You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: Today's agenda appears on slide three.
We'll begin with our Chairman and Chief Executive Officer, Tom Williams, providing an update on Parker's response to COVID-19.
Tom will then discuss highlights from the fourth quarter and full year.
Following Tom's comments, I'll provide a review of our fourth quarter performance together with guidance for fiscal year 2021.
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 calls we can today.
Please refer now to slide four, and Tom will get us started.
A couple of comments from me before we start slide four.
First, I hope that everybody listening in that you and your families are safe and healthy.
And I'd like to extend our thoughts to those affected by this crisis, and our deepest sympathies go out to those that have lost loved ones as a result of the virus.
First, we delivered outstanding performance during unprecedented times, as you saw by the quarter and by the full year results.
And we're living up to our purpose.
We're providing products and technologies that are helping society through the crisis and helping to do our part to create a better tomorrow for people.
So on slide four, we talk about our response to pandemic.
It starts with safety.
That's the first goal on everyone's strategy.
And really, when we made that change in 2015, it provided a great foundation for us to respond to this pandemic.
We're helping society through the crisis.
Our technologies are essential.
What was interesting with all the government orders that came out, almost every one of those deemed us as an essential manufacturer.
Our purpose and action is more clear than ever, and I'll give you a few examples of that.
And our manufacturing capacity has stayed near-normal levels throughout the pandemic.
The governing principle that's really been the takeaway on this page, which is our two safest places that we want for our people is to be at work and at home.
And we're doing everything we can to live up for that.
So on slide five, the performance during this health and economic crisis and the confidence in the results that you saw in Q4 really come from this list that you see.
I want to just touch on the very last bullet, to engage people.
This was a big change that we made in Win Strategy 2.0 2015, and we recognized the strong correlation between safety, engagement and business performance.
We are now top quartile in safety, top quartile in engagement, and you can see the significant progress we're making toward being top quartile on our financial performance-based on the results that we just turned in.
If you go to the next page, I'm going to talk about the strength of our portfolio and our purpose and action.
And on slide seven is the unmatched breadth of technologies that we have, those 8-motion control technologies.
They are our competitive differentiator.
It's how we bring value to customers.
And our customers see it.
60% of our revenue comes from customers who buy four or more of these technologies.
Go to slide eight.
Our capital deployment strategy has been thoughtful and we've been transforming this already great portfolio through these strategic acquisitions by acquiring CLARCOR, LORD and Exotic.
This is $3 billion of acquired sales.
We bought three great companies, the three largest in our history.
And they've increased our resilience because of their technologies and because of their aftermarket content.
And you've seen in the results they are accretive to growth, margins and cash.
And this was especially evident during a crisis.
And we've been able to equal or beat our synergy goals despite the macro conditions.
Slide nine is our purpose statement, enabling engineering breakthroughs that lead to a better tomorrow, which has really acted as our compass and our guiding light and provide a lot of inspiration to our team.
On slide 10, just some examples of that purpose in action.
On the left-hand side is the food supply, we're basically from the farm all the way to your kitchen table.
Transportation, whether it's truck, air or rail, we're helping the world move products and goods around the various customers.
In the middle section there on life sciences, we're helping patients, whether it's in the hospital or in the ambulance.
And that probably the poster child for us and the one that's really is probably the signature of the purpose in action for the last quarter was the work we did on the ventilator.
So six of those eight technologies that I showed in the prior page or two are ventilators.
And we saw dramatic, you might expect, ramp-up in production needs based on what was happening in the society with existing customers, and we took on a lot of new customers that could not find suppliers that could keep up with this production demand.
And in some cases, we went from zero to full production in weeks, and it was really a remarkable job by the divisions involved.
On the right-hand side in the upper right, we are an essential manufacturer, as I mentioned earlier.
And basically, if you look at any plant in the world, you can probably find a Parker part somewhere in that plant.
So we're an essential manufacturer because we're needed by everybody else.
Then on power generation, whether it's traditional renewables, we're there to help customers with their energy source.
