Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2013 Parker Hannifin Corporation Earnings Conference Call. My name is Shaquana, and I will be your coordinator for today. [Operator Instructions] I would now like to turn the presentation over to your host for today's call, Ms. Pamela Huggins, Vice President and Treasurer. Please proceed, ma'am.

Thanks, Shaquana. Good morning, everyone. Pam Huggins here, just as Shaquana mentioned. I'd like to welcome you to Parker Hannifin's Fourth Quarter and Fiscal Year 2013 Earnings Release Teleconference. Joining me today is Chairman, CEO and President, Don Washkewicz; and Executive Vice President and Chief Financial Officer, Jon Marten. For those of you who wish to do so, you may 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, those slides will remain posted on the company's Investor information website 1 year after today's call. So at this time, please reference Slide #2 in the slide deck, which is the Safe Harbor disclosure statement addressing forward-looking statements. Please take note of the statement in its entirety, if you haven't already done so. Now moving to Slide #3. This slide is required and indicates that in cases where non-GAAP numbers have been used, they've been reconciled to the appropriate GAAP numbers, and they're posted on Parker's website as well. Slide #4. The agenda for today consists of 4 parts as usual. Don Washkewicz, Chairman and CEO and President, will provide highlights for the quarter and year. Second, I'll provide a review, including key performance measures for the fourth quarter and year, concluding with the 2014 guidance. The third part of the call will consist of the standard Q&A session. And for the fourth part of the call, Don will close with some final comments. So at this time, I'm going to turn over it to Don and ask that you refer to Slide #5, titled Highlights Fiscal Year 2013.

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 results. First of all, I'd like to start by talking a little bit about the year, the full year. Our performance for fiscal 2013 largely reflected soft global economic conditions, particularly outside the United States. Sales were $13 billion, and they were positively impacted by a 3% contribution from acquisitions but largely offset by a 3% decline organically, which includes the divestiture of our automotive business, which was minus 1%. So we had a plus 3 contribution from acquisitions, offset by 2 organically and then 1 divestiture, or 3 total, which kind of offset the 3% increase from acquisitions. And then we had a negative 1% currency on top of that. So for that, the net for the whole year then was down 1%. I hope that's clear as to how we get to that number. So what was happening basically is lower margin acquisitions were replacing higher-margin organic growth throughout the year. Earnings for the year were within our guidance and were impacted primarily by lower volume and acquisition and integration-related expenses. Segment operating margins were 13.8%, which was a strong performance despite soft economic conditions. Operating cash flow before a discretionary contribution to our pension plan was $1.4 billion, or 10.9% of sales. And I'll just make the comment that this is the 12th year now in a row that we've generated greater than 10% operating cash flow for the company, so we're pretty excited about that. In fiscal 2013, we acquired 8 companies, totaling approximately $0.5 billion in annualized sales. And we completed divestitures within the CIC group, totaling about $155 million.…

Thanks, Don. I'll ask that you reference Slide #7, and I'll begin by addressing earnings per share for the quarter. Fully diluted earnings per share came in at $1.78 for the fourth quarter. And again, this is the highest quarter of the fiscal year and an increase of 6% sequentially versus the third quarter. Of course, the $1.78 is less than last year, $0.18. We did $1.96 last year. So for the full year, fully diluted earnings per share came in at $6.26. And again, $1.19, or 16% lower than last year's fully diluted earnings per share of $7.45. So moving to Slide #8 and just laying out the significant components of the $0.18 decrease in earnings per share for the fourth quarter, quarter-over-quarter. The majority of the $0.18, as you can see on here, or the $0.14, is the result of decreased segment operating income. And this is mainly due to decreased volume in North America. And I notice that most of you did pick that up in your reports this morning. It's also due to acquisition-related expenses and then, of course, inventory reductions that Don talked about, both in North America and in International. Other expense was higher by $0.06 as a result of higher pension expense, and we took the liberty to net some of these numbers here. EPS was favorably impacted by $0.02 as a result of reduced shares outstanding, obviously, in connection with the share repurchases. And then we netted below the line items corporate G&A, interest and taxes as they offset one another. So moving to Slide #9. Sales, again, $6.26 versus the $7.45. We've laid out the components of the decrease here for you of $1.19. And again, as you can see, $1.19 really related to segment operating income. This was mostly due…

[Operator Instructions] And your first question comes from the line of Steve Volkmann, representing Jefferies.

