Fiscal 2023 Third Quarter Earnings Presentation LISTED May 4, 2023 Non-GAAP Financial Measures Among other factors which may affect future performance are: the impact of the global outbreak of COVID-19 and governmental and other actions taken in response; changes in business relationships with and purchases by or from major customers, suppliers or distributors, including delays or cancellations in shipments; disputes regarding contract terms or significant changes in financial condition, changes in contract ...

Parker-Hannifin Corporation (NYSE:PH) Q3 2023 Earnings Conference Call May 4, 2023 11:00 AM ET Company Participants Todd Leombruno - Executive Vice President & Chief Financial Officer Jennifer Parmentier - Chief Executive Officer Lee Banks - Vice Chairman & President Conference Call Participants Joe Ritchie - Goldman Sachs Andrew Obin - Bank of America Scott Davis - Melius Research Mig Dobre - Baird Julian Mitchell - Barclays Jamie Cook - Credit Suisse Nathan Jones - Stifel Nigel Coe - Wolfe Research Jeffre ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File number 1-4982 PARKER-HANNIFIN CORPORATION (Exact name of registrant as specified in its charter) | | | (State or other jurisdiction of Incorporatio ...

Parker-Hannifin Corporation (NYSE:PH) Q2 2023 Earnings Conference Call February 2, 2023 11:00 AM ET Company Participants Todd Leombruno - EVP & CFO Jennifer Parmentier - CEO Lee Banks - Vice Chairman and President Conference Call Participants Jamie Cook - Credit Suisse Andrew Obin - Bank of America Scott Davis - Melius Research Julian Mitchell - Barclays Jeffrey Sprague - Vertical Research Partners Mircea Dobre - Robert W. Baird & Co. Stephen Volkmann - Jefferies Joshua Pokrzywinski - Morgan Stanley Joseph ...

Financial Performance - Net sales for the three months ended September 30, 2022, were $4,233 million, an increase of 12.5% compared to $3,763 million for the same period in 2021[91]. - Gross profit margin improved to 34.0% in the current year from 33.4% in the prior year, primarily due to higher sales volume and cost management[91]. - Selling, general and administrative expenses rose to $836 million, representing 19.7% of sales, up from 16.7% in the prior year[91]. - Net income decreased to $388 million, or 9.2% of sales, compared to $451 million, or 12.0% of sales, in the prior year[91]. - The Diversified Industrial North America segment reported net sales of $2,132 million, an increase of 18.8% year-over-year, while the International segment saw a slight decline of 1.6%[104][106]. - Aerospace Systems Segment net sales for the current-year quarter reached $746 million, up from $593 million in the prior-year period, with Meggitt contributing $115 million in sales[117][118]. Expenses and Margins - The operating margin for the Aerospace Systems Segment decreased to 12.4% from 20.0% year-over-year, attributed to higher commercial OEM volume and acquisition-related expenses[117][119]. - The effective tax rate for the current quarter was 22.9%, higher than the 21.0% in the comparable prior-year period[91]. - The company experienced a foreign currency transaction loss of $36 million in the current quarter, compared to a gain of $9 million in the prior year[98]. Backlog and Future Expectations - The backlog for the Diversified Industrial Segment increased to $4,901 million, up from $3,583 million in the prior year[104]. - As of September 30, 2022, the backlog for the Diversified Industrial Segment increased to $4.5 billion, primarily due to orders exceeding shipments and the addition of Meggitt backlog[114]. - The company anticipates incurring approximately $40 million in additional business realignment and acquisition integration charges for the remainder of fiscal 2023[112]. - The company expects to incur approximately $46 million in additional business realignment and acquisition integration charges in the remainder of fiscal 2023[120]. - The company anticipates that changes in economic conditions, including the impacts of the Russia-Ukraine war and COVID-19, may materially affect future performance[154]. Cash Flow and Financing - Cash provided by operating activities increased to $457 million for the first three months of fiscal 2023, compared to $424 million in the same period of fiscal 2022[129]. - Cash flows from investing activities were significantly impacted by strategic acquisitions and capital expenditures of $84 million in fiscal 2023[131]. - The company has a line of credit totaling $3.0 billion, with $1.7 billion available as of September 30, 2022[138]. - The debt to debt-shareholders' equity ratio was 0.62 to 1.0 as of September 30, 2022, indicating compliance with financial covenants[140]. Acquisitions and Divestitures - The company completed the acquisition of Meggitt for an aggregate cash purchase price of $7.2 billion, including debt assumption, at a price of 800 pence per share[145]. - The company sold its aircraft wheel and brake business for proceeds of $441 million as part of commitments made to the European Commission regarding the Meggitt acquisition[147]. - Acquisitions and divestitures impacted sales by approximately $143 million and $3 million, respectively, during the current-year quarter[94]. Debt and Interest Rates - A 100 basis point increase in near-term interest rates would increase annual interest expense on variable rate debt by approximately $37 million[153]. - The company has a debt portfolio that includes $2 billion of variable rate debt, aiming for a 60/40 mix between fixed and variable rate debt[153]. - The company fully drew against a $2.0 billion Term Loan Facility in September 2022 to finance part of the acquisition, which matures in September 2025[144]. Currency Risk Management - The company expects to manage foreign currency transaction and translation risk using existing processes, especially after the acquisition of Meggitt[150]. - The company has deal-contingent forward contracts with an aggregate notional amount of £6.4 billion to mitigate currency risk related to the acquisition[146]. - The company does not believe that changes in the availability of supply chain financing will significantly impact its liquidity[142].