Moving and shifting to really a summary of the quarter and the full year on slide 12, it was outstanding.
It was a difficult time, probably the most difficult in the history as a company.
The organic growth came in at 21% decline.
So we clearly felt that impact we paid down debt by $687 million.
That was on top of what we did in Q3.
And when you look at margin on the two different categories we're going to look at here, it was just terrific performance.
On operating margins, it's better to look at it without acquisitions, given the acquisitions we've got and not and don't have in prior periods.
But if you look at the adjusted growth there, 18.1% versus 17.6%.
So 50 bps increase in Q4 as a 16% decremental, just fantastic.
That's a fantastic job by all the groups and divisions around the company.
And then without acquisitions, EBITDA it's a good way to look at this, apples-to-apples.
If you go down to the last row, 20.4%, 160 basis points improvement, probably the first time, at least in recent memory that we've ellipsed 20% EBITDA margin.
So this is really a combination of the base business performing well, the Win Strategy, the prior period restructuring and bringing on acquisitions that are accretive on margins.
If you go to slide 13, a quick summary of a full year.
We've made continued progress.
I would just remind people that we were already in an industrial session before the pandemic hit.
So these accomplishments really are up against a pretty stiff headwind.
And on safety, 35% reduction in recordable incidents.
This puts us in the top quartile and I would just contrast, five years ago, we were in the fourth quartile on safety and we're not in the first quarter, so remarkable progress there.
Cash flow from operations from a dollar standpoint is an all-time record.
So that's an all-time record in the history of the company, $2.1 billion.
If you got to hit a record, cash is a good place to hit a record on.
You can see the CFOA margins at 15.1%, free cash flow conversion 152%.
And then just some debt metrics, leverage metrics there.
You can see that we improved on our gross debt, down to 3.6 to 3.8 times.
And then on a net debt stand point, is at 3.3 from 3.5.
What we're very proud of is the cumulative debt reduction in FY 2020 was $1.3 billion, approximately 25% of the transaction debt.
So in just a little over eight months of acquisition ownership we, paid off a quarterly of debt that we took on to acquire the company.
It's just a great job by the teams here.
And then moving on 14 to the full year.
Again, just great margin performance for that.
So the full year organic was down about 10%.
and again, same methodology without acquisitions, look at the operating margin that, to us, simply hold out flat at 17.2%, which is very hard to do on a volume drop and came in at a 17% decremental, which is a best-in-class performance.
With acquisitions, looking at EBITDA adjusted, we raised it to 19.3%, again, showing the combination of the Win Strategy and acquiring companies that are accretive on margins to help out the total business.
So if you move to the transition here.
So the Parker transformation, it's happening.
Those numbers that you saw in the prior pages don't happen just by accident or by luck.
So what we've been doing to drive that.
So if you go to page 16, all roads lead to the Win Strategy.
And I would say it's the combination of our decentralized divisional structure with the Win Strategy that drives this unique ownership culture that is really putting up these kinds of results.
If you go to page 2017, just to elaborate a little bit more on what's different.
We started off this time period with a major restructuring activity that's really started in FY '14, and you look at the cumulative restructuring we did for those three years.
It was approximately $270 million of restructuring.
So that really set us on a path of putting the right kind of cost structure in place.
We've built upon that.
We launched simplification in 2015.
Immersed simplification on a broad standpoint is a structure and organization design on 80/20 and on Simple by Design.
But just from a structure standpoint, you can see that we reduced 1/3 of the divisions of the company.
And we made two major updates to the Parker business system, which is the Win Strategy.
Building on the success of the original Win Strategy, we did 2.0 in 2015 and of course, 3.0, just recently and we're very excited about that because we have a ton of potential.
We just launched it and has a lot of runway in front of it.
We talked about the power of the companies that we acquired.
And you see that resilience coming through in the business like.
I'm going to give you two slides coming up that will show you that resilience, objectively, looking at both margins and growth.
But don't underestimate the takeaway of the purpose statement has really provided great create alignment and aspiration.
And there's a big difference between being at work and being inspired by your work and purpose does that for you.
