8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 29, 2004

PARKER-HANNIFIN CORPORATION

(Exact Name of Registrant as Specified in Charter)

Ohio	1-4982	34-0451060
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6035 Parkland Blvd. Cleveland, Ohio	44124-4141
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (216) 896-3000

Item 9. Regulation FD Disclosure

Item 12. Disclosure of Results of Operations and Financial Condition

The following information is furnished pursuant to Item 9, “Regulation FD Disclosure” and Item 12, “Disclosure of Results of Operations and Financial Condition”.

On July 29, 2004, Parker-Hannifin Corporation issued a press release and presented a Webcast announcing earnings for the quarter ended June 30, 2004. A copy of the press release is filed as Exhibit 99.1 to this report. A copy of the Webcast presentation is filed as Exhibit 99.2 to this report.

EXHIBIT INDEX

99.1	Press release issued by Parker-Hannifin Corporation, dated July 29, 2004.
99.2	Webcast presentation by Parker-Hannifin Corporation, dated July 29, 2004.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

PARKER-HANNIFIN CORPORATION
By:	/s/ Timothy K. Pistell
	Timothy K. Pistell Vice President Finance and Administration and Chief Financial Officer

Date: July 29, 2004

EX-99.1

Exhibit 99.1

For Release:	Immediately
Contact:	Media –
	Lorrie Paul Crum, VP - Corp. Communications	216/896-2750	After hours: 330/666-4196
	lcrum@parker.com
	Financial Analysts –
	Pamela Huggins, VP & Treasurer	216/896-2240
	phuggins@parker.com
Stock Symbol:	PH - NYSE

PARKER EARNINGS ACCELERATE WITH RECORD SALES AND CASH FROM OPERATIONS

• FOURTH-QUARTER INCOME UP 156 PERCENT ON 20-PERCENT REVENUE INCREASE

• SALES TOP $7 BILLION AS UPBEAT OUTLOOK SIGNALS RECORD EARNINGS IN FY 2005

Cleveland, Ohio: July 29, 2004 – Parker Hannifin Corporation (NYSE: PH) today marked new records in sales and cash flow for fiscal-year 2004, as sales topped $7 billion for the first time in the company’s 86-year history, and cash from operations reached a record $662.4 million, surpassing last year’s result of $557.5 million. This year’s record cash from operations was achieved even with the company’s discretionary contribution to its retirement and benefits plans of approximately $146 million, compared with $108 million contributed last year.

For the full year, Parker posted a 76-percent increase in net income, at $345.8 million, or $2.91 per diluted share. Revenues reached a record $7.11 billion, up 11 percent, including a 5.6-percent increase in organic volume. Last year, the company earned $196.3 million, or $1.68 per diluted share, on sales of $6.41 billion. The current year’s results include a five-cent divestiture gain and a reduction of nine cents per diluted share in realignment costs, compared with a four-cent divestiture gain and a reduction of 16 cents per diluted share in realignment costs last year.

Fourth-quarter net income for the period ended June 30, 2004 was up 156 percent, at $125.5 million, or $1.05 per diluted share, on sales of $1.99 billion, compared with last year’s quarterly income of $49.1 million, or 42 cents per diluted share, on sales of $1.66 billion. Included in the current quarter’s earnings is a five-cent divestiture gain and a two-cent reduction from realignment costs, while last year’s earnings reflected a four-cent divestiture gain and a reduction of six cents per share in realignment costs. Revenue growth in the current quarter includes a 15-percent increase in organic volume, a two-percent increase from currency translation and three-percent growth from acquisitions not reflected in the prior-year comparison.

“With the broad based recovery of all our industrial markets, and aerospace at the beginning of a rebound, our growth engine is firing on all cylinders,” said Parker CEO Don Washkewicz. “The recovery didn’t really start

1

to pick up until January, so we’ve only had the wind at our backs for half a year. Yet our margins are up dramatically, inventories remain lean and cash flow has never been stronger. We are executing our Win Strategy, and as long as this recovery is sustained, we see a lot more growth potential in our business.

