Good day, ladies and gentlemen, and welcome to the First Quarter 2015 Parker Hannifin Corporation Earnings Conference Call. My name is Genaida, and I will be your operator for today. At this time, all participants on a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to, Ms. Pam Huggins, Vice President and Treasurer. Please proceed.

Thanks, Genaida. Good morning, everyone. It’s Pam speaking, just as Genaida mentioned. I’d like to welcome you to Parker Hannifin’s fiscal year 2015 first quarter earnings release teleconference. Joining me today is Chairman, Chief Executive Officer and President, Don Washkewicz; and Executive Vice President and Chief Financial Officer, Jon Marten. For those of you who wish to do so, you can follow today’s presentation with the PowerPoint slides that have been presented on Parker’s website at www.phstock.com. For those of you not online, the slides will remain posted on the company’s investor information website one year after today’s call. At this time, if you will reference Slide #2 in the slide deck, which is the Safe Harbor Disclosure Statement addressing forward-looking statements. And I ask that you please take note of this statement in its entirety if you haven’t already done so. This slide also indicates, as required, that in cases where non-GAAP members have been used, they have been reconciled to the appropriate GAAP numbers, and are posted on Parker’s website again that phstock.com. Slide #3. This is the agenda for today. It consists of four parts. First, Don, Chairman, Chief Executive Officer and President will provide highlights for the first quarter. Second, I’ll provide a review, including key performance measures, for the first quarter, and then of course conclude with a revised guidance for fiscal year 2015. The third part of the call will consist of our standard Q&A session. And so in the fourth part of the call, Don will close with some final comments. So at this time, I’ll turn it over to Don and ask that you refer to Slide #4 titled Highlights, First Quarter Fiscal Year 2015.

Thanks Pam and welcome to everyone on the call. We certainly appreciate your participation today. I’ll make a few brief comments and then Pam is going to return for a more detailed review of the quarter. I’ll address capital structure in a moment, but first I want to review a very strong first quarter for the company. I’m pleased we’re up to such a solid start to the year, as we executed well, delivered strong results and reinforced our view that this will be another record year for the company. The first quarter highlights, we had a record first quarter sales at $3.3 billion up slightly from last year’s first quarter. Organic growth adjusted for the GE Aviation joint venture increased almost 4%. So, we’re very pleased with that. Orders increased 5% and we’re positive across all segments, but especially strong in Aerospace. Total segment operating margins reached 15.9% and we’re certainly very pleased with those numbers, and that’s a 150 basis point increase from last year’s first quarter and on an adjusted basis reached 16.1%. This is a result of the success for restructuring completed last fiscal year. Our performance is led by an all-time record for segment operating margins in our Industrial North American businesses at 18%. Both Aerospace Systems and Industrial International had meaningful increases in margin this quarter compared with a year ago. Notably, the Industrial International margins reached 15%. And that’s a great number considering Europe and Latin America are still pretty weak for us. So, hitting 15% was a great accomplishment. Operating cash flows was again strong at $261 million and we anticipate that fiscal year 2015 will be our 14th consecutive year of cash flows greater than 10% and we’ve generated greater than 10% ever since we launched the win strategy back in…

Thanks Don. At this time, I ask that you reference Slide #5 and I’ll begin by addressing earnings per share. If you go to the far right of this slide, you can see that the first quarter came in at $1.89 versus $1.67 for the same quarter a year ago, an increase of $0.22 or a 13%. Restructuring were originally planned at $0.07 with $0.04 in the quarter and this compares to $0.06 for the same quarter a year ago. So, moving to Slide #6. This chart lays out the significant components of the lock from adjusted earnings per share of $1.67 for the first quarter of last year to the $1.89 for the first quarter of this year. And as you can see by looking at the slide, the significant contributors to the increase was segment operating income of $0.24. And this was due to better performance across all segments with a little offset due to the higher below the line expenses $0.02. And this is a result of less stock compensation expense offset by higher tax rate due to the elimination of the R&D credit and favorable discrete items last year. And I think that’s not new to you. So, moving to the next Slide #7. On the far right in the blue box commencing, if you go to the fourth line down, you can see that adjusted organic sales in the fourth quarter or in the first quarter increased almost 4%. So, we’re real happy with that 4% increase. And this takes into account just as a reminder the joint venture that commenced October 1st of last year. There was minimal impact to sales in the quarter from acquisitions, and currency or FX originally planned to be positive reduced reported sales by $23 million or 7/10 of…

[Operator Instructions] Your first question comes from the line of Jeff Hammond with KeyBanc Capital Markets. Please proceed. Jeff Hammond – KeyBanc Capital Markets: Good morning.

