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): January 20, 2012

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 January 20, 2012, Parker-Hannifin Corporation issued a press release and presented a Webcast announcing earnings for the quarter ended December 31, 2011. The press release contains references to sales growth excluding the effects of acquisitions and foreign currency exchange rates. The effects on sales 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 January 20, 2012.
99.2	Webcast presentation by Parker-Hannifin Corporation, dated January 20, 2012.

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: January 20, 2012

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 Record Fiscal 2012 Second Quarter Sales, Net Income and Earnings per Share

• Sales Increased 8 percent, Reaching a Second Quarter Record of $3.1 billion

• Earnings Per Diluted Share Increased 12 percent to a Second Quarter Record of $1.56

• Company Adjusts Outlook for Full Year Earnings; Continues to Anticipate Record Year

CLEVELAND, January 20, 2012 – Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2012 second quarter ended December 31, 2011. Fiscal 2012 second quarter sales were $3.1 billion, a second quarter record and an increase of 8.4 percent from $2.9 billion in the prior year quarter. Net income was also a second quarter record at $242.3 million, an increase of 4.5 percent compared with $231.8 million in the second quarter of fiscal 2011. Fiscal 2012 second quarter earnings per diluted share were a second quarter record at $1.56, an increase of 12.2 percent compared with $1.39 in the prior year quarter. Cash flow from operations for the first six months of fiscal 2012 was $563.4 million, or 8.9 percent of sales, compared with $408.2 million, or 7.2 percent of sales, for the first six months of fiscal 2011.

“We are pleased to deliver strong organic growth and second quarter record sales, net income and earnings,” said Chairman, CEO and President, Don Washkewicz. “We generated 8 percent sales growth in the quarter, substantially all of which was organic, led by double-digit revenue growth in our Industrial North America business segment. Internationally, we are seeing some softening in business conditions consistent with global

1

macro-economic indicators, which moderated our year over year revenue growth and affected segment operating margin performance. However, strong operating margin performance in the Industrial North America segment contributed to an overall increase in total segment operating margins, which reached 14.2 percent for the quarter and exceeded 15 percent year to date.”

Segment Results

In the Industrial North America segment, second quarter sales increased 13.2 percent to $1.2 billion, and operating income was $195.7 million compared with $159.4 million in the same period a year ago.

In the Industrial International segment, second quarter sales increased 6.2 percent to $1.2 billion, and operating income was $165.9 million compared with $167.8 million in the same period a year ago.

In the Aerospace segment, second quarter sales increased 8.0 percent to $496.5 million, and operating income was $70.3 million compared with $63.6 million in the same period a year ago.

In the Climate and Industrial Controls segment, second quarter sales declined 2.9 percent to $208.2 million, and operating income was $9.8 million compared with $9.5 million in the same period a year ago.

Orders

Parker reported an increase of 3 percent in orders for the quarter ending December 31, 2011, compared with the same quarter a year ago. The company reported the following orders by operating segment:

• Orders increased 8 percent in the Industrial North America segment, compared with the same quarter a year ago.

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

• Orders remained unchanged in the Aerospace segment on a rolling 12-month average basis.

• Orders declined 5 percent in the Climate and Industrial Controls segment, compared with the same quarter a year ago.

2

Outlook

For fiscal 2012, the company has adjusted its guidance for earnings from continuing operations to the range of $6.90 to $7.30 per diluted share.

Washkewicz added, “We have made an adjustment in our earnings range to reflect business conditions internationally, while continued strength in North America will allow Parker to deliver an all-time record fiscal year in diluted earnings per share.”

NOTICE OF CONFERENCE CALL: Parker Hannifin’s conference call and slide presentation to discuss its fiscal 2012 second quarter 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.

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

3

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 the 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; ability to identify acceptable strategic acquisition targets; 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.