“Our message to Parker employees is to keep up the great work. Our goal is to maintain the gains we worked so hard to achieve, and extend them – by executing our strategic initiatives, staying lean and focused – and shifting growth into high gear. Today, we’re winning more competitive bids on our systems and portfolio strength, global expansion, and innovation exceeding our customers’ expectations.”

Operating Results

Sales and operating income were up in all of the company’s segments, with an overall 109-percent increase in operating income for the fourth quarter, and up 45 percent for the full year.

The North American Industrial units led the improvement, with operating income up 230 percent in the fourth quarter, and 98 percent for the year. Quarterly operating income was $114.3 million on sales of $867.4 million, for a return on sales of 13.2 percent, compared with a 4.8-percent margin last year. For the year, North American Industrial operating income was $306.9 million on revenues of $3.09 billion, for an operating margin of 9.9 percent, up from 5.5 percent last year.

The International Industrial businesses posted fourth-quarter operating income of $55.9 million, up 138 percent, on sales of $565.1 million, yielding a 9.9-percent return on sales for the quarter, compared with 5.5 percent last year. The most significant margin improvements were made in Europe, despite additional realignment costs this year. In all of 2004, the international businesses recorded operating income of $159.6 million, on sales of $1.97 billion, for an 8.1-percent operating margin, compared with 6.1 percent the prior year.

Parker Aerospace sales grew 11 percent during the quarter, to $307.6 million, with $40 million in operating income, improving its operating margin to 13.0 percent, compared with 12.3 percent a year ago. Full-year sales were up 2.8 percent to $1.14 billion, while operating income was $141.8 million, for a 12.4 percent return on sales in 2004, versus 14.2 percent last year.

In the Climate & Industrial Controls business, fourth-quarter operating income was $22.4 million, on sales of $189.3 million, an 11.8 percent return on sales, compared with 10.5 percent a year ago. The business generated full-year operating income of $71.8 million on sales of $671.2 million, a 10.7-percent return on sales, compared with 9.5 percent last year.

In the Other segment, comprised of the Wynn Specialty Chemical and Astron units, quarterly operating income was $9.5 million on $63.5 million in sales, for an operating margin of 15.0 percent, compared with 8.0

2

percent last year. Annual operating income was $22.1 million on $233 million in sales, an operating margin of 9.5 percent, compared with 5.5 percent a year ago.

Outlook

Parker cited a positive outlook for fiscal-year 2005, noting an expectation for continued expansion in its diverse markets, with some possible tempering in heavy-duty trucks and semiconductors.

“As our markets continue to recover, we feel we have positioned Parker to gain a greater share of business in core and emerging markets where we have an unrivaled breadth of products and bring added engineering value, especially in aerospace, mobile, refrigeration, life sciences and clean-energy markets such as wind power and fuel cells,” said Washkewicz.

The company projected earnings for fiscal-year 2005 to mark a new record, ranging from $3.30 to $3.70 per diluted share. In the first quarter, earnings are expected to range between 70 and 80 cents per diluted share, reflecting the company’s typical pattern of earnings momentum, with more of the year’s earnings occurring in the second half.

In addition to the information provided herein, Parker advises shareholders to note order trends, for which the company makes a disclosure several business days after the conclusion of each month. This information is available on the company’s investor information web site, at www.phstock.com.

NOTICE OF CONFERENCE CALL: Parker Hannifin’s conference call and slide presentation to discuss its fiscal fourth-quarter results is available to all interested parties via live webcast at 10 a.m. ET, on the company’s investor information web site, at www.phstock.com. To access the call, click on the “Live Webcast” link. From this link, users may also complete a pre-call system test and register for e-mail notification of future events and information available from Parker.

With annual sales of more than $7 billion, Parker Hannifin is the world’s leading diversified manufacturer of motion and control technologies and systems, providing precision-engineered solutions for a wide variety of commercial, mobile, industrial and aerospace markets. The company employs more than 48,000 people in 44 countries around the world. For more information, visit the company’s web site at www.parker.com, or its investor information site at www.phstock.com.

