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): August 2, 2011

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 August 2, 2011, Parker-Hannifin Corporation issued a press release and presented a Webcast announcing earnings for the quarter ended June 30, 2011. The press release contains references to sales growth excluding the effects of acquisitions and foreign currency exchange rates and the effect on cash flows from operating activities as a percent of sales of a discretionary pension plan contribution. The effects on sales of acquisitions and foreign currency exchange rates and the effect on cash flows from operating activities as a percent of sales of a discretionary pension plan contribution are removed to allow investors and the company to meaningfully evaluate changes in sales and cash flows from operating activities as a percent of 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 August 2, 2011.
99.2	Webcast presentation by Parker-Hannifin Corporation, dated August 2, 2011.

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/ Jon P. Marten
	Jon P. Marten
	Executive Vice President - Finance and Administration and Chief Financial Officer

Date: August 2, 2011

EX-99.1

Exhibit 99.1

For Release:	Immediately
Contact:	Media – Christopher M. Farage - Vice President, Communications & External Affairs cfarage@parker.com	216/896-2750
	Financial Analysts – Pamela Huggins, Vice President - Treasurer phuggins@parker.com	216/896-2240
Stock Symbol:	PH – NYSE

Parker Reports Year End Results with All-Time Record Sales, Net Income and Earnings per Share

- Fiscal 2011 Full Year Sales Reach All-Time Record of $12.3 billion

- Fiscal 2011 Full Year Diluted Earnings Per Share Reaches a Record $6.37

- Company Maintains Strong Cash Flow and Balance Sheet

- Issues Guidance for Record Earnings in Fiscal 2012

CLEVELAND, August 2, 2011—Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported all-time record results for the fiscal 2011 fourth quarter and year ended June 30, 2011. Fiscal 2011 sales were $12.3 billion, an increase of 23.5 percent from $10.0 billion in the prior year and surpassing the previous record achieved in fiscal 2008. Net income for the year was a record $1.1 billion, an increase of 90.0 percent compared with $556.4 million in fiscal 2010. Fiscal 2011 earnings per diluted share were a record at $6.37 compared with $3.40 in the previous year. Cash flow from operations for fiscal 2011 was $1.2 billion, or 9.5 percent of sales, compared with cash flow from operations of $1.2 billion, or 12.2 percent of sales in the prior year period. Cash flow from operations included discretionary contributions to the company’s pension plan of $400 million in fiscal 2011 and $100 million in fiscal 2010. Excluding these discretionary contributions, cash flow as a percent of sales in fiscal 2011 and fiscal 2010, was 12.7 percent and 13.2 percent, respectively.

Fiscal 2011 fourth quarter sales were a record $3.4 billion, an increase of 22.4 percent from $2.8 billion in the same quarter a year ago. Net income for the fourth quarter was also a record at $294.7 million, a 32.1 percent increase compared with $223.1 million in the fourth quarter of fiscal 2010. Earnings per diluted share for the quarter were a record $1.79, compared with $1.35 in last year’s

1

fourth quarter. Cash flow from operations for fiscal 2011 fourth quarter was $367 million, or 10.8 percent of sales, compared with cash flow from operations of $377 million, or 13.5 percent of sales in the prior year period. Fiscal 2011 fourth quarter cash flow from operations included a $200 million discretionary contribution to the company’s pension plan. Excluding this discretionary contribution, cash flow as a percent of sales was 16.6 percent for the fiscal 2011 fourth quarter.

“Achieving record performance this year is a remarkable accomplishment,” said Chairman, CEO and President, Don Washkewicz. “I am especially proud of our global team that delivered this performance. We will continue the focus on executing Parker’s Win Strategy and build on this success.”

Parker also achieved all-time record sales and earnings per share in the fourth quarter and strong segment operating margin performance. Total sales for the quarter increased 22 percent as organic sales increased 15 percent, acquisitions contributed 1 percent and foreign currency translation was a positive 6 percent. Profitability in the quarter was strongest in the Industrial segment. Industrial North America segment operating margin reached 16.9 percent and Industrial International segment operating margin was 14.7 percent.

Segment Results

In the Industrial North America segment, fourth quarter sales increased 18.6 percent to $1.2 billion, and operating income was $207.3 million compared with $162.9 million in the same period a year ago.

