Parker Hannifin Corporation

Investor Meeting 2020

Robin Davenport

Vice President Corporate Finance

March 12, 2020

Forward-Looking Statements and

Non-GAAP Financial Measures

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. These statements may be identified from the use of forward-looking terminology such as "anticipates," "believes," "may," "should," "could," "potential," "continues," "plans," "forecasts," "estimates," "projects," "predicts," "would," "intends," "anticipates," "expects," "targets," "is likely," "will," or the negative of these terms and similar expressions, and include all statements regarding future performance, earnings projections, events or developments. Parker cautions readers not to place undue reliance on these 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. Additionally, the actual impact of changes in tax laws in the United States and foreign jurisdictions and any judicial or regulatory interpretation thereof on future performance and earnings projections may impact the company's tax calculations. 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 and similar transactions, including the integration of CLARCOR, LORD Corporation or Exotic Metals; the ability to successfully divest businesses planned for divestiture and realize the anticipated benefits of such divestitures; the determination to undertake business realignment activities and the expected costs thereof and, if undertaken, the ability to complete such activities and realize the anticipated cost savings from such activities; ability to implement successfully capital allocation initiatives, including timing, price and execution of share repurchases; availability, limitations or cost increases of raw materials, component products and/or commodities that cannot be recovered in product pricing; ability to manage costs related to insurance and employee retirement and health care benefits; compliance costs associated with environmental laws and regulations; potential labor disruptions; threats associated with and efforts to combat terrorism and cyber-security risks; uncertainties surrounding the ultimate resolution of outstanding legal proceedings, including the outcome of any appeals; global competitive market conditions, including global reactions to U.S. trade policies, and resulting effects on sales and pricing; 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, as well as uncertainties associated with the timing and conditions surrounding the return to service of the Boeing 737 MAX and the recent outbreak of coronavirus. The company makes these statements as of the date of this disclosure and undertakes no obligation to update them unless otherwise required by law.

This presentation contains references to non-GAAP financial information including adjusted operating margin, adjusted EBITDA margin, adjusted cash flow from operating activities, free cash flow, and adjusted earnings per share. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before business realignment, voluntary retirement, gain or loss on sale and write-down of assets, Integration costs to achieve, and acquisition related expenses. Free cash flow is defined as cash flow from operations less capital expenditures plus discretionary pension contribution. Although adjusted operating margin, adjusted EBITDA margin, adjusted cash flow from operating activities, free cash flow, and adjusted earnings per share are not measures of performance calculated in accordance with GAAP, we believe that they are useful to an investor in evaluating the company performance for the periods presented. Detailed reconciliations of these non-GAAP financial measures to the comparable GAAP financial measures have been included in the appendix to this presentation.

Please visit www.PHstock.com for more information

2

Today's Presenters

Tom Williams

Lee Banks

Cathy Suever

Robin Davenport

Chairman and

President and

EVP - Finance &

Vice President

Chief Executive Officer

Chief Operating Officer

Administration and

Corporate Finance

Chief Financial Officer

3

Today's Program

Welcome & Introductions

Robin Davenport, Vice President Corporate Finance

Parker's Transformation, The Win Strategy 3.0 & Parker's Purpose Statement

Tom Williams, Chairman & Chief Executive Officer

Lee Banks, President & Chief Operating Officer

Performance Review, Forecast & FY23 Targets

Cathy Suever, EVP Finance & Administration and Chief Financial Officer

Q&A

Tom Williams, Lee Banks, Cathy Suever

4

Parker Hannifin Corporation

Investor Meeting 2020

Tom Williams

Lee Banks

Cathy Suever

Chairman & CEO

President & COO

EVP Finance & Admin. & CFO

March 12, 2020

Agenda

  • Parker's Transformation
  • The Win Strategy 3.0 & Purpose Statement
  • Strategies to grow organically & expand margins
  • Portfolio & capital deployment strategy
  • Performance review, forecast & FY23 Targets

6

Key Messages

  • The Win Strategy 2.0 drove substantial performance improvements
  • Strategic portfolio transformation - CLARCOR, LORD & Exotic
  • Strength & interconnectivity of Parker's portfolio
  • Improving financial performance over the cycle
  • The Win Strategy 3.0 & Purpose Statement will accelerate performance

Confident in achieving FY23 Targets

7

Parker's Transformation - What's Different

  • Strategic restructuring FY14-FY16 has reduced cost structure
  • Simplification has streamlined organization structure:
    • 126 to 84 divisions with acquisitions
  • Two major enhancements to the Parker Business System:
    • 2015 - The Win Strategy 2.0
    • 2019 - The Win Strategy 3.0
  • Great cash generation with a more strategic capital deployment
  • Enhanced performance resilience over business cycle

Purpose Statement provides alignment & inspiration

9

Raising the Floor on Operating Margins

Last five manufacturing recessions

Adjusted Operating Margin¹

16.2%

14.8%

13.9%

Up 830 bps

10.2%

7.9%

Original Win

Strategy Launched

FY02

FY09

FY13

FY16

FY20G

1) Adjusted numbers include certain non-GAAP financial measures. See Appendix for additional details and reconciliations.