And that's what our people feel about that.
So on slide 18, talk about the margin side.
And I showed you this last quarter.
And this is looking at the last five manufacturing recessions.
And I would argue FY 2020 has actually got two separate recessions in it.
The industrial recession we were already in and the pandemic that came in, in March.
But you can see whether you look at it on an as-reported basis or adjusted, you would see the significant step change in performance over these manufacturing recessions type here.
Something we're very proud of and something that we intend to keep doing.
And if you go to 19, this was a look at top line resilience and go to 19.
So I recognize that the Great Recession and COVID-19 is not the same, but these are two examples of significant shocks to the system.
My view, COVID-19 is worse.
If you look at the GDP reduction across the world in the last quarter, it dwarfs any kind of GDP reduction happened in the Great recession.
But let's just say, for the sake argument that the organic that the environment was the same.
And we took the worst period that happened in the Great recession happened to be Q4 as well, and FY '09 was down 32%, and then what did we do last quarter?
We did minus 21.
Now hopefully, that'll be our worst quarter, time will tell.
But we think it's going to be the worst quarter.
So why is it better?
There's some distinct structural reasons why it's better.
First, the CLARCOR acquisition is now part of our organic performance, and it has 80% aftermarket.
So that's more resilient.
The percent revenue that we get from innovative products and the way we calculate that as a percent of revenue is new to the world, new to the market, divided by our total revenue.
That, over the last five years, that has more than doubled over this period of time.
Innovative production more resilient, they grow faster, better margins.
And then you've heard us talk about how we changed the mix in the international distribution by raising that by 500 bps over this period of time.
And we've had better customer experience.
We have lots more to do on customer experience, but that's been another contributor.
So the top line, we're not immune to the cycle.
We felt it, obviously, but it is better than we were before, and there's distinct reasons why it's better.
And it's only going to get better in the future because LORD and Exotic, not yet in our organic numbers.
And you can see, by the results we've showed so far, they are performing better than legacy Parker We move to slide 2020.
Something we're very proud of, our cash generation history.
I mentioned the CFOA record at $2.1 billion.
And then we've just been very, very consistent.
Good times and bad times, you've seen 19 consecutive years up to double-digit CFOA and greater than 1% free cash flow conversion.
So I want to move to FY 2021 and the outlook, and we decided to reinstate guidance.
And you can make good arguments as to why not to give guidance with the uncertainty.
And we're not trying to pretend that we're any smarter than anybody else because we're not.
However, we're four months smarter than we were the last earnings call, and we've proven that we can operate safely and with strong results.
And while the future is uncertain, we felt we are in the best position to communicate to shareholders and provide them the insight as to where we're going.
And hence, that's why we decided to do guidance.
Of course, it's an opportunity we'll have every quarter, and we will certainly get smarter as order entry comes in.
And we'll update your thoughts as we go through and certainly, we'll go through this in more detail in the Q&A portion of the call.
But I wanted to give you that context as to why we decided to guide before Cathy actually gives you some of the specific numbers.
So then if you go to 22, a big part of our success in Q4 was our actions on costs.
And this is a combination, as I've mentioned, of prior period restructuring, the Win Strategy and all the things we've been doing for years.
And then the speed and agility of our pandemic response.
But what you see here in contrast between what we did in Q4 and what we're going to do in FY 2021 is a strategic shift in the cost to a more permanent cost action basis.
So you can see the little donut chart in Q4 of FY 2020, 12% permanent, and that's going to move to 55% permanent in FY 2021.
If you look underneath the donut for Q4, you see permanent actions.
These are all savings.
It was $25 million.
And that was spot on what we told you last quarter.
And you see the $175 million of savings that was less than what we told you.
We told you a range of $250 million to $300 million.
And it was lower because our volume was better, which was a good thing.
We didn't necessarily give you specific guidance last quarter, but we in our own internal planning, we were projecting a 30% decline in volume.
And hence, that's why we gave you the range in discretionary, came in at minus 21%, which we were grateful for, and we didn't need to do as many discretionary actions.