Good morning Jeff. Jeff Hammond – KeyBanc Capital Markets: Pam congrats on the retirement and best of luck.

Thank you so much, it’s been a pleasure Jeff. Jeff Hammond – KeyBanc Capital Markets: Okay, so just on the – just to be clear on the buyback are you guys doing a 10b5 or you will be in it every day or will you be more opportunistic and have your normal blackouts? And maybe just to follow on, what kind of gets you to the higher low end to that $2 billion to $3 billion?

Okay, Jeff Jon here, I’ll start out, I think we are going to continue with our 10b5 just as we have right now as Don said for planning purposes, best to use a straight line method for yourself. The actual results are likely to be lumpy. So, we’re going to be reviewing matters as the in sewing quarters go on. And it’s going to be something that we’re going to be focused on every day. Jeff Hammond – KeyBanc Capital Markets: Okay, and what takes you to the higher low end?

I think that, we’re going to just take it one quarter, our best advice right now Jeff, is that we’re just going to take it one quarter at a time, we’re going to update it every quarter as to what the results are. We would be able to tell you more about the high or the low end as we get into the program and time goes on. I don’t want to say anything to lead you to believe it is going to be closer to the low end or at the high end on this call. Jeff Hammond – KeyBanc Capital Markets: Okay great. And just a quick follow-up, can you just talk about what trends you’re seeing in Europe just on an underlying basis, what you saw kind of coming out of the summer shutdowns in the September, October and we’re hearing certainly mix things and just want to get your sense of Europe?

I think you know to just start out on that Jeff in Europe things came in exactly as we had put our guidance together. We had a good July not a great August, again accounting for the normal shutdowns that we see in August. And then we had exactly what we expected in the month of September, things are not ramping up, things are not ramping down things are relatively flat in Europe when we take a look at the orders. And that’s what we’re seeing right now, of course the major change on our guidance going forward is just the impact of the strong dollar vis-à-vis euro. And that’s how we’re seeing and that’s how Europe is looking to us right now today. Jeff Hammond – KeyBanc Capital Markets: Thanks.

Your next question comes from the line of Mig Dobre from RW. Baird. Please proceed. Joe Grabowski – RW. Baird: Hi good morning everyone, this is Joe Grabowski for Mig. Really nice recovery in the International operating margins, just wanted to maybe find out if some the restructuring disruptions you had last quarter, it seems like perhaps those were worked out this quarter?

Yeah that’s a fair assumption, we were really quite worried that in Q4. We talked about it a lot in our Q4 conference call. Those kind of disruptions, the restructuring related costs that we were experiencing in the Q4 of last year have all that been eliminated here, our plans are being executed very well by our team mates and we are very pleased with the results internationally here at this past quarter. Joe Grabowski – RW. Baird: Great, okay thanks. And then maybe just a quick follow-up, you kind of gave sort of the cadence of business in Europe, could you maybe talk about how the quarter progressed for North American industrial and maybe what you’re seeing so far in October?

Well right now in terms of the orders in North America, first your last question first for October, it’s right into where our guidance is coming out. So nothing remarkable there to report out on two you that was along with our orders, that was along with our guidance. In North America, in the quarter, the results as we saw them in July, August and September again sequentially August is always lower than July, which is what we saw and September was sequentially better than August and September was slightly better than the month of July. Joe Grabowski – RW. Baird: Okay great, thanks for taking my questions.

Sure.

Your next question comes from the line of Nathan Jones with Stifel. Please proceed. Nathan Jones – Stifel: Good morning Don, Jon and Pam.

Hey Nathan. Nathan Jones – Stifel: If we could just go back to the beat in the quarter, it seem to me when you gave the guidance for this quarter that you had some vigor in built in there for possible cost over runs from the restructuring in Europe, how much of that improvement in Europe or you know the beat relative to your guidance was not incurring those costs, good execution on the restructuring versus fundamental improvement in the business?