10

Financial Performance

Expanding profitability

Adjusted EBITDA Margin¹

Recession

18.6%

18.2%

17.5%

Recession16.7%

14.7%

FY16FY17FY18FY19FY20

Up 390 bps

Guide

1) Adjusted numbers include certain non-GAAP financial measures. See Appendix for additional details and reconciliations.

11

Financial Performance

*

CFOA

CFOA Margin

*Cash Flow Provided by Operating Activities adjusted for discretionary pension contributions;

Free Cash Flow = Cash Provided by Operating Activities - Capital Expenditures + Discretionary Pension Contribution

12

Safety

Recordable Incident Rate (RIR) 1.43

70% reduction

Top Quartile

0.50

0.44

FY15FY20E

Focus areas:

  • Training
  • Machine guarding
  • Energy control
  • Ergonomics
  • Non-routinework

High Performance Teams driving ownership and improvement

13

Engagement Trend

% Engagement - Team Member Survey Results

Top Quartile

75%

67%

64%

61%

2017

2018

2019

2020

Highly engaged team members driving our performance

14

Sustainability Summary

Initiative

Result

§

Safety incidents

§ Top Quartile* Recordable Incident Rate

§

Greenhouse gas reduction

§ Top Quartile* Carbon Disclosure Ranking

§ Water usage & conservation

§ Top Quartile* Carbon Disclosure Water Score

§

Waste recycling

§ 85% of waste recycled

§

Parker Foundation initiatives

§ $20M donated over last three years

Robust ESG process in place

* Top Quartile for our Proxy Peer Group

15

M&A Last Three Years…

  • $3 billion in acquired sales1
  • More resilient
  • Accretive to growth & margins

1) As announced at time of acquisition

16

3.0

Strategy Summary

Why We Win

+

Where We Are Going

§

The Win Strategy

§

The Win Strategy

§

Decentralized business model

§

Purpose Statement

§ Technology breadth & interconnectivity

§

Strategies to grow organically and

§ Engineered products with IP

expand margins

  • Long product life cycles
  • Global distribution
  • Low capital investment needs
  • Great generators and deployers of cash over the cycle

Positioned for top quartile performance

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

Strategies are time-bound and target specific results. Your purpose, in contrast, is what makes you durably relevant to the world.

- Harvard Business Review, 2017

33

The Value of Purpose

81% of millennials say a successful business needs to have a genuine purpose.

- Redefining the C-Suite: Business the Millennial Way, American Express

34

35

36

To see this and other videos and read more about Parker's Purpose please visit:

parker.com/purpose

Bringing our Purpose to Life

Structural adhesives

Enabling Technology

Engineering Breakthrough

A Better Tomorrow

Adhesive technology

Enables lightweighting &

Fuel efficiency &

electrification

lower emissions

38

Bringing our Purpose to Life

Enabling Technology

Engineering Breakthrough

A Better Tomorrow

Threaded connection (60 seconds)

Quick coupling solutions designed for

Firefighter safety and more time

Quick connection solution

performance under pressure

to rescue survivors

(2 seconds)

39

40

Strategies to Grow Organically & Expand Margins

Portfolio

Acquire companies with higher growth trajectory and resiliency:

  • CLARCOR
  • LORD
  • Exotic

Performance

  • The Win Strategy 3.0
  • Simplification - Simple by Design
  • Innovation - Winovation 2.0
  • Annual Cash Incentive Program (ACIP)
  • Expand and grow distribution
  • Kaizen, HPT and Lean

Requires both portfolio and performance actions

41

Simplification

  • Organization structure
  • Operational complexity 80/20
  • Simple by Design

Enables speed & growth at reduced costs

42

43

The road to complexity is paved with good intentions…

Simple by Design

Product Cost & Complexity Continuum

70% - Design

30% - Labor & OH

Decisions made here:

Decisions made here:

§

Relatively few

§

Hundreds

§

Significant/lasting impact

§

Limited impact

§

Difficult to change

§

Easier to change

Enables speed, margin expansion and growth

45

Simple by Design

Guiding principles & tools

Design with

Design to

Design to

Design to

Forward

Reduce

Reuse

Flow

Thinking

Made possible by big data and artificial intelligence (AI)