We needed people to work more hours, which was a good thing.
Then when you move to 2021, you see discretionary of $200 million.
That will be mostly in the first half, and we will gradually wean off of that as we go through the first half.
There will be some in the second half.
There will be more local driven by what the general manager needs based on local conditions and predominantly help balancing plant hours to demand.
But then you see a permanent action rising to $250 million.
And if you look at when COVID hit, and you take the second half of FY 2020 and add all of FY 2021, and look at our restructuring cost.
So we did $65 million we're proposing $65 million of restructuring in FY 2021.
We did $60 million in the second half of FY 2020.
So that's $125 million, of what I would call COVID-related restructuring that's going to generate this $250 million of savings.
So that might seem a little more efficient than normal.
And the reason for that is it's going to be an asset-light restructuring plan.
We will have very few plant closures, as a result, that's why it's a lot more efficient than normal.
So with that, I'm going to hand it back to Cathy for more details on the quarter.
I'd like you to now refer to slide 24, and I'll summarize the fourth quarter financial results.
This slide presents as reported and adjusted earnings per share for the fourth quarter.
Current year adjusted earnings per share of $2.55 compares to $3.31 last year.
Adjustments from the 2020 as reported results netted to $0.28, including business realignment expenses of $0.37 and lowered acquisition integration and transaction expenses of $0.05.
These were offset by the tax effect of these adjustments of $0.09 and the result of a favorable tax settlement of $0.05.
Prior year fourth quarter earnings per share had been adjusted by $0.14.
The details of which are included in the reconciliation tables for non-GAAP financial measures.
Moving to slide 25.
You'll find the significant components of the $0.76 walk from prior year fourth quarter adjusted earnings per share to $2.55 for this year.
With organic sales down 21%, adjusted segment operating income decreased the equivalent of $0.61 per share or $99 million.
Decremental margins on a year-over-year basis were 19%.
Decremental margins without the impact of acquisitions were just 16%, demonstrating excellent cost containment and productivity by the teams.
Offsetting this decline, we gained $0.07 from lower corporate G&A as a result of salary reductions taken during the quarter and tight cost controls on discretionary spending.
Interest expense cost an additional $0.15 of earnings per share as debt is currently at a higher level because of the acquisitions.
Income taxes accounted for an additional $0.08 of expense because we had fewer favorable discrete tax credits in the current quarter.
Slide 26 shows total Parker segment sales total Parker sales and segment operating margin for the fourth quarter.
The fourth quarter organic sales decreased year-over-year by 21.1%, and currency had a negative impact of 1.1%.
Acquisition impact of 8.1% partially offset these declines.
Total adjusted segment operating margins were 17.4% compared to 17.6% last year.
This 20 basis point decline is net of the company's ability to absorb approximately 100 basis points or $33 million of incremental amortization expense from the acquisitions.
On slide 27, we're showing the impact LORD and Exotic had on fourth quarter FY 2020 on both an as-reported and adjusted basis.
Sales from the acquisitions were $298 million and operating income on an adjusted basis were $32 million.
The operating income for LORD and Exotic includes $35 million in amortization expense.
I'd like to point out that the improvement of 50 basis points in legacy Parker operating income despite the $818 million drop in sales.
The great work the teams did on controlling costs resulted in a 16% decremental margin for the quarter within the legacy businesses.
Moving to slide 28.
I'll discuss the business segments, starting with diversified industrial North America.
For the fourth quarter, North America organic sales were down 24.7% while acquisitions contributed 7.6%.
Operating margin for the fourth quarter on an adjusted basis was 16.5% of sales versus 18.4% last year.
This 190 basis point decline includes absorbing approximately 60 basis points or $9 million of incremental amortization.
North America's legacy businesses generated an impressive decremental margin of 24%, reflecting the hard work of diligent cost containment and productivity improvements, a favorable sales mix together with the impact of our Win Strategy initiatives.
I'll continue with the Diversified Industrial International segment on slide 29.
Organic sales for the fourth quarter in the industrial international segment decreased by 15.4%.