I think Nathan, there is certainly was some hesitation on our part in the month as we were putting the guidance together in terms of whether happen in Q4 for Europe. But a significant part of the beat that you are looking at above the segment line is coming from a tremendous performance in North America, our North America Industrial business. With an all-time record 18% return on sales as we’re reporting externally. And that was even bigger and the slight beat that we saw in Europe and the more that we have since of what it transpired in Q4 last year. Nathan Jones – Stifel: And on those margins in North America, which were obviously extremely strong, was there anything that positively impacted that lot makes our price et cetera. This is normally your second lowest revenue quarter. Are they sustainable kind of margin levels do you think?

Well first of all to answer your first question it was across the Board, excellent performance every product grouping across the company in North America. So there is no mix issue that kind of crops out here, are these margin sustainable. Well, we have for the year higher guidance and Diversified Industrial North America at very good margins for us. We’re not showing that it can be sustained in Q2 or Q3, Q2 is always sequentially a little bit lower in terms of the top-line and Q3 we start to catch-up and around Q4 we will be very close to that same number in terms of our return on sales. And so for the whole year, we will be slightly below the 18 that’s what’s indicated in our guidance, but we will be in our guidance showing and we are showing all time high North America Industrial margins. Nathan Jones – Stifel: And once a little up just on the balance sheet, Don you can’t get read it out with me one on the balance sheet, I know you guys would have like to be able to get deals done over the past 12 months or so before getting to those point, can you talk about, what got in your way from getting those deals, Don whether it was discipline on price or what led you to not be able to get those done?

Nathan Don, just so that everybody on the call recalls what we had said in the past, it’s been about three or four quarters that of course everybody was asking what, how we’re going to deploy capital and so forth, that’s we’re building up cash balances on the balance sheet. And just sort of I can let you know now, what was going on, we had been in very serious discussions with a couple of major opportunities, acquisition opportunities in which case I would have needed all of the capital, all the cash that we had on the balance sheet and then some. They were very significant, we were in confidentiality agreements with them, I really couldn’t disclose or say anything at all at the time. So, we kept putting you up and I know that that was frustrating for all of our shareholders out there, that we – weren’t taken any positive action, I think they were thinking that we’re dragging our feet for one reason or other. But we were very, very seriously involved in a couple of major ones. We just couldn’t bridge the gap at the end of the day, the – we’re pretty disciplined, we have and these being strategic acquisitions. We felt that we had an advantage over other potential parties that would be interested from a standpoint that we would have more synergies. And so, even using a synergistic model with building and all the synergies, we still came up significantly short from what the expectation of the sellers were so. We agreed to part ways and at some point in the future maybe we’ll come back together, I think we kept everything friendly and I think there was just a difference in expectation or evaluation expectation that was the main reason why…

Thank you, Nathan.

Your next question comes from the line of Eli Lustgarten with Longbow Securities. Please proceed. Eli Lustgarten – Longbow Securities: Good morning everyone and me too wish you the best Pam.

Thank you, Eli, the pleasure is been mine. Eli Lustgarten – Longbow Securities: Can we talk about what you’re seeing in the marketplace in demand across the Board, you’ve gone to plus or the minus in this segment. And the order – your order in North America were quite actually, quite respectable for the quarter, and can you give us some idea, well we’re seeing of course business at this point if we go into the end of the year?

Yeah, I think I can do what I have done in the past, is seems like people would like to hear a little bit about, first I would give you a little color on the PMI and then I’ll give you a little overview on the regions and then maybe going to some specific market segments kind of wrap it up. But just starting off on the PMI and this would be comparing PMI of June to PMI of September basically, and I’m going to run you through the regions globally of just a little bit about 4/10 still tracking north of 50 at 52.2. So, globally we’re still on positive territory there. The U.S. was the – a very nice pick up since June, June was 55.3 we’re at 56.6, so it was a pickup of 1.3, which was good. The Euro zone was just the opposite, it went down to 50.3 from 51.8 was up 1.5. Germany was a big negative within the Euro zone of course Germany makes up a big part of that Euro zone. And Germany came in just above 50 was running more around 52 in June and now tracking around 50. So just off about 2 points. China off about a half tracking at about 50.2 right now in September and Brazil was under 50 at 49.3. So just some general comments about the PMI, all the PMIs are 50 or greater which bodes well with one exception and that is Brazil and they are very closer at 49.3.But I think when you look at just the PMI keep in mind my understanding of the way it works is that when you are at down as low as 44 you can still be growing, but had a much lower rate. So, all of…