I'm wondering if we can touch a little bit, the cash flow continues to be very strong and the balance sheet also very strong. And Don, you talked in the past couple of 3 quarters about stepping up the share repurchase. But obviously, we haven't really seen that, and I don't think there's any share repurchase in your guidance. So I guess, I'm wondering if you can just address, is there enough in the pipeline acquisition lines that you feel like you want to hold off on this? Is the price not attractive? Or is there some potential for some share repurchase to sort of be additive to all this guidance for '14?

Good question, Steve. I think our priority as far as the capital allocations, first of all, would be the dividends. Okay. And you've seen what we've able to do with the dividends this past year, and we'll continue to work on that. We want to get to about a 30% payout on the dividends, moving up from 25%. So that will continue to be a focus for us. As far as the acquisitions and the share repurchase, our interest right now is in acquisitions. And basically, the interest is strong enough for acquisitions because of the soft global economy that we're faced with. So I think the organic growth for the near term here as you can see is going to be subdued. So what we would like to do is to spend that money on acquisitions as opposed to share repurchase. However, if we're going to continue to do at least $200 million in share repurchases to the 10b5-1, that's kind of a steady-state number for us going forward. However, if acquisitions don't materialize for the extended period of time, I mean, we will definitely consider doing more share repurchase, no question about it. I don't want to leave a lot of money on the balance sheet, not putting it to good use. So we will do one or the other or both for sure. But we also want to hit the dividends. We'll continue to work on the dividends. And then I think we're in pretty good shape on the pensions right now after having what we did last year for the pensions so I don't think we're going to have to allocate much more to the pensions at this point in time. Does that help you, Steve?

It does. But I'm wondering if I can just push you a little bit. I mean, you did about $500 million, I think, in acquisition revenue in '13. Is '14 going to be up meaningfully from that?

We would like to have at least that much. We're targeting like 4% to 5% for acquisitions, and so we'd like to have at least that much. We can handle more if we find the right properties and at the right prices. One of the challenges that you have in any time when you go into an environment like this, especially with acquisitions, from a practical standpoint is as sales -- the global world outlook as far as growth is subdued, of course, that has a major impact on your discounting cash flow valuations. And so there is always this -- the realization have to be a coming -- a meeting of the minds, if you will, between the buyer and the seller as to what reality is going forward. And so there's that challenge that you always have with acquisitions. We will put in what we think is a prudent growth rate. They'll figure that. Of course, the growth rate is going to be much higher, then you have to kind of come to terms with that. So that's one of the challenges you have in an environment like this, especially when there's very little growth, and that depends on where the growth is at as well. For instance, in some of the regions around the world, I'm not sure that you can put much of a growth rate in at all into a model based on what we know right now. So that's where the challenge comes in with acquisitions. I hope you follow what I'm saying there. That's not to say we can't do them, and we're going to continue to look. We're looking at some right now. We'll continue to focus on it, and I'm hopeful that we can meet our target at least 4% to 5% and more. We've got plenty of capacity to do more if we find the right properties.

Great, that's helpful. And just quickly clarifying your 15% target for '15, I think what you're saying is you think you can do that kind of that even in this very slow growth environment that we're all "enjoying." And I just want to make sure that, that's on a segment basis. Is that how you're thinking about that?

That's correct. That's on a segment basis. And you're right, we are not anticipating or projecting anything special happening to get us to the 15% other than the restructuring. Now if we go into a major recession, I mean, all bets are off. But at least if we maintain this kind of activity level, we feel comfortable we can get to 15% in '15 for the entire company. And that's our goal, and that will put us nicely into the top quartile of our peers, and that's where we want to be. That's where we were last year. This year, we fell down a little bit, but we'll be back. We'd be back and next year -- we're taking some pretty definitive action here to get back to where we were.

Your next question comes from the line of Jeff Hammond, representing KeyBanc Capital Markets.

