee Banks. Today's presentation slides, together with the audio webcast replay, will be accessible on the company's investor information website at phstock.com for 1 year following today's call.

謝謝你，拉蒂夫。早安.歡迎參加派克漢尼汾 '20 財年第三季財報發布電話會議。今天與我一起出席的有董事長兼執行長湯姆威廉斯 (Tom Williams)；李‧班克斯 (Lee Banks) 總裁兼營運長。今天的簡報幻燈片以及音訊網路廣播重播將在今天的電話會議後一年內透過公司的投資者資訊網站 phstock.com 提供。

On Slide #2, you'll find the company's safe harbor disclosure statement addressing forward-looking statements as well as non-GAAP financial measures. Reconciliations for any reference to non-GAAP financial measures are included in this morning's materials and are also posted on Parker's website at phstock.com.

在投影片#2 上，您會發現該公司的安全港揭露聲明，涉及前瞻性聲明以及非公認會計準則財務指標。今天早上的資料中包含了所有非公認會計準則財務指標的調節表，並且也發佈在 Parker 的網站 phstock.com 上。

Today's agenda appears on Slide #3. We'll begin with our Chairman and Chief Executive Officer, Tom Williams, providing comments on the current environment and related actions we've been taking. Tom will then discuss highlights from the third quarter. Following Tom's comments, I'll provide a more detailed review of our third quarter financial performance. Tom will then provide a few summary comments and we'll open the call for a question-and-answer session. We'll do our best to take all the questions we can today.

今天的議程出現在投影片 #3 上。首先，我們的董事長兼執行長湯姆威廉斯 (Tom Williams) 將就當前環境以及我們一直在採取的相關行動提供評論。然後湯姆將討論第三季的亮點。根據湯姆的評論，我將更詳細地回顧我們第三季的財務表現。然後，湯姆將提供一些總結意見，我們將開始問答環節。今天我們將盡力回答所有能提出的問題。

Please refer now to Slide #4 and Tom will get us started.

現在請參閱幻燈片#4，湯姆將帶我們開始。

Thank you, Cathy, and good morning, everybody. Thanks for your participation today. Before I get into Slide 4, I just want to first extend our thoughts to all those that have been affected by the crisis and our deepest sympathies go out to those that have lost loved ones as a result of the virus. A special thank you to all the health care professionals for their courageous efforts around the world and I'd also like to thank all the Parker team members for their dedication and their support and what we have done in really, in our own small way to help society through this crisis. I'll elaborate more about that later on in the presentation.

謝謝你，凱西，大家早安。感謝您今天的參與。在進入投影片 4 之前，我想先向所有受危機影響的人們表示我們的思念，並向那些因病毒而失去親人的人們表示最深切的同情。特別感謝世界各地所有醫療保健專業人員的勇敢努力，我還要感謝所有派克團隊成員的奉獻和支持，以及我們以自己的微薄之力所做的一切。幫助社會度過這場危機。我將在稍後的演示中詳細闡述這一點。

So this is unprecedented times and that's a word that's probably overused but very appropriate given the uniqueness of having a combined health and economic crisis. So on Slide 4, our performance and our strength for both of these crises really comes from The Win Strategy, which is a proven operating system and we're now in our third and very powerful revision of that. A portfolio of products and technologies that are needed and this has never been more evident and important in today's climate. We make things that the world absolutely needs. Our culture and our values, which is why people join and stay at Parker and our purpose, which has been our North Star, and I'll talk more about the connectedness of our purpose to our actions later on. And we have an engaged team of people. We have top quartile engagement scores and you couple that with our decentralized divisional structure, that is what has enabled us to move at the speed and agility that you've seen during this crisis.

因此，這是一個前所未有的時代，這個詞可能被過度使用，但考慮到健康和經濟危機相結合的獨特性，它非常合適。因此，在幻燈片 4 上，我們應對這兩場危機的表現和優勢確實來自於“獲勝策略”，這是一個經過驗證的作業系統，我們現在正在進行第三次非常強大的修訂。所需的產品和技術組合在當今的環境下變得更加明顯和重要。我們製造世界絕對需要的東西。我們的文化和價值觀，這就是人們加入並留在帕克的原因，我們的目標，這是我們的北極星，稍後我將更多地談論我們的目標與我們的行動的聯繫。我們擁有一支敬業的團隊。我們擁有最高四分之一的敬業度分數，再加上我們分散的部門結構，這使我們能夠以您在這場危機期間看到的速度和敏捷性採取行動。

So on Slide 5, our crisis management strategy is really threefold. First is the safety of our team members and their families; second is how do we help society through this crisis, we are essential, and I'll talk to you more about why we are essential. And that we want to emerge stronger than ever before after the crisis is over. We have utilized the crisis response management team and that structure we have in every key country and we have it for corporate as well, and their focus has really been on the health and safety side of things. We've had a daily cadence with that team, 7 days a week, really, since this all started in January.

所以在投影片 5 上，我們的危機管理策略其實有三重。首先是我們團隊成員及其家人的安全；第二個是我們如何幫助社會度過這場危機，我們是必不可少的，我會和大家多談談為什麼我們是必不可少的。我們希望在危機結束後變得比以往任何時候都更強大。我們利用了危機應對管理團隊以及我們在每個關鍵國家/地區擁有的結構，我們也為企業提供了這種結構，他們的重點實際上是在健康和安全方面。自從這一切從 1 月開始以來，我們與該團隊的日常工作節奏是一致的，每週 7 天。

I wanted to make a comment about how the executive team has been functioning. So the executive team, say the top 20 executives in the company, have still been coming to the office, and we maintain physical distancing and do zoom conferencing, all those type of things, but it's very advantageous to have us co-located to where we very quickly can see each other, make decisions. That's been a key enabler to our speed and decisiveness as well.

我想對執行團隊的運作方式發表評論。因此，執行團隊，例如公司的 20 名高管，仍然來到辦公室，我們保持身體距離並進行變焦會議，所有這些類型的事情，但讓我們同地辦公是非常有利的我們很快就能看到對方並做出決定。這也是我們速度和果斷的關鍵推動因素。

On Slide 6, we'll talk about the health and safety actions. They've been early and they've been decisive. They've been patterned off of the CDC and the WHO as well as lessons that we've learned from China. And this is a list that you probably are familiar with as you've listened to other companies. I won't necessarily go through each one of these, but I would just point to, we were early on with travel restrictions and we were early with cancellation of in-person meetings. And I will highlight two examples. First, ConExpo. We're probably one of the first companies to withdraw from ConExpo, which is a very important show. So in that sends a very strong message, I think, to everybody in our space as well as our people, the importance of what we wanted to do here, protecting our people. And then we were an early adopter of the virtual Investor Day, which all of you were part of, and we thought that was very successful. Not as good as in person, but it was very successful. And it was a smart move to do that.

在投影片 6 上，我們將討論健康和安全行動。他們很早就做出了決定。它們以疾病預防控制中心和世界衛生組織以及我們從中國學到的經驗為藍本。當您聽過其他公司的介紹時，您可能會熟悉這個清單。我不一定會逐一介紹，但我只想指出，我們很早就受到了旅行限制，並且很早就取消了面對面的會議。我將重點介紹兩個例子。首先是康博會。我們可能是最早退出 ConExpo 的公司之一，這是一個非常重要的展覽。因此，我認為，這向我們這個領域的每個人以及我們的人民發出了一個非常強烈的信息，即我們想要在這裡做的事情的重要性，即保護我們的人民。然後我們是虛擬投資者日的早期採用者，你們所有人都參加了，我們認為這是非常成功的。雖然不如親自做的那麼好，但是非常成功。這樣做是明智之舉。

So the takeaway on this page, the governing message to all of our people has been this takeaway. We wanted the 2 safest places for our people to be at work and at home, and we're going to do everything humanly possible to make sure that it happen.

因此，本頁的要點，向我們所有人傳達的指導性訊息就是這個要點。我們希望為我們的員工提供兩個最安全的工作場所和家庭場所，我們將竭盡全力確保實現這一目標。

So I mentioned that we were essential. And on Slide 7, I just wanted to highlight some examples of our purpose and action. And I'm going to go through these just real quickly. But our products have helped society through this entire crisis. So if you look at food supply, we have products from the farm all the way to the point-of-use in retail, helping patients, whether it's emergency transportation on a helicopter or on hospital beds. And we are a essential manufacturer but we're also helping other people that are essential manufacturers. That little picture that you see in the upper right-hand corner there, is a picture of a typical manufacturing plant with the roof off of it. And I would tell you that we are in almost every manufacturing plant around the world, helping people make their products. So those 8 motion control technologies, seen in the lower right, are being put to use to help society.

所以我提到我們是必不可少的。在投影片 7 上，我只想強調一些我們的目的和行動的例子。我很快就會講完這些內容。但我們的產品幫助社會度過了整個危機。因此，如果你看看食品供應，我們的產品從農場一直到零售使用點，為患者提供幫助，無論是在直升機上還是在醫院病床上進行緊急運輸。我們是一家重要製造商，但我們也在幫助其他重要製造商。你在右上角看到的那張小圖片是一張典型的製造工廠的圖片，屋頂就沒有了。我想告訴你，我們幾乎遍布世界各地的每一個製造工廠，幫助人們製造他們的產品。因此，右下角的這 8 種運動控制技術正在被用來幫助社會。

And if you go to the next page on Slide 8, a couple more examples, transportation, whether it's heavy-duty truck or air freight to get products to customers, power generation for electricity. We're on traditional as well as renewables. And I would -- I think the best example and the poster child of this crisis is really the ventilator. We do a fair amount in health care but the ventilator in particular, we have almost doubled our sales in this calendar year 2020, and we have 6 of our 8 technologies on the ventilator. And we've been supporting new and existing customers as well as countries from around the world. And the divisions that have been doing this have just done a herculean job staying up with customers. It's just a fantastic job and my compliments to all of them.

如果你轉到幻燈片 8 的下一頁，還有幾個例子，運輸，無論是重型卡車還是空運，將產品運送給客戶，發電。我們既使用傳統能源，也使用再生能源。我認為，這場危機的最佳例子和典型就是呼吸器。我們在醫療保健領域做了相當多的工作，尤其是呼吸機，在 2020 年，我們的銷售額幾乎翻了一番，而且我們的 8 項技術中有 6 項是關於呼吸機的。我們一直為新客戶和現有客戶以及世界各地的國家提供支援。一直在做這件事的部門剛剛完成了一項艱鉅的工作，以跟上客戶的步伐。這是一項非常棒的工作，我向他們所有人表示敬意。

So on slide -- the next slide is our purpose statement, enabling engineering breakthroughs that lead to a better tomorrow. We released this last September, and I can tell you, we probably never envisioned how positive an impact it's had on our people. And it's really is becoming a rallying cry for our organization through this crisis, and it illuminates, I think the purpose in what we bring to society and gives a great deal of meaning for our people on what they do, day in and day out.

在投影片上，下一張投影片是我們的目的聲明，實現工程突破，帶來更美好的明天。我們去年九月發布了這個，我可以告訴你，我們可能從未想到它對我們的員工產生了多麼積極的影響。這確實成為我們組織度過這場危機的戰鬥口號，它闡明了，我認為我們為社會帶來的目的，並為我們的員工日復一日所做的事情賦予了很大的意義。

Moving to Slide 10, a quick snapshot of the facility and supply chain status. And you go to that middle column, just at the major regions and total Parker. So this is percent capacity versus pre-virus. Using pre-virus as 100%, as an example, we're virtually back to normal at 97%, but there's obviously a lot of things that went on through the quarter and in April, with stay-at-home orders and all that, that moved us up quite a bit. Our supply chain strategy on the right-hand side has done great and very effective during the crisis. You've heard me talk about this in the past that we may buy and sell in the region for the region. We've also got a very robust supply chain risk mitigation strategy that we've been doing for years, well before this started. So we're in very good shape on that. This is a nonissue for us.

