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Parker Hannifin's CEO Discusses F4Q2012 Results - Earnings Call Transcript

The margins were strong 15.5% that also will go down in the record books as a record for the fourth quarter.

Cash flow was strong. We generated over $0.5 billion in operating cash flow in the quarter, I can remember years when we didn’t generate $0.5 billion. So this is pretty exciting for the company.

We also -- so those are some of the quarter highlights, for the year then we closed out the fiscal year for Parker with a number of records as well. That includes the record sales of $13.1 billion that was up 6.5%, just and I might want to point out that most all of that was organic growth in a very tough economic environment out there.

Total segment operating margin, which is really a highlight for the year was a record exceeding 15% and that was the first time in our history and for those of you that have been tracking us for a number of years, you’ll remember 10 years ago, when we launched the Win Strategy, we talked about hitting that 15% target. So we’re popping the champagne corks here a little bit, in the background if you hear some corks popping that’s what it’s all about.

But you may recall that as we went through this last 10-year period. We consistently improved margins year-on-year even in some pretty ugly periods where we had two major recessions for the company.

So, we -- in that 10-year period we dealt with two major recessions, we drove the margins up to what we see now as a record first time in the history of the company at 15%. And I know what everyone’s thinking that well this must be it, now that you’re at 15% only direction to go is down.

I would just point out one thing and that is, if you look at our North American industrial margins, we hit 17.6%. So we certainly don’t think that it’s the end of the road. I think there’s more room on the topline and certainly on the operating margin line to continue to move these to higher levels. We can talk more about that later in the Q&A session.

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