46

Simple by Design

Process changes

(CAL) 5

(CAL) 4

(CAL) 3

(CAL) 1

(CAL) = Complexity Assessment Level

Complexity scoring integrated into every stage-gate

47

Access to Data

45% of a typical design engineer's time is spent looking for information

48

Game Changer

Artificial intelligence software

The ability to search large databases in a relevant format:

  • Part geometry
  • % similar
  • Materials used
  • Manufacturing methods

49

Product Example - High Pressure Coupler

Simple by Design

Existing

The "New"

FET Series

59 Series

Design with

Design to

Design to

Design to

Forward

Reduce

Reuse

Flow

Thinking

50

The Result…

Simple

Existing

The "New"

FET Series

59 Series

  • The New 59 Series was redesigned, requalified and launched
  • 123 parts were eliminated - Reduce
  • 100% function achieved, 90% components shared - Reuse
  • No additional capital equipment - Reuse

Cost Inventory Delivery

51

Resulting in…

  • Higher value - "must have products"
  • Improved margin
  • Improved customer experience
  • Sustainable advantage
  • Speed

52

Innovation Strategy

  • Simplify for focus
  • Simple by Design
  • Winovation 2.0
  • Parker Technology Centers

Product Vitality Index metric launched

54

Time for an Upgrade

Winovation 2.0

Issues

Actions

§

Inside-out vs. outside-in

§ Launched New Product Blueprinting

§

Weak customer engagement

§

Training complete

§

Integrated into Winovation 2.0

55

Parker Technology Centers

  • Advanced Process Development - IoT, Additive & Robotics
  • Filtration Technology Center - +

§ Motion Technology Center -

Systems

Aerospace

Motion

  • Advanced Materials Center:

Engineered Materials & Fluid Connectors - +

Small, focused & accountable…Complements our division engineering

56

Current Annual Incentive Plan

RONA

  • 30+ years in existence
  • Serving Parker well since inception
  • High rate of global participation
  • Firmly rooted within Parker

58

Summary of Review

RONA Challenges

  • Behaves like a long-term plan
  • Limited elasticity
  • Growth multiplier generated modest impact

Requires New Annual Incentive Design

59

New Plan Design Principles

  • Better linkage to annual performance
  • Aligned to TSR drivers
  • Simple, easy to communicate
  • Influences growth mindset

60

Annual Cash Incentive Program

50%

+

30%

+

20%

=

Incentive

Weight

Weight

Weight

Target

Division

Cash

ACIP

Net

Revenue

Opportunity

Earnings

Growth

Flow

% of Salary

(DNE)

  • Aligned with key drivers of total shareholder return
  • More elastic and tied to annual performance

Stronger annual incentive...

Multi-year implementation

61

Profitable Growth

Key initiatives

  • Strategic Positioning
  • Market-DrivenInnovation
  • System Solutions
  • Strong Distribution
  • Grow Share
  • Acquisitions

Keys to growing faster than the market

63

Distribution Strategy

Multiple channels based on needs

Single

Technology

Focus

Multiple

MRO Focused/

Technologies,

Systems Focused

Catalog House

Distributor

Market

Focused

Product Line

Focus

64

Global Distribution Network

15,500 Distributors

97 Countries

65

Distribution Success Factors

Focus and alignment

  • Dedicated sales force
  • Channel management integrity
  • Broad technology portfolio
  • Executive engagement
  • Distribution mind share

66

Distribution Growth History

  • Channel is decades in the making
  • Most valuable off-balance sheet asset
  • Growing global distribution and services
  • North America channel consolidation

Focus on expanding international distribution and digital leadership

67

Expanding International Distribution

FY15

FY19

Distribution

Distribution

35%

40%

Direct

Direct

65%

60%

  • Added dedicated global and regional leadership
  • 480 new distributors … 165 former Parker team members

Shifted mix by > 100 bps per year

68

Expanding International Distribution

  • Continue dedicated global and regional leadership
  • Expand capabilities of existing channel
  • Continue to expand in developing markets
  • Support Parker team members

Continue to increase mix by > 100 bps per year

69

Digital Leadership

Content syndication

  • Enabling consistent high-quality content
  • Driving demand through lead generation

MyParker.com

  • Personalized one-stop shop
  • Consistent experience

Enhanced experience for customers and distributors

70

Strategies Going Forward

  • Focus on international distribution
  • Extend digital leadership through distribution
  • Encourage Parker team member participation
  • Take advantage of NA channel consolidation