###

4

PARKER HANNIFIN CORPORATION - DECEMBER 31, 2011

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

	Three Months Ended December 31,						Six Months Ended December 31,
(Dollars in thousands except per share amounts)	2011			2010			2011			2010
Net sales	$	3,106,832		$	2,866,664		$	6,340,713		$	5,695,937
Cost of sales		2,381,322			2,195,728			4,795,764			4,333,602
Gross profit		725,510			670,936			1,544,949			1,362,335
Selling, general and administrative expenses		368,690			345,679			755,156			679,263
Interest expense		23,769			25,631			46,990			50,264
Other (income), net		(5,896	)		(6,624	)		(7,729	)		(9,806	)
Income before income taxes		338,947			306,250			750,532			642,614
Income taxes		96,604			74,432			210,031			161,766
Net income		242,343			231,818			540,501			480,848
Less: Noncontrolling interests		1,577			1,638			2,717			3,497
Net income attributable to common shareholders	$	240,766		$	230,180		$	537,784		$	477,351
Earnings per share attributable to common shareholders:
Basic earnings per share	$	1.59		$	1.42		$	3.55		$	2.96
Diluted earnings per share	$	1.56		$	1.39		$	3.47		$	2.90
Average shares outstanding during period - Basic		150,960,202			161,701,219			151,699,614			161,486,878
Average shares outstanding during period - Diluted		154,717,211			166,101,535			155,024,479			164,790,789
Cash dividends per common share	$	.37		$	.29		$	.74		$	.56

BUSINESS SEGMENT INFORMATION BY INDUSTRY

(Unaudited)

	Three Months Ended December 31,				Six Months Ended December 31,
(Dollars in thousands)	2011		2010		2011		2010
Net sales
Industrial:
North America	$	1,183,352	$	1,045,469	$	2,388,169	$	2,110,384
International		1,218,812		1,147,231		2,507,927		2,240,212
Aerospace		496,505		459,630		993,997		896,310
Climate & Industrial Controls		208,163		214,334		450,620		449,031
Total	$	3,106,832	$	2,866,664	$	6,340,713	$	5,695,937
Segment operating income
Industrial:
North America	$	195,738	$	159,429	$	418,965	$	348,791
International		165,940		167,776		374,159		351,576
Aerospace		70,262		63,644		138,899		107,420
Climate & Industrial Controls		9,823		9,501		29,615		31,053
Total segment operating income		441,763		400,350		961,638		838,840
Corporate general and administrative expenses		46,136		37,593		104,152		70,947
Income before interest and other		395,627		362,757		857,486		767,893
Interest expense		23,769		25,631		46,990		50,264
Other expense		32,911		30,876		59,964		75,015
Income before income taxes	$	338,947	$	306,250	$	750,532	$	642,614

PARKER HANNIFIN CORPORATION - DECEMBER 31, 2011

CONSOLIDATED BALANCE SHEET

(Unaudited)

(Dollars in thousands)	December 31, 2011		June, 30 2011		December 31, 2010
Assets
Current assets:
Cash and cash equivalents	$	487,984	$	657,466	$	808,736
Accounts receivable, net		1,828,117		1,977,856		1,636,905
Inventories		1,452,664		1,412,153		1,361,457
Prepaid expenses		129,439		111,934		106,416
Deferred income taxes		144,819		145,847		130,426
Total current assets		4,043,023		4,305,256		4,043,940
Plant and equipment, net		1,691,162		1,797,179		1,764,558
Goodwill		2,879,169		3,009,116		2,910,729
Intangible assets, net		1,101,020		1,177,722		1,178,912
Other assets		613,210		597,532		720,705
Total assets	$	10,327,584	$	10,886,805	$	10,618,844
Liabilities and equity
Current liabilities:
Notes payable	$	78,375	$	75,271	$	101,293
Accounts payable		1,069,503		1,173,851		960,567
Accrued liabilities		821,335		909,147		730,011
Accrued domestic and foreign taxes		150,896		232,774		148,997
Total current liabilities		2,120,109		2,391,043		1,940,868
Long-term debt		1,659,434		1,691,086		1,742,464
Pensions and other postretirement benefits		838,644		862,938		1,328,893
Deferred income taxes		147,123		160,035		150,069
Other liabilities		306,371		293,367		241,957
Shareholders’ equity		5,158,126		5,383,854		5,113,261
Noncontrolling interests		97,777		104,482		101,332
Total liabilities and equity	$	10,327,584	$	10,886,805	$	10,618,844

