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): April 22, 2008

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

Item 7.01 Regulation FD Disclosure

The following information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition” and Item 7.01, “Regulation FD Disclosure”

On April 22, 2008, Parker-Hannifin Corporation issued a press release and presented a Webcast announcing earnings for the quarter ended March 31, 2008. The press release contains references to sales growth excluding the effects of acquisitions and foreign currency exchange rates. The effects of acquisitions and foreign 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. 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.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits:

99.1	Press release issued by Parker-Hannifin Corporation, dated April 22, 2008.
99.2	Webcast presentation by Parker-Hannifin Corporation, dated April 22, 2008.

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
	Executive Vice President - Finance and Administration and Chief Financial Officer

Date: April 22, 2008

EX-99.1

Exhibit 99.1

For Release:	Immediately
Contact:	Media –
	Christopher M. Farage - Vice President, Corp. Communications	216/896-2750
	cfarage@parker.com
	Financial Analysts –
	Pamela Huggins, Vice President - Treasurer	216/896-2240
	phuggins@parker.com

Stock Symbol: PH – NYSE

Parker Reports Record Quarterly Sales, Net Income, Earnings Per Diluted Share and Cash Flow from Operations

• Company raises earnings guidance for fiscal year 2008

CLEVELAND, April 22, 2008 — Parker Hannifin (NYSE: PH), the world leader in motion and control technologies, today reported record third quarter sales, net income, earnings per diluted share and cash flow from operations.

For the third quarter of fiscal year 2008, which ended on March 31, 2008, sales were $3.2 billion, an increase of 14.4 percent from $2.8 billion in the same quarter a year ago. Net income increased 22.0 percent to $255.4 million from $209.3 million in the same quarter a year ago. Earnings per diluted share increased 25.2 percent to $1.49 as compared to $1.19 in the same quarter a year ago. Cash flow from operations was $863.8 million, or 9.8 percent of sales.

“We are clearly headed to another record year for Parker, which will be the fifth record year in a row. The company continues to perform very well, showing strength during an economic cycle that has resulted in a challenging economic environment, particularly in North America. This is clearly the result of the dedication of our nearly 60,000 empowered employees who continue to stay focused on the Win Strategy, which is the clear roadmap that defines the goals, sets the strategies for achieving them, and identifies how progress will

1

be measured,” said Chairman, CEO and President Don Washkewicz. “First among those goals is one which serves Parker well independent of the economic cycle - to continually provide premier customer service. At Parker this means not just providing quality products on-time, but partnering with our customers all over the world to help them become more productive and profitable.”

“Our consistent profitable growth also clearly demonstrates the power behind Parker’s globally balanced assets and capabilities to serve customers in key regions of the world,” Washkewicz continued. “This allows for more consistent financial performance, and coupled with our strong global distribution network, also allows Parker to serve its customers, and their customers, anywhere in the world. This is a distinctive business model that we believe separates Parker from others in our industry.”

“Of the 14.4 percent sales growth this quarter, 4.3 percent was organic, 4.0 percent was the result of strategic acquisitions, and the remainder was from the movement of foreign currency exchange rates. Parker is benefiting today from the many strategic actions taken earlier in this decade. We have demonstrated our ability to profitably grow both organically and through strategic acquisitions of quality companies, and will continue to do so as further opportunities arise,” continued Washkewicz.

“Particularly strong results were again delivered this quarter by the Industrial International segment, with robust organic growth and an increase in operating income by over 50 percent as compared to the same period a year ago,” added Washkewicz.

“Adding high growth, advanced technologies and systems to our portfolio through acquisitions is an important part of the Win Strategy,” said Washkewicz. “Strong cash flow is leveraged to selectively add to the portfolio. We made two recent strategic acquisitions, which added approximately $270 million in sales. These acquisitions included Vansco Electronics, a global leader in the design and manufacture of electronic controls, displays and terminals, communication and operator interfaces, and sensors. Vansco adds to our total systems capabilities to serve the mobile equipment market with applications for agricultural, construction,

2

material handling, bus, RV, and specialty truck equipment. The other recent acquisition was HTR Holdings Corp., which provides Parker greater access to the life sciences market. It adds to our capability to provide precision elastomeric components for medical devices such as intravenous equipment, drug infusion pumps, masks, septums, respirator hoses, catheters and diaphragms sold directly to original equipment manufacturers.”