轉到投影片 10，這是設施和供應鏈狀態的快速快照。然後你轉到中間的欄，就在主要地區和總帕克。這是容量與病毒爆發前相比的百分比。以病毒爆發前的 100% 為例，我們實際上已恢復到 97% 的正常水平，但顯然整個季度和 4 月份發生了很多事情，包括居家訂單等，這讓我們進步了很多。我們的右側供應鏈策略在危機期間表現出色且非常有效。你們過去曾聽我說過，我們可以在該地區為該地區進行買賣。我們也制定了非常強大的供應鏈風險緩解策略，早在這之前，我們就已經實施多年了。所以我們在這方面處於非常好的狀態。這對我們來說不是問題。

Moving to 11. I want to talk about the quarter and I would just -- if I had to summarize, I would tell you it's probably one of the best quarters that we've ever done, given the environment that we're in. It was really just remarkable performance by the team. Starting with safety, we had a 27% reduction in recordable incidents and that yields, when you look at reportable incident rates, so that's the number of safety incidents per hundred people, we're a top quartile company, which is fantastic progress. Sales were flat year-over-year. Acquisitions offset the decline we had in organic and currency. But the margins really were stellar. They really stood out. So we got 2 categories here, without acquisitions, and I would call your attention to the adjusted segment operating growth and you see, we came in at 17.3% for the quarter versus 17.2% in FY '19, the same quarter. So a 10 basis point improvement, 16% decremental and remember, this is on about a 7.5% organic decline. So just fantastic progress by the teams to pull that off.

轉向 11。我想談談這個季度，如果我必須總結的話，我會告訴你，考慮到我們所處的環境，這可能是我們做過的最好的季度之一。這確實是團隊的出色表現。從安全開始，我們的可記錄事件減少了 27%，當你查看可報告事件率（即每百人的安全事件數）時，我們是排名前四分之一的公司，這是一個了不起的進步。銷售額較去年同期持平。收購抵消了我們在有機和貨幣方面的下降。但利潤確實非常可觀。他們確實脫穎而出。因此，我們這裡有2 個類別，沒有收購，我想請您注意調整後的部門營運成長，您會看到，我們本季的成長率為17.3%，而19 財年同一季度的成長率為17.2 %。因此，改善了 10 個基點，減少了 16%，請記住，有機下降約為 7.5%。因此，團隊取得了巨大的進步，才實現了這個目標。

And then when you put acquisitions, it's easier to look at EBITDA to make it apples-to-apples. If you look at EBITDA margin on an adjusted basis, that last row, you can see we came in at 19.3%, so a 60 basis point improvement versus the prior period and this speaks to 2 things: one, the base business keeps getting better and is performing better, and we acquired companies that have accretive EBITDA margins to legacy Parker, which is helping fuel that margin expansion.

然後，當您進行收購時，可以更輕鬆地查看 EBITDA，使其處於同等水平。如果你看看調整後的EBITDA 利潤率，最後一行，你可以看到我們的利潤率為19.3%，因此與上一時期相比提高了60 個基點，這說明了兩件事：第一，基礎業務不斷好轉並且表現更好，我們收購了那些比傳統 Parker 的 EBITDA 利潤率更高的公司，這有助於推動利潤率的擴張。

One more page on the highlights for the quarter on Slide 12. Our EPS performance, as you saw, was very strong, exceeded expectations. We had a record Q3 year-to-date cash flow. So records, meaning a record in the history of the company of $1.3 billion, which was great. The CFOA margin was 12.3% and the free cash flow conversion rate was 122%. We are very pleased with our debt reduction of $611 million. That was a very nice reduction. And that helped reduce our leverage from 4.0x to 3.8x when you look at it from a gross debt to EBITDA. So you can see from these 2 slides and how the quarter went, we performed extremely strong. So we're going into this pandemic in a very strong financial position.

幻燈片 12 上還有一頁介紹本季的亮點。正如您所看到的，我們的每股盈餘表現非常強勁，超出了預期。今年第三季迄今，我們的現金流創下了歷史新高。如此記錄，意味著公司歷史上的記錄達到了13億美元，這非常了不起。 CFOA利潤率為12.3%，自由現金流轉換率為122%。我們對債務減少 6.11 億美元感到非常高興。這是一個非常好的減少。當你從總債務與 EBITDA 的比率來看時，這有助於將我們的槓桿率從 4.0 倍降低到 3.8 倍。因此，您可以從這兩張幻燈片以及本季的進展中看到，我們的表現非常強勁。因此，我們將以非常強勁的財務狀況來應對這場大流行。

So on Slide 13, we had the order rates. And this is traditionally in Cathy's section, but I wanted to pull it up earlier to allow me to talk about April. Just a reminder, on this page, industrial orders are a 3-month year-over-year comparison and aerospace is a 12-month year-over-year -- rolling 12-month year-over-year comparison and excludes acquisitions and currency. But I think the next -- so you can see what happened here a little bit better, driven primarily by international, but it's probably a little more illustrative if you go to Slide 14, where we talk about April in particular. But I just want to emphasize that while Q3 got a little better, there was a distinct drop and that we felt it in March in the middle of the month. So on a daily rate basis, you got to remember that the prior slide is 3 months rolling. When you look at the daily basis, we were clearly feeling this in March already and so that was impacting us. The pandemic was declared March 11 and we had IR day on March 12. And I think just as soon as the cameras stopped rolling, the stay-at-home orders started up pretty much around every country and around the world. China had already started that. And so what you're looking at this page is a [112], not a [312]. So this is April, month-to-date, versus April month-to-date of the prior period. Again, it excludes acquisitions and currency. The month hasn't closed, hence why we have ranges on here. And orders were clearly influenced by those stay-at-home orders that I referred to and extensive customer plant shutdowns that happened through the month of April and started in March, for that matter as well. But one positive note here is that our orders have stabilized the last 2 weeks so that's a very good sign.

在投影片 13 上，我們看到了訂單率。這傳統上是在凱西的部分，但我想早點把它拉出來，讓我談談四月。提醒一下，在此頁面上，工業訂單是 3 個月同比比較，航空航天是 12 個月同比——滾動 12 個月同比比較，不包括收購和貨幣。但我認為接下來 - 所以你可以更好地看到這裡發生的事情，主要是由國際推動的，但如果你轉到幻燈片 14，它可能會更具說明性，我們特別談論四月份。但我只是想強調，雖然第三季有所好轉，但還是有明顯的下降，我們在 3 月中旬就感受到了這一點。因此，在每日費率基礎上，您必須記住，之前的投影片是 3 個月滾動的。當你查看日常情況時，我們在三月就已經明顯感受到了這一點，因此這對我們產生了影響。 3 月 11 日宣布了大流行，我們在 3 月 12 日度過了 IR 日。我認為，一旦攝影機停止轉動，幾乎每個國家和世界各地都開始實施居家令。中國已經開始這樣做了。所以你在這個頁面看到的是[112]，而不是[312]。這是 4 月至今，與上一期間的 4 月至今。同樣，它不包括收購和貨幣。這個月還沒結束，因此我們這裡有範圍。訂單顯然受到我提到的那些留在家裡的訂單以及從 4 月到 3 月開始的大規模客戶工廠停工的影響。但一個積極的方面是，過去兩週我們的訂單已經穩定下來，這是一個非常好的跡象。

So as a result of that, on Slide 15, we've taken decisive cost reduction actions in the fourth quarter and I would give you a hockey analogy that we are skating to where the puck was going. We saw this decline happening. We felt it in the middle of March. And we started these actions in March. And so we started at the beginning of April, these were effective April 1. Now these actions are really in 2 distinct buckets. The first is discretionary, which will vary based on order entry and it will flex to the amount of orders and business that we have. So that's the first category. The second is permanent structural cost actions that are predominantly SG&A and that will be across the company, but in particular, focusing on aerospace and oil and gas end markets that are low for longer, that need structural actions, too.

因此，在幻燈片 15 上，我們在第四季度採取了果斷的成本削減行動，我會給您一個曲棍球類比，即我們正在滑向冰球要去的地方。我們看到了這種下降的發生。我們在三月中旬就感受到了這一點。我們在三月開始了這些行動。所以我們從 4 月初開始，這些措施在 4 月 1 日生效。現在這些行動實際上分為兩個不同的部分。第一個是酌情決定的，這將根據訂單輸入而變化，並將根據我們擁有的訂單量和業務量進行調整。這是第一類。第二個是永久性的結構性成本行動，主要是SG&A，並將在整個公司範圍內實施，但特別關注航空航太和石油和天然氣終端市場，這些市場長期處於低位，也需要結構性行動。

So let me just take one at a time here. So on the discretionary side, we have salary-based wage reductions and you can see the various elements here. All of our salaried team members around the world and our directors took a 10% base salary reduction. Our offers -- officers are in the 20% to 30% range and myself at 50%. Now this is effective April 1 and it's effective for 90 days, and we'll evaluate whether we need to extend it when we get to Q1, and that valuation will be dependent on how order entry is doing and how the business is progressing.

所以讓我在這裡一次只取一個。因此，在可自由支配的方面，我們有基於工資的工資削減，你可以在這裡看到各種要素。我們世界各地的所有受薪團隊成員和董事的基本薪資都減少了 10%。我們的報價——官員的報價在 20% 到 30% 的範圍內，而我自己則在 50% 的範圍內。現在，該政策將於 4 月 1 日生效，有效期為 90 天，到了第一季度，我們將評估是否需要延長該政策，該估值將取決於訂單輸入情況以及業務進度。

The next category you see there is reduced work schedules. And that could range anywhere from a reduced work schedule of 10% to 100%. And we could take a plant down 1 day a week, it could go down for several weeks at a time. It depends on, really, with the activity in that plant, and we're very much matching work hours to order entry and we've had terrific, terrific collaboration around the world from all of our colleagues, works councils, et cetera, to use this as a very effective tool to adjust business to order entry.

您看到的下一個類別是減少的工作安排。工作時間減少 10% 到 100% 不等。我們可以每週讓工廠停工一天，也可以一次停工數週。這實際上取決於該工廠的活動，我們在很大程度上將工作時間與訂單輸入相匹配，並且我們在世界各地與所有同事、勞資委員會等進行了非常非常好的合作，使用它作為調整業務訂單輸入的非常有效的工具。

We're foregoing annual merit increases and we're reducing travel and basically producing everything that's not moving, we're not spending. So that -- you add up all that, that comes to a $250 million to $300 million cost reduction in Q4. And then as I referred to on the structural side, those are SG&A related reductions in force. And if I was to highlight aerospace, we are going to do an approximate 20% reduction in force in the number of people that we have in the aerospace group. And that yields a $25 million to $30 million cost reduction for the quarter, add that up, that's $275 million to $330 million. So we're targeting an approximate 30% decremental margin.

我們放棄了每年的績效成長，我們正在減少旅行，基本上生產所有不流動的東西，我們不花錢。因此，將所有這些加起來，第四季的成本將減少 2.5 億至 3 億美元。正如我在結構方面提到的，這些都是與銷售、管理和行政費用相關的權力削減。如果我要強調航空航天，我們將把航空航天部門的人員數量減少約 20%。這將為本季帶來 2,500 萬至 3,000 萬美元的成本削減，加起來即 2.75 億至 3.3 億美元。因此，我們的目標是減少約 30% 的利潤。

We're planning for an L type of recovery here, where the L is going to have the bottom of L, the horizontal side is going to have some variation and a variation that is not known at this point. But we're planning conservatively on the cost and cash side for an L. But you notice very distinctly with the way we've done in discretionary, we absolutely have the flexibility, that L turn into a modified V or to a U, that we could respond at a moment's notice to any kind of growth because our discretionary side is very flexible.