So just a few questions on restructuring. One, can you walk through the cadence of the spend? And maybe just clarify, it looks like most of it is coming in the International segment. And then finally, what is the savings versus the $100 million spend, kind of annualized savings all-in when it's all said and done?

Let me start off, and I'll let Jon and Pam finish. When you look at the actual restructuring, it happens -- the majority of it is going to happen internationally. There is some happening in North America, but the majority will happen outside of North America throughout the year. So that's basically where it's going to happen. And I think if you look at the segment data that we've provided you as far as the operating margin data, I think you'll be able to tell pretty quickly as to where it might happen in the International markets and other segments of our business. And I'll turn it over to Jon and Pam.

Yes, Jeff, just to give you some additional context there. In the press release, we talked about the $100 million in restructuring, and that's the gross number. And we are expecting to get off of that $30 million in savings. And if you take that $100 million in gross expenses for restructuring, take out the $30 million in the savings, add that back, that's how we get to the $0.32 that is on Pam's reconciliation. And that breaks down first half, $0.21, and the last half, $0.11. And that's the net impact here of the restructuring here that we've got built into the guidance for FY '14, and as Don said, the majority outside North America. But this includes all segments, all regions all together here. So as we report back to you through FY '14, we'll be able to detail that for you in more detail at that point.

Okay. Just a consideration, as you go forward and report, maybe if you can spike out into this JV noise, as well as the restructuring noise, I think it'd be a big help in the presentation and reported results.

We'll do. I appreciate that, Jeff.

We will do that, Jeff.

You're next question comes from the line of Mig Dobre, representing Robert W. Baird. Mircea Dobre - Robert W. Baird & Co. Incorporated, Research Division: I guess, first question for me, maybe a little more color on what you're seeing in various end markets and how orders have sort of progressed through the quarter? I remember on the last call, you sort of mentioned that April progressed quite well. So I guess, I'm kind of wondering what changed.

Well, I can tell you what the different markets are looking like for us to kind of give you an idea as to what is looking good and what's not looking quite as good right now might help you with what our order trends are seeing. First of all, the worst 2 segments for us as far as market segments are construction and process markets. Okay? Constructing pretty much globally is down. And I think that is probably the major decline that we've seen in the last quarter or quarters, if you will. Some of the more positive segments are commercial aerospace, both on the OEM side and the aftermarket side. Our distribution is still positive, not as strong as it was but still positive. Farm and ag is a really strong segmentm for us. Cars and light trucks shouldn't be a surprise. That's been doing pretty well. Semiconductor is turning around. It's actually improving now a little bit. Forestry, industrial trucks and industrial refrigeration are all positive. So that would be some of the markets that we're tracking positive. On the downside, in addition to the process and the construction market that I mentioned, oil and gas is softening. And then military markets, both on the defense side, defense OEM and defense aftermarket, are both negative as far as order trends for us. And then the rest of them would be flat. So the rest of them would include things like machine tools, general industrial, power gen and commercial air conditioning and commercial refrigeration. The other thing I might just point out is just what's happening on the PMI because we kind of track along with that to some extent in these various markets. So if you look at the PMI and globally, there's been a slight increase. It's…

Yes, right now, Mig, our guidance is just right around 9%. We were hoping to get it down to 8%. We're going to be striving for is very, very hard to get there. But our guidance indicates 9%, and that's after the impact of the JV, which will reduce sales as recorded once this JV is closed in FY '14 by about $100 million.

You're next question comes from the line of Andy Casey, representing Wells Fargo Securities.

Just a quick question, I guess, on the quarter, the Industrial International margin performance. Could you give us the puts and takes in there? I would imagine a lot of the restructuring, the $0.02 that you called out, is included. I'm just wondering if acquisitions were added, if at all, or if they were just neutral.

I think, Andy, for the Industrial International for Q4, acquisitions are a slight add. They're not, of course, nearly as much of a additional incremental earnings there that we would get from our classic organic business that we have been experiencing there in the Industrial International area. If you look at the results, although we were down quarter-over-quarter by 100 basis points, it was our best quarter of the year in Industrial International. And we do see, as Pam indicated and Don indicated, the Eurozone starting to stabilize and maybe bounce up from the bottom that has been formed and an inflection point being incurred there. Asia, as Pam indicated, which is the other major significant portion of that segment, is still down and the order trends are still down. And we're projecting that to move back up later in the year. That did not move up as quickly as we hoped during Q4 and as we indicated here in some of our earlier commentary here at the end of January and the end of April.