Forward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. All statements regarding future performance, earnings projections, events or developments are forward-looking statements. It is possible that the future performance and earnings projections of the company and individual segments may differ materially from current expectations, depending on economic conditions within both its industrial and aerospace markets, and the company’s ability to achieve anticipated benefits associated with announced realignment activities, strategic initiatives to improve operating margins, and growth initiatives. A change in economic conditions in individual markets may have a particularly volatile effect on segment projections. Among the other factors which may affect future performance are: changes in business relationships with and purchases by or from major customers or suppliers, including delays or cancellations in shipments; uncertainties surrounding timing, successful completion or integration of acquisitions; threats associated with and efforts to combat terrorism; competitive market conditions and resulting effects on sales and pricing; increases in raw-material costs that cannot be recovered in product pricing; and global economic factors, including currency exchange rates, difficulties entering new markets and general economic conditions such as interest rates. The company makes these statements as of the date of this disclosure, and undertakes no obligation to update them.

3

PARKER HANNIFIN CORPORATION - JUNE 30, 2004

CONSOLIDATED STATEMENT OF INCOME

	Three Months Ended June 30,						Year Ended June 30,
(Dollars in thousands except per share amounts)	2004			2003			2004			2003
Net sales	$	1,992,927		$	1,660,661		$	7,106,907		$	6,410,610
Cost of sales		1,567,483			1,382,628			5,742,053			5,309,775
Gross profit		425,444			278,033			1,364,854			1,100,835
Selling, general and administrative expenses		229,479			185,290			801,237			721,065
Other income (deductions):
Interest expense		(17,012	)		(22,162	)		(73,396	)		(81,561	)
Interest and other (expense), net		6,656			3,108			3,847			(827	)
		(10,356	)		(19,054	)		(69,549	)		(82,388	)
Income before income taxes		185,609			73,689			494,068			297,382
Income taxes		60,136			24,607			148,285			101,110
Net income	$	125,473		$	49,082		$	345,783		$	196,272
Earnings per share:
Basic earnings per share	$	1.06		$	.42		$	2.94		$	1.69
Diluted earnings per share	$	1.05		$	.42		$	2.91		$	1.68
Average shares outstanding during period - Basic		118,194,932			116,509,222			117,707,772			116,381,880
Average shares outstanding during period - Diluted		119,614,996			116,961,265			119,006,468			116,894,506
Cash dividends per common share	$	.19		$	.19		$	.76		$	.74
BUSINESS SEGMENT INFORMATION BY INDUSTRY
	Three Months Ended June 30,						Year Ended June 30,
(Dollars in thousands)	2004			2003			2004			2003
Net sales
Industrial:
North America	$	867,399		$	716,086		$	3,091,947		$	2,840,628
International		565,065			428,429			1,970,398			1,584,443
Aerospace		307,598			276,825			1,140,122			1,109,566
Climate & Industrial Controls		189,337			181,356			671,157			665,629
Other		63,528			57,965			233,283			210,344
Total	$	1,992,927		$	1,660,661		$	7,106,907		$	6,410,610
Segment operating income
Industrial:
North America	$	114,273		$	34,624		$	306,903		$	155,258
International		55,859			23,482			159,629			96,301
Aerospace		39,983			33,971			141,838			157,295
Climate & Industrial Controls		22,364			19,055			71,769			63,441
Other		9,537			4,642			22,141			11,584
Total segment operating income	$	242,016		$	115,774		$	702,280		$	483,879
Corporate general and administrative expenses		32,886			17,992			106,501			80,147
Income from operations before interest expense and other		209,130			97,782			595,779			403,732
Interest expense		17,012			22,162			73,396			81,561
Other expense		6,509			1,931			28,315			24,789
Income before income taxes	$	185,609		$	73,689		$	494,068		$	297,382

Note: Certain prior period amounts have been reclassified to conform to the current year presentation.