我們在這裡計劃 L 類型的恢復，其中 L 將具有 L 的底部，水平側將有一些變化，目前未知的變化。但我們在成本和現金方面對 L 進行了保守的規劃。但是你很明顯地註意到我們酌情所做的方式，我們絕對有靈活性，L 變成修改後的 V 或 U，我們可以立即對任何類型的成長做出反應，因為我們的自由裁量權非常靈活。

If you go to 16 on the cash side, we're conserving capital spending, as you might imagine, we're optimizing working capital, which is a traditional strength for the company. You go through all of our past recessions, this is a legacy that we've always done extremely well in. We're temporarily suspending the 10b5-1 share repurchase program, and we will maintain the dividend payout and the annual record of increasing dividends paid. Just as a footnote, our annual dividends paid in FY '19 was $3.16 and FY '20 was $3.52. It's a record we're proud of and it's a record that's going to continue. We're confident if you look at all these actions on the cost side and the cash side and generating a greater than 10% CFOA going into the future.

如果現金方面達到 16，我們正在節省資本支出，正如您可能想像的那樣，我們正在優化營運資本，這是公司的傳統優勢。你經歷了我們過去所有的經濟衰退，這是我們一直做得非常好的遺產。我們暫時中止了10b5-1股票回購計劃，我們將維持股息支付和增加股息的年度記錄有薪酬的。作為腳註，我們在 19 財年支付的年度股利為 3.16 美元，20 財年支付的年度股利為 3.52 美元。這是我們引以為傲的記錄，也是一個會繼續下去的記錄。如果您從成本方面和現金方面考慮所有這些行動，並在未來產生超過 10% 的 CFOA，我們就有信心。

So I want to close out my opening section with the transformation of the company. And it starts with the Win Strategy, while it was the original Win Strategy almost 20 years ago, Win Strategy 2.0 in 2015 to today, Win Strategy 3.0, this is the engine behind our success. And it's going to create a very powerful future for us, but this is the highlight of Investor Day, so I won't go back through that as we just did that last month.

所以我想以公司的轉型來結束我的開場部分。它從贏戰略開始，雖然它是大約20年前最初的贏戰略，2015年的贏戰略2.0到今天的贏戰略3.0，這是我們成功背後的引擎。它將為我們創造一個非常強大的未來，但這是投資者日的亮點，所以我不會像上個月那樣回顧這一點。

On Slide 19, this unmatched breadth of technologies is even more clear today because it's a portfolio that is unmatched and gives us a competitive advantage, but it's also a portfolio that is very much needed in society. And the fact that 60% of our revenue comes from customers that buy from 4 or more of these 8 technologies, is recognition that our customers feel the same way.

在投影片 19 上，這種無與倫比的技術廣度在今天更加清晰，因為它是一個無與倫比的產品組合，為我們提供了競爭優勢，但它也是社會非常需要的產品組合。事實上，我們 60% 的收入來自購買這 8 種技術中的 4 種或更多技術的客戶，這表明我們認識到我們的客戶也有同樣的感受。

On Slide 20, we've been very strategic in upgrading the portfolio. This is a list of 3 transformational acquisitions, adding to filtration, engineered materials and aerospace. And even in these trying times, we see the power of these deals, their top lines, all 3 have been far more resilient than legacy Parker, and the EBITDA margins have been nicely accretive.

在投影片 20 中，我們非常有策略地升級產品組合。這是 3 項轉型性收購的清單，增加了過濾、工程材料和航空航太領域的收購。即使在這些艱難時期，我們也看到了這些交易的力量，它們的營收，這三者都比傳統的 Parker 更具彈性，而且 EBITDA 利潤率也得到了很好的成長。

If you go to Slide 21, this is the chart we showed at Investor Day, and we've got 2 stair steps in here and the black is, as reported, operating margin and the orange is adjusted operating margin. And this is how we've done the last 5 manufacturing recessions and this is remarkable progress from where we were when the original Win Strategy was launched, 5 recessions and these stair steps, I think really speak to the improvement that we've done over many recessions and you get ready for your current recession, many years before. So the reason why we're performing as well as we are now is we've been changing the cost structure for the last 5 years and we've been working on this for the last 20. Our Q3 year-to-date adjusted operating margin at 16.7% was already in a tough environment. I would remind you that year-to-date, if I add organic and currency together, it's about a minus 7% environment. So we are performing at remarkably high levels in a tough environment. That's an almost 900 basis point improvement from when The Win Strategy was first launched. Now obviously, Q4 is going to put downward pressure on that number but we will still end the year significantly better than we've been in any prior recession.

如果你看投影片 21，這是我們在投資者日展示的圖表，這裡有 2 個階梯，黑色是報告中的營業利潤率，橘色是調整後的營業利潤率。這就是我們應對過去 5 次製造業衰退的方式，與最初的獲勝策略推出時相比，這是顯著的進步，5 次衰退和這些階梯，我認為真正說明了我們所做的許多次經濟衰退，而你在很多年前就為當前的經濟衰退做好了準備。因此，我們之所以表現得像現在這樣，是因為我們在過去 5 年裡一直在改變成本結構，並且在過去 20 年裡我們一直在努力實現這一目標。我們今年第三季調整後的營運16.7 %的利潤率已經處於艱難的環境。我想提醒大家，今年迄今為止，如果我將有機因素和金錢因素加在一起，大約是負 7% 的環境。因此，我們在艱難的環境中表現得非常高。與「制勝策略」首次推出時相比，這一數字提高了近 900 個基點。顯然，第四季將對該數字施加下行壓力，但我們在今年年底的表現仍將明顯優於之前的任何衰退時期。

On 22, as I look at cash flow, and I would just call your attention to the blue line, which is the CFOA margin line. And you can see we've been extremely resilient over many cycles. Good times and bad times, this company generates 10% or greater CFOA and 100% greater free cash flow conversion. We did it before and we're going to do it again. This graph hopefully speaks to the resiliency of the cash flow for the company.

22 日，當我查看現金流時，我只想提請您注意藍線，即 CFOA 保證金線。你可以看到我們在許多周期中都表現得非常有彈性。無論順境或逆境，這家公司都會產生 10% 或更高的 CFOA 和 100% 的自由現金流轉換。我們以前這樣做過，我們還會再這樣做。該圖可望說明公司現金流的彈性。

Then on 23, the outlook for FY '20. The current environment is highly uncertain, as all of you, I think, can certainly understand and appreciate, making it very difficult for us to guide with any kind of accuracy or reliability, hence we're withdrawing FY '20 guidance. The portfolio and the cost structure has been transformed over the last 5 years. It's why we've been performing as well as we have been. And the proof is really in those slides I just showed you. We have come out very rapidly and assertively to adjust cost to the current environment. And as I just spoke to, our cash flow is very resilient. And we have a bright future. The Win Strategy 3.0 and our purpose are going to propel us as soon as we get through this crisis and will propel us through this crisis as well.

然後是 23 日，對 20 財年的展望。當前的環境高度不確定，我認為你們所有人都可以理解和理解，這使得我們很難提供任何準確性或可靠性的指導，因此我們將撤回 20 財年的指導。過去五年來，產品組合和成本結構發生了轉變。這就是我們表現出色的原因。證據就在我剛剛給你們看的那些投影片中。我們非常迅速且果斷地調整成本以適應當前環境。正如我剛才所說，我們的現金流非常有彈性。我們有一個光明的未來。獲勝策略 3.0 和我們的目標將在我們度過這場危機時推動我們，也將推動我們度過這場危機。

So with that, I'm going to hand it back to Cathy for details on the quarter.

因此，我將把它交還給凱西，以了解本季的詳細資訊。

Okay. Thanks, Tom. I'd like you to now refer to Slide #24, and I'll summarize the quarter. This slide presents as-reported and adjusted earnings per share for the third quarter. Adjusted earnings per share for the quarter were $2.92 compared to $3.17 last year. Adjustments from the current fiscal year as-reported results netted to $0.09, including before tax amounts of business realignment charges of $0.10, acquisition costs to achieve of $0.06 and acquisition transaction expenses of $0.14. These were offset by the tax effect of these adjustments of $0.07 and the result of a favorable tax settlement of $0.14. Prior year third quarter earnings per share has been adjusted $0.03, the details of which are included in the reconciliation tables for non-GAAP financial measures.

好的。謝謝，湯姆。我希望您現在參考投影片#24，我將總結本季。這張投影片展示了第三季報告和調整後的每股盈餘。本季調整後每股收益為 2.92 美元，去年同期為 3.17 美元。本財政年度報告結果的調整淨額為 0.09 美元，其中包括稅前業務調整費用 0.10 美元、實現收購成本 0.06 美元以及收購交易費用 0.14 美元。這些調整被 0.07 美元的稅收影響和 0.14 美元的優惠稅結算結果所抵消。去年第三季每股收益調整了 0.03 美元，詳細資訊包含在非 GAAP 財務指標的調整表中。

On Slide 25, you'll find the significant components of the walk from adjusted earnings per share of $3.17 for the third quarter last year to $2.92 for the third quarter of this year. Starting with the net decrease of $0.07 in segment operating income. For legacy Parker, a $329 million decline in sales resulted in only a $54 million reduction in operating income or $0.31. The Parker teams did an excellent job of controlling costs on the lower volume, resulting in a legacy Parker decremental margin of 16% for the quarter. The LORD and Exotic acquisitions contributed $0.24 in operating income. Lower net corporate G&A and other expense contributed $0.03 this quarter as a result of currency gains on forward hedge contracts. We incurred incremental interest expense of $0.19 year-over-year. And after adjusting out the benefit of a favorable tax settlement, a higher tax rate from continuing operations and less favorable discrete adjustments resulted in a $0.04 reduction from income taxes.

在幻燈片 25 上，您會發現調整後每股收益從去年第三季的 3.17 美元增至今年第三季的 2.92 美元的重要組成部分。首先，分部營業收入淨減少 0.07 美元。對於老派克公司來說，銷售額下降了 3.29 億美元，但營業收入僅減少了 5,400 萬美元，即 0.31 美元。 Parker 團隊在控制較低產量的成本方面做得非常出色，導致本季 Parker 的傳統利潤減少了 16%。 Lord 和 Exotic 收購貢獻了 0.24 美元的營業收入。由於遠期對沖合約的貨幣收益，本季公司 G&A 和其他費用淨額下降 0.03 美元。我們比去年同期增加了 0.19 美元的利息支出。在調整了優惠稅收結算的好處後，持續經營帶來的更高稅率和不太有利的離散調整導致所得稅減少了 0.04 美元。

On Slide 26, you'll find the significant components of the walk from the previous third quarter adjusted earnings per share guidance at the midpoint of $2.36 to $2.92 for the third quarter fiscal year '20 actual results. Segment operating income contributed $0.43 more to the quarter than anticipated. Our guidance was developed at the start of the COVID-19 scare in Asia and we anticipated a 16% drop in international organic sales but actually achieved only a 10% organic decline. The aerospace segment, on the other hand, experienced more impact in the quarter than was anticipated. Our quick reactions to controlling costs and the resulting higher margins also contributed to the higher than expected operating income. Lower net corporate G&A and other expense contributed $0.10 due to the previously noted currency gains in the quarter. Lower interest expense due to reductions in debt and lower variable interest rates in the quarter, resulted in a $0.02 per share improvement.