And then on the guidance midpoint that you've provided, Pam, for the first quarter, it seems like that's a normal kind of sequential decline with seasonality. Is the restructuring that you called out, I believe it was $0.21 for the first half, is that primarily weighted to the second quarter?

Yes, yes. There's about $0.07 in the first quarter. And so $0.21 minus the $0.07 is what's in the second quarter. But don't forget, in the first quarter, we also have much, much higher stock compensation expense that falls in that other category. So yes, I think besides those things, then it's the volume.

You're next question comes from the line of Alex Blanton, representing Clear Harbor Asset Management.

Can I ask about the fourth quarter guidance? I think you said $1.40, first quarter, December quarter. You said $1.40 towards the end of your remarks, and that will be versus $1.57 last year. Could you bridge that gap briefly? I don't think you've done that.

No. I think Alex, not to just reiterate what I said. But if you look at '13 versus the first quarter, we always have a lower quarter from the fourth to the first, but I know you're looking at first quarter a year ago.

Year-on-year?

Yes, yes. So we do have lower volume, a little bit of lower volume. We have higher stock compensation expense, and then we have restructuring expenses that are flowing through there. And those are the bulk of the differences.

Okay. What is the restructuring part? Do you know?

Restructuring is about $0.07 in the first quarter.

$0.07, okay. Secondly, the inventory reduction you mentioned, is that company inventory?

Yes, that is company inventory.

Okay. So you're down to what as a percent of sales and inventory?

Yes, we're at 10.6% of sales, which is a record for us.

Record low, right?

Right.

So that contributes to the high cash flow. What did that cost you in terms of absorption? Do you know?

What did that cost us?

Yes, in terms of underabsorption of [indiscernible] when you reduce inventory?

Alex, Jon here. We have calculations that unabsorbed overhead that's related to the inventory reduction is about $0.08 in the quarter in Q4.

$0.08 in the fourth quarter?

Yes, that's it. That's almost a $90 million reduction in our inventory in the quarter.

Quarter-over-quarter, right?

Yes, that was in the -- from the end of Q3 to the end of Q4, yes.

Okay. So that was $0.08 of the shortfall, right?

Yes.

And finally, when you look ahead at next year to this first half to this -- the second half of this fiscal year and all of calendar 2014, really, to what extent are you expecting Europe to recover? Because you've mentioned the beginnings of what could be a substantial improvement that would help you, but I believe that we see that in your guidance, I mean, your guidance at the midrange, if you substract the gain, it's flat, overall flat. And there's no pension cost coming out of it. So really, if you subtract that, it's down.

Well, let me just recap for you what our guidance shows here as we look at the regions around the world. We're looking at all-in a 2% increase built into our guidance in the top line for FY '14. That 2%, Alex, includes about a 2% projection for us for Europe and about a 3% projection for us in Asia. And the balance of it is Aerospace is going to come in flat because of the impact of the joint venture, and the balance of that is in North America, which is about almost 3%. And that's how our guidance breaks down here by region for FY '14 top line, including the impact of that reduction of the Aerospace sales due to the joint venture.

All right. Well, it just make me a little -- I wanted to get to the details because, overall, it doesn't seem like much of a recovery.

Your next question comes from the line of Nathan Jones, representing Stifel. Nathan Jones - Stifel, Nicolaus & Co., Inc., Research Division: If I could just go back to the restructuring actions, you said that you intend to save $30 million in fiscal 2014. Correct?

Yes. Nathan Jones - Stifel, Nicolaus & Co., Inc., Research Division: At the full run rate, what's that annualized savings? What will that annualized savings be in 2015?

$80 million is our best estimate. Nathan Jones - Stifel, Nicolaus & Co., Inc., Research Division: $80 million. Okay. So obviously, it looks like a lot of that is intended to be in Industrial International. And we have been looking at negative auto comps in Industrial International other than this most recent quarter for a year. Can you talk about why this decision to restructure those businesses was not taken earlier?

