Donaldson Company Earnings Call Nuggets: Sales Outlook, Gas Turbine & Mining
Hamzah Mazari – Credit Suisse: The first question Bill is just on, if you could maybe give some more color on the delta between the low end and the high end of guidance specifically how much of the high end versus low end is dependent on a recovery in the sort of second half calendar year ’13 in most of your end-markets. And how much visibility do you have in talking to your OEM customers as to how this production ramp-up materializes in the back half as well as maybe you want to touch on, how some of these expenses flow through for the balance of the year around some of the growth initiatives?
William M. Cook – Chairman, President and CEO: I’ll start with the sales outlook and then I think Jim will comment on the how the expenses are calendarized during the year. So, on the sales outlook and starting with visibility, we don’t have, as you know, a tremendous amount of visibility in most of our business with the exception of Gas Turbine. And so we have that for Gas Turbine and we have a pretty good handle on the second half of the year and that’s baked into our guidance. With the rest of our businesses there is a normal seasonal strength in the second half so there is typically always some seasonal uptick in the second half just the way many of our end markets operate with replacement cycles, for filters, for ag equipment or construction equipment et cetera. For OEM businesses we don’t have that visibility into the second half of the year, but we are basing this on comments from customers in terms of what they see with – in some cases the regulations or the replacement cycle of our equipment currently in the field and also that the anticipation that, in some segments where there’s still equipment inventories that are being worked down, that’ll be done in the first half of our fiscal year, essentially by the end of the calendar year. So, for example Caterpillar’s talked about that they continue to see a work down of their finished equipment inventory happening through the end of this calendar year and that they anticipate in calendar year ’14 that their production of new equipment will better match the end user demand, because it won’t have that inventory draw down. So, those are the factors that we’ve baked into the second half forecast.
James F. Shaw – VP and CFO: Hamzah, it’s Jim. I’ll comment a little bit in terms of the operating expenses. You saw in the press release, we talked about a $30 million delta year-over-year related to two things. One is, this year, with the way our bonuses are supposed to work, we didn’t hit our targets that we set out at the start of the year, so, our incentive compensation as at the low end of historical averages. So, as we go towards next year, we see about a $20 million impact for the full year of putting that incentive compensation back to normal levels. That should be fairly ratable throughout the year, really no spike from quarter-to-quarter. That’s a little over $20 million. The other piece is our strategic business system project that we’ve been working on’ a project to standardize our systems around the world. We’ve been working on that all of this past year, but now as we head into fiscal ’14, we’ll begin to implement at certain locations and we see about a $7 million increase year-over-year in terms of our expense related to that project. So, that will be generally ratable, but probably a little less first quarter than the rest of the year. So, a little light on the first quarter and then a little heavier as we get into second quarter would be how that will play out…