在投影片 26 上，您會發現 20 財年第三季實際業績的重要組成部分與先前第三季調整後每股盈餘指引相比，處於 2.36 美元至 2.92 美元的中點。部門營業收入對本季的貢獻比預期高出 0.43 美元。我們的指導是在亞洲出現 COVID-19 恐慌之初制定的，我們預計國際有機銷售額將下降 16%，但實際上僅實現了 10% 的有機下降。另一方面，航空航太領域在本季受到的影響比預期更大。我們對控製成本的快速反應以及由此帶來的更高的利潤率也導致了高於預期的營業收入。由於先前提到的本季貨幣收益，公司 G&A 和其他費用淨額下降貢獻了 0.10 美元。由於本季債務減少和可變利率降低，利息支出減少，導致每股收益提高 0.02 美元。

Slide 27 shows total Parker sales and segment operating margin for the third quarter. Organic sales decreased year-over-year by 7.4% and currency had a negative impact of 1.5%. These declines were more than offset by the positive impact of 9.3% from acquisitions. Total adjusted segment operating margins were 16.9% compared to 17.2% last year. This 30 basis point decline is net of the company's ability to absorb 100 basis points of incremental amortization expense from the acquisitions.

幻燈片 27 顯示了派克第三季的總銷售額和部門營業利潤率。有機銷售額年減 7.4%，匯率帶來 1.5% 的負面影響。這些下降被收購帶來的 9.3% 的正面影響所抵消。調整後分部營業利益率為 16.9%，而去年為 17.2%。這 30 個基點的下降扣除了該公司從收購中吸收 100 個基點增量攤銷費用的能力。

On Slide 28, we're showing the impact LORD and Exotic had on the third quarter of fiscal year '20 on both an as-reported and adjusted basis. Sales from the acquisitions were $343 million and operating income on an adjusted basis was $42 million. The operating income for LORD and Exotic includes $35 million in amortization expense. Note the improvement of 10 basis points in legacy Parker operating income despite the $329 million drop in sales. The great work the teams did on controlling costs resulted in a 16.4% decremental margin for the quarter.

在投影片 28 上，我們展示了 Lord 和 Exotic 對 20 財年第三季的影響（按報告和調整後計算）。此次收購的銷售額為 3.43 億美元，調整後的營業收入為 4,200 萬美元。 Lord 和 Exotic 的營業收入包括 3500 萬美元的攤銷費用。請注意，儘管銷售額下降了 3.29 億美元，但派克傳統營業收入仍提高了 10 個基點。團隊在控製成本方面所做的出色工作導致本季度利潤率下降了 16.4%。

Moving to Slide #29. I'll discuss the business segments, starting with diversified industrial North America. For the third quarter, North American organic sales were down 7.1%, while acquisitions contributed 8.9%. Operating margin for the third quarter on an adjusted basis was 17.1% of sales versus 16.5% in the prior year. This 60 basis point improvement is after absorbing 100 basis points of incremental amortization. North America's legacy businesses generated an impressive decremental margin of 4%, reflecting the hard work of diligent cost containment and productivity improvements together with the impact of our Win Strategy initiatives.

轉到投影片#29。我將討論業務部門，從多元化的工業北美開始。第三季度，北美有機銷售額下降 7.1%，而收購貢獻了 8.9%。調整後第三季營業利潤率的 17.1%，去年同期為 16.5%。這 60 個基點的改善是在吸收 100 個基點的增量攤提之後。北美的傳統業務利潤率下降了 4%，令人印象深刻，這反映了我們努力控製成本和提高生產力的努力以及我們的雙贏策略舉措的影響。

Moving to the Diversified Industrial International segment on Slide #30. Organic sales for the third quarter in the Industrial International segment decreased by 10.2%. Acquisitions contributed 6.2%, and currency had a negative impact of 4%. Operating margin for the third quarter on an adjusted basis was 16.2% of sales versus 16.5% in the prior year. Without the incremental amortization expense, margins would have improved 10 basis points on an overall 8% reduction in sales. The legacy businesses generated a very good decremental margin of 19%, again, reflecting diligent cost containment and the impact of The Win Strategy.

前往幻燈片#30 上的多元化工業國際部分。工業國際部門第三季的有機銷售額下降了 10.2%。收購貢獻了 6.2%，貨幣的負面影響為 4%。調整後第三季營業利潤率的 16.2%，去年同期為 16.5%。如果沒有增量攤銷費用，利潤率將提高 10 個基點，整體銷售額將減少 8%。傳統業務再次產生了 19% 的非常好的遞減利潤，反映了努力的成本控制和勝利策略的影響。

I'll now move to Slide #31 to review the Aerospace Systems segment. The Aerospace Systems sales increased 16.7% from acquisitions, while organic sales declined 2.4%. Declines in OEM volumes, primarily commercial, were partially offset by higher commercial and military aftermarket sales. Operating margin for the third quarter was 17.4% of sales versus 20.7% in the prior year. Incremental amortization expense impacted the change in margins, 160 basis points. Lower earnings were driven by the OEM volume declines, higher engineering development costs and a less favorable aftermarket mix. Good margin performance from Exotic and hard work by the teams on cost containment and productivity improvements helped contribute to the solid performance in the quarter.

我現在將轉到第 31 張投影片來回顧航空航天系統部分。航空航太系統公司的銷售額因收購成長了 16.7%，而有機銷售額下降了 2.4%。 OEM 銷售量（主要是商業銷售）的下降被商業和軍用售後市場銷售的成長部分抵消。第三季營業利益率為銷售額的 17.4%，而去年同期為 20.7%。增量攤銷費用影響了利潤率變動 160 個基點。收益下降的原因是 OEM 銷量下降、工程開發成本上升以及售後市場組合較差。 Exotic 良好的利潤率表現以及團隊在成本控制和生產力提高方面的辛勤工作為本季度的穩健業績做出了貢獻。

On Slide 32, we're showing the impact LORD and Exotic has had year-to-date fiscal year '20 on both an as-reported and adjusted basis. Sales from the acquisitions totaled $651 million and operating income on an adjusted basis contributed $82 million. This operating income includes $65 million of amortization expense. Adjusted EBITDA from LORD and Exotic is 26.3%. With this meaningful contribution from acquisitions, total Parker adjusted EBITDA has increased to 19% year-to-date compared to 18% for the same year-to-date period in fiscal year 2019.

在投影片 32 上，我們展示了 Lord 和 Exotic 在報告和調整後的基礎上對 20 財年年初至今的影響。收購帶來的銷售額總計 6.51 億美元，調整後的營業收入貢獻了 8,200 萬美元。這筆營業收入包括 6,500 萬美元的攤銷費用。 Lord 和 Exotic 的調整後 EBITDA 為 26.3%。憑藉著收購帶來的這項有意義的貢獻，帕克調整後的 EBITDA 總額今年迄今已增至 19%，而 2019 財年同期為 18%。

On Slide 33, we report cash flow from operating activities. Year-to-date, cash flow from operating activities was a record $1.3 billion or 12.3% of sales. This compares to 12.1% of sales for the same period last year after last year's number is adjusted for a $200 million discretionary pension contribution. Free cash flow for the current year-to-date is 10.5% of sales and the conversion rate to net income is 122%.

在投影片 33 中，我們報告了經營活動產生的現金流量。年初至今，經營活動產生的現金流達到創紀錄的 13 億美元，佔銷售額的 12.3%。相較之下，根據 2 億美元的可自由支配退休金繳款對去年的數字進行調整後，去年同期銷售額佔 12.1%。本年度迄今的自由現金流佔銷售額的 10.5%，淨利的換算率為 122%。

Moving to Slide 34, I'd like to discuss our current liquidity and credit positions. Our cash as of the end of the quarter was $0.7 billion. The majority of this cash is overseas, allowing the international operations to be self-financed. Our long history of free cash flow exceeding net income during growth periods as well as recessionary periods, gives us strong confidence in our cash flow outlook. With additional emphasis on our well-established cash management practices, we are optimizing working capital, taking advantage of the government tax payment deferrals and reducing our capital expenditure investments. We have temporarily suspended our 10b5-1 share repurchase program but as Tom described, we remain committed to paying our shareholders a dividend, and we're confident we have the cash available to do so.

轉到投影片 34，我想討論一下我們目前的流動性和信貸狀況。截至本季末，我們的現金為 7 億美元。這些現金大部分都在海外，使國際業務能夠自籌資金。我們在成長期和衰退期的自由現金流超過淨利潤的悠久歷史使我們對現金流前景充滿信心。我們更重視完善的現金管理實踐，優化營運資本，利用政府納稅延期的優勢，並減少資本支出投資。我們已經暫時中止了 10b5-1 股票回購計劃，但正如 Tom 所描述的，我們仍然致力於向股東支付股息，我們相信我們有足夠的現金來這樣做。

We have a $2.5 billion revolving credit facility readily available should we need it, and we have no major debt repayments due until fiscal year '23. We remain active in the commercial paper market and as of the quarter end, we held $0.9 billion in commercial paper debt. The only active financial covenant in place is to maintain a gross debt to total cap ratio below 65%. We are currently at 59.4% and we have $2.5 billion of headroom were we in need of additional debt. Our gross debt-to-EBITDA leverage metric at the end of the quarter was 3.8x, down from 4.0x at December 31. We were able to pay down $611 million of debt during the quarter and as we build a full 12 months of EBITDA from the acquisitions, the metric will become more meaningful.

我們擁有 25 億美元的循環信貸額度，可在需要時隨時使用，並且在 23 財年之前我們沒有到期的重大債務償還。我們仍然活躍在商業票據市場，截至本季末，我們持有 9 億美元的商業票據債務。唯一有效的財務契約是將總負債與總上限比率維持在 65% 以下。我們目前的比率為 59.4%，如果我們需要額外的債務，我們還有 25 億美元的空間。截至本季末，我們的總債務與 EBITDA 槓桿指標為 3.8 倍，低於 12 月 31 日的 4.0 倍。我們能夠在本季度償還 6.11 億美元的債務，並且我們建立了整整 12 個月的 EBITDA從收購來看，該指標將變得更有意義。

As Tom mentioned, we are withdrawing our fiscal year '20 guidance due to the uncertainties we are still facing through this quarter. We ask that you continue to publish your estimates using adjusted results for a more consistent year-over-year comparison. As a reminder, we will be revising our method of reporting adjusted results to include adjusting out the amortization related and -- the acquisition-related amortization expense, but we do not intend to make that change until fiscal year '21. We ask that you do not adjust for amortization expense in your estimates until we all consistently make that change.

正如 Tom 所提到的，由於本季我們仍然面臨不確定性，我們將撤回 20 財年的指導。我們要求您繼續使用調整後的結果發布您的估計，以便進行更一致的同比比較。提醒一下，我們將修改報告調整後結果的方法，以包括調整攤銷相關和收購相關攤銷費用，但我們不打算在 21 財年之前進行此更改。我們要求您不要調整估算中的攤銷費用，直到我們一致做出改變。

If you'll now go to Slide #35, I'll turn it back to Tom for summary comments.

如果您現在轉到幻燈片 #35，我會將其轉回給 Tom 以獲取摘要評論。

Thank you, Cathy. We are confident in our ability to emerge stronger than we've ever been before. And that confidence and that hope really comes from a couple of factors: The Win Strategy, the portfolio we have of needed products and technologies, our culture and our purpose, and probably most importantly, is the last page, our team of people, fantastic team of people, which we try to show as many as we could here on this page from all around the world.

謝謝你，凱西。我們對我們比以往任何時候都更強大的能力充滿信心。這種信心和希望確實來自幾個因素：制勝策略、我們所需產品和技術的組合、我們的文化和我們的目標，也許最重要的是最後一頁，我們的團隊，太棒了我們試圖在此頁面上展示來自世界各地的盡可能多的人團隊。

And what this crisis has clearly exposed and shown is just how -- what an important role everybody plays within the company. I would just like to again thank the global team for an extraordinary job, thanking what they've done to date and thank them for what we're going to do in the future.

這場危機清楚地暴露和展示了每個人在公司中扮演著多麼重要的角色。我想再次感謝全球團隊所做的出色工作，感謝他們迄今為止所做的一切，並感謝他們為我們未來要做的事情。

And with that, I'll turn it over to Latif to start the Q&A.