Well, Nathan, I think the conclusion that we came to is, just like Don alluded to earlier, we're in the point of the cycle as we understand it right now that we knew that, given the growth prospects in some of the regions, that we are going to be doing the restructuring. And let me just emphasize that there will be in all regions in all segments that we'll be doing restructuring in FY '14, that we have always had the policy that pursuant to the WIN strategy that we put in place 12 years ago, that Don talked about earlier, that we would want to have a cost structure that would allow us to get to 15%. And given the organizational structure that we have right now, given as we look at our cost structure here in FY '14, as we were doing the deep, deep planning for FY '14 and really realizing the results that were going to give us the 13.8% ROS in FY '13 versus the 15.2% in FY '12, as we started pulling all that together here during our planning cycle, we knew that there were certain regions and certain buildings and certain facilities and certain businesses that needed to be restructured. We always restructure. We've always restructured throughout the history of the company, but this was such a big number. As we were pulling the planning, we knew that we had to call it out in the press release. Of course, when we look back and we take a look at the mix of the volume, you always are able to take a look at the cost structure and really take a look at our results vis-à-vis our peers. We do that. We do that consistently. We were able to get to 15.2% in FY '12 coming off of a big low. But during the entire business cycle, we knew, for us to maintain 15% going forward, that we could and we should restructure and we should do it in FY '14. And so that was our thinking. Nathan Jones - Stifel, Nicolaus & Co., Inc., Research Division: That's helpful. If I could just get one in on the Industrial North America. Don, you were talking about the PMI numbers earlier. And historically, where the PMI has been for the last 12 months would have had you with order growth in the 0% to 5% range, and you've been down in the high negative single digits. Can you talk about the impact of OEM customer destocking and now that, that's over, why your guidance isn't higher for revenue growth in Industrial North America?

I think that when you look at Industrial North America, I read off those segments to you that we're tracking positive. I think that there was -- we know that there was some destocking going on because we've been paying attention to the press releases from some of our customers as well. But also what we do is we track the 3/12 and 12/12 cyclicals on these various market segments based on our order trends. And I would say we're just now getting to probably the bottom of the destocking cycle. If I can look at, for instance, in the construction end of the business, our 3/12 cyclical is flattening out but well below 100%. It's been flattening out now for several months. But the 12/12 continues to trend down, but it looks like it's probably going to be coming in for a landing here shortly. So I think that we haven't totally seen the end of the destocking, but it's going to be in the near term here. And I think that probably the biggest impact is going to be in the construction part of the construction market segment for us. GDP is looking like about 1.7%. I mean, that's nothing to write home about. I think they started higher than that. The production index is about 0.1%. GDP for the quarter, I think, was started well over 2%, but they keep adjusting it down. So I'm not sure, frankly, what is the real growth out there other than what I can tell from my own cyclical trends and order trends that I'm looking at here. And so we're just being cautious at this point. We're just saying, hey, we're not going to assume anything. I'm not going to budget, set up these budgets for this company based on some blue sky forecast and then have a real fiasco to explain down the road. We're going to set tight budgets and plan accordingly. And if something happens better than that, then we're all going to be happy about what we did. So hopefully, that gives you a little bit of a little color on it.

You're next question comes from the line of Jamie Cook, representing Credit Suisse. Jamie L. Cook - Crédit Suisse AG, Research Division: As you went through sort of this restructuring effort and you thought about what you could do in a flat environment, are there any businesses that you look at that you're just sort of saying, okay, even with this restructuring, they just don't generate optimal returns? And in that regard, are there any businesses -- incremental businesses that you think could be up for divestiture in 2014? The second question is with regards to the acquisitions that you talked about, Don, I think you said you hope to contribute about 4% to 5%. Can you just talk about the size of those? Are they bigger ones or compiled of a bunch of small ones? And then my last question, can you just talk about what you're assuming this year for pension and then material costs?

Wow, that was a long list, Jamie. But that was okay. That covered about all the rest of the topics. Nonetheless, well, let me just... Jamie L. Cook - Crédit Suisse AG, Research Division: But they're quick answers.