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	Six Months Ended December 31,
(Dollars in thousands)	2011			2010
Cash flows from operating activities:
Net income	$	540,501		$	480,848
Depreciation and amortization		164,131			170,293
Stock incentive plan compensation		44,462			41,331
Net change in receivables, inventories, and trade payables		(94,532	)		(62,540	)
Net change in other assets and liabilities		(75,129	)		(257,071	)
Other, net		(16,017	)		35,296
Net cash provided by operating activities		563,416			408,157
Cash flows from investing activities:
Acquisitions (net of cash of $6,802 in 2011 and $1 in 2010)		(90,545	)		(43,359	)
Capital expenditures		(96,897	)		(109,795	)
Proceeds from sale of plant and equipment		11,179			17,243
Other, net		(14,498	)		(9,369	)
Net cash (used in) investing activities		(190,761	)		(145,280	)
Cash flows from financing activities:
Net (payments for) proceeds from common stock activity		(308,747	)		4,863
Net (payments for) proceeds from debt		(1,089	)		19,673
Dividends		(119,031	)		(90,907	)
Net cash (used in) financing activities		(428,867	)		(66,371	)
Effect of exchange rate changes on cash		(113,270	)		36,704
Net (decrease) increase in cash and cash equivalents		(169,482	)		233,210
Cash and cash equivalents at beginning of period		657,466			575,526
Cash and cash equivalents at end of period	$	487,984		$	808,736

EX-99.2

Parker Hannifin Corporation

Quarterly Earnings Release

2

nd

Quarter FY2012

January 20, 2012

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;

ability

to

identify

acceptable

strategic

acquisition

targets; 

uncertainties

surrounding

timing,

successful

completion

or

integration

of

acquisitions;

ability

to

realize

antici

pated

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

Slide 3

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. 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

CEO 2

nd

Quarter Highlights

Key Performance Measures & Outlook

Questions & Answers

CEO Closing Comments

Slide 5

Second Quarter FY12 Highlights

Record

2

nd

Quarter

Sales:

Q2

Sales

Increased

8.4%

Year-over-Year

to $3.1B

End

Market

Demand:

Order

Improvement

of

3%

Year-over-Year

Against Tougher Comparables ; International Industrial Orders

Moderating

Operating

Margin:

14.2%

as

compared

to

14.0%

in

Q2

FY11

NA Industrial Increased to 16.5% from 15.2% in Q2 FY11

Record

2

nd

Quarter

Net

Income:

$242

million

Continued

Strong

Cash

Flow:

Q2

FY12

Operating

Cash Flow/Sales

of 8.2%; YTD FY12 of 8.9%

Earnings

Per

Share:

Q2

Record

of

$1.56

vs.

$1.39

in

Q2

FY11

Strong

Balance

Sheet:

Cash

Balance

Greater

than

$487M

and

Debt/Total Capitalization Metric of 25.2%

Slide 6

Financial Highlights

Diluted Earnings per Share

2

nd

Quarter and Year-to-Date

$1.56

$1.39

$3.47

$2.90

$.00

$.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

Q2 FY12

Q2 FY11

FY12

FY11

Slide 7

Influences on 2

nd

Quarter Earnings

Diluted Earnings Per Share Increase Year-over-Year of $.17

or 12% Primarily Driven By:

Improved NA Segment Operating Margins to 16.5% from 15.2%

($.17 EPS Impact)

Improved Aerospace Segment Operating Margins to 14.2% from

13.8% ($.03 EPS Impact)

Lower Shares Outstanding due to Share Repurchase ($.11 EPS

Impact)

Offset by:

Increased Expense Below Segment Operating Income due to Higher

Market-driven Benefit Expense ($.04 EPS Impact)

Higher Tax Rate due to Multi-period R&D Tax Credit booked in Q2

FY11 ($.09 EPS Impact)