接下來，我將把它交給拉蒂夫來開始問答。

(Operator Instructions) Our first question comes from the line of Nigel Coe of Wolfe Research.

（操作員說明）我們的第一個問題來自 Wolfe Research 的 Nigel Coe。

Okay. Great. So Tom, you mentioned that you're planning on an L-shaped recovery. And I'm just wondering what that means in terms of balance sheet liquidation on inventories and it suggests that you're going to be very aggressive in terms of liquidating the balance sheet. So my real question is, 4Q guidance obviously being withdrawn, but do you have confidence that you could still generate $1.8 billion of free cash flow versus the $1.3 billion year-to-date?

好的。偉大的。湯姆，您提到您正在計劃 L 型恢復。我只是想知道這對於庫存資產負債表清算意味著什麼，它表明您將非常積極地清算資產負債表。所以我真正的問題是，第四季度指導顯然被撤回了，但是您是否有信心仍然可以產生 18 億美元的自由現金流（而今年迄今為止為 13 億美元）？

Nigel, yes. Because we -- typically, our fourth quarter, even in tough times is always a very strong quarter for us, and we will have the advantage of working capital generating a lot of cash for us in Q4 and that should help us quite a bit. And so we still see that, that 10% or greater CFOA as a percent of sales is going to continue, and we'll do a good job in Q4.

奈傑爾，是的。因為我們——通常來說，我們的第四季度，即使在困難時期，對我們來說也總是一個非常強勁的季度，我們將擁有營運資本的優勢，在第四季度為我們產生大量現金，這應該對我們有很大幫助。因此，我們仍然認為，CFOA 佔銷售額的 10% 或更高的比例將繼續下去，我們將在第四季度做得很好。

I think what I want to emphasize is we're planning for an L to be conservative, but we have the flexibility with whatever shape, letter it turns out to be. And of course, nobody knows at this point, but we have the supply chain flexibility. We have the people flexibility to respond in whatever direction it works.

我想我想強調的是，我們計劃讓 L 保持保守，但我們可以靈活地選擇任何形狀、字母。當然，目前沒有人知道，但我們擁有供應鏈的彈性。我們讓員工能夠靈活地向任何方向做出反應。

Great. And then my second question is on the decremental margins. You've obviously done a fantastic job, especially on the legacy Parker businesses. Your comments on the 4Q seems to suggest that there's going to be some deterioration in the run rates given the volume drop-off that you're expecting. But given the cost countermeasures you've put in place, a little bit surprised that maybe decrementals can't be managed below 30%. So I'm just wondering what you're expecting in terms of decremental margins based on your scenario planning?

偉大的。然後我的第二個問題是關於遞減的邊際。顯然，您做得非常出色，尤其是在派克的傳統業務方面。您對第四季度的評論似乎表明，鑑於您預期的銷量下降，運行率將會惡化。但考慮到您已採取的成本對策，令人有點驚訝的是，也許減量無法控制在 30% 以下。所以我只是想知道根據您的情境規劃，您對遞減利潤有何期望？

Well, like I have on that slide that I outlined all the cost reductions, we're targeting a 30% decremental. A 30% decremental is still best-in-class, if you benchmark other companies. And doing a 30% decremental approximately in this kind of climate is really, really good performance. Who knows what the quarter is going to turn out to be, I would suggest to the folks listening, that April is probably our low point and that we would see May start to improve a little bit and then improve a little bit after that with June. But if you can do decrementals like this in this kind of environment, that's really outstanding performance.

嗯，就像我在幻燈片上概述的所有成本削減一樣，我們的目標是減少 30%。如果你以其他公司為基準，30% 的減幅仍然是同類中最好的。在這種環境下減少大約 30% 確實是非常非常好的性能。誰知道這個季度會是什麼樣子，我建議聽眾，四月可能是我們的低點，我們會看到五月開始有所改善，然後六月之後又有所改善。但如果你能在這種環境下進行這樣的減量運算，那就真的是非常出色的性能了。

The next question comes from the line of Mig Dobre of Baird.

下一個問題來自貝爾德 (Baird) 的米格·多布雷 (Mig Dobre)。

I'm glad to hear you doing well. I'd like to ask a question on aerospace. The color that you've given us on April is quite different than the orders prior to coronavirus becoming an issue. And I just -- I guess I'm wondering, how should we be thinking about this softness in orders playing through to fundamentals next quarter and over the next couple of quarters? How does it flow to revenues and how should we think about decremental margins in this segment specifically?

我很高興聽到你做得很好。我想問一個關於航空航天的問題。你們四月給我們的顏色與冠狀病毒成為問題之前的訂單有很大不同。我只是 - 我想我想知道，我們應該如何考慮下個季度和接下來幾季的基本面訂單的疲軟？它如何轉化為收入？我們應該如何具體考慮該細分市場的利潤下降？

Mig, it's Tom. So I think, obviously, we never disclosed -- haven't disclosed until this time, aerospace on a [112] because it is lumpy, and there's a lot of multimonth, multiquarter, multiyear type of orders that get in there. So it can sometimes be misleading, either on the positive or the negative side when you look at it. But aerospace, what we're planning for is a significant change to aerospace. It's going to go through a tough time. And you've got the commercial side, it's going to come down very strongly, but we have a really great military business. So we're basically 2/3 commercial, 1/3 military and that military business is growing very nicely. So our 20% reduction in force will be in addition to those discretionary things for aerospace. So we'll do the 20% reduction in force, that's a permanent SG&A challenge to kind of reshape aerospace for this new normal, but we will continue the reduced work schedules, the salary reduction of the things I have on the discretionary page that I outlined so that aerospace can flex as well.

米格，是湯姆。所以我認為，很明顯，我們從未披露過——直到這次才披露過[112]上的航空航天，因為它是不穩定的，而且有很多個多月、多季度、多年類型的訂單。因此，當你看待它時，它有時可能會產生誤導，無論是積極的一面還是消極的一面。但是在航空航太領域，我們正在計劃對航空航太領域進行重大變革。它將經歷一段艱難的時期。商業方面，它會大幅下降，但我們有非常出色的軍事業務。所以我們基本上 2/3 是商業業務，1/3 是軍事業務，軍事業務成長得非常好。因此，我們減少 20% 的兵力將不包括在航空航太方面的自由裁量權之外。因此，我們將減少20% 的兵力，這是一項永久性的SG&A 挑戰，旨在重塑航空航天業以適應這種新常態，但我們將繼續減少工作時間，減少我在可自由支配的頁面上所擁有的東西的工資。概述，以便航空航天也可以彎曲。

And we feel very good that aerospace will be able to do well in this new environment. The Exotic team that's come on is performing well. They're performing better than legacy Parker and it has over 60% military business. So aerospace long term, long, long-term is still a great business. It's going to have a couple of years here of challenges, and we're reshaping the portfolio to win in this new reality, and we're doing it very quickly.

我們對航空航太業能夠在這個新環境中表現出色感到非常滿意。上場的異國情調隊伍表現出色。他們的表現比傳統 Parker 更好，並且擁有超過 60% 的軍事業務。因此，從長遠來看，航空航太仍然是一項偉大的業務。這將面臨幾年的挑戰，我們正在重塑投資組合，以在這個新的現實中獲勝，而且我們做得很快。

Understood, Tom. But is there a way to maybe talk about this business sequentially from a revenue standpoint? Just trying to make sure that we have our expectations properly gauged there.

明白了，湯姆。但有沒有辦法從收入的角度依序討論這項業務呢？只是想確保我們的期望得到了正確的衡量。

Well, we're not guiding. So I'm not going to start spouting off what I think Q4 is going to be. But I think you can look at order entry there. And you can also recognize that we do have very strong backlogs in this business. So we had the ability to continue to work backlog. And actually, the backlogs have held up fairly well. When I look at backlogs going from March to April to date, commercial OEM is at about 11-month backlog and military OEM is at almost 2-year backlog. Commercial MRO, if you remember at IR Day, we talked about at 2.5 months, it's still about 2.5 months. And military MRO is at about a 16-month backlog. So the backlogs are holding up. I would tell you what customers are doing is they're more rescheduling quantities. And that's what we're doing is we're reshaping our supply chain demand and our people to that new reality.

好吧，我們不是在指導。所以我不會開始滔滔不絕地談論我對第四季的看法。但我認為你可以在那裡查看訂單輸入。您還可以認識到，我們在該業務中確實有非常多的積壓訂單。這樣我們就有能力繼續積壓工作。事實上，積壓情況一直相當好。當我查看從 3 月到 4 月至今的積壓訂單時，商業 OEM 的積壓量約為 11 個月，軍用 OEM 的積壓量接近 2 年。商業 MRO，如果你還記得在 IR Day 上，我們談到了 2.5 個月，現在仍然是 2.5 個月左右。軍事 MRO 積壓了大約 16 個月。因此，積壓的情況一直存在。我會告訴你客戶正在做的事情是他們更多地重新安排數量。這就是我們正在做的，我們正在重塑我們的供應鏈需求和我們的員工，以適應新的現實。

Our next question comes from Andrew Obin of Bank of America.

我們的下一個問題來自美國銀行的安德魯·奧賓。

Just a question. Can you just talk maybe about region-specific trends on orders? You provided great granularity on orders by segment in April. But maybe just compare and contrast how Asia, Europe and U.S. -- well, U.S., you have, but how the pace of recovery in Asia and what do you see at the end of the tunnel in terms of your China experience?

就一個問題。能談談特定地區的訂單趨勢嗎？您提供了 4 月份按細分市場劃分的訂單的詳細資訊。但也許只是比較和對比亞洲、歐洲和美國——好吧，美國，但亞洲的復甦速度如何，以及你對中國經驗的看法是什麼？

Andrew, it's Tom. So I'll address that. Let me start with -- I'll give you the Q3. I recognize maybe a lot of you won't need Q2 but I just -- I'll give it to you for context. And then I'll go into April and China, your specific question. So you saw the orders on Q3 and the improvement that we saw before middle of March was really international. It was both EMEA and Asia. And you saw aerospace orders stay level, and that was because we had very strong military OEM orders. When you look at it by kind of subsegment, and this is organic, and you've already seen total Parker at minus 7.5%, aerospace at minus 2.5%. But distribution was down about mid-single digits, pretty much steady versus the prior quarter. Again, this is a Q3 market summary. Industrial was down mid-single digits, a slight improvement of about 200 bps improvement versus Q2. And then mobile was down low teens. And it had a slight improvement versus Q2.

安德魯，是湯姆。所以我會解決這個問題。讓我開始──我會給你第三個問題。我知道你們中的很多人可能不需要第二個問題，但我只是——我會把它提供給你們作為背景。然後我將談談四月和中國，你的具體問題。所以你看到了第三季的訂單，我們在三月中旬之前看到的改善確實是國際性的。歐洲、中東和非洲 (EMEA) 和亞洲都是如此。你看到航空航太訂單保持水平，那是因為我們有非常強大的軍事原始設備製造商訂單。當你按細分市場來看時，這是有機的，你已經看到帕克的總增長率為-7.5%，航空航天為-2.5%。但分佈下降了大約個位數，與上一季相比幾乎穩定。同樣，這是第三季的市場摘要。工業指數下跌中個位數，較第二季略有改善約 200 個基點。然後行動裝置的銷量下降到了十幾歲。與第二季相比略有改善。

The markets that were positive, we had some very strong end markets that were positive in Q3. Greater than 10% was power gen and semiconductor. We had 2 markets that were positive, low single digits, marine and mining. And then on the declining markets, I'll just give you in various buckets, low single-digit decline was mills and foundries; mid-single-digit declines, refrigeration, oil and gas, lawn and turf and distribution; high single-digit declines in life science and automotive. And then that 20% to -- and that 10% to 20% decline was tires, telecom, construction, heavy-duty truck, agriculture and rail.