No, those are all good questions. On the size of the acquisition, it really doesn't matter to us. We typically have been more successful in the up to $200 million kind of range acquisition or $0.25 billion, whatever. We've had some bigger than that, and we've had a lot smaller than that, of course. We are looking at some larger potential ones. We don't have anything that's imminent. We're going to be able to say, we're going to bring this home this year, but we're always in touch with some little bit larger ones. But by and large, the preponderance of the acquisitions are in that smaller, relatively smaller scale, like a $0.25 billion and less in size. And I would expect that to be the case going forward. If we happen to land one of the bigger ones, that would be great, too. That would be on top of what we're doing. We could handle more as well. We could certainly handle a bigger one if we wanted to do. Jamie L. Cook - Crédit Suisse AG, Research Division: And then on the divestiture side, as you just went through this restructuring exercise?

Jamie, Jon here. Just on the divestitures, for every 10 acquisitions that we do, we do 1 divestiture. We don't do them, as you know, very well very often. There may be a business or 2, nothing really material in FY '14 that we would divest. But that's not nearly the amount of energy that we're spending on the acquisition front, as Don would talk about. So that's our thinking on the divestitures. In terms of the pension, we're showing about $0.17 tailwind built into our numbers for FY '14. And that's largely being offset by certain compensation and benefit offsets to that year, so that's not going to be a real big tailwind for us and certainly nowhere near the magnitude of the headwind that we took coming in from FY '12 into FY '13. And in terms of the material costs, I think we are really not seeing a tremendous amount of change in the input versus the pricing structure here for us. But Don, perhaps if you want to please go ahead and make a few additional comments about that.

Yes, the raw materials, Jamie, actually compared to where we were last time, actually have come down a little bit. Some of them have, some are flat, some of the inputs. I'll give you some for instances here. Castings and steel and zinc die-cast parts and, frankly, oil, those would be some of the categories that have been flat. Natural gas is down. Nickel is down. Nickel would be -- and then some of our stainless and higher alloy products is down. Aluminum is down, and copper is down. So some of the input raw materials are down. Steel is relatively flat. That would be a big input for us. So it's going to be a little bit of a mixed bag, but the general trend, I think, is softening. And I think copper being down is probably directly related to the fact that China has stopped growing and has stopped -- the construction has kind of flatlined over there at least for the time being. And because they were consuming most of the copper on the planet, I think, going back from a year ago. So that's kind of what we see there. We're recouping any kind of increases we're seeing. We're having success there because we track that across the company with our producer price -- our purchase price index, rather, and that is tracking positive for us as far as being less than one, the pricing we're paying now relative to what we were paying. And then the sell price index is tracking good for us as well. So everything there is holding up fine as far as recouping any cost that we're incurring, input cost and recouping the cost plus the margin.

You're next question comes from the line of David Raso, representing ISI Group.

For the fiscal '15 commentary on the margins, just thinking through how you think about base revenue growth in acquisitions, it appears the fiscal '15 EPS number would be roughly $8. I just wanted to see if maybe you would bless that as the framework you're thinking about. And secondarily, the new global technology platforms, if you could just help us size of them to at least put a framework around sizing those 3 platforms within diversified.

David here, Jon. First on the FY '15 $8 per share number, I have to tell you that we have been spending so much time worrying about FY '14 that we have not really focused on the FY '15 EPS number very much. I don't think that you're going to be too far off, but there are so many different variables that are going to be involved in getting that. We feel very confident that we're going to have our cost structure in-line by then, and it's going to be a matter of what happens with the growth rates. If growth rate accelerate past what our guidance indicates, then certainly we've got the capability as a company to do $2 per share per quarter. So it doesn't sound outrageous, but I have to tell you, I don't want to endorse that number here on this call at this point. I hope you understand.

No, I can understand. I guess the idea is more organic growth gets better incremental margins, so my $8 was just doing more of a $2, $3 kind of organic the next 2 years. Obviously, you get more on the incrementals from at least typically from organic than acquisitions.

Very much so. And very much so, our upside leverage, given where we are right now and given the restructuring that we do, is going to be just as good as it's ever been for the company, I think, going forward. We feel very confident in that.

And the new global technology platforms?

Do you want to answer that?