Pricing and raw materials first of all, let me just touch on raw materials, because it’s tied in with pricing. We’re seeing quite a few of the inputs there as far as raw materials going up, steel and aluminum both are going up a little more to actually up to 20%. This is comparing trends from October last year to October this year. And copper is down just slightly, steel is up. So, what we’re doing is as we have done in the past, our time for reviewing pricing on the distribution channel is January and July. So, we’ll approach, we’re going to be approaching that here in the next month or two. So, I anticipate we will maybe making some adjustments depending on the raw material involved in the product involved. Keep in mind that our goal here is for the, we have like what we call PI index that purchasing price index, the goal is to keep that less than 1, we’ve been running less than 1. So, we’ve been recouping any increases in our input cost effectively. And the other thing we track very closely worldwide is our sell price index and that’s been tracking greater than 1. So, it has been running greater than 1 for considerable period of time. So, we’re recovering basically what that tells is recovering our cost plus the margin. So there will be some adjustments in January and if these increases continue, we’ll have to adjust them again mid-year. And then the other thing we do is for the OEMs, we look at the pricing at the anniversary of the contracts that we have with the OEMs and make the appropriate adjustments and negotiate those adjustments at that time. Eli Lustgarten – Longbow Securities: Thank you very much.

Your next question comes from the line of Jamie Cook with Credit Suisse. Please proceed. Jamie Cook – Credit Suisse: Hi good morning, can year hear me.

Hi Jamie, yes we can hear you. Jamie Cook – Credit Suisse: And Pam congratulations.

Thank you, Jamie. Jamie Cook – Credit Suisse: So, just a couple of questions and I apologize, because this is like four different calls going on at the same time. But, can you just give us an update, on the Aerospace side your confidence level with the margin projections that you guys have given where we are in the first quarter and the headwinds that we’ve experienced over the past couple of years? And then my follow up question is just back sorry again on the share repurchase again, can you just talk, you talk to your assumptions of the timeline, but can you just talk to how you plan to finance, would you take on that should be expected to be, you will just use your free cash flow, will you repatriate cash from oversees, if you can just walk through that? Thanks.

Okay Jamie, Jon here. First on the Aerospace margins, we’re expecting to be coming right around guidance. We had a slight beat here in Q1. We are concerned as always about the trends that we see and the development expenses. That might be a little bit higher than what we were talking about for the year, maybe $5 million to $10 million. But, still we’re expecting R&D as a percent of sales around 9% for the year and we’re expecting our guidance at – we’re expecting the results to come in right at the 13.5 range. Now in terms of the share buyback, we’re going just use cash that we have on hand in the U.S. as well as our, Commercial Paper line that we have that we use that you’ll see that and it’s payable portion of our balance sheet and so it’s just the cash that we generate, the cash that we have here in the U.S. and our Commercial Paper line that’s how we plan to fund the share repurchases. Money that is oversees, we’re – it has been permanently reinvested oversees. Jamie Cook – Credit Suisse: All right, thank you.

Thank you.

Your next question comes from the line of David Raso with ISI Group. Please proceed. David Raso – ISI Group: Hi, just quick question on the sales guidance for International, I was curious you lowered it solely on currency. Can you take us through the moving parts geographically, did you raise your outlook on Asia to offset a weaker outlook on Europe or is everything generally been maintained?

Well David just big picture, you are correct, we Asia is trending better than we expected and so, the trends in Asia are offsetting the weakness that we’re seeing in Europe without regard to the currency as it turns out the currency offsets the impact overall internationally, but when you break it down a little bit further we are seeing some pretty good growth and better than we expected in Asia and in some of our key end markets. David Raso – ISI Group: Can you flush that out a little bit where is Asia providing you the upside?

Well, it’s – this would go along with some of our rail businesses, our marine businesses, our oil and gas businesses. This would be centered around some of our engineering materials group, some of our filtration group, some of our life sciences businesses that are cut across all of our groups. So it’s no one end market David, but it’s – but it’s the mobile construction which of course is been a problem is flattening out there and again we’re seeing another end market, other key end markets in Asia some of the signs of mid-single digit to a little bit higher growth there in some those of markets that I just mentioned. David Raso – ISI Group: So the net ex-currency is international is still expected to be up a little bit, can you help us a little bit with how much is Europe down in that total International up slightly ex-currency?