Slide 8

Financial Highlights

Sales –

2

nd

Quarter

Dollars in millions

FY2012

%

Change

FY2011

FY2012

%

Change

FY2011

Sales

As reported

3,107

$      

8.4 %

2,867

$     

6,340

$ 

11.3 %

5,696

$     

Acquisitions

10

0.3 %

32

0.6 %

Currency

0

0.0 %

86

1.5 %

Adjusted Sales

3,097

$      

8.1 %

6,222

$ 

9.2 %

Operating Margin

As reported

442

$         

400

$        

962

$    

839

$        

% of Sales

14.2 %

14.0 %

15.2 %

14.7 %

2nd Quarter

Year to Date

Slide 9

Segment Reporting

Industrial North America

Dollars in millions

FY2012

%

Change

FY2011

FY2012

%

Change

FY2011

Sales

As reported

1,183

$      

13.2 %

1,046

$     

2,388

$ 

13.2 %

2,110

$     

Acquisitions

4

0.4 %

15

0.7 %

Currency

(3)

(0.3)%

1

0.1 %

Adjusted Sales

1,182

$      

13.1 %

2,372

$ 

12.4 %

Operating Margin

As reported

196

$         

159

$        

419

$    

349

$        

% of Sales

16.5 %

15.2 %

17.5 %

16.5 %

2nd Quarter

Year to Date

Slide 10

Segment Reporting

Industrial International

Dollars in millions

FY2012

%

Change

FY2011

FY2012

%

Change

FY2011

Sales

As reported

1,219

$      

6.2 %

1,147

$     

2,508

$ 

12.0 %

2,240

$     

Acquisitions

6

0.5 %

16

0.7 %

Currency

4

0.4 %

81

3.6 %

Adjusted Sales

1,209

$      

5.3 %

2,411

$ 

7.7 %

Operating Margin

As reported

166

$         

168

$        

374

$    

352

$        

% of Sales

13.6 %

14.6 %

14.9 %

15.7 %

2nd Quarter

Year to Date

Slide 11

Segment Reporting

Aerospace

Dollars in millions

FY2012

%

Change

FY2011

FY2012

%

Change

FY2011

Sales

As reported

497

$         

8.0 %

460

$        

994

$    

10.9 %

897

$        

Acquisitions

0

0.0 %

0

0.0 %

Currency

0

0.0 %

1

0.1 %

Adjusted Sales

497

$         

8.0 %

993

$    

10.8 %

Operating Margin

As reported

70

$           

64

$          

139

$    

107

$        

% of Sales

14.2 %

13.8 %

14.0 %

12.0 %

2nd Quarter

Year to Date

Slide 12

Segment Reporting

Climate & Industrial Controls

Dollars in millions

FY2012

%

Change

FY2011

FY2012

%

Change

FY2011

Sales

As reported

208

$         

(2.9)%

214

$        

450

$    

0.4 %

449

$        

Acquisitions

0

0.0 %

1

0.2 %

Currency

(1)

(0.5)%

3

0.7 %

Adjusted Sales

209

$         

(2.4)%

446

$    

(0.5)%

Operating Margin

As reported

10

$           

10

$          

30

$      

31

$          

% of Sales

4.7 %

4.4 %

6.6 %

6.9 %

2nd Quarter

Year to Date

Slide 13

Parker Order Rates

Excludes Acquisitions & Currency

3-month year-over-year comparisons of total dollars, except Aerospace

Aerospace is calculated using a 12-month rolling average

DEC '11

SEPT '11

DEC '10

SEPT '10

Total Parker

3 %

+  

9 %

+  

29 %

+  

29 %

+  

Industrial North America

8 %

+  

16 %

+

26 %

+  

31 %

+  

Industrial International

1 %

+  

4 %

+  

29 %

+  

34 %

+  

Aerospace

0 %

+  

14 %

+

37 %

+  

16 %

+  

Climate & Industrial Controls

5 %

-

4 %

-

26 %

+  

23 %

+  

Three Month Rolling at Period End

Slide 14

Balance Sheet Summary

Cash

Working capital

-

Accounts receivable

-

Inventory

-

Accounts payable

Slide 15

Strong Cash Flow

Cash from Operating Activities

2

nd

Quarter and Year-To-

Date

Cash From Operating Activities

Q2 '12

Q2 '11

As Reported

$ 254M

$285M

As Reported % Sales

8.2%

10.0%

Year-to-Date Cash from Operating Activities:

YTD '12

YTD '11

As Reported

$563M

$408M

As Reported % Sales

8.9%

7.2%

Slide 16

Financial Leverage

20.0%

22.0%

24.0%

26.0%

28.0%

30.0%

32.0%

34.0%

36.0%

38.0%

40.0%

42.0%

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

YTD

Debt to Debt Equity

25.2% 

Debt to Debt Equity

(19.5% net Debt)

25.2%

Slide 17

FY 2012  Earnings Outlook Assumptions

Segment Sales & Operating Margins

FY 2012 Sales change versus FY 2011

Industrial North America

8.4 %

--

10.4 %

Industrial International

1.9 %

--

3.9 %

Aerospace

7.1 %

--

9.1 %

Climate & Industrial Controls

(2.7) %

--

.3 %

FY 2012 Operating margin percentages

Industrial North America

17.0 %

--

17.4 %

Industrial International

14.7 %

--

15.1 %

Aerospace

13.3 %

--

13.7 %

Climate & Industrial Controls

7.7 %

--

8.0 %

Slide 18

FY 2012 Earnings Outlook Assumptions

below Operating Margin (+/-.50%)

Expenses Below Segment Operating Margin*

$412M at Midpoint

Tax Rate = 29%

*Corporate Admin, Interest and Other Expense (Income)

Low

Midpoint

High

Diluted Earnings Per Share

6.90

$ 

$  7.10

$  7.30

Slide 19

Earnings Outlook –

FY12

Slide 20

Questions & Answers...

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Appendix

Income Statement

2

nd

Quarter FY2012

1

st

Half FY2012

*

*

*

*

*********************************

********************

***********************

***********************

Slide 22

Income Statement –

2

nd

Quarter

Quarter

Dollars in millions

% of Sales

% of Sales

Net Sales

3,106.8

$ 

100.0 %

2,866.6

$ 

100.0 %

Cost of sales

2,381.3

76.6 %

2,195.7

76.6 %

Gross profit

725.5

23.4 %

670.9

23.4 %

S, G & A

368.7

11.9 %

345.7

12.1 %

Interest expense

23.8

.8 %

25.6

.9 %

Other (income), net

(5.9)

(.2)%

(6.6)

(.3)%

Income before taxes

338.9

10.9 %

306.2

10.7 %

Income taxes

96.6

3.1 %

74.4

2.6 %

Net income

242.3

$    

7.8 %

231.8

$    

8.1 %

Less: Noncontrolling interests

1.5

$        

.1 %

1.6

$        

.1 %

Net income attributable to common

shareholders

240.8

$    

7.7 %

230.2

$    

8.0 %

FY 2012

FY 2011

Slide 23

Income Statement –

1

st

Half

Dollars in millions

% of Sales

% of Sales

Net Sales

6,340.7

$ 

100.0 %

5,695.9

$ 

100.0 %

Cost of sales

4,795.8

75.6 %

4,333.6

76.1 %

Gross profit

1,544.9

24.4 %

1,362.3

23.9 %

S, G & A

755.1

11.9 %

679.2

11.9 %

Interest expense

47.0

.8 %

50.3

.9 %

Other (income), net

(7.7)

(.1)%

(9.8)

(.2)%

Income before taxes

750.5

11.8 %

642.6

11.3 %

Income taxes

210.0

3.3 %

161.8

2.8 %

Net income

540.5

$    

8.5 %

480.8

$    

8.5 %

Less: Noncontrolling interests

2.7

$        

.0 %

3.5

$        

.1 %

Net income attributable to common

shareholders

537.8

$    

8.5 %

477.3

$    

8.4 %

FY 2012

FY 2011