Acquisitions contributed 5.4%, and currency had a negative impact of 2.9%.
Operating margin for the fourth quarter on an adjusted basis increased to 16.8% of sales versus 16.4% last year.
This 40 basis point improvement is net of the additional burden of approximately 110 basis points or $12 million of incremental amortization expense.
The legacy businesses generated a very good decremental margin of just 9.8%, again, reflecting diligent cost containment, a favorable mix and the impact of the Win Strategy.
I'll now move to slide 30 to review the Aerospace Systems segment.
Organic sales decreased 22.3% for the fourth quarter, partially offset by acquisitions contributing 14.3%.
Declines in commercial OEM and aftermarket volume were partially offset by higher sales in both military OEM and aftermarket.
Operating margins for the current fourth quarter increased to 20.4% of sales versus 17.9% last year.
This is net of the incremental amortization expense impact of approximately 190 basis points or $12 million, a favorable mix, proactive realignment actions, cost containment and lower engineering development costs contributed nicely to the quarter.
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.
On slide 31, we're showing the impact LORD and Exotic has had during FY 2020 on both an as-reported and adjusted basis.
Sales from the acquisitions for the year totaled $949 million and operating income on an adjusted basis contributed $114 million.
The LORD team was able to pull forward synergy savings, reaching a run rate of $40 million by the end of the year.
These savings plus a great deal of hard work by the teams on integration, productivity and adjusting to lower volume due to the pandemic, helps the acquisitions be $0.04 per share accretive for the year after absorbing $100 million of amortization expense.
Adjusted EBITDA from LORD and Exotic is 26.3%.
With this meaningful contribution from acquisitions, fiscal year 2020 total Parker adjusted EBITDA has increased to 19.3% as compared to 18.2% for fiscal year 2019.
Note that the legacy Parker business was able to improve EBITDA margin 60 basis points to 18.8% despite lower sales of nearly $1.6 billion.
On slide 32, we report cash flow from operating activities.
We had strong cash flow this year, resulting in record cash flow from operating activities of $2.1 billion or 15.1% of sales.
This compares to 13.5% of sales for the same period last year.
After last year's number has adjusted for a $200 million discretionary pension contribution.
Free cash flow for the current year is 13.4% of sales, and the conversion rate to net income is 152%.
Moving to slide 33.
I'd like to discuss our current leverage and liquidity position.
Based on the continued strong free cash flow generation, and effective working capital management, we made a sizable $687 million reduction to our debt during the quarter, which brought our full year debt reduction to $1.3 billion, which is approximately 25% of the debt issued for the LORD and Exotic Metals acquisition.
I apologize for a typo on the slide, the second bullet should be $1.3 billion rather than $1.3 million.
With this reduction, our gross debt EBITDA leverage metric at the end of the quarter was 3.6 times, down from 3.8 times at March 31, despite a drop in EBITDA.
Our net debt-to-EBITDA reduced to 3.3 times from 3.5 times at March 31.
We've continued to suspend our 10b5-1 share repurchase program and we remain committed to paying our shareholders a dividend, and we intend to uphold our record of annually increasing the dividend paid.
Moving to slide 34, we show the details of current order rates by segment.
Total orders decreased by 22% as of the quarter ending June.
This year-over-year decline is a consolidation of minus 29% within Diversified Industrial North America, minus 21% within Diversified Industrial International and minus 5% within Aerospace Systems orders.
Just a reminder that we report the Aerospace Systems orders on a 12-month rolling average.
The full year earnings guidance for fiscal year 2021 is outlined on slide 35.
Guidance is being provided on both an as-reported and an adjusted basis.
Beginning with this fiscal year 2021 guidance, as we've previously announced, we are revising our disclosures for adjusted segment operating earnings and adjusted earnings per share.
With this guidance, we will now start to include acquisition-related intangible asset amortization expense in our adjustments.
In the appendix of today's slides, you can find the impact of the acquisition-related asset amortization expense on fiscal year 2019 and fiscal year 2020.