Parker-Hannifin Corporation (NYSE:PH) Q1 2023 Earnings Conference Call November 3, 2022 11:00 AM ET Company Participants Todd Leombruno - EVP & CFO Thomas Williams - Chairman & CEO Jennifer Parmentier - COO Lee Banks - Vice Chairman & President Conference Call Participants Scott Davis - Melius Research Andrew Obin - Bank of America Merrill Lynch Jeffrey Sprague - Vertical Research Partners David Raso - Evercore ISI Stephen Volkmann - Jefferies Jamie Cook - Crédit Suisse Nigel Coe - Wolfe Research Joseph Rit ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-4982 PARKER-HANNIFIN CORPORATION (Exact name of registrant as specified in its charter) Ohio 34-0451060 (State or other jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) 6035 Parkland Boulevard, Cleveland, Ohio 44124-4141 (Address of Principal E ...

Parker-Hannifin Corporation (NYSE:PH) Q4 2022 Earnings Conference Call August 4, 2022 11:00 AM ET Company Participants Todd Leombruno - Chief Financial Officer Tom Williams - Chairman & Chief Executive Officer Lee Banks - Vice Chairman & President Conference Call Participants Jeff Sprague - Vertical Research Partners Joe Ritchie - Goldman Sachs Scott Davis - Melius Research Stephen Volkmann - Jefferies Jamie Cook - Credit Suisse David Raso - Evercore ISI Nigel Coe - Wolfe Research Joseph O'Dea - Wells ...