In the Industrial International segment, fourth quarter sales increased 33.8 percent to $1.4 billion, and operating income was $202.8 million compared with $140.3 million in the same period a year ago.

In the Aerospace segment, fourth quarter sales increased 9.3 percent to $521.9 million, and operating income was $70.7 million compared with $64.1 million in the same period a year ago.

In the Climate and Industrial Controls segment, fourth quarter sales increased 15.2 percent to $276.8 million, and operating income was $22.5 million compared with $20.5 million in the same period a year ago.

2

Orders

Parker reported an increase of 15 percent in orders for the quarter ending June 30, 2011, compared with the same quarter a year ago. The company reported the following orders by operating segment:

• Orders increased 11 percent in the Industrial North America segment, compared with the same quarter a year ago.

• Orders increased 18 percent in the Industrial International segment, compared with the same quarter a year ago.

• Orders increased 27 percent in the Aerospace segment on a rolling 12-month average basis.

• Orders increased 1 percent in the Climate and Industrial Controls segment, compared with the same quarter a year ago.

Outlook

For fiscal 2012, the company has issued guidance for earnings from continuing operations in the range of $6.70 to $7.50 per diluted share.

Washkewicz added, “Our earnings range for fiscal 2012 anticipates another record year for Parker. We will continue in fiscal 2012 with a strong focus on the fundamentals defined by the Win Strategy. We will continue to invest in profitable growth through new product and systems innovation, strategic acquisitions, and expansion of our distribution network.”

NOTICE OF CONFERENCE CALL: Parker Hannifin’s conference call and slide presentation to discuss its fiscal 2011 fourth quarter and full year results are available to all interested parties via live webcast today at 10:00 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 also may complete a pre-call system test and register for e-mail notification of future events and information available from Parker. A replay of the conference call will also be available at www.phstock.com for one year after the call.

3

With annual sales exceeding $12 billion in fiscal year 2011, 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 mobile, industrial and aerospace markets. The company employs approximately 58,000 people in 47 countries around the world. Parker has increased its annual dividends paid to shareholders for 55 consecutive fiscal 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 www.parker.com, or its investor information web site at 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 for 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, including its individual segments, may differ materially from current expectations, depending on economic conditions within its mobile, 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, actions taken to combat the effects of the current economic environment, and growth, innovation and global diversification initiatives. A change in economic conditions in individual markets may have a particularly volatile effect on segment performance. Among other factors which may affect future performance are: 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 cost and revenue estimates for new development programs and changes in product mix; uncertainties surrounding timing, successful completion or integration of acquisitions; ability to realize anticipated costs savings from business realignment activities; threats associated with and efforts to combat terrorism; uncertainties surrounding the ultimate resolution of outstanding legal proceedings, including the outcome of any appeals; 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 insurance and employee retirement and health care benefits; and global economic factors, including manufacturing activity, air travel trends, currency exchange rates, difficulties entering new markets and general economic conditions such as inflation, deflation, interest rates and credit availability. The company makes these statements as of the date of this disclosure, and undertakes no obligation to update them unless otherwise required by law.