In today's pandemic environment, total sales for fiscal year 2021 are expected to decrease between 10.7% and 6.7% compared to the prior year.
Anticipated organic decline for the full year is forecasted at a midpoint of 11.3%.
Acquisitions are expected to benefit growth at a midpoint of 2.7% while currency is projected to have a marginal negative 0.1% impact.
We've calculated the impact of currency to spot rates as of the quarter ended June 30, 2020, and we have held those rates steady as we estimate the resulting year-over-year impact for fiscal year 2021.
You can see the forecasted as reported and adjusted operating margins by segment.
At the midpoint, total Parker adjusted margins are forecasted to decrease approximately 80 basis points from prior year.
For guidance, we are estimating adjusted margins in a range of 17.8% to 18.4% for the full fiscal year.
The full year effective tax rate is projected to be 23%.
For the full year, the guidance range on an as-reported earnings per share basis is $7.41 to $8.41 or $7.91 at the midpoint.
On an adjusted earnings per share basis, the guidance range is $9.80 to $10.80 or $10.30 at the midpoint.
The adjustments to the as-reported forecast made in this guidance, at a pre-tax level, include business realignment expenses of approximately $65 million for the full year fiscal 2021 with the associated savings projected to be $120 million in the current year.
We anticipate integration costs to achieve of $19 million.
Synergy savings for LORD are projected to hit a run rate of $80 million and for Exotic, a run rate of $2 million by the end of the year.
And in addition, acquisition-related intangible asset amortization expense of $321 million will be included in our adjustments.
Some additional key assumptions for full year 2021 guidance at the midpoint are: sales will be divided 47% first half, 53% second half; adjusted segment operating income is divided 43% first half, 57% second half; adjusted earnings per share first half/second half is divided 40%, 60%.
First quarter fiscal 2021 adjusted earnings per share is projected to be $2.15 per share at the midpoint, and this excludes to $0.67 per share or $115 million of projected acquisition-related amortization expense, business realignment expenses and integration costs to achieve.
On slide 36, you'll find a reconciliation of the major components of fiscal year 2020 adjusted earnings per share compared to the adjusted fiscal year 2021 guidance of $10.3 at the midpoint.
Fiscal year 2020, adjusted earnings per share was reported at $10.79.
To make it comparable to the fiscal year 2021 guidance, which includes an adjusted for which includes an adjustment for acquisition-related asset amortization expense, we show the adjustment of $1.68 to get to a comparable $12.47.
With organic sales down over 11%, adjusted segment operating income is expected to drop approximately $1.95.
This would result in decremental margins of 27% on a year-over-year basis.
Corporate G&A and other expense is projected to negatively impact earnings per share by $0.36 because of gains achieved in fiscal year 2020 that are not anticipated to repeat.
Offsetting these declines, interest expense is projected to be $0.29 lower in fiscal year 2021.
An income tax rate of 23% will reduce earnings per share by $0.10 year-over-year.
And the assumption of a full year of suspending share buybacks is projected to result in a $0.05 dilution due to an increase in average shares outstanding.
We ask that you continue to publish your estimates using adjusted guidance, which should now include adjusting for acquisition-related amortization expense.
This concludes my prepared comments.
I thought we would close with what is probably an obvious question on most people's minds is, how do you feel about the FY '23 targets that you just outlined in IR Day given the pandemic and what it's done.
And the short answer is, we're still committed to them.
We've made tremendous progress on margins, and our top line is clearly becoming more resilient.
While the top line revenue that Cathy articulated in IR Day was $16.4 billion, that will be very hard to hit.
But we can still grow faster than the market, which is our intention.
So these targets you see in this page, growing faster than global industrial production index.
The margin targets of 21% at the op margin and EBITDA free cash flow conversion and EPS, barring a recession in FY '23 and recognize that we have three full fiscal years left to get here and provided we get some modest growth as we go in FY '22 and '23, we believe we can hit these numbers.

user
q4 adjusted earnings per share $2.55.
sees fy 2021 earnings per share $7.41 to $8.41.

assistant