市場表現積極，我們有一些非常強勁的終端市場，在第三季表現積極。超過10%是發電和半導體。我們有兩個市場表現積極，即低個位數的市場：海洋和採礦業。然後，在下降的市場上，我將給您分不同的類別，低個位數下降的是工廠和鑄造廠；中個位數下降，冷凍、石油和天然氣、草坪和草皮以及分銷；生命科學和汽車領域出現大幅個位數下降。然後下降 20% 到 10% 到 20% 的是輪胎、電信、建築、重型卡車、農業和鐵路。

Now to April, Andrew. So what we saw in April so far, now -- so you saw the segments. So let me give you color on international. So in page, Slide 14 in the deck, it's 25% to 30% down, but Asia Pacific was down about minus 5% to minus 10%. And then EMEA and Latin America down minus 35% to 40%. We did have some positive end markets in April. Life sciences, I mentioned the amount of ventilator work that we were doing, power generation, semiconductor as well as aerospace military OEM and aerospace military MRO, all the other ones were negative. The positive, as I mentioned earlier on, was that orders stabilized the last 2 weeks at these levels. So they did not continue to decline, which is kind of the first sign of healing. In May, and this is a guess on our part, is that this will be somewhat similar, but slightly better as most of our customer shutdowns start back up in May, but there's been a lot of variations as part of why we're not giving guidance is their start dates have moved very much. Almost every day, we get a new letter from a customer moving a start date and their levels of production have moved and really won't be finalized till they start-up. And they'll start at low levels. But we expect May to be slightly better and then June should build slightly better on that.

現在到四月了，安德魯。所以我們在四月到目前為止所看到的，現在 - 所以你看到了這些片段。那麼讓我來跟你介紹一下國際化的情況。因此，在投影片 14 頁面中，下降了 25% 到 30%，但亞太地區下降了約 -5% 到 -10%。然後歐洲、中東和非洲 (EMEA) 和拉丁美洲下降了負 35% 至 40%。四月份我們確實有一些積極的終端市場。生命科學，我提到了我們正在做的呼吸器工作量，發電，半導體以及航太軍事OEM和航太軍事MRO，所有其他都是負面的。正如我之前提到的，積極的一面是訂單在過去兩週穩定在這些水平。所以它們沒有繼續下降，這是治癒的第一個跡象。五月份，這是我們的猜測，這會有些相似，但會稍微好一些，因為我們的大多數客戶關閉都會在五月重新開始，但有很多變化，這也是我們不這樣做的原因之一。給予指導的是他們的開始日期已經移動了很多。幾乎每天，我們都會收到客戶的一封新信，要求更改開始日期，並且他們的生產水平也發生了變化，並且在啟動之前實際上不會最終確定。他們將從低水平開始。但我們預計 5 月會稍微好一些，然後 6 月應該會在此基礎上稍微好一點。

But to your point, and what we're looking at really is what you were getting to, is Asia. So Asia was the first to go in and the first to come out of this. So Asia, while maybe not necessarily being foreshadowing what the rest of world is going to do, it's illustrative to understand what happened in Asia. So in particular, if I look at China, because that's really the bulk, it's half of Asia, at least. In Q3, the trend there, I'm using round numbers on sales, was a minus 30 in January, minus 40 in February and then flat in March. So we had a very sharp rebound in China orders in March. This is restocking due to the pent-up demand from January and February. And so our thoughts and about the only region I'm going to give you thoughts on Q4 is Asia. And so I'll give you what we -- our initial estimates are might be for Asia, again, indicative of what might happen as you think about the rest of the world, subsequent months down the road. Is that we have North Asia, China, Japan and Korea, kind of in that minus 5% to minus 10% for the quarter, Q4. Southeast Asia is slightly positive. And then India being down probably in the high teens. Most of India is taking a very hard line on their manufacturing capacity shutdowns, that puts total Asia in that minus 5% to minus 10% range for Q4.

但就你的觀點而言，我們真正關注的是亞洲。所以亞洲是第一個進入的，也是第一個走出去的。因此，亞洲雖然不一定預示著世界其他地區將要做什麼，但它對於了解亞洲發生的事情具有說明性。特別是，如果我看看中國，因為這確實是大部分，至少是亞洲的一半。在第三季度，我使用銷售額的整數來計算趨勢，1 月為負 30，2 月為負 40，然後 3 月持平。因此，三月我們的中國訂單出現了非常急劇的反彈。這是由於一月和二月被壓抑的需求而進行的補貨。因此，我們的想法以及我要向您提供有關第四季度的唯一想法的地區是亞洲。因此，我將再次向您提供我們對亞洲的初步估計，這表明您對世界其他地區未來幾個月可能發生的情況進行了預測。我們有北亞、中國、日本和韓國，第四季的成長率為負 5% 到負 10%。東南亞略顯正面。然後印度的經濟下滑可能在十幾歲左右。印度大部分地區對產能關閉採取了非常強硬的態度，這使得亞洲第四季的產能下降幅度處於負 5% 到負 10% 的範圍內。

I would just comment that, that visibility is cloudy, clearly dependent on how global trade does and probably mostly dependent on China's economy. The same challenges that we have seen in the rest of the world on small to medium-sized companies, China has the same issue, those companies need cash and then the rest of Asia is still operating with partial shutdowns. If you look at New Zealand, Singapore, Malaysia, Indonesia and India in particular. So Asia is the first to start to heal and that's the indicator that we see at this moment, Andrew.

我只想評論說，這種能見度是陰暗的，顯然取決於全球貿易的表現，而且可能主要取決於中國經濟。我們在世界其他地區的中小企業身上看到了同樣的挑戰，中國也有同樣的問題，這些公司需要現金，而亞洲其他地區仍在部分關閉的情況下運作。尤其是紐西蘭、新加坡、馬來西亞、印尼和印度。因此，亞洲是第一個開始復甦的地區，這就是我們目前看到的指標，安德魯。

That is incredibly helpful. And just a follow-up question. How do you gauge the financial health of your distributors, the ability to access capital, the ability to access in this environment? And where do you think financial health for your distribution stands right now?

這非常有幫助。只是一個後續問題。您如何衡量經銷商的財務狀況、獲得資金的能力以及在這種環境下獲得資金的能力？您認為您的發行版目前的財務狀況如何？

Yes. Andrew, this is Lee. So I mean, as you know, we've got incredibly close relationships with all our distribution. And we have constant health checks with them, very current on receivables. Just very frank conversations on credit and we don't have any issues looking through the channel right now to speak of.

是的。安德魯，這是李。所以我的意思是，如您所知，我們與所有發行版都建立了非常密切的關係。我們不斷與他們進行健康檢查，及時了解應收帳款。只是非常坦率的信用對話，我們現在透過該管道沒有任何問題可談。

And congratulations on a great quarter.

恭喜您度過了一個出色的季度。

Our next question comes from David Raso of Evercore ISI.

我們的下一個問題來自 Evercore ISI 的 David Raso。

I'm trying to think of a setup exiting this calendar 2Q. I mean, it looks like the way the revenues are playing out the orders with your decrementals, it seems like your sort of wide range EPS for the quarter is like $1 to $1.50 or so. But typically, the next quarter, you have sales down mid-single digit. I would think just given what's happening here, it should be the opposite. They should be improving from calendar 2Q to 3Q? But I'm trying to understand the setup. When you're saying stabilization, are you getting any indication, is this -- distributor inventories low enough that they're restocking, OEMs were not stocking up before they're shutdown, so they have a catch-up? I'm just trying to get a better sense of how comfortable can we be that the first quarter of fiscal '21 can really leverage off that, say $1 to $1.50 range. I think people are just trying to get a sense of what's the earnings power after what could be obviously difficult calendar 2Q.

我正在嘗試考慮退出此日曆第二季度的設定。我的意思是，看起來收入是按照你的減量來執行訂單的，看起來你這個季度的每股收益範圍很廣，大約是 1 美元到 1.50 美元左右。但通常情況下，下個季度的銷售額會下降中個位數。我認為考慮到這裡發生的事情，情況應該相反。他們應該從日曆第二季到第三季有所改善？但我正在嘗試理解這個設定。當你說穩定時，你是否得到任何跡象，是不是——經銷商庫存足夠低，他們正在補貨，原始設備製造商在停產前沒有備貨，所以他們有趕上？我只是想更了解 21 財年第一季我們是否可以真正利用這一點（例如 1 美元至 1.50 美元的範圍）。我認為人們只是想了解在經歷了明顯困難的第二季度之後的盈利能力。

So David, it's Tom. So I probably won't surprise you. I'm not going to comment on Q1, but I'll give you maybe some thoughts on the other parts of your question. So when I make comments about being more stable, it's the daily rate stabilizing for the last 2 weeks. And our distributors are smart business people and they're conserving cash just like everybody else. So they are pretty much being very careful with what kind of things they're going to do on inventory and they're managing inventory very appropriately. I think our Q1 is going to have an advantage because our cost structure is going to be extremely lean going into Q1. What I can't predict is what's going to happen on the top line. I do think that we will progressively improve April to May, May to June. But I can't guess necessarily what the year-over-year is going to be because the pandemic, you have to cycle the pandemic before you start to show really positive gains. But I think sequentially, you're going to start to see improvement. The big question is just the rate of improvement. Is this an L? Is it an L where the bottom of the L starts to move up more aggressively than a traditional L? Is it a U? We don't know. That's why we've designed our ability to flex to that demand if it happens, but have a cost structure that can be there, if it doesn't happen as well.

大衛，是湯姆。所以我可能不會讓你感到驚訝。我不會對第一個問題發表評論，但我可能會給你一些關於問題其他部分的想法。因此，當我評論更加穩定時，指的是過去兩週的每日匯率穩定。我們的經銷商都是聰明的商人，他們和其他人一樣節省現金。因此，他們非常謹慎地對待庫存，並且非常適當地管理庫存。我認為我們的第一季將具有優勢，因為進入第一季我們的成本結構將非常精簡。我無法預測的是頂線上會發生什麼事。我確實認為我們將在四月至五月、五月至六月逐步改善。但我不一定能猜測每年會發生什麼，因為大流行，你必須先經歷一次大流行，然後才能開始顯示出真正積極的收益。但我認為接下來，你會開始看到進步。最大的問題只是改進的速度。這是L嗎？它是L形底部開始比傳統L形更積極向上移動的L形嗎？是U嗎？我們不知道。這就是為什麼我們設計了能夠在這種需求發生時靈活滿足這種需求的能力，但如果這種需求沒有發生，我們也有一個可以存在的成本結構。

That was sort of the genesis of the question. So if there's any reopening that can be stabilized at all, you would think your revenue sequentially would go against the historical norm. It won't decline mid-single, it should improve. But from your answer, it sounds like it's more OEM right now than it is distributor. And to your point, I'm just trying to figure out the incrementals coming out because if it's OEM over a distributor, you'd argue you'd rather have distributor. But to your point, you're going to have cost-outs that should not automatically come back. Right? You should have some leaned out costs. But again, it's more OE improving from here, stabilizing, let's say, then I should think it's the distribution. It's more OE. Right?

這就是這個問題的起源。因此，如果有任何可以穩定的重新開放，您會認為您的收入將違反歷史正常水平。中單不會下降，應該會有所改善。但從你的回答來看，聽起來現在更像是 OEM，而不是經銷商。就你的觀點而言，我只是想找出增量，因為如果是 OEM 而不是分銷商，你會說你寧願擁有分銷商。但就您而言，您將面臨不應自動收回的成本支出。正確的？您應該節省一些成本。但同樣，從這裡開始，更多的是 OE 的改進、穩定，那麼我應該認為這是分佈。更多的是 OE。正確的？

Okay. So I get your question more, David. So I think you'll see improvement -- marked improvement across both channels, OE and distribution because those order rates that we showed you on that slide for April are pretty equally representative distribution and OEM, maybe slightly better in distribution, but they're pretty much the same. So you're going to see both of them come back. It won't be like, "Hey, we're just going to rebound in OEM and distribution stays the same." You'll get both coming back.