###

4

PARKER HANNIFIN CORPORATION—JUNE 30, 2011

CONSOLIDATED STATEMENT OF INCOME

	Three Months Ended June 30,					Twelve Months Ended June 30,
(Dollars in thousands except per share amounts)	2011			2010		2011			2010
Net sales	$	3,409,830		$	2,786,470	$	12,345,870		$	9,993,166
Cost of sales		2,590,772			2,114,190		9,387,457			7,847,067
Gross profit		819,058			672,280		2,958,413			2,146,099
Selling, general and administrative expenses		413,441			349,328		1,467,773			1,277,080
Interest expense		24,821			26,896		99,704			103,599
Other (income) expense, net		(594	)		3,896		(22,785	)		10,603
Income before income taxes		381,390			292,160		1,413,721			754,817
Income taxes		86,736			69,108		356,571			198,452
Net income		294,654			223,052		1,057,150			556,365
Less: Noncontrolling interests		2,464			889		8,020			2,300
Net income attributable to common shareholders	$	292,190		$	222,163	$	1,049,130		$	554,065
Earnings per share attributable to common shareholders:
Basic earnings per share	$	1.83		$	1.38	$	6.51		$	3.44
Diluted earnings per share	$	1.79		$	1.35	$	6.37		$	3.40
Average shares outstanding during period—Basic		159,369,296			161,310,414		161,125,869			160,909,655
Average shares outstanding during period—Diluted		163,688,610			163,997,297		164,798,221			162,901,717
Cash dividends per common share	$	.37		$	.26	$	1.25		$	1.01
BUSINESS SEGMENT INFORMATION BY INDUSTRY
	Three Months Ended June 30,					Twelve Months Ended June 30,
(Dollars in thousands)	2011			2010		2011			2010
Net sales
Industrial:
North America	$	1,227,412		$	1,034,573	$	4,516,510		$	3,623,460
International		1,383,748			1,033,971		4,917,007			3,811,464
Aerospace		521,868			477,629		1,921,984			1,744,283
Climate & Industrial Controls		276,802			240,297		990,369			813,959
Total	$	3,409,830		$	2,786,470	$	12,345,870		$	9,993,166
Segment operating income
Industrial:
North America	$	207,290		$	162,933	$	745,544		$	487,137
International		202,848			140,295		754,222			394,089
Aerospace		70,722			64,052		247,126			208,002
Climate & Industrial Controls		22,504			20,513		76,134			53,452
Total segment operating income		503,364			387,793		1,823,026			1,142,680
Corporate general and administrative expenses		51,187			54,911		163,868			153,965
Income from operations before interest expense and other		452,177			332,882		1,659,158			988,715
Interest expense		24,821			26,896		99,704			103,599
Other expense		45,966			13,826		145,733			130,299
Income before income taxes	$	381,390		$	292,160	$	1,413,721		$	754,817

5

PARKER HANNIFIN CORPORATION—JUNE 30, 2011

CONSOLIDATED BALANCE SHEET

(Dollars in thousands) June 30,	2011			2010
Assets
Current assets:
Cash and cash equivalents	$	657,466		$	575,526
Accounts receivable, net		1,977,856			1,599,941
Inventories		1,412,153			1,171,655
Prepaid expenses		111,934			111,545
Deferred income taxes		145,847			130,129
Total current assets		4,305,256			3,588,796
Plant and equipment, net		1,797,179			1,697,881
Goodwill		3,009,116			2,786,334
Intangible assets, net		1,177,722			1,150,051
Other assets		597,532			687,320
Total assets	$	10,886,805		$	9,910,382
Liabilities and equity
Current liabilities:
Notes payable	$	75,271		$	363,272
Accounts payable		1,173,851			888,743
Accrued liabilities		909,147			776,527
Accrued domestic and foreign taxes		232,774			176,349
Total current liabilities		2,391,043			2,204,891
Long-term debt		1,691,086			1,413,634
Pensions and other postretirement benefits		862,938			1,500,928
Deferred income taxes		160,035			135,321
Other liabilities		293,367			196,208
Shareholders’ equity		5,383,854			4,367,965
Noncontrolling interests		104,482			91,435
Total liabilities and equity	$	10,886,805		$	9,910,382
CONSOLIDATED STATEMENT OF CASH FLOWS
	Twelve Months Ended June 30,
(Dollars in thousands)	2011			2010
Cash flows from operating activities:
Net income	$	1,057,150		$	556,365
Depreciation and amortization		339,800			362,509
Stock incentive plan compensation		73,238			59,318
Net change in receivables, inventories, and trade payables		(170,650	)		92,949
Net change in other assets and liabilities		(156,080	)		155,991
Other, net		23,475			(8,310	)
Net cash provided by operating activities		1,166,933			1,218,822
Cash flows from investing activities:
Acquisitions (net of cash of $385 in 2011)		(60,227	)		(5,451	)
Capital expenditures		(207,294	)		(129,222	)
Proceeds from sale of plant and equipment		32,289			11,929
Other, net		(9,706	)		(23,429	)
Net cash (used in) investing activities		(244,938	)		(146,173	)
Cash flows from financing activities:
Net (payments for) common stock activity		(624,411	)		(994	)
Net (payments for) debt		(85,283	)		(486,263	)
Dividends		(206,084	)		(162,739	)
Net cash (used in) financing activities		(915,778	)		(649,996	)
Effect of exchange rate changes on cash		75,723			(34,738	)
Net increase in cash and cash equivalents		81,940			387,915
Cash and cash equivalents at beginning of period		575,526			187,611
Cash and cash equivalents at end of period	$	657,466		$	575,526

6

EX-99.2

Parker Hannifin Corporation

Quarterly Earnings Release

4

th

Quarter and Total Year FY2011

August 2, 2011

Exhibit 99.2

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, including its individual

segments, may differ materially from current expectations, depending on economic conditions

within its mobile, 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, actions taken to combat the effects of the current

economic

environment,

and

growth,

innovation

and

global

diversification

initiatives.