Supporting continued margin expansion

71

CHANGE

IDEAL STATE

Win Strategy Alignment

  • Parker Lean System
  • HPT Culture
  • Kaizen
  • Engaged People
  • Financial Performance

Congruent with Parker culture and values

73

A Culture of Continuous Improvement

Parker Lean System (PLS)

§ Ownership

+

§ Speed

High Performance Teams

+

§ Productivity

Culture of Kaizen

§ Customer experience

Sustainable financial performance

74

Parker Lean System (PLS)

Established in 2001

  • Comprehensive tool set
  • Robust systems approach
  • Manufacturing and non-manufacturing
  • Understanding throughout Parker

PLS

Just in

Problem

Jidoka

Time

Solving

Engaged People

Build from a strong PLS foundation

75

High Performance Teams

Drive continuous improvement

  • Team members think and act like owners
  • Organized into natural work teams and star point teams

§

Empowered

Safety

§

Responsible & accountable

Quality

Delivery

  • Assisted by engaged leaders

Engagement Cost

Creating a high performance culture

76

Kaizen

"A way of life"

  • Kaizen = Action
  • Operator is the focus
  • Speed of execution
  • Step change mentality
  • Team approach
  • Better customer experience

317 Kaizen weeks, 8,000 participants in CY2019

77

Financial Performance

Parker Lean System, Kaizen & High Performance Teams Impact

  • Top quartile safety performance
  • Quickly integrate acquisitions
  • Strong decremental margin performance
  • Improved operating margin performance

A strong culture of continuous improvement

78

A Culture of Continuous Improvement

Parker Lean System (PLS)

§ Ownership

+

§ Speed

High Performance Teams

+

§ Productivity

Culture of Kaizen

§ Customer experience

Sustainable financial performance

79

#1 Position in Motion & Control Industry

Significant opportunities for growth in a >$130 billion global market

All Other

Top

Competitors

81

Unmatched Breadth of Technologies

82

Interconnected Parker Technologies

Integrated systems and components across the platform

Electromechanical

Engineered Materials

Filtration

Fluid & Gas Handling

Hydraulics

Pneumatics

NOISE & VIBRATION

ENGINE

CONTROL

PNEUMATIC

FLIGHT CONTROL

DUCTING

ACTUATION

COCKPIT

CONTROLS

THERMAL

DYNAMIC &

MANAGEMENT

STATIC SEALS

WHEELS &

BRAKESFILTERS

ENGINE EXHAUST

ENGINE ACTUATION & CONTROL

HYDRAULIC

POWER GENERATION

FUEL

MANAGEMENT

AIRFRAME FLUID

CONVEYANCE

83

Interconnected Parker Technologies

Utility lift vehicle

CABIN AIR FILTER

HVAC SEALS

NON-CONDUCTIVE

CYLINDER ROD & PISTON

HYDRAULIC HOSES

SEALS

IQAN

HYDRAULIC HOSE

HYDRAULIC ROTORARY

ACTUATOR

ASSEMBLIES

Electromechanical

Engineered Materials

Filtration

Fluid & Gas Handling

Hydraulics

Pneumatics

FAN MOTORS

JOYSTICK

CONTROL

ENGINE SEALS

PILOT LINE

PISTON PUMP

HYDRAULIC

HOSES

ENGINE FILTER

FILTER

TRANSMISSION

HOSES

84

Capital Deployment Strategy

  • Dividends - Payout 30-35% Net Income, maintain track record
  • Fund organic growth and productivity
  • Offset equity plan share dilution through 10b5-1
  • Pay down debt
  • Acquisitions & discretionary share repurchase once Debt/EBITDA ~2.0x leverage

85

Acquisition Strategy

Continue as consolidator of choice in Motion & Control

Focus on Aerospace, Engineered Materials,

Filtration and Instrumentation

Targeted investments in

key electrification technologies

and natural adjacencies

86

FY23 Corporate Targets

FY23 Target Metrics

Growth

150 bps > GIPI

Seg Op Margin

19%

EBITDA Margin

20%

FCF Conversion

> 100%

EPS CAGR

10%+

88

Segment Operating Margin Growth

As Reported and Adjusted

Growth Comparison

+180 bps

20.0%

Recession Comparison

19.0%

+140 bps

18.0%

17.2%

16.0%

15.8%

16.2%

16.2%

14.8%

14.0%

17.0%

15.7%

14.9%

15.3%

12.0%

13.9%

10.0%

FY16

FY17

FY18

FY19

FY20

FY23

Guide

Target1

Reported Adjusted 1

1) Adjusted numbers include certain non-GAAP financial measures. See Appendix for additional details and reconciliations.