CONSOLIDATED BALANCE SHEET

	June 30,
(Dollars in thousands)	2004			2003
Assets
Current assets:
Cash and cash equivalents	$	183,847		$	245,850
Accounts receivable, net		1,201,343			1,002,060
Inventories		991,378			997,167
Prepaid expenses		45,814			51,949
Deferred income taxes		114,551			99,781
Total current assets		2,536,933			2,396,807
Plant and equipment, net		1,591,853			1,657,425
Goodwill		1,198,411			1,108,610
Intangible assets, net		102,097			59,444
Other assets		827,610			763,347
Total assets	$	6,256,904		$	5,985,633
Liabilities and shareholders’ equity
Current liabilities:
Notes payable	$	35,198		$	424,235
Accounts payable		534,561			437,103
Accrued liabilities		565,436			497,295
Accrued domestic and foreign taxes		124,546			65,094
Total current liabilities		1,259,741			1,423,727
Long-term debt		953,804			966,332
Pensions and other postretirement benefits		813,635			920,420
Deferred income taxes		79,028			20,780
Other liabilities		168,242			133,463
Shareholders’ equity		2,982,454			2,520,911
Total liabilities and shareholders’ equity	$	6,256,904		$	5,985,633
CONSOLIDATED STATEMENT OF CASH FLOWS
	Year Ended June 30,
(Dollars in thousands)	2004			2003
Cash flows from operating activities:
Net income	$	345,783		$	196,272
Depreciation and amortization		252,785			259,178
Net change in receivables, inventories, and trade payables		15,201			140,625
Net change in other assets and liabilities		55,457			(66,397	)
Other, net		(6,828	)		27,811
Net cash provided by operating activities		662,398			557,489
Cash flows from investing activities:
Acquisitions (less cash acquired of $63,691 in 2004 and $196 in 2003)		(200,314	)		(16,648	)
Capital expenditures		(141,546	)		(158,260	)
Other, net		71,388			37,723
Net cash (used in) investing activities		(270,472	)		(137,185	)
Cash flows from financing activities:
Net proceeds from common share activity		56,223			9,386
Net (payments of) debt		(415,428	)		(145,764	)
Dividends		(89,286	)		(85,833	)
Net cash (used in) financing activities		(448,491	)		(222,211	)
Effect of exchange rate changes on cash		(5,438	)		1,373
Net (decrease) increase in cash and cash equivalents		(62,003	)		199,466
Cash and cash equivalents at beginning of period		245,850			46,384
Cash and cash equivalents at end of period	$	183,847		$	245,850

EX-99.2

Exhibit 99.2

Parker Hannifin Corporation

Quarterly Earnings Release 4th Quarter FY 2004

July 29, 2004

.

Forward Looking Statements

Forward-Looking Statements:

Forward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. All statements regarding future performance, earnings projections, events or developments are forward-looking statements. It is possible that the future performance and earnings projections of the company and individual segments may differ materially from current expectations, depending on economic conditions within both its industrial and aerospace markets, and the company’s ability to achieve anticipated benefits associated with announced realignment activities, strategic initiatives to improve operating margins, and growth initiatives. A change in economic conditions in individual markets may have a particularly volatile effect on segment results. Among the other factors which may affect future performance are: changes in business relationships with and purchases by or from major customers or suppliers, including delays or cancellations in shipments; uncertainties surrounding timing, successful completion or integration of acquisitions; threats associated with and efforts to combat terrorism; competitive market conditions and resulting effects on sales and pricing; increases in raw-material costs that cannot be recovered in product pricing; and global economic factors, including currency exchange rates, difficulties entering new markets and general economic conditions such as interest rates. The company makes these statements as of the date of this disclosure, and undertakes no obligation to update them.

Non-GAAP Financial Measure

This presentation reconciles sales amounts reported in accordance with U.S. GAAP to sales amounts adjusted to remove the effects of acquisitions and divestitures made within the prior four quarters as well as the effects of currency exchange rates on sales. The effects of acquisitions and divestitures and currency exchange rates are removed to allow investors and the company to meaningfully evaluate changes in sales on a comparable basis from period to period.