Yeah, I don’t want to give you an impression that Europe is down very big, it’s not – it’s just down slightly, it’s relatively flat, it’s just the currency that we seeing that we’re calling out here on the call. And Asia is up slightly, but I don’t want to give you the impression that in our guidance Europe is coming in extremely weak it is not, it’s coming in right as we have kind of put our guidance together just slightly, slightly down but not significant at all.

And David, just kind of regrouping back at the order trends, that’s evidenced by the order trends of 3/12 being running at about a 112, 12/12 at 100. So it’s pretty flat. David Raso – ISI Group: I appreciate the color. Thank you.

Your next question comes from the line of Joel Tiss with BMO. Please proceed. Joel Tiss – BMO: Hey guys, how is it going?

Good, how are you? Joel Tiss – BMO: That’s good, all right. This other expense line, I don’t know if you talked about that or not, it’s down $26 million in the quarter, I just wondered what was in there?

Well in the – on the other expense it is really a reduction in our stock option expenses just less stock option expense. We do that once a year in the company and it came in significantly lower for that line that we in plan drill. So that’s what we called out in our opening comments. Joel Tiss – BMO: And is there any reason why well to sort of going to blue two weird questions together, is there any reason why you’re not updating your long-term operating margin targets. You always talked about 15% seems like your pretty there now, I just wondered if there is another level. And any reason why you’re not including share repurchase in your forward guidance?

Well in terms of the share repurchase in the forward guidance, because it is likely to be lumpy as time goes on. We’ve thought the best thing to do for everybody understanding the models that we’re working with is to just give the advice that it would be, just straight lined over the next 24 months. And in terms of the – in terms of updating our long-term operating margins, of course we would, we don’t see a limit to the up increasing margins that we are seeing right now. We feel like that 15% is always been the number that has been over the cycle that is something that we’ve been really keyed on in areas of the world like we are right now and North America we’re able to 18. And so, it is something that we are very proud of here, but we don’t want to set a new level of expectations at this point. Don, but you want to add on to that?

I would just say that, if you look at what we were heading, we’re at 15% here; we’re going to close the year at 15%. And what I would consider kind of medio per year, with two of our regions doing recently well North America and then Asia. And two pretty much flat under back being Europe and Latin America. So, I think you can see that any tailwind that we get, going forward is just going to be accretive to our margins. I think it’s going to obviously be accretive to the MROS that will be generating. I think when you look at Aerospace, Aerospace is still well below where we think it will ultimately be and I think as we bleed off some of the R&D, the NRE expense, that R&D that we’ve been experiencing because of the new programs. I think you’re going to see margin improvement certainly across that platform. I think the other thing is, you’ve heard now about our self-help program, everybody was very positive on that this last year. And we appreciate that the fact that you’d hung in with us through that process. And but we’re not done, there is some more restructuring going on right now, some of that’s baked in to the obviously, into the numbers that you see. But as we fully appreciate the full impact of all of these restructuring that’s going to help margins as well. The other thing going on in the company that we don’t talk about a whole lot certainly on these cost is the innovation and as we drive more and more innovation new product, new to the world, new to the industry type products out there, our margins are going to increase. And then lastly, I would say and we already talked…

Thanks Joel.

Your next question comes from the line of Alex Blanton with Clear Harbor Asset Management. Please proceed. Alex Blanton – Clear Harbor Asset Management: Thank you.

Good morning Alex. Alex Blanton – Clear Harbor Asset Management: Good morning and congratulations Pam.

Thank you. Alex Blanton – Clear Harbor Asset Management: A quick question on the – the payout ratio that you indicated. If you take the new quarterly dividend rate $2.52 a year and divide that by the midpoint of your guidance, is a 32.5% payout. To be a 30% payout you would have to earn $8.40 here. So, could you just clarify that?