Part I - Financial Information [Financial Statements](index=2&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Parker-Hannifin Corporation's unaudited consolidated financial statements for the period ended March 31, 2022, detailing income, balance sheet, cash flows, segment information, and notes on key events [Consolidated Statement of Income](index=2&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20INCOME) This statement details the company's financial performance over three and nine months ended March 31, 2022, showing net sales, income before taxes, net income, and diluted earnings per share Consolidated Statement of Income (Three and Nine Months Ended March 31, 2022, in thousands) | Financial Metric | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $4,086,387 | $3,746,326 | $11,673,776 | $10,388,771 | | **Income before income taxes** | $433,989 | $599,340 | $1,496,058 | $1,590,406 | | **Net income** | $348,088 | $473,239 | $1,187,280 | $1,241,892 | | **Net income attributable to common shareholders** | $348,017 | $473,153 | $1,186,774 | $1,241,307 | | **Diluted Earnings Per Share** | $2.67 | $3.60 | $9.10 | $9.50 | [Consolidated Balance Sheet](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEET) This statement provides a snapshot of the company's assets, liabilities, and equity as of March 31, 2022, and June 30, 2021 Consolidated Balance Sheet Summary (in thousands) | Balance Sheet Item | March 31, 2022 | June 30, 2021 | | :--- | :--- | :--- | | **Total current assets** | $8,229,694 | $5,616,750 | | **Total assets** | $22,545,320 | $20,341,200 | | **Total current liabilities** | $5,406,664 | $3,096,503 | | **Total liabilities** | $13,572,461 | $11,927,530 | | **Total shareholders' equity** | $8,959,866 | $8,398,307 | | **Total liabilities and equity** | $22,545,320 | $20,341,200 | [Consolidated Statement of Cash Flows](index=5&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities for the nine months ended March 31, 2022 and 2021 Cash Flow Summary (Nine Months Ended March 31, in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $1,548,438 | $1,881,405 | | **Net cash (used in) provided by investing activities** | $(125,762) | $51,413 | | **Net cash provided by (used in) financing activities** | $799,258 | $(2,215,670) | | **Net increase (decrease) in cash, cash equivalents and restricted cash** | $2,222,040 | $(195,914) | [Business Segment Information](index=7&type=section&id=BUSINESS%20SEGMENT%20INFORMATION) This section provides detailed financial data for the company's Diversified Industrial and Aerospace Systems segments, including net sales and operating income - The company operates in two reportable business segments: Diversified Industrial and Aerospace Systems, both leveraging eight core technologies[20](index=20&type=chunk) Segment Net Sales (in thousands) | Segment | Three Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2022 | | :--- | :--- | :--- | | **Diversified Industrial: North America** | $2,014,715 | $5,615,454 | | **Diversified Industrial: International** | $1,439,357 | $4,214,972 | | **Aerospace Systems** | $632,315 | $1,843,350 | | **Total net sales** | **$4,086,387** | **$11,673,776** | Segment Operating Income (in thousands) | Segment | Three Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2022 | | :--- | :--- | :--- | | **Diversified Industrial: North America** | $413,998 | $1,085,117 | | **Diversified Industrial: International** | $298,475 | $881,206 | | **Aerospace Systems** | $119,016 | $352,063 | | **Total segment operating income** | **$831,489** | **$2,318,386** | [Notes to Consolidated Financial Statements](index=8&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides additional details and explanations for the financial statements, including backlog, acquisition details, share repurchases, and impacts from global events - The company's backlog at March 31, 2022 was **$7.761 billion**, with approximately **88%** expected to be recognized as revenue within the next 12 months[34](index=34&type=chunk) - Announced a recommended cash acquisition of Meggitt plc for approximately **£6.263 billion**, to be funded with cash and new debt, pending regulatory clearances[35](index=35&type=chunk)[36](index=36&type=chunk) - In connection with the Meggitt acquisition, the company deposited **$2.487 billion** into a restricted escrow account as of March 31, 2022[37](index=37&type=chunk) - The company repurchased **1,095,430 shares** for approximately **$330 million** during the nine months ended March 31, 2022[41](index=41&type=chunk)[51](index=51&type=chunk) - Incurred **$20 million** in expenses due to the exit of business operations in Russia, primarily from write-downs of inventory and working capital[48](index=48&type=chunk) - Entered into deal-contingent forward contracts with a notional amount of **£6,415 million** to mitigate currency risk for the Meggitt acquisition, resulting in a liability of **$396 million** at March 31, 2022[73](index=73&type=chunk)[74](index=74&type=chunk) [Management's Discussion and Analysis (MD&A)](index=20&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses fiscal 2022 Q3 financial results, highlighting sales growth, impacts of inflation and supply chain issues, and analyzing segment performance, liquidity, and capital resources, including Meggitt acquisition financing [Overview](index=20&type=section&id=MD%26A_Overview) The company manages impacts from the Russia-Ukraine war and COVID-19, including inflation and supply chain disruptions, while commercial aerospace demand begins to recover - The company's business is impacted by the Russia-Ukraine war and COVID-19 pandemic, leading to an inflationary environment, supply chain disruptions, and labor market issues[89](index=89&type=chunk) - In response to international sanctions, the company suspended all shipments to and from Russia and closed its Moscow office in March 2022[89](index=89&type=chunk) - A third-party data breach was detected on March 14, 2022, but it has not had a significant financial or operational impact on the company[93](index=93&type=chunk) [Consolidated Statement of Income Analysis](index=21&type=section&id=MD%26A_Consolidated_Statement_of_Income) Net sales for the nine months ended March 31, 2022, increased to **$11.674 billion** due to higher volume, with gross profit margin improving to **28.0%**, while other expense significantly increased due to a **$396 million** loss on deal-contingent forward contracts - Net sales increased for the nine months of fiscal 2022 due to higher