Segment Results

In spite of a soft overall economy in the Industrial North America segment, third-quarter sales increased 3.7 percent to $1.1 billion, and operating income increased 0.8 percent to $148.0 million, as compared to the same period a year ago.

In the Industrial International segment, third-quarter sales increased 32.2 percent to $1.3 billion, and operating income increased 54.7 percent to $217.2 million, as compared to the same period a year ago.

In the Aerospace segment, third-quarter sales increased 7.7 percent to $470.1 million, and operating income increased 3.2 percent to $68.3 million, as compared to the same period a year ago. During the quarter, this segment was awarded a $2 billion long-term contract to supply the fuel package and hydraulic system for the new Airbus A350 XWB aircraft.

In the Climate & Industrial Controls segment, third-quarter sales increased 0.5 percent to $279.6 million, and operating income decreased 4.9 percent to $18.3 million, as compared to the same period a year ago. This segment continues to be impacted by the ongoing weakness in the automotive, residential construction, and heavy duty truck markets.

Orders

In addition to financial results, for the quarter ending March 31, 2008, Parker also reported an increase of 9 percent in total orders before the effect of foreign currency and acquisitions, as compared to the same

3

quarter a year ago. Parker reported the following orders by operating segment:

• Orders increased 2 percent in the Industrial North America segment versus the same quarter a year ago.

• Orders increased 11 percent in the Industrial International segment versus the same quarter a year ago.

• Orders increased 28 percent in the Aerospace segment on a rolling 12 month average basis.

• Orders decreased 1 percent in the Climate and Industrial Controls segment versus the same quarter a year ago.

Outlook

For fiscal year 2008, the company increased its guidance for earnings to the range of $5.40 to $5.60 per diluted share. Previous guidance for earnings was $5.15 to $5.40 per diluted share.

“Since fiscal 2008 continues to be strong overall, we have again raised our earnings guidance,” said Washkewicz. “Orders are growing in Europe, Asia, Latin America and North America. Many of our key markets, including Aerospace, continue to grow. For other markets, especially those in North America which have been in recession, we are positioned to benefit when they return to more normal growth levels.”

“We will continue to invest to take advantage of the many growth opportunities we see,” continued Washkewicz. “To further this investment, we are pleased to have had our syndicated credit facility, comprised of 18 creditors around the world, increased by nearly 50 percent over previous levels to $1.5 billion. Given today’s tight credit markets, we believe it signals our creditors’ trust in Parker’s ability to deliver on the profitable growth and financial performance measures of the Win Strategy.”

“We were also pleased to receive an important third-party recognition this quarter. Parker was honored with IR Magazine’s “Most Progress in Investor Relations” award at its annual recognition dinner for publicly held companies in New York City. The awards dinner recognizes outstanding communications between companies and their shareholders based on independent research conducted among more than 2,600 buy-side analysts, sell-side analysts, and portfolio managers in the U.S.”

4

Concluded Washkewicz, “Our financial results, along with our proven business model and the Win Strategy, give us confidence about the continuing growth potential we see in our future.”

NOTICE OF CONFERENCE CALL: Parker Hannifin’s conference call and slide presentation to discuss its fiscal third-quarter results is available to all interested parties via live webcast today at 10:00 a.m. ET, on the company’s investor information web site, http://www.phstock.com. To access the call, click on the “Live Webcast” link. From this link, users also may complete a pre-call system test and register for e-mail notification of future events and information available from Parker.

With annual sales exceeding $10 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 57,000 people in 43 countries around the world. Parker has increased its annual dividends paid to shareholders for 52 consecutive years, among the top five longest-running dividend-increase records in the S&P 500 index. For more information, visit the company’s web site at http://www.parker.com, or its investor information site at http://www.phstock.com

Notes on Orders

Orders provide near-term perspective on the company’s outlook, particularly when viewed in the context of prior and future quarterly order rates. However, orders are not in themselves an indication of future performance. All comparisons are at constant currency exchange rates, with the prior year restated to the current-year rates. All exclude acquisitions until they can be reflected in both the numerator and denominator. Aerospace comparisons are rolling 12-month average computations. The Total Parker orders number is derived from a weighted average of the year-over-year quarterly percent change in orders for the Industrial North America, Industrial International, and Climate and Industrial Controls segments, and the year-over-year 12-month rolling average of orders in the Aerospace segment.