Well Alex, Jon here. My math comes up a little bit differently, here we’ve got, I’m showing at around 31, but of course you’re not far off. So, we are of course going to always grow. We’re at, we have not talked about our FY’16 and what we expected FY’16 in terms of the top-line growth as well as EPS. But our goal that we have set a few years ago it was to get to a 30% payout ratio. And I don’t think that there is anything wrong with the calculation that you just did. And but, I’m not sure you might want to just check your calculations on the share buybacks and what the straight line of the share buybacks would give you in terms of the 31, I think it might move from 31 to maybe around 28 or 29. Alex Blanton – Clear Harbor Asset Management: And so you’re at 30, so you are 31% takes into account reduction number of shares?

31% is that exist right now today uses the current shares. Alex Blanton – Clear Harbor Asset Management: Oh current shares?

Yeah, but I think that if you – if you just assumed in your calculation the advice that we gave at the outset, I think it will go below 30. Alex Blanton – Clear Harbor Asset Management: You know I just did a simple calculation.

Right. Alex Blanton – Clear Harbor Asset Management: Dividend were 8 per share divided by earnings per share.

Right. Alex Blanton – Clear Harbor Asset Management: Okay I see were just high. All right the second question sort of relates to Joel’s previous question, you had an incremental margin overall 111% in the quarter with profit up 49 million on 44 million increase of sales. And that was composed of 33% incremental margin in North America and then in rest of world and Aerospace you had higher profit on lower sales. So that was the result of your restructuring program which I assume continue to show some results this year. But going forward after that and relating to the possibility of even higher operating margins, what do you think you can generate normally as the incremental operating margin without any further restructuring?

Normally? Alex Blanton – Clear Harbor Asset Management: Normally going forward after the restructuring is all in, why would you continue to expect leverage?

Our cost structure right now normally will give us about a 30% margin return on sales as the business unfolds overtime. That’s what our cost structure gives us across the Board for all of the segments. Alex Blanton – Clear Harbor Asset Management: 30% well, of course if you carry that out for ever you would raise your operating margin 30% ultimately.

Right, right.

Thanks Alex, we try to make people understand that. So, thank you, you just have that. Alex Blanton – Clear Harbor Asset Management: My point is that there is upper limit, but is pretty it can be well above where you are now.

Right, yes sir. Alex Blanton – Clear Harbor Asset Management: Okay thank you.

Thank you.

Your next question comes from the line of Josh Pokrzywinski with Buckingham. Please proceed. Josh Pokrzywinski – Buckingham: Hi good morning guys.

Good morning Josh. Josh Pokrzywinski – Buckingham: So, just a couple of clarifications, first on the pacing of the buyback. I guess, first why not try to frontload that to the extent that, that the free cash flow enables it? And then I guess secondly, just looking out into the coming years, especially with the CEO transition coming up. How should we think about, any discretion on the low end of that range to the extent deals come up? I would imagine that whoever takes the reigns from down here, wouldn’t want to feel handcuffed by a program, should we think of that $2 billion is being aligned in the sand and if something comes along they are still able to do that, how does, how should that transpire?

We, this is Don. We think that, first of all there is no big acquisition that we’re looking at right now, as I talked about earlier. So the smaller ones that we anticipate coming through will be able to handle those in the normal course, okay. We’re not using every last bit of capacity that we have. So there will be enough capacity to handle a number of smaller ones tuck-in type acquisitions like we’ve – you’ve seen us do on the past pretty effectively. So, I don’t think we will be tying anyone’s hands going forward, as far as the ability to continue down that path and we do want to continue down that path, because we do want to grow the acquisitions as well as internal growth. What was the other question that? Josh Pokrzywinski – Buckingham: You got it item both together, so that was helpful and I guess just as a follow-up Don you mentioned, a couple of whale sized properties that you were looking and the space, and you think from an end market perspective that you could share, color on where you guys were focused?

No I don’t think, I don’t think we want to do that, because of the sensitivity of course of the companies that we’re looking at and the people there. We did have a confidentiality agreement; we are going to honor that even going forward. So, we won’t be disclosing any specifics. Suffice it to say though, these properties has everything we do, makes perfect sense and I would assure you that you would agree with us, would make perfect sense for the company. It’s focused on motion and control, it’s accretive, they are synergistic. Everything that we would do is not going to often and let feel somewhere. So, and it would be good for their company, as we were able to do that. So, I’m still optimistic that down the road that we’ll have another shot at a couple of these potentially. So, but we won’t go on the specifics as far as segment or name or anything for obvious reasons. Josh Pokrzywinski – Buckingham: Understood, thank you very much.

Thank you, Josh.