volume in both the Diversified Industrial and Aerospace Systems Segments, with currency changes decreasing net sales by **$89 million**[98](index=98&type=chunk) - Gross profit margin increased in fiscal 2022 due to higher sales volume, continuous improvement initiatives, and price increases, which were partially offset by increased freight, material, and labor costs[99](index=99&type=chunk) - Other expense for the nine months ended March 31, 2022, was **$386 million**, a significant shift from an income of **$122 million** in the prior year, primarily driven by a **$396 million** loss on deal-contingent forward contracts and **$51 million** in acquisition-related financing fees[104](index=104&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) [Business Segment Information Analysis](index=23&type=section&id=MD%26A_Business_Segment_Information) Both Diversified Industrial and Aerospace Systems segments reported increased sales and operating income, with Diversified Industrial sales up **13.9%** and Aerospace Systems operating margin improving to **19.1%** due to commercial recovery Diversified Industrial Segment Sales Growth (vs. Prior Year) | Region | Three Months Ended Mar 31, 2022 (as reported) | Nine Months Ended Mar 31, 2022 (as reported) | | :--- | :--- | :--- | | **North America** | 14.6% | 15.7% | | **International** | 3.6% | 11.6% | | **Total Segment** | 9.7% | 13.9% | - Diversified Industrial segment operating margin increased in both North America (to **19.3%**) and International (to **20.9%**) for the nine-month period, driven by higher sales volume and price increases, partially offset by higher operating costs[116](index=116&type=chunk) - Aerospace Systems segment sales increased due to higher volume in commercial OEM and aftermarket, while military OEM and aftermarket volume declined[124](index=124&type=chunk) - Aerospace Systems operating margin for the nine months ended March 31, 2022, increased to **19.1%** from **15.9%** in the prior year, driven by higher sales volume, favorable product mix, and lower engineering expenses[125](index=125&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=MD%26A_Liquidity_and_Capital_Resources) Cash from operations for the first nine months of fiscal 2022 was **$1.548 billion**, down due to increased working capital, with liquidity impacted by Meggitt acquisition financing, while maintaining a strong position and compliance with debt covenants - Cash from operating activities decreased by **$333 million** to **$1.548 billion** for the nine months of fiscal 2022, primarily due to increased working capital requirements and a decrease in net income[135](index=135&type=chunk) - The company declared a quarterly dividend of **$1.33 per share** on April 28, 2022, marking **66 consecutive fiscal years** of increased annual dividends[138](index=138&type=chunk) - To finance the proposed Meggitt acquisition, the company issued **$2,126 million** of commercial paper in October 2021 and established a Bridge Credit Agreement and a **$2 billion** Term Loan Facility[141](index=141&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) - The company's debt to debt-shareholders' equity ratio was **0.48 to 1.0** at March 31, 2022, well within the most restrictive covenant limit of **0.65 to 1.0**[144](index=144&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company manages foreign currency and interest rate risks using derivative instruments, aiming for a **60/40 mix** of fixed to variable rate debt, while acknowledging potential material impacts from the Russia-Ukraine war and COVID-19 - The company uses derivative instruments like forward exchange contracts, deal-contingent forward contracts, and cross-currency swaps to manage foreign currency risk[154](index=154&type=chunk) - The company's objective is to maintain a **60/40 mix** between fixed-rate and variable-rate debt to manage interest rate risk[156](index=156&type=chunk) - The future financial impact of the Russia-Ukraine war and the COVID-19 pandemic cannot be reasonably estimated but is acknowledged as potentially material[157](index=157&type=chunk) [Controls and Procedures](index=31&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded the company's disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal controls over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2022[158](index=158&type=chunk) - No material changes were made to the company's internal controls over financial reporting during the quarter ended March 31, 2022[159](index=159&type=chunk) Part II - Other Information [Legal Proceedings](index=32&type=section&id=ITEM%201.%20Legal%20Proceedings.) The company is involved in various environmental matters and will report any such matter where monetary sanctions are expected to exceed **$1.0 million** - The company reports on environmental legal matters when it reasonably believes monetary sanctions may exceed **$1.0 million**[162](index=162&type=chunk) [Issuer Purchases of Equity Securities](index=32&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) During Q3 FY2022, the company repurchased **165,622** common shares under its program, with approximately **8.6 million shares** remaining authorized for repurchase as of March 31, 2022 Issuer Purchases of Equity Securities (Q3 FY2022) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | Jan 1 - Jan 31, 2022 | 50,800 | $319.34 | | Feb 1 - Feb 28, 2022 | 49,700 | $304.83 | | Mar 1 - Mar 31, 2022 | 65,122 | $285.99 | | **Total** | **165,622** | | - As of March 31, 2022, **8,601,550 shares** may yet be purchased under the existing share repurchase program, which has no expiration date[163](index=163&type=chunk) [Exhibits](index=33&type=section&id=ITEM%206.%20Exhibits.) This section lists exhibits filed with the Form 10-Q, including incentive plan amendments, CEO/CFO certifications, and Inline XBRL data files - Exhibits filed include amendments to the Long-Term Incentive Performance Plan, CEO/CFO certifications, and Inline XBRL financial data[165](index=165&type=chunk)

Parker-Hannifin Corporation (NYSE:PH) Q3 2022 Earnings Conference Call May 5, 2022 11:00 AM ET Company Participants Todd Leombruno - Chief Financial Officer Tom Williams - Chairman & Chief Executive Officer Lee Banks - Vice Chairman & President Conference Call Participants Scott Davis - Melius Research Mig Dobre - Baird Jeff Sprague - Vertical Research Jamie Cook - Credit Suisse David Raso - Evercore ISI Joe Ritchie - Goldman Sachs Stephen Volkmann - Jefferies Nigel Coe - Wolfe Research Julian Mitchell - Ba ...