A

change

in

economic conditions in individual markets may have a particularly volatile effect on segment

performance. Among other factors which may affect future performance are: 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 cost and revenue estimates for new

development programs and changes in product mix; uncertainties surrounding timing,

successful

completion

or

integration

of

acquisitions;

ability

to

realize

anticipated

cost

savings

from business realignment activities; threats associated with and efforts to combat terrorism;

uncertainties

surrounding

the

ultimate

resolution

of

outstanding

legal

proceedings,

including

the

outcome of any appeals; 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 insurance and employee retirement and health

care benefits; and global economic factors, including manufacturing activity, air travel trends,

currency exchange rates, difficulties entering new markets and general economic conditions

such as inflation, deflation, interest rates and credit availability. The company makes these

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

unless otherwise required by law.

Slide 2

Non-GAAP Financial Measures

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

and

the

effects

of

currency exchange rates on sales.  This presentation also reconciles

cash flow from operating activities as a percent of sales in accordance

with U.S. GAAP to cash flow from operating activities as a percent of

sales without the effect of a discretionary pension plan contribution.

The effects of acquisitions, currency exchange rates and the

discretionary pension plan contribution are removed to allow investors

and the company to meaningfully evaluate changes in sales and cash

flow from operating activities as a percent of sales on a comparable

basis from period to period.

Slide 3

Slide 4

Discussion Agenda

CEO 4

th

Quarter and Total Year Highlights

Key Performance Measures & Outlook

Questions & Answers

CEO Closing Comments

4th Quarter & Total Year FY11 Highlights

Total Year FY11:

Sales

Growth:

All-time

Record

Sales

of

$12.3B,

increased

23.5%

Year-

over-Year

Operating

Margins:

All-time

Record

Total

Segment

Operating

Margin

of

14.8%

Net

Income

&

EPS:

Achieved

All-time

Record

Net

Income,

EPS

increased 87%

4

Quarter

FY11:

Sales

Growth:

Q4

Record

Sales,

an

Increase

of

22%

Year-over-Year

Net

Income:

Achieved

All-time

Record

Net

Income,

EPS

and

Net

Income/Sales

Operating

Margins:

Total

Segment

Operating

Margin

of

14.8%

Continued Strong Cash Flow:

FY11 Operating Cash Flow/Sales of 9.5%; 12.7% Excluding $400M

Discretionary Pension Plan Contribution

Increased Dividend Payout by 42% and Share Repurchase Totaled 

$693M in FY11

Slide 5

th

Slide 6

Financial Highlights

Diluted Earnings per Share

4

th

Quarter and Total Year

$1.79

$1.35

$6.37

$3.40

$.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

Q4 FY11

Q4 FY10

FY11

FY10

Influences

on

4

Quarter

Earnings

Diluted Earnings Per Share Increase of $.44 Year-over-Year

Driven By:

Increased Sales of 22%

Improved Segment Operating Income ($.54 EPS Impact)

Margins Improved to 14.8% from 13.9% Year-over-Year

Lower Corporate Tax Rate ($.02 EPS Impact)

Fewer Shares Outstanding ($.01 EPS Impact)

Offset by:

Net

Increase

in

Expenses

Below

Segment

Operating

Income

($.12 EPS Impact)

Higher Non-controlling Interests ($.01 EPS Impact)

Slide 7

th

Influences on Total Year FY11 Earnings

Diluted Earnings Per Share Increase of $2.97 Year-over-

Year Driven By:

Increased Sales of 24%

Improved Segment Operating Income ($3.08 EPS Impact)

Margins Improved to 14.8% from 11.4% Year-over-Year

Lower Corporate Tax Rate ($.09 EPS Impact)