Your next question comes from the line of John Inch with Deutsche Bank. Please proceed. John Inch – Deutsche Bank: Thanks, good morning everyone.

Good morning John, welcome. John Inch – Deutsche Bank: Good morning Pam, thank you and congratulations.

Thank you. John Inch – Deutsche Bank: So, I just want to ask about the financing again of the share repurchase, I think based on the previous quarter or Q almost all of your cash, Jon was oversees. So, if you, if your sort of stepping this out your dividend is up, and all your cashes oversees did that imply that the repurchase if it’s going to be linear mostly has to be financed with Commercial Paper. And I just, I’m trying to understand the mechanics of how you afford this, it’s in fact it didn’t really have any cash, in the U.S. begin with and you’ve just jacked up your dividend commendably in the U.S. which has to be paid with U.S. dollars?

Right, well, all of your facts are absolutely correct, all of the cash on our balance sheet that you were looking at June 30th was oversees and we use the cash that we generate here in the U.S. I think the in order to pay down CP or to take care of ongoing U.S. need. And so, we would do that same for our share repurchase program, we would use the U.S. cash that we generate which is a significant portion of our free cash flow of course. And we would use our credit line that we have established as it is right now on CP in order to work on the program going forward. And so as we model the straight line guidance that we gave to you, because of the cash generating ability of the company we feel that we can fund the share repurchase quite nicely. John Inch – Deutsche Bank: Maybe another way ask this was, if you prior to the dividend increase in share repurchase authorization, you were generating healthy profit in the U.S. and you wouldn’t have the cash on balance sheet. So, where was the cash going that now allows you to use that cash to in turn fund these actions, that’s maybe the better question?

I don’t have the exact numbers in front of me John, but in the round numbers, I think we took our notes payable line if you look on our balance sheet down approximately in the last 12 months as we were going through this review of this very big opportunities as Don was talking to you about by a total just for those, just for a total of about $900 million in the last 12 months. That could be wrong from that stat, but that’s if you look at the notes payable line in the reduction and that’s where you will see that. John Inch – Deutsche Bank: And that’s probably the filler. And then just big picture I mean be commendably by $0.25, you know it seems like maybe half of that was below or I’m sorry $0.05 that was below the line $0.19 now from currency, we just sort we had the moving parts and it doesn’t seem like you’re really given that you raise the guidance by $0.10 at the midpoint giving yourself much credit for the opportunity based on improving orders. I mean are you, well I mean how much of the $0.10 if you will comes from an expectation that, these improved orders in North America and oversees actually roll through to the rest of the quarters?

Well I think all of the $0.10 is, is really tied into the increased, confidence that we have in our guidance that we set up for the year that we are maintaining in terms of the top-line, but for the translational impact of that you have a strong dollar. So, as we look at that and our guidance. We wanted to take the guidance up by $0.10 and as we kind of added up all the numbers from all around the hurdle that’s the way that, that our calculations came together. And so, I think that our order rates support that, our order rates support our guidance and mind the strongest order rates are in North America and our guidance is over 5% increasing volume in North America. So, I think it ties together quite nicely, looking at the trends in the orders and we feel very confident in our guidance going forward. Hopefully that helps you John. John Inch – Deutsche Bank: That is, thank you.

Thank you, John. We are now five minutes past the hour. So, I’m going to turn it over to Don, who will have some closing comments. And I would just like to thank all of you and it is really been a pleasure working with all of you. And hope to talk to you soon.

So, just a few closing comments. I want to once again thank everybody on the call for joining us this morning to recap our current performance expectations for fiscal 2015 continue positive. Thanks for the restructuring completed in FY’14. Our confidence is reflected in the announcements we just made increasing our dividend 31% and the $2 billion to $3 billion share repurchase program along with a strong quarter to start our fiscal year. As always I will take this opportunity to thank our employees for their continued commitment and success. Our global team has done just an outstanding job executing the win strategy and delivering positive results for the company. I also want to say thanks to all of you on the call for congratulating Pam and her retirement, I know that she is going to miss working with all of you and I will add a special thanks to Pam Huggins for her 30 plus years of service, loyal service to the company and her passion for helping our company and our shareholders. If you have any additional questions Pam and Todd Leombruno will be around the balance of the day. So, I want to thank you once again and have a great day. Bye, bye.