好的。所以我更了解你的問題，大衛。因此，我認為您會看到改進- 兩個通路、OE 和分銷都有顯著改善，因為我們在4 月份幻燈片上向您展示的訂單率在分銷和OEM 方面具有同等代表性，也許在分銷方面稍好一些，但它們幾乎相同的。所以你會看到他們兩個都回來。它不會是這樣的，“嘿，我們只是要在 OEM 領域反彈，而分銷保持不變。”你會讓兩個人都回來。

Okay. That's helpful. I appreciate it. And lastly, anything about how you're viewing the world now, that changes how you feel about what leverage you want to come down to before? And I know it never was imminent anyway, but we used to talk kind of 12, 18 months. Have you rethought at all what you are comfortable with on leverage before you would lean back forward, be it M&A or repo?

好的。這很有幫助。我很感激。最後，關於你現在看待世界的方式，是否有任何事情會改變你對以前想要達到的槓桿作用的看法？我知道無論如何這從來都不是迫在眉睫的，但我們過去常談論 12、18 個月。在您決定向後傾斜之前，無論是併購還是回購，您是否重新考慮過您對槓桿的適應程度？

David, it's Tom again. So we would -- we still feel strongly we want to get back down to that approximate 2.0 level on a gross debt to EBITDA. That was our feeling before the crisis, it's still our feeling.

大衛，又是湯姆。因此，我們仍然強烈認為，我們希望將 EBITDA 總債務降至約 2.0 的水平。這是我們在危機發生前的感受，現在仍然是我們的感受。

The next question comes from Nathan Jones of Stifel.

下一個問題來自 Stifel 的 Nathan Jones。

Just a question on the decrementals first. You guys have some noise going on in the decremental margins with the acquisitions folding in. Is that 30% decremental that you're targeting, including the acquisitions, excluding the acquisitions? How should we think about that?

首先是關於減量的問題。隨著收購的進行，你們的利潤率下降了一些。你們的目標是 30% 的下降，包括收購，不包括收購？我們該如何思考這個問題？

Nathan, it's Tom. That would be excluding the acquisitions, the legacy business. But I would just tell you, the 2 acquisitions are doing extremely well. And I would just want to make one quick comment in case there's -- people have more -- might have more questions in acquisitions. Part of why you see the improvement in North America is our synergies on LORD have accelerated. We've gone from what we told you last quarter at $18 million in FY '20 to $30 million. And we've been able to accelerate our SG&A on LORD. And so we look for that -- the decrementals on legacy, but we look at the 2 acquisitions. Both acquisitions, as you saw, are coming in at a really nice -- LORD is significantly beating where we thought they'd be on EBITDA. They're approximately 27% EBITDA for Q3 and Exotic was in the mid-20s. And both of those businesses are executing the same kind of cost reductions and cash actions that the rest of the business is doing. So they will continue to be helpful. Their top line is holding up better than legacy Parker and our margins are better. So they will continue to hold to that. Decremental, I quoted, it was on the legacy business.

內森，是湯姆。這不包括收購和遺留業務。但我只想告訴你，這兩次收購進展得非常好。我只想快速發表評論，以防人們對收購有更多疑問。您看到北美地區取得進步的部分原因是我們與耶和華的協同效應加速了。我們已經從上個季度告訴您的 20 財年的 1800 萬美元增至 3000 萬美元。我們已經能夠加速在LORD 上的SG&A。因此，我們尋找的是遺產的減少，但我們關注的是兩次收購。正如您所看到的，這兩項收購的收益都非常好——LORD 的 EBITDA 顯著超過了我們的預期。第三季的 EBITDA 約為 27%，而 Exotic 則在 20 多歲左右。這兩家公司都在執行與其他公司相同的成本削減和現金行動。因此，他們將繼續提供協助。他們的營收比傳統帕克的表現更好，我們的利潤率也更高。所以他們會繼續堅持這一點。我引用的是遞減，這是關於遺留業務的。

Okay. And then on the cost out numbers, the $250 million to $300 million, it sounded like that was in place on April 1. Are you already at the run rate there? And then the $25 million to $30 million that's structurally coming out of the aerospace business, how long does that take before that falls into your cost structure?

好的。然後關於成本支出數字，2.5 億至 3 億美元，聽起來像是 4 月 1 日就已經到位了。你已經達到了運行速度嗎？然後，結構上來自航空航太業務的 2500 萬至 3000 萬美元，需要多長時間才能落入您的成本結構？

The numbers that are on that page are what we will feel in Q4. So that's for a full quarter, you'll feel it. And it's more than just aerospace and the structural, there's oil and gas, things we're doing. And there's things really across every group that we're doing as well. But clearly, a lot of it is aerospace driven.

該頁面上的數字是我們在第四季度感受到的。這是整整一個季​​度的時間，你會感覺到的。這不僅僅是航空航太和結構，還有石油和天然氣，我們正在做的事情。我們也在每個團隊中做一些事情。但顯然，其中很多都是航空航天驅動的。

And then just one quick one on the Exotic synergies. You talked about the LORD synergies there. Does the -- the large drop in the expectation for aerospace here reduced the expectation of the amount of synergies that you can get out of Exotic over the next year or 2?

然後快速介紹一下異國情調的協同作用。你在那裡談到了主的協同作用。對航空航太的預期大幅下降是否會降低您對未來一兩年可以從異國情調中獲得的協同效應的預期？

Yes, for Exotic, we've had a pretty minimal amount of synergy, if you remember, it's $13 million. And we recognized that with material savings for Exotic, you've got long supply agreements, and they really weren't going to start to kick in until year '22 and '23. And most of Exotic's synergies were productivity and The Win Strategy, which we feel very good about. So the $13 million, the short answer is we feel good about that, that's not changing.

是的，對於 Exotic，我們的協同效應非常小，如果你還記得的話，那就是 1300 萬美元。我們認識到，隨著 Exotic 材料的節省，您可以獲得長期供應協議，而且它們實際上要到 22 年和 23 年才會開始生效。 Exotic 的大部分協同效應是生產力和獲勝策略，我們對此感覺非常好。所以 1300 萬美元，簡短的回答是我們對此感覺良好，這不會改變。

And I would just highlight again for Exotic, their top line in Q3 was still significantly better than legacy Parker. We're clearly fortunate that over 60% of that business is military. And we've been able to pull in and accelerate our F135 work to kind of help cushion what's happening on the commercial side. And so for Exotic to deliver mid-20 EBITDAs, given what's going on, it's just really fantastic performance by them.

我想再次強調異國情調，他們在第三季的頂線仍然明顯好於傳統帕克。我們顯然很幸運，超過 60% 的業務是軍事業務。我們已經能夠拉動並加速我們的 F135 工作，以幫助緩解商業方面發生的情況。因此，考慮到正在發生的事情，Exotic 能夠實現 20 年中期的 EBITDA，這真是他們的出色表現。

Our next question comes from Jamie Cook of Crédit Suisse.

我們的下一個問題來自瑞士信貸銀行的傑米庫克。

Nice quarter. I guess 2 questions. Tom, you kept talking about the resilience of Exotic and LORD through the third quarter. Can you sort of talk about trends that you're seeing in April for those businesses? And then my second question was with regards to the 30% decremental, I assume that's specific to the fourth quarter. And my question is, if we're in a prolonged sort of downturn, how confident are you with decremental margins because of some of the actions you're taking seem like more short term versus like salary cuts and stuff like that, versus long term?

不錯的季度。我猜有2個問題。湯姆，你一直在談論異國情調和洛德在第三季度的韌性。您能談談您在四月看到的這些企業的趨勢嗎？然後我的第二個問題是關於 30% 的減少，我認為這是特定於第四季的。我的問題是，如果我們處於長期的低迷時期，您對利潤下降有多大信心，因為您所採取的一些行動似乎更短期，而不是減薪之類的事情，而不是長期的？

Okay. So let me start with the second part. So the 30% decremental in Q4, that will continue going forward. We'll continue to do the things we have to do to flex the business to deliver that. And again, I'm saying approximate 30% regardless of what's happening with the top line. I believe that this will eventually start to turn, so you had to be careful that you don't do too many permanent structural actions and prevent your ability to respond. So we will watch that. We obviously won't let the temporary things go on forever because that would be unfair to people, and we would then have to turn them into permanent. But we will look at that quarter-to-quarter and make those decisions as a team but I think you can expect the decrementals and the resilience. Remember, the resilience you're seeing now is 5 years in the making. It's work we've been doing on -- and I would say it's even before that. That stair steps on those margins happen because of all the actions we've done over the last 20 years. We've been building a more resilient business model for 20 years now. So this is why we're able to perform here. But specifically, you've seen the margins significantly increase in the last 5 years, and that, you could point directly to Win Strategy 2.0 for that.

好的。那麼讓我從第二部分開始。因此，第四季 30% 的減少將持續下去。我們將繼續做我們必須做的事情來靈活業務以實現這一目標。再說一次，我說的是大約 30%，無論營收情況如何。我相信這最終會開始扭轉，所以你必須小心，不要做太多永久性的結構性行動，從而妨礙你的反應能力。所以我們會關注這一點。我們顯然不會讓暫時的事情永遠持續下去，因為這對人們不公平，然後我們就必須把它們變成永久性的。但我們將逐季審視這一情況，並作為一個團隊做出這些決定，但我認為你可以預見到衰退和彈性。請記住，您現在看到的復原力是五年來形成的。這是我們一直在做的工作——我想說，甚至在那之前。這些邊緣上的階梯之所以出現，是因為我們在過去 20 年裡所做的所有行動。 20 年來，我們一直在建立更具彈性的業務模式。這就是我們能夠在這裡表演的原因。但具體來說，您已經看到過去 5 年中利潤率顯著增加，為此您可以直接指向獲勝策略 2.0。

The trends on -- in April for LORD and Exotic. So I don't really want to go into too much detail on this. I would just say that LORD would be probably half as better than what you saw for legacy Parker, at least half better, I mean, less -- half less bad. That's a way to say that in English. And I would say the same thing for -- and even better for Exotic because Exotic is probably going to be able to hang in there at a high single-digit type of decline because of their very strong military business. And that's what's really helping that. We've been able to pull forward and our customers have approved this, the F135 work, and we just happen to be very fortunate, and thank you to the Exotic team for having such a big bill of material on one of the premier military programs really in our history.

4月LORD和Exotic的趨勢。所以我真的不想對此討論太多細節。我只想說，LORD 可能會比你所看到的遺留帕克好一半，至少好一半，我的意思是，更少 - 更少糟糕。這是英語的一種表達方式。我想說同樣的事情，對於異國情調甚至更好，因為異國情調可能會因為其非常強大的軍事業務而能夠保持高個位數的下降。這才是真正有幫助的。我們已經能夠向前推進，我們的客戶也批准了 F135 的工作，我們非常幸運，感謝 Exotic 團隊在一項重要的軍事項目上提供瞭如此大的材料清單確實在我們的歷史上。

Our next question comes from Nicole DeBlase of Deutsche Bank.

我們的下一個問題來自德意志銀行的 Nicole DeBlase。

So I just wanted to talk a little bit more about distributor inventory levels. If you could just comment on, do you think distributor inventories have rightsized for the current level of demand? Just trying to gauge how much restocking would be required as we come out of this and end-user demand increases?

所以我只想多談談經銷商庫存水準。如果您可以評論一下，您認為經銷商的庫存是否已根據當前的需求水準進行調整？只是想估算一下，當我們走出困境以及最終用戶需求增加時，需要補充多少庫存？

Nicole, this is Lee. My sense is that inventories are in line with demand. They're not buying anything. They're conserving cash. So what I think you would see is a pull-through on real demand through the channel back to Parker-Hannifin.