89

Adjusted EBITDA Margin Growth

Growth Comparison

+140 bps

22.0%

Recession Comparison

+390 bps

20.0%

20.0%

18.6%

18.2%

18.0%

17.5%

16.7%

16.0%

14.7%

14.0%

12.0%

10.0%

FY17

FY18

FY19

FY20

FY23

FY16

Guide

Target

Adjusted numbers include certain non-GAAP financial measures. See Appendix for additional details and reconciliations.

90

Driving Free Cash Flow

Free Cash Flow / Net Income

>18 consecutive years

with 100%+

FCF conversion

$2,000 $1,800

$1,600 $1,400 $1,200 $1,000 $800

$600 $400 $200 $0

FY16

FY17

FY18

FY19

FY20

Guide

FCF $1

Net Income $

FCF Conversion %

1) Free Cash Flow = Cash Provided by Operating Activities - Capital Expenditures + Discretionary Pension Contribution

180%

160%

140%

120%

100%

80%

60%

40%

20%

0%

91

EPS Growth

As Reported and Adjusted

$16.00

13% CAGR

$15.10

$12.00

$11.85

$10.42

$10.55

$8.00

$8.11

$6.46

$11.48

$4.00

$7.25

$7.83

$9.08

$5.89

$0.00

FY16

FY17

FY18

FY19

FY20

FY23

1

Guide

Target

Reported

Adjusted 1

1) Adjusted numbers include certain non-GAAP financial measures. See Appendix for additional details and reconciliations.

92

Capital Deployment

Fiscal Years 2019 - 2023E

Cash flow from operations

Approx.

$11.1

Billion

Debt funding

$5.4

Billion

$16.5 Billion

Deployment

  • $2.5B - Dividends
  • $1.5B - Capital expenditures
  • $3.9B - Debt reduction
  • $1.0B - 10b5-1 Share repurchases
  • $5.4B - LORD & Exotic acquisitions
  • $2.2B - Strategic M&A and discretionary share repurchases

94

Efficient Deleveraging Strategy

Gross Debt to EBITDA: Fiscal Years 2016 - 2023E

4.0x

3.6x

3.5x

3.2x

3.0x

2.8x

2.5x

1.9x

2.1x

2.0x

2.0x

LORD

1.5x

$3.7B

CLARCOR

Exotic

$4.3B

1.0x

$1.7B

FY16

FY17

FY18

FY19

FY20E

FY23E

Strategic Utilization of the Balance Sheet

95

Progress on Strategic Acquisitions

  • Achieved targeted debt reduction in 18 months
  • By end of FY20:
    • Cost synergies: $160M
    • Revenue synergies: $100M
  • Integration ahead of schedule
  • High-margin,resilient business
  • By end of FY23:
    • Expected cost synergies: $125M
  • Integration on track
  • Long-cycle,high margin business
  • By end of FY23:
    • Expected cost synergies: $13M

96

Dividend History

64 Fiscal Years of consecutive increases

Target Payout Ratio

5-Year Average

30% - 35%

$4.00

$3.52

$3.50

$3.16

$3.00

$2.74

$2.52$2.58

$2.50

$2.00

$1.50

$1.00

FY16

FY17

FY18

FY19

FY20 Guide

Current 5-Year Average = 35%

97

Improved Earnings Disclosures

Segment Operating Earnings and Earnings per Share

Effective Fiscal Year 2021, Parker will include acquisition-related intangible asset amortization expense in disclosed adjustments

Rationale:

  • Improved representation of core operating earnings
  • Amortization expense has become much more material as a result of recent acquisitions
  • Better aligns disclosures with acquisitive peer companies' reporting methodologies

99

Revised Target Metrics by FY23

Revenue Growth

Target Metrics

210 bps > Industrial Production

Original

Updated

FY23

FY232

¹

.6%

CAGR

3

GIPI

$16.4

LORD +

Exotic

$14.3

FY20FY23E

Global Industrial Production Index

(GIPI) = 1.5% CAGR

Revenue Growth

150 bps

150 bps

> GIPI

> GIPI

As Reported Seg Op Margin

19%

21%

Adjusted Seg Op Margin

As Reported EBITDA

20%

21%

Adjusted EBITDA

Free Cash Flow

$2.2B

$2.3B

As Reported EPS

$15.50

$16.90

Adjusted EPS

¹ FY20E Revenues for LORD and Exotic Metals have been calendarized for CAGR calculation.

² Updated FY23 Adjusted Segment Operating Margins, Adjusted EBITDA, and Adjusted EPS exclude Acquisition-Related Intangible Amortization Expense and Business Realignment Charges.

101

FY23