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.

# # #

5

PARKER HANNIFIN CORPORATION - MARCH 31, 2008

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

	Three Months Ended March 31,					Nine Months Ended March 31,
(Dollars in thousands except per share amounts)	2008		2007			2008			2007
Net sales	$	3,182,537	$	2,780,969		$	8,798,853		$	7,843,694
Cost of sales		2,447,216		2,163,828			6,763,650			6,049,193
Gross profit		735,321		617,141			2,035,203			1,794,501
Selling, general and administrative expenses		347,022		308,562			990,944			893,427
Interest expense		25,540		22,403			73,977			61,879
Other expense (income), net		4,965		(8,750	)		(1,424	)		(22,153	)
Income before income taxes		357,794		294,926			971,706			861,348
Income taxes		102,353		85,617			274,805			248,488
Net income	$	255,441	$	209,309		$	696,901		$	612,860
Earnings per share:
Basic earnings per share	$	1.52	$	1.21		$	4.14		$	3.50
Diluted earnings per share	$	1.49	$	1.19		$	4.05		$	3.45
Average shares outstanding during period - Basic		167,750,603		173,176,299			168,532,262			175,031,276
Average shares outstanding during period - Diluted		170,892,454		176,210,661			171,878,223			177,829,325
Cash dividends per common share	$	.21	$	.173		$	.63		$	.52
BUSINESS SEGMENT INFORMATION BY INDUSTRY (Unaudited)
	Three Months Ended March 31,					Nine Months Ended March 31,
(Dollars in thousands)	2008		2007			2008			2007
Net sales
Industrial:
North America	$	1,086,986	$	1,048,474		$	3,084,233		$	3,008,902
International		1,345,849		1,017,953			3,624,486			2,817,668
Aerospace		470,109		436,476			1,328,097			1,240,873
Climate & Industrial Controls		279,593		278,066			762,037			776,251
Total	$	3,182,537	$	2,780,969		$	8,798,853		$	7,843,694
Segment operating income
Industrial:
North America	$	148,019	$	146,794		$	444,881		$	433,822
International		217,243		140,456			575,903			389,756
Aerospace		68,323		66,219			177,676			202,622
Climate & Industrial Controls		18,282		19,232			39,209			57,019
Total segment operating income	$	451,867	$	372,701		$	1,237,669		$	1,083,219
Corporate general and administrative expenses		48,157		40,538			133,505			121,168
Income from operations before interest expense and other		403,710		332,163			1,104,164			962,051
Interest expense		25,540		22,403			73,977			61,879
Other expense		20,376		14,834			58,481			38,824
Income before income taxes	$	357,794	$	294,926		$	971,706		$	861,348

PARKER HANNIFIN CORPORATION - MARCH 31, 2008

CONSOLIDATED BALANCE SHEET

(Unaudited)

(Dollars in thousands) March 31,	2008		2007
Assets
Current assets:
Cash and cash equivalents	$	182,134	$	183,727
Accounts receivable, net		1,985,894		1,717,153
Inventories		1,488,799		1,270,971
Prepaid expenses		70,334		64,200
Deferred income taxes		145,013		132,261
Total current assets		3,872,174		3,368,312
Plant and equipment, net		1,861,893		1,709,239
Goodwill		2,652,727		2,169,631
Intangible assets, net		724,607		491,383
Other assets		497,776		969,972
Total assets	$	9,609,177	$	8,708,537
Liabilities and shareholders’ equity
Current liabilities:
Notes payable	$	621,168	$	293,456
Accounts payable		879,169		734,801
Accrued liabilities		820,720		720,770
Accrued domestic and foreign taxes		166,229		147,734
Total current liabilities		2,487,286		1,896,761
Long-term debt		1,189,736		1,115,987
Pensions and other postretirement benefits		362,865		833,123
Deferred income taxes		140,077		122,942
Other liabilities		310,220		219,282
Shareholders’ equity		5,118,993		4,520,442
Total liabilities and shareholders’ equity	$	9,609,177	$	8,708,537