Discussion Agenda

Financial Highlights

Influences on Sales & Earnings

WIN Strategy

Balance Sheet & Cash Flow Trends

Outlook

Questions & Answers

Financial Highlights

EPS – 4th Quarter and YTD as of June 30, 2004 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00

4Q FY 04 4Q FY 03 YTD FY 04 YTD FY 03 $1.05 $0.42 $2.91 $1.68

Note: FY04 4Q EPS was reduced by $0.02 for business realignment charges and benefited $0.05 from the divestiture of a business. FY03 4Q EPS was reduced by $0.06 for business realignment charges and benefited $0.04 from the divestiture of a business. FY04 YTD EPS was reduced by $0.09 for business realignment charges and benefited $0.05 from the divestiture of a business. FY03 YTD EPS was reduced by $0.14 for business realignment charges, $0.02 for an equity investment adjustment, and benefited $0.04 from the divestiture of a business.

Financial Highlights

Sales – 4th Quarter and YTD through June 30

4th Quarter YTD

FY 04 FY03 FY 04 FY03

Sales $1,992.7 $1,660.7 $7,106.9 $6,410.6

% change 20.0% 10.9%

Sales from acquisitions & divestitures $59.8 $8.4 $112.0 $27.5

Sales without acquisitions & divestitures $1,932.9 $1,652.3 $6,994.9 $6,383.1

% change 17.0% 9.6%

Currency effects $37.4 $255.2

Sales without acquisitions, divestitures & currency $1,895.5 $1,652.3 $6,739.7 $6,383.1

% change 14.7% 5.6%

Significant Influences on Sales

Industrial end market strength

Aerospace

Commercial

Defense

Globalization Trends

Parker New Order Rates

Industrial North America

24

30 20 10 0 -10 -20 -30 -40

J O

J 9 6

A J O

J 9 7

A J O

J 9 8

A J O

J 9 9

A J O

J 0 0

A J O

J 0 1

A J O

J 0 2

A J O

J 0 3

A J O

J 0 4

A

Current month vs. prior year

Parker New Order Rates

Industrial R.O.W.

21

30 25 20 15 10 5 0 -5 -10 -15

J O

J 9 6

A J O

J 9 7

A J O

J 9 8

A J O

J 9 9

A J O

J 0 0

A J O

J 0 1

A J O

J 0 2

A J O

J 0 3

A J O

J 0 4

A

Current month vs. prior year

Parker New Order Rates

Climate & Industrial Controls

-2

30 25 20 15 10 5 0 -5 -10 -15 -20

J O

J 0 2

A J O

J 0 3

A J O

J 0 4

A

Current month vs. prior year

Parker New Order Rates

Aerospace

15

30 20 10 0 -10 -20 -30

J O

J 9 6

A J O

J 9 7

A J O

J 9 8

A J O

J 9 9

A J O

J 0 0

A J O

J 0 1

A J O

J 0 2

A J O

J 0 3

A J O

J 0 4

A

Average last 12 months orders to previous 12 months orders

Influences on Earnings

Increased Volume

Restructuring/Move to Low Cost Countries

Win Strategy

Sales Mix – Aerospace

Segment Reporting Industrial North America

FY 2004 FY 2003

4th Qtr YTD 4th Qtr YTD

Sales

As reported $867.4 $3,091.9 $716.1 $2,840.6

% change 21.1% 8.8%

Acquisitions $17.3 $41.6 $0.0 $0.0

without Acquisitions $850.1 $3,050.3 $716.1 $2,840.6

% change 18.7% 7.4%

Currency effects ($0.3) $11.8 $0.0 $0.0

without Acquisitions & Currency $850.4 $3,038.5 $716.1 $2,840.6

% change 18.8% 7.0%

Operating Margin

As reported $114.3 $306.9 $34.6 $155.3

% of sales 13.2% 9.9% 4.8% 5.5%

Business realignment $1.8 $9.1 $3.1 $8.3

Segment Reporting Industrial Rest of World

FY 2004 FY 2003

4th Qtr YTD 4th Qtr YTD

Sales

As reported $565.1 $1,970.4 $428.4 $1,584.4

% change 31.9% 24.4%

Acquisitions $42.6 $70.4 $0.0 $0.0

without Acquisitions $522.5 $1,900.0 $428.4 $1,584.4

% change 22.0% 19.9%

Currency effects $31.5 $202.8 $0.0 $0.0

without Acquisitions & Currency $491.0 $1,697.2 $428.4 $1,584.4

% change 14.6% 7.1%

Operating Margin

As reported $55.9 $159.6 $23.5 $96.3

% of sales 9.9% 8.1% 5.5% 6.1%

Business realignment $0.8 $4.5 $1.8 $7.9

Segment Reporting Aerospace

FY 2004 FY 2003

4th Qtr YTD 4th Qtr YTD

Sales

As reported $307.6 $1,140.1 $276.8 $1,109.6

% change 11.1% 2.7%

Acquisitions/Divestitures $0.0 $0.0 $2.5 $17.9

without Acquisitions/Divestitures $307.6 $1,140.1 $274.3 $1,091.7

% change 12.1% 4.4%

Currency effects $2.3 $7.1 $0.0 $0.0

without Acquisitions & Currency $305.3 $1,133.0 $274.3 $1,091.7

% change 11.3% 3.8%

Operating Margin

As reported $40.0 $141.8 $34.0 $157.3

% of sales 13.0% 12.4% 12.3% 14.2%

Business realignment $0.0 $0.1 $1.4 $2.5

Segment Reporting Climate & Industrial Controls

FY 2004 FY 2003

4th Qtr YTD 4th Qtr YTD

Sales

As reported $ 189.3 $ 671.2 $ 181.4 $ 665.6

% change 4.4% 0.8%

Acquisitions/Divestitures $ 0.0 $ 0.0 $ 0.0 $ 0.0

without Acquisitions/Divestitures $ 189.3 $ 671.2 $ 181.4 $ 665.6

% change 4.4% 0.8%

Currency effects $ 0.9 $ 11.3 $ 0.0 $ 0.0

without Acquisitions & Currency $ 188.4 $ 659.9 $ 181.4 $ 665.6

% change 3.9% -0.9%

Operating Margin

As reported $ 22.4 $ 71.8 $ 19.1 $ 63.4

% of sales 11.8% 10.7% 10.5% 9.5%

Business realignment $ 0.0 $ 0.4 $ 0.3 $ 1.2

Segment Reporting Other

FY 2004 FY 2003

4th Qtr YTD 4th Qtr YTD

Sales

As reported $63.5 $233.3 $58.0 $210.3

% change 9.6% 10.9%

Acquisitions $0.0 $0.0 $5.9 $9.6

without Acquisitions $63.5 $233.3 $52.1 $200.7

% change 21.9% 16.2%

Currency effects $2.9 $22.1 $0.0 $0.0

without Acquisitions & Currency $60.6 $211.2 $52.1 $200.7

% change 16.3% 5.2%

Operating Margin

As reported $9.5 $22.1 $4.6 $11.6

% of sales 15.0% 9.5% 7.9% 5.5%

Business realignment $0.4 $1.0 $0.0 $1.3

Balance Sheet Summary

Cash

Working Capital

Inventory

Accounts Receivable

PP & E

Shareholders Equity

Financial Leverage

Debt to Debt Equity

38.0% 36.0% 34.0% 32.0% 30.0% 28.0% 26.0% 24.0% 22.0% 20.0%

FY99 FY00 FY01 FY02 FY03 FY 04

FY04

Target

24.9%

Strong Cash Flow

Operating Cash Flow $800 $700 $600 $500 $400 $300 $200 $100 $0

FY 99 FY 00 FY 01 FY 02 FY 03 FY 04

12.0% 10.0% 8.0% 6.0% 4.0%

% to Sales

459

538

529

631

557

662

FY 2005 Earnings Outlook

Business Segment Adjustment

Revenue

Reclassify $76 million from Industrial to Aerospace

Segment Operating Income Margins

Industrial North America decreases from 9.9% to 9.6%

Aerospace increases from 12.4% to 13.0%

FY 2005 Earnings Outlook Assumptions Segment Sales & Operating Income

FY 2005 Sales change vs. FY 2004

NA Industrial 6.0% - 8.0%

Industrial ROW 8.0% - 10.0%

Aerospace 3.0% - 5.0%

CIC -1.0% - 1.0%

Other -1.0% - 1.0%

FY 2005 Operating Margin percentage change vs. FY 2004 Basis points

NA Industrial 120 - 220

Industrial ROW 70 - 160

Aerospace 30 - 120

CIC -40 - 50

Other 0 - 100

FY 2005 Earnings Outlook Assumptions below Operating Margin

Corporate Admin. -1% to -3% vs. FY 2004 Interest Expense -8% to -10% vs. FY 2004 Other Exp. (Income) +75% to +100% vs. FY 2004 Tax Rate 31.0%

Earnings Outlook

Fiscal Year 2005 1st Quarter EPS Range $0.70 - $0.80

Fiscal Year 2005 EPS Range $3.30 - $3.70

Forecast Risks

Downside:

Raw material price increases

Interest Rates

Upside:

Aerospace recovery

Semiconductor

Heavy Duty Truck Stability

Questions & Answers

Appendix

FY 2004 Income Statements

Income Statement – 4thQuarter

FY 2004 FY 2003

% of Sales Business Realignment % of Sales Business Realignment & Equity Adj.

Net sales $1,992.9 100.0% $1,660.7 100.0%

Cost of sales 1,567.5 78.7% $2.9 1,382.6 83.3% $6.5

Gross profit 425.4 21.3% (2.9) 278.1 16.7% (6.5)

S, G & A 228.4 11.4% 0.1 185.3 11.2%

Goodwill impairment loss 1.0 0.1%

Other income (deductions)

Interest expense (17.0) -0.9% 0.0 (22.2) -1.3% 0.0

Interest & other income 6.6 0.3% 0.0 3.1 0.2% (3.5)

(10.4) -0.5% 0.0 (19.1) -1.2% (3.5)

Income before taxes 185.6 9.3% (3.0) 73.7 4.4% (10.0)

Income taxes 60.1 3.0% (1.0) 24.6 1.5% (3.5)

Net income $125.5 6.3% ($2.0) $49.1 3.0% ($6.5)

* Business realignment primarily includes severance costs and costs related to the consolidation of manufacturing product lines.

Income Statement – YTD

FY 2004 FY 2003

% of Sales Business Realignment % of Sales Business Realignment & Equity Adj.

Net sales $7,106.9 100.0% $6,410.6 100.0%

Cost of sales 5,742.1 80.8% $14.8 5,309.8 82.8% $20.1

Gross profit 1,364.8 19.2% (14.8) 1,100.8 17.2% (20.1)

S, G & A 800.2 11.3% 0.3 721.1 11.2% 3.6

Goodwill impairment loss 1.0 0.0%

Other income (deductions)

Interest expense (73.4) -1.0% 0.0 (81.6) -1.3% 0.0

Interest & other income 3.8 0.1% 0.0 (0.8) 0.0% (3.5)

(69.6) -1.0% 0.0 (82.4) -1.3% (3.5)

Income before taxes 494.0 7.0% (15.1) 297.3 4.6% (27.2)

Income taxes 148.3 2.1% (5.0) 101.1 1.6% (8.3)

Net income $345.7 4.9% ($10.1) $196.2 3.1% ($18.9)

* Business realignment primarily includes severance costs and costs related to the consolidation of manufacturing product lines.