妮可，這是李。我的感覺是庫存符合需求。他們不買任何東西。他們正在節省現金。因此，我認為您會看到的是透過管道返回帕克漢尼汾的實際需求。

Okay. Got it. That's helpful. And then on the leverage, is the expectation that you guys have more opportunity to continue paying down debt in the fourth quarter? Or is the next tranche of that likely to be coming in 2021?

好的。知道了。這很有幫助。然後在槓桿方面，是否期望你們有更多機會在第四季繼續償還債務？或者下一部分可能會在 2021 年推出嗎？

Yes, Nicole, this is Cathy. We'll watch how things are going through the fourth quarter. But if you look at our expectation for cash flow, we will have some flexibility, I believe, to pay down additional debt during the quarter. And if we're comfortable going into next year in the position that we are, then I think we will definitely do that.

是的，妮可，這是凱西。我們將關注第四季度的情況。但如果你看看我們對現金流的預期，我相信我們將有一定的彈性來償還本季的額外債務。如果我們能夠以現在的狀態進入明年，那麼我認為我們肯定會這麼做。

Our next question comes from Ann Duignan of JPMorgan.

我們的下一個問題來自摩根大通的 Ann Duignan。

This is John MacMillan on behalf of Ann. The question is, can you provide us a little bit more of an update of the lower discount rate environment and weaker equity returns on your pension plan funding?

我是約翰·麥克米倫，代表安。問題是，您能否向我們提供更多關於較低貼現率環境和退休金計畫資金股權回報疲弱的最新資訊？

Sure. This is Cathy. Our -- the discount rate that we're currently booking expense to was set last June, and we set it once a year at our June 30 timing. And we're at a discount rate of 3.28%. As we disclosed in our Q, if the rate drops 50 basis points, that will have an impact of about $15 million to our expense. We're watching it. We -- as of the June rating last year, we had no required pension contribution due until fiscal year '23. As the rate will likely drop and will have some impact on the need to fund. We don't anticipate it being any sooner than fiscal year '22. And so we have a good year plus before we'd have any -- and that repayment, we think, would be a pretty minimal amount required. So no funding requirements, we don't think, for the rest of this year and fiscal '21.

當然。這是凱茜。我們目前預訂費用的折扣率是去年 6 月設定的，我們每年在 6 月 30 日設定一次。我們的折扣率為 3.28%。正如我們在問題中所揭露的，如果利率下降 50 個基點，將對我們的開支產生約 1500 萬美元的影響。我們正在關注它。截至去年 6 月評級，我們在 23 財政年度之前沒有到期的退休金繳款要求。由於利率可能會下降，並對資金需求產生一些影響。我們預計不會早於 22 財年。因此，在我們還款之前，我們已經度過了美好的一年，而且我們認為，所需的還款金額將是相當低的。因此，我們認為，今年剩餘時間和 21 財年不會有資金需求。

Our next question comes from Stephen Volkmann of Jefferies.

我們的下一個問題來自 Jefferies 的 Stephen Volkmann。

Great. Maybe I guess I could do a couple of longer-term questions here, and I'll just sort of take them together. I'm wondering, it's probably too early to answer a lot of it, but I'm wondering if there's any change in your long-term margin expectation as you have laid out recently? And second to that, given that things look like they could be a little bit different going forward for some of the end markets like you mentioned, aerospace and oil and gas, does that potentially free up some businesses that might be candidates for divestiture going forward?

偉大的。也許我想我可以在這裡回答幾個長期問題，我會把它們放在一起。我想知道，現在回答很多問題可能還為時過早，但我想知道您最近提出的長期利潤預期是否有任何變化？其次，考慮到像你提到的航空航太、石油和天然氣等一些終端市場，情況看起來可能會有所不同，這是否可能釋放一些可能成為未來剝離候選者的業務？

Steve, this is Tom. So the margin targets that we gave you at Investor Day are still the targets. We're not moving off of those. They're still what we're striving to get to for FY '23, and we still think we can do that.

史蒂夫，這是湯姆。因此，我們在投資者日給您的保證金目標仍然是目標。我們不會放棄這些。它們仍然是我們在 23 財年努力實現的目標，而且我們仍然認為我們可以做到這一點。

From the divestiture side, oil and gas and aerospace are still great businesses. And we are able to perform well in those end markets, and we use all 8 of the technologies into those end markets. So they meet all the performance criteria to stay part of the team. And we'll get through these near-term challenges and we're going to reshape those businesses to win in this new market. But these are really strong businesses for us, have all the right kind of returns. So yes, they will stay part of the portfolio.

從資產剝離的角度來看，石油天然氣和航空航太仍然是偉大的業務。我們能夠在這些終端市場中表現良好，並且我們將全部 8 項技術用於這些終端市場。因此，他們滿足了留在團隊的所有績效標準。我們將克服這些近期挑戰，並重塑這些業務，以贏得這個新市場。但這些對我們來說確實是強大的業務，具有良好的回報。所以是的，它們將保留在投資組合中。

Our next question comes from Julian Mitchell of Barclays.

我們的下一個問題來自巴克萊銀行的朱利安·米切爾。

Maybe just a quick question around aerospace again. So you've taken some fixed cost measures in that business. So the assumption understandably is for a prolonged downturn. Maybe just help us understand what you're thinking about aerospace aftermarket within the commercial side, specifically. And is it fair to assume, similar to peers, that decremental margins on that aftermarket decline will be very, very severe?

也許又是一個關於航空航天的簡單問題。因此，您在該業務中採取了一些固定成本措施。因此，可以理解的是，這種假設是長期低迷的。也許只是幫助我們了解您對商業方面的航空航太售後市場的看法，特別是。與同業類似，我們可以公平地假設售後市場下滑帶來的利潤率下降將非常非常嚴重嗎？

And then sticking to aerospace, one of the large defense contractors talked about some production choppiness for the F-35 program. Just wondered if you'd seen any of that or expecting any type of slowdown or disruption on that program on the military side?

然後是航空航太領域，一家大型國防承包商談到了 F-35 項目的一些生產波動。只是想知道您是否看到這些情況或預計軍事方面的該計劃會出現任何類型的放緩或中斷？

Okay. Julian, it's Tom. I'll start with that one. On the F-35, no, we've not seen any choppiness. As a matter of fact, we are accelerating our deliveries. So everything has been fine on that. And then on the commercial MRO, you're right. As you might expect, that's feeling a very sharp decline. It's probably in the greater than 50% type of decline area. And that will take a while to heal. You'll need the public to want to get back in airplanes, but they will. If you think about it over time here, I think the leisure traveler wants the right kind of safeguards and comfort -- are there, will come back, and who knows how long that takes, but they will come back. And the business traveler will come back, but probably not in the levels that you've seen because we've all learned that there's a lot of digital productivity that you could do. And that's why we're designing the structure of aerospace to be able to win because it might take a little while for this to heal. Nobody fully knows, but I think you'll see the leisure side heal faster. The business travel will come back, but probably not come back to 100%.

好的。朱利安，是湯姆。我將從那個開始。在 F-35 上，不，我們沒有看到任何波動。事實上，我們正​​在加快交貨速度。所以一切都很好。然後在商業 MRO 方面，你是對的。正如您所預料的那樣，這種感覺急劇下降。它可能處於超過 50% 的下降區域。這需要一段時間才能治癒。你需要公眾想要重返飛機，但他們會的。如果你在這裡考慮一下，我認為休閒旅行者想要適當的保障和舒適感——在那裡，會回來，誰知道這需要多長時間，但他們會回來的。商務旅行者將會回來，但可能不會達到您所看到的水平，因為我們都知道您可以提高許多數位生產力。這就是為什麼我們設計的航空結構能夠獲勝，因為這種情況可能需要一段時間才能治癒。沒有人完全知道，但我認為你會看到休閒方面恢復得更快。商務旅行將會恢復，但可能不會恢復到 100%。

But then you'll have the demographics that we were there before -- is that aerospace tends to follow GDP historically and tends to follow GDP at 2x GDP. So once you get through this kind of reshaping of aerospace, it will start to then follow that kind of growth rate, which is a nice growth rate, and we will continue to have this business perform well. We will do the things to make aerospace as creative a business as it is now, to be great in a tough environment.

但隨後你會看到我們先前的人口統計數據——航空航太業在歷史上往往遵循 GDP 的規律，並且往往遵循 GDP 的 2 倍。因此，一旦航空航太業經歷了這種重塑，它將開始遵循這種成長率，這是一個不錯的成長率，我們將繼續讓這項業務表現良好。我們將盡一切努力，使航空航太成為像現在這樣富有創意的企業，在艱難的環境中取得卓越成就。

Latif, we have time for one more question.

拉蒂夫，我們還有時間再問一個問題。

Yes, ma'am. That question comes from Andy Casey of Wells Fargo Securities.

是的女士。這個問題來自富國銀行證券的安迪凱西。

Hope everybody's well. I just was looking for a little bit more color on the -- what you may be seeing on the distribution inventory actions. Going into the quarter, it looked like those might be stabilizing a little bit. Clearly, April, they probably fell off. But is the pattern kind of stabilization and then reacceleration?

希望大家都好。我只是想尋找更多關於您可能在分銷庫存操作中看到的內容。進入本季度，看起來這些可能會稍微穩定下來。顯然，四月，他們可能會掉下來。但這種模式是先穩定然後再加速嗎？

Andy, I think the way I would characterize it, you're right. They were declining to stabilizing in March. I think the second half of March, there was -- the channel saw what was coming, there was a conservation of cash, really not buying anything. We saw a direct impact through our divisions from distribution. I would tell you, in April, as Tom characterized, they're down about as much as the OEMs are down right now. So I think any kind of rebound we get in demand will facilitate a rebound in demand directly to our divisions.

安迪，我認為我對它的描述方式是對的。 3 月的情況逐漸趨於穩定。我認為三月下半月，渠道看到了即將發生的事情，保留了現金，實際上沒有購買任何東西。我們看到了分銷部門的直接影響。我想告訴你，正如 Tom 所描述的那樣，四月他們的下滑幅度與 OEM 廠商目前的下滑幅度差不多。因此，我認為我們的任何需求反彈都會直接促進我們部門的需求反彈。

And then should we kind of look at the distribution in terms of regions as similar to what Tom had laid out in terms of China getting a little bit better, down less, maybe getting better? And then the other regions, still down?

然後，我們是否應該像湯姆所闡述的那樣，從地區角度來看待分佈情況，即中國變得更好一點，下降更少，也許會更好？那麼其他地區，還低嗎？

Yes. I think the way to think about distribution is really the reemergence of the manufacturing base. So a lot of our distribution is dealing with MRO activities inside the manufacturing space. And when they're closed, they're not buying anything. So we've seen a rebound in distribution in Asia, China specifically, Europe has been incredibly soft, along with North America and Latin America.

是的。我認為思考分銷的方式實際上是製造基地的重新出現。因此，我們的許多分銷業務都在處理製造領域內的 MRO 活動。當他們關門時，他們就不會買任何東西。因此，我們看到亞洲（特別是中國）的分銷出現反彈，歐洲以及北美和拉丁美洲則非常疲軟。

This concludes our Q&A session and the earnings call. Robin and Jeff will be happy to take your calls should you have any further questions. Thank you for joining us today. Stay safe and enjoy the rest of your day.

我們的問答環節和財報電話會議到此結束。如果您還有任何其他問題，羅賓和傑夫將很樂意接聽您的電話。感謝您今天加入我們。確保安全並享受剩下的一天。

Ladies and gentlemen, that concludes today's conference call. Thank you for participating. You may now disconnect.

女士們先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。