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	Nine Months Ended March 31,
(Dollars in thousands)	2008			2007
Cash flows from operating activities:
Net income	$	696,901		$	612,860
Depreciation and amortization		231,680			222,019
Stock-based compensation		37,934			28,517
Net change in receivables, inventories, and trade payables		(163,824	)		(179,683	)
Net change in other assets and liabilities		87,582			(71,970	)
Other, net		(26,501	)		(74,864	)
Net cash provided by operating activities		863,772			536,879
Cash flows from investing activities:
Acquisitions (net of cash of $13,668 in 2008 and $1,088 in 2007)		(467,686	)		(188,340	)
Capital expenditures		(188,172	)		(174,946	)
Proceeds from sale of plant and equipment		16,120			35,389
Other, net		(3,554	)		(2,839	)
Net cash (used in) investing activities		(643,292	)		(330,736	)
Cash flows from financing activities:
Net (payments for) common share activity		(521,262	)		(361,651	)
Net proceeds from debt		414,363			254,196
Dividends		(107,077	)		(91,187	)
Net cash (used in) financing activities		(213,976	)		(198,642	)
Effect of exchange rate changes on cash		2,924			4,673
Net increase in cash and cash equivalents		9,428			12,174
Cash and cash equivalents at beginning of period		172,706			171,553
Cash and cash equivalents at end of period	$	182,134		$	183,727

EX-99.2

Parker Hannifin Corporation

Quarterly Earnings Release

3rd Quarter FY 2008

April 22, 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

3

rd

quarter highlights

Key performance measures & outlook

Questions & answers

Closing comments

Slide 5

Third Quarter and Q3-YTD Highlights

Record Quarterly Sales, Earnings, and Cash Flow

FY 2008 projected to be another record year

International strength offsetting challenging North

American environment

Q3 Sales growth 14.4% -

4.3%

organic

Earnings per diluted share up 25.2% in Q3,

17.4% Q3-YTD

Total Parker Orders up 9% in Q3

Slide 6

Financial Highlights

Diluted Earnings per Share

3

rd

Quarter and YTD as of March 31

$3.45

$4.05

$1.49

$1.19

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

Q3 FY08

Q3 FY07

Q3 FY08 YTD

Q3 FY07 YTD

Slide 7

Influences on 3

rd

Quarter Earnings

Sales increased 14.4%

-

4.3%

organic

Segment operating income increased 21%

Fewer shares outstanding

—

5.3 million fewer diluted shares in FY08

Offset by:

Lower No. America and Aerospace margins

Higher Interest expense

Higher Other expense

Slide 8

Financial Highlights

Sales –

3

rd

Quarter  and YTD as of March 31

Dollars in millions

FY2008

%

Change

FY2007

FY2008

%

Change

FY2007

Sales

As reported

3,183

$

14.4 %

2,781

$

8,799

$ 

12.2 %

7,844

$

Acquisitions

111

4.0 %

247

3.1 %

Currency

172

6.1 %

382

4.9 %

Adjusted Sales

2,900

$

4.3 %

8,170

$ 

4.2 %

3rd 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

1,087

$

3.7 %

1,048

$

3,084

$  

2.5 %

3,009

$

Acquisitions

6

0.6 %

51

1.7 %

Currency

8

0.7 %

18

0.6 %

Adjusted Sales

1,073

$

2.4 %

3,015

$  

0.2 %

Operating Margin

As reported

148

$   

147

$   

445

$      

434

$   

  % of Sales

13.6 %

14.0 %

14.4 %

14.4 %

3rd Quarter

YTD

Slide 11

Segment Reporting

Industrial International

Dollars in millions

FY2008

%

Change

FY2007

FY2008

%

Change

FY2007

Sales

As reported

1,346

$

32.2 %

1,018

$

3,624

$  

28.6 %

2,818

$

Acquisitions

92

9.0 %

174

6.2 %

Currency

151

14.8 %

334

11.8 %

Adjusted Sales

1,103

$

8.4 %

3,116

$  

10.6 %

Operating Margin

As reported

217

$   

140

$   

576

$      

390

$   

  % of Sales

16.1 %

13.8 %

15.9 %

13.8 %

3rd Quarter

YTD

Slide 12

Segment Reporting

Aerospace

Dollars in millions

FY2008

%

Change

FY2007

FY2008

%

Change

FY2007

Sales

As reported

470

$   

7.7 %

436

$   

1,328

$  

7.0 %

1,241

$

Acquisitions

14

3.2 %

22

1.8 %

Currency

3

0.6 %

7

0.5 %

Adjusted Sales

453

$   

3.9 %

1,299

$  

4.7 %

Operating Margin

As reported

68

$      

66

$      

178

$      

203

$   

  % of Sales

14.5 %

15.2 %

13.4 %

16.3 %

3rd Quarter

YTD

Slide 13

Segment Reporting

Climate & Industrial Controls

Dollars in millions

FY2008

%

Change

FY2007

FY2008

%

Change

FY2007

Sales

As reported

280

$   

0.5 %

278

$   

762

$      

(1.8)%

776

$   

Acquisitions

Currency

10

3.6 %

23

3.0 %

Adjusted Sales

270

$   

(3.1)%

739

$      

(4.8)%

Operating Margin

As reported

18

$      

19

$      

39

$        

57

$      

  % of Sales

6.5 %

6.9 %

5.1 %

7.3 %

3rd Quarter

YTD

Slide 14

Parker Order Rates

Excludes Acquisitions & Currency

3-month

year-over-year

comparisons

of

total

dollars,

except

Aerospace

Aerospace is calculated using a 12-month moving average

FY08

FY07

Total Parker

9 %

+   

2 %

+   

Industrial North America

2 %

+   

2 %

-    

Industrial International

11 %

+

11 %

+

Aerospace

28 %

+

2 %

+   

Climate & Industrial Controls

1 %

-    

4 %

-    

Three months ending March

Slide 15

Balance Sheet Summary

Cash

Working capital

Inventory

Accounts receivable

Pensions –

FAS 158

Slide 16

Strong Cash Flow

Cash from Operating Activities

3

rd

Quarter YTD

$537

$864

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

FY08

FY07

Slide 17

Financial Leverage

Debt to Debt Equity

26.1%

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

3.7 %

--

4.1 %

Industrial International

25.0 %

--

25.4 %

Aerospace

7.3 %

--

7.7 %

Climate & Industrial Controls

(2.8)%

--

(2.4)%

FY 2008 Operating margin percentages

Industrial North America

14.1 %

--

14.5 %

Industrial International

15.7 %

--

16.0 %

Aerospace

13.6 %

--

14.0 %

Climate & Industrial Controls

5.5 %

--

5.9 %

Slide 19

FY 2008 Earnings Outlook Assumptions

below Operating Margin

Corporate Admin

+  2% to +  1% vs. FY 2007

Interest Expense

+ 26% to + 23% vs. FY 2007

Other Expense (Inc.) 

+ 29% to + 24% vs. FY 2007

Tax Rate

29 %

Slide 20

Earnings Outlook –

FY08

Low

High

Diluted earnings per share

5.40

$ 

5.60

$  

Slide 21

Questions & Answers...

Appendix

Income Statements

3

rd

Quarter

3

rd

Quarter YTD

Slide 23

Income Statement –

3

rd

Quarter

Dollars in millions

% of Sales

% of Sales

Net Sales

3,182.5

$  

100.0 %

2,781.0

$

100.0 %

Cost of sales

2,447.2

76.9 %

2,163.8

77.8 %

Gross profit

735.3

23.1 %

617.2

22.2 %

S, G & A

347.0

10.9 %

308.6

11.1 %

Interest expense

25.5

.8 %

22.4

.8 %

Other expense (income), net

5.0

.2 %

(8.7)

(.3)%

Income before taxes

357.8

11.2 %

294.9

10.6 %

Income taxes

102.4

3.2 %

85.6

3.1 %

Net income

255.4

$      

8.0 %

209.3

$   

7.5 %

FY 2008

FY 2007

Slide 24

Income Statement –

3

rd

Quarter YTD

Dollars in millions

% of Sales

% of Sales

Net Sales

8,798.9

$  

100.0 %

7,843.7

$

100.0 %

Cost of sales

6,763.7

76.9 %

6,049.2

77.1 %

Gross profit

2,035.2

23.1 %

1,794.5

22.9 %

S, G & A

990.9

11.3 %

893.4

11.4 %

Interest expense

74.0

.8 %

61.9

.8 %

Other (income), net

(1.4)

(.0)%

(22.2)

(.3)%

Income before taxes

971.7

11.0 %

861.4

11.0 %

Income taxes

274.8

3.1 %

248.5

3.2 %

Net income

696.9

$      

7.9 %

612.9

$   

7.8 %

FY 2008

FY 2007