Yes, let me just say, first of all, David, in September, we are going to be coming out with a fact book. Communications has spent a lot of time the last couple of months putting this together, so it's going to give you a lot of information relative to those global platforms that you don't have today. The other thing that we will be doing at the same time is we're going to release historical information for you on a quarterly basis just as we have done for CIC. So you will have all that information at your disposal in September.

And David, just to maybe to give you -- I can give you a little logic for what we're doing, okay, maybe if that will help you a little bit. The motion systems piece basically is going to include the tri-technologies that we have in the company that produce motion and those are the automation technology or electrohydraulics or electric actuation, if you will; hydraulic actuation; and then as well as pneumatics. So it's going to include all those tri-technologies. So it would be a combination of what you would consider in the past being our hydraulic group and our automation groups. Okay? Those would be combined in the motion systems. So that's the way you create movement or motion is through utilizing those technologies. The flow and the process control piece is a combination now of our instrumentation, what was prior instrumentation group or is our instrumentation group, our fluid connectors group. And then also now embedded in there is going to be our refrigeration and air conditioning process control, and that's going to be part of the instrumentation group. So those are the pieces that will be in flow and process control. And the rationale there is they're all similar type products but address different or differing markets, if you will. But keep in mind that all of these products really work together as a system. When we go out and present them to a customer, we're breaking them down in these spaces because they make some logical sense from a technology platform standpoint. In front of the customer, we piece parts and pieces together from all of these platforms to generate the system activity that we have at the customer level. The filtration and the engineered materials segment is basically going to include the filtration group, as we've known it in the past, and the seal group. And the seal group has really morphed into something way beyond what you would consider just seal technology. All of these, both in the filtration and the engineered materials, the filtration group and the seal group, they all have to do with material technology, either their media, material media for filter, applications or steels. And certainly, there's other material technology involved in our seal group like EMI shielding and things like that. The technologies are very similar. They all have to do with material technology and sophisticated materials, and that's the reason why they fell in the filtration and engineered materials group. And then, of course, the last one you already know, and that's Aerospace systems. And those would be the kind of the 4 technology platforms that we would have, 3 Industrial and 1 Aerospace.

Lastly, are there any changes operationally how you're running the company related to these changes? Or is it simply the presentation of your results?

Well, David, in the press release that we did on the CIC consolidation very clearly, there is a set of management that is not going to be managing that CIC group. That management has gone on to other assignments within the company within those 3 technology platforms. So that is operationally a very big change. We had traditionally 8 groups. Now we have 7, and the management of those technology platforms has been put together here in ways that we will really be able to use synergies in working closer together in ways that we haven't been before. But we will still have our 7 traditional group presidents managing those platforms. But they -- because of the reasons Don just articulated here, they go together very well, I think, looking at the outside in at the company. And that's what we're trying to do is just provide more transparency.

And David, what is going to happen when you get that fact book, you're going to get sales breakdown in these areas, okay, these new platforms. And then we're trying to give you just kind of a rule of thumb. And it may not come out exactly this, but I think it's probably going to be pretty close to this. Because I know the next thing everybody is going to want to know is what's the margin by all these segments and then more and more and more information on those lines. But I think what we'll be able to tell you is that, from an operating margin standpoint, that every segment that we have in that Industrial breakup, those 3 Industrial segments, will be within 100 basis points as far as operating margin from the corporate average. So that might help you kind of get a feel that these are all pretty high-performing pieces of the company, and they're fairly close with respect to their ability to generate operating margin.

So at this time, we'll close the conference call with just a few final comments from Don. Thank you for your participation, and we truly appreciate it.

Okay, great. I just want to once again thank everyone on the call for joining us this morning. As always, I want to take the opportunity to thank our employees for their continued commitment and for the success that we've had as a business. Our global team continues to do a great job executing the WIN strategy and delivering positive results for the company. The tone for our new fiscal year is to be, and as I mentioned earlier, is to be cautiously optimistic. If our orders continue their current trend, we could have a record year in fiscal '14. In any event, our restructuring will put us on a path to consistently deliver 15% starting in fiscal '15. If you have any additional questions, Pam will be around the rest of the day. So I'll just say goodbye and have a great day.

Thank you for your participation in today's conference, and this concludes the presentation. You may now disconnect, and have a great day.