Offset by:

Net

Increase

in

Expenses

Below

Segment

Operating

Income

($.10 EPS Impact)

Increased Diluted Shares Outstanding ($.07  EPS Impact)

Higher Non-controlling Interests ($.03 EPS Impact)

Slide 8

Slide 9

Financial Highlights

Sales –

4

th

Quarter  and Total Year

Dollars in millions

FY2011

%

Change

FY2010

FY2011

%

Change

FY2010

Sales

As reported

3,410

$       

22.4 %

2,786

$      

12,346

$

23.5 %

9,993

$      

Acquisitions

21

0.7 %

54

0.5 %

Currency

185

6.7 %

205

2.0 %

Adjusted Sales

3,204

$       

15.0 %

12,087

$

21.0 %

Operating Margin

As reported

503

$          

388

$         

1,823

$ 

1,143

$      

% of Sales

14.8 %

13.9 %

14.8 %

11.4 %

4th Quarter

Total Year

Slide 10

Segment Reporting

Industrial North America

Dollars in millions

FY2011

%

Change

FY2010

FY2011

%

Change

FY2010

Sales

As reported

1,227

$       

18.6 %

1,034

$      

4,517

$ 

24.6 %

3,624

$      

Acquisitions

11

1.0 %

24

0.7 %

Currency

9

0.9 %

24

0.6 %

Adjusted Sales

1,207

$       

16.7 %

4,469

$ 

23.3 %

Operating Margin

As reported

207

$          

163

$         

746

$     

487

$         

% of Sales

16.9 %

15.7 %

16.5 %

13.4 %

4th Quarter

Total Year

Slide 11

Segment Reporting

Industrial International

Dollars in millions

FY2011

%

Change

FY2010

FY2011

%

Change

FY2010

Sales

As reported

1,384

$       

33.8 %

1,034

$      

4,917

$ 

29.0 %

3,811

$      

Acquisitions

7

0.6 %

15

0.4 %

Currency

164

15.9 %

168

4.4 %

Adjusted Sales

1,213

$       

17.3 %

4,734

$ 

24.2 %

Operating Margin

As reported

203

$          

140

$         

754

$     

394

$         

% of Sales

14.7 %

13.6 %

15.3 %

10.3 %

4th Quarter

Total Year

Slide 12

Segment Reporting

Aerospace

Dollars in millions

FY2011

%

Change

FY2010

FY2011

%

Change

FY2010

Sales

As reported

522

$          

9.3 %

478

$         

1,922

$ 

10.2 %

1,744

$      

Acquisitions

0

0.0 %

3

0.2 %

Currency

2

0.4 %

0

0.0 %

Adjusted Sales

520

$          

8.9 %

1,919

$ 

10.0 %

Operating Margin

As reported

71

$             

64

$            

247

$     

208

$         

% of Sales

13.6 %

13.4 %

12.9 %

11.9 %

4th Quarter

Total Year

Slide 13

Segment Reporting

Climate & Industrial Controls

Dollars in millions

FY2011

%

Change

FY2010

FY2011

%

Change

FY2010

Sales

As reported

277

$          

15.2 %

240

$         

990

$     

21.7 %

814

$         

Acquisitions

3

1.4 %

12

1.5 %

Currency

10

4.1 %

13

1.6 %

Adjusted Sales

264

$          

9.7 %

965

$     

18.6 %

Operating Margin

As reported

23

$             

21

$            

76

$       

53

$            

% of Sales

8.1 %

8.5 %

7.7 %

6.6 %

4th Quarter

Total Year

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

JUN '11

MAR '11

JUN '10

MAR '10

Total Parker

15 %

+

24 %

+

35 %

+ 

23 %

+ 

Industrial North America

11 %

+

20 %

+

46 %

+ 

30 %

+ 

Industrial International

18 %

+

22 %

+

46 %

+ 

42 %

+ 

Aerospace

27 %

+

44 %

+

3 %

-

22 %

-

Climate & Industrial Controls

1 %

+  

14 %

+

35 %

+ 

38 %

+ 

Three Month Rolling at Period End

Slide 15

Balance Sheet Summary

Cash

Working capital

-

Accounts receivable

-

Inventory

-

Accounts payable

Strong Cash Flow

Cash from Operating Activities

4

Quarter

and

Total

Year

Slide 16

th

Q4 Cash From Operating Activities

Q4 '11

Q4 '10

As Reported

$367M

$377M

As Reported % Sales

10.8%

13.5%

Pension Plan Contribution

$200M

-0-

Adjusted Cash From Operating Activities

$567M

$377M

Adjusted % Sales

16.6%

13.5%

Full Year Cash from Operating Activities:

FY '11

FY '10

As Reported

$1,167M

$1,219M

As Reported % Sales

9.5%

12.2%

Pension Plan Contribution

$400M

$100M

Adjusted Cash From Operating Activities

$1,567M

$1,319M

Adjusted % Sales

12.7%

13.2%

Slide 17

Financial Leverage

24.7% 

Debt to Debt Equity

24.7%

16.0%

18.0%

20.0%

22.0%

24.0%

26.0%

28.0%

30.0%

32.0%

34.0%

36.0%

38.0%

40.0%

42.0%

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

Debt to Debt Equity

Slide 18

FY 2012  Earnings Outlook Assumptions

Segment Sales & Operating Margins

  FY 2012 Sales change versus FY 2011

  Industrial North America

4.2 %

  -- 

8.2 %

  Industrial International

8.6 %

  -- 

12.6 %

  Aerospace

3.0 %

  -- 

6.0 %

  Climate & Industrial Controls

3.6 %

  -- 

7.6 %

  FY 2012 Operating margin percentages

  Industrial North America

16.5 %

  -- 

17.1 %

  Industrial International

15.2 %

  -- 

15.8 %

  Aerospace

13.0 %

  -- 

13.3 %

  Climate & Industrial Controls

8.8 %

  -- 

9.3 %

Slide 19

FY 2012 Earnings Outlook Assumptions

below Operating Margin (+/-

4.0%)

Expenses Below Segment Operating Margin*

$425M at Midpoint

Tax Rate = 28%

*Corporate Admin, Interest and Other Expense (Income)

Slide 20

Earnings Outlook –

FY12

Low

High

Diluted earnings per share

6.70

$ 

7.50

$

Slide 21

Questions & Answers...

Appendix

Income Statement

4

th

Quarter FY2011

Total Year FY2011

Slide 23

Income Statement –

4

Quarter

Dollars in millions

% of Sales

% of Sales

Net Sales

3,409.8

$ 

100.0 %

2,786.5

$ 

100.0 %

Cost of sales

2,590.8

76.0 %

2,114.2

75.9 %

Gross profit

819.0

24.0 %

672.3

24.1 %

S, G & A

413.4

12.1 %

349.3

12.5 %

Interest expense

24.8

.7 %

26.9

1.0 %

Other (income) expense, net

(.6)

(.0)%

3.9

.1 %

Income before taxes

381.4

11.2 %

292.2

10.5 %

Income taxes

86.7

2.5 %

69.1

2.5 %

Net income

294.7

$     

8.7 %

223.1

$    

8.0 %

Less: Noncontrolling interests

2.5

$         

.1 %

.9

$           

.0 %

Net income attributable to common

shareholders

292.2

$     

8.6 %

222.2

$    

8.0 %

FY 2011

FY 2010

th

Slide 24

Income Statement –

Total Year

Dollars in millions

% of Sales

% of Sales

Net Sales

12,345.9

$

100.0 %

9,993.2

$ 

100.0 %

Cost of sales

9,387.5

76.0 %

7,847.1

78.5 %

Gross profit

2,958.4

24.0 %

2,146.1

21.5 %

S, G & A

1,467.8

11.9 %

1,277.1

12.8 %

Interest expense

99.7

.8 %

103.6

1.0 %

Other (income) expense, net

(22.8)

(.2)%

10.6

.1 %

Income before taxes

1,413.7

11.5 %

754.8

7.6 %

Income taxes

356.6

2.9 %

198.4

2.0 %

Net income

1,057.1

$ 

8.6 %

556.4

$    

5.6 %

Less: Noncontrolling interests

8.0

$         

.1 %

2.3

$         

.1 %

Net income attributable to common

shareholders

1,049.1

$ 

8.5 %

554.1

$    

5.5 %

FY 2011

FY 2010