Slide 1

Parker Hannifin Corporation

Quarterly Earnings Release

2nd Quarter FY 2008

January 17, 2008

Exhibit 99.2

Slide 2

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 maintain and achieve anticipated benefits associated with announced realignment activities,

strategic initiatives to improve operating margins, and growth, innovation and global diversification

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 or significant changes in financial condition; 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; the company’s ability to manage costs related

to employee retirement and health care benefits and insurance; and global economic factors, including

manufacturing activity, air travel trends, currency exchange rates, difficulties entering new markets and

general economic conditions such as inflation, interest rates and credit availability. The company makes

these statements as of the date of this disclosure, and undertakes no obligation to update them.

Slide 3

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

made within the prior four quarters as well as the effects of currency

exchange rates on sales. The effects of acquisitions 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.

Slide 4

Discussion Agenda

2

nd

quarter highlights

Key performance measures & outlook

Questions & answers

Closing comments

Slide 5

Second Quarter and First Half Highlights

Record Q2 Sales, Earnings, and Cash Flow

Headed for another record year

Globally balanced in Sales and margins

Q2 Sales growth 12.7% -

5% organic

Earnings per diluted share up 12.8% in Q2,

13.3% in first half

Total Parker Orders up 10% in Q2

Slide 6

Financial Highlights

Diluted Earnings per Share

2

nd

Quarter and 1

st

Half

$2.26

$2.56

$1.23

$1.09

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

Q2 FY08

Q2 FY07

1st Half FY08

1st Half FY07

Slide 7

Influences on 2

nd

Quarter Earnings

Sales increased 13%

Segment operating income increased 13%

Lower Corporate G&A –

9%

Reduction in shares outstanding

-

4.9 million fewer diluted shares in FY08

Offset by:

Lower Aerospace and CIC margins

Higher Interest expense

Higher Other expense

Higher income tax rate –

28.5% vs. 27.1%

Slide 8

Financial Highlights

Sales –

2

nd

Quarter  and 1

st

Half

Dollars in millions

FY2008

%

Change

FY2007

FY2008

%

Change

FY2007

Sales

As reported

2,829

$

12.7 %

2,511

$

5,616

$  

10.9 %

5,063

$

Acquisitions

74

2.9 %

135

2.7 %

Currency

120

4.9 %

211

4.1 %

Adjusted Sales

2,635

$

4.9 %

5,270

$  

4.1 %

2nd Quarter

YTD

Slide 9

Influences on Sales

Continued Industrial end market strength

International

–

Asia Pacific

–

Latin America

–

Europe 

Distribution

Aerospace

Acquisitions

Emerging markets

Slide 10

Segment Reporting

Industrial North America

Dollars in millions

FY2008

%

Change

FY2007

FY2008

%

Change

FY2007

Sales

As reported

991

$   

3.3 %

960

$   

1,997

$  

1.9 %

1,960

$

Acquisitions

18

1.9 %

45

2.3 %

Currency

7

0.7 %

10

0.6 %

Adjusted Sales

966

$   

0.7 %

1,942

$  

(1.0)%

Operating Margin

As reported

142

$   

134

$   

297

$      

287

$   

  % of Sales

14.3 %

14.0 %

14.9 %

14.6 %

2nd Quarter

YTD

Slide 11

Segment Reporting

Industrial International

Dollars in millions

FY2008

%

Change

FY2007

FY2008

%

Change

FY2007

Sales

As reported

1,178

$

27.7 %

922

$   

2,279

$  

26.6 %

1,800

$

Acquisitions

48

5.2 %

83

4.6 %

Currency

104

11.2 %

183

10.2 %

Adjusted Sales

1,026

$

11.3 %

2,013

$  

11.8 %

Operating Margin

As reported

175

$   

122

$   

359

$      

249

$   

  % of Sales

14.9 %

13.2 %

15.7 %

13.9 %

2nd Quarter

YTD

Slide 12

Segment Reporting

Aerospace

Dollars in millions

FY2008

%

Change

FY2007

FY2008

%

Change

FY2007

Sales

As reported

431

$   

7.1 %

402

$   

858

$      

6.7 %

804

$   

Acquisitions

8

2.0 %

8

1.0 %

Currency

2

0.5 %

4

0.5 %

Adjusted Sales

421

$   

4.6 %

846

$      

5.2 %

Operating Margin

As reported

52

$      

68

$      

109

$      

136

$   

  % of Sales

12.1 %

16.9 %

12.7 %

17.0 %

2nd Quarter

YTD

Slide 13

Segment Reporting

Climate & Industrial Controls

Dollars in millions

FY2008

%

Change

FY2007

FY2008

%

Change

FY2007

Sales

As reported

229

$   

0.8 %

227

$   

482

$      

(3.2)%

498

$   

Acquisitions

Currency

7

3.1 %

13

2.5 %

Adjusted Sales

222

$   

(2.3)%

469

$      

(5.7)%

Operating Margin

As reported

5

$        

7

$        

21

$        

38

$      

  % of Sales

2.4 %

3.1 %

4.3 %

7.6 %

2nd Quarter

YTD

Slide 14

Parker Order Rates

Excludes Acquisitions & Currency

3-month year-over-year comparisons, except Aerospace

Aerospace is calculated using a 12-month moving average

FY08

FY07

Total Parker

10 %

+

5 %

+   

Industrial North America

4 %

+   

1 %

-    

Industrial International

16 %

+

13 %

+

Aerospace

19 %

+

10 %

+

Climate & Industrial Controls

6 %

-    

2 %

-    

Three months ending December

Slide 15

Balance Sheet Summary

Cash

Working capital

Inventory

Accounts receivable

Pensions –

FAS 158

Slide 16

$308

$474

$0

$100

$200

$300

$400

$500

$600

FY08

FY07

Strong Cash Flow

Cash from Operating Activities

2

nd

Quarter YTD

Slide 17

Financial Leverage

Debt to Debt Equity

29.7%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

30.0%

32.0%

34.0%

36.0%

38.0%

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

Goal -

Not to exceed 37% over the cycle

Slide 18

FY 2008  Earnings Outlook Assumptions

Segment Sales & Operating Income

FY 2008 Sales change versus FY 2007

Industrial North America

1.5 %

--

1.9 %

Industrial International

19.3 %

--

19.7 %

Aerospace

3.6 %

--

4.0 %

Climate & Industrial Controls

(4.5)%

--

(4.1)%

FY 2008 Operating margin percentages

Industrial North America

14.7 %

--

15.1 %

Industrial International

15.1 %

--

15.5 %

Aerospace

14.1 %

--

14.5 %

Climate & Industrial Controls

5.8 %

--

6.2 %

Slide 19

FY 2008 Earnings Outlook Assumptions

below Operating Margin

Corporate Admin

+  1% to  -

1% vs. FY 2007

Interest Expense

+ 24% to + 19% vs. FY 2007

Other Expense (Inc.) 

+

45%

to  +

40%

vs. FY 2007

Tax Rate

29 %

Slide 20

Earnings Outlook –

FY08

Low

High

Diluted earnings per share

5.15

$

5.40

$ 

Slide 21

Questions & Answers...

*

*

*

Slide 22

Appendix

Income Statements

2

nd

Quarter FY2008

1

st

Half FY2008

*

*

*

Slide 23

Income Statement –

2

nd

Quarter

Dollars in millions

% of Sales

% of Sales

Net Sales

2,829.1

$  

100.0 %

2,511.2

$

100.0 %

Cost of sales

2,194.1

77.6 %

1,938.0

77.2 %

Gross profit

635.0

22.4 %

573.2

22.8 %

S, G & A

319.0

11.3 %

292.9

11.7 %

Interest expense

26.0

.9 %

22.3

.9 %

Other (income)

(6.2)

(.3)%

(6.8)

(.3)%

Income before taxes

296.2

10.5 %

264.8

10.5 %

Income taxes

84.3

3.0 %

71.8

2.8 %

Net income

211.9

$      

7.5 %

193.0

$   

7.7 %

FY 2008

FY 2007

Slide 24

Income Statement –

1

st

Half

Dollars in millions

% of Sales

% of Sales

Net Sales

5,616.3

$  

100.0 %

5,062.7

$

100.0 %

Cost of sales

4,316.4

76.9 %

3,885.4

76.7 %

Gross profit

1,299.9

23.1 %

1,177.3

23.3 %

S, G & A

643.9

11.5 %

584.9

11.6 %

Interest expense

48.4

.8 %

39.4

.8 %

Other (income)

(6.4)

(.2)%

(13.4)

(.3)%

Income before taxes

614.0

11.0 %

566.4

11.2 %

Income taxes

172.5

3.1 %

162.8

3.2 %

Net income

441.5

$      

7.9 %

403.6

$   

8.0 %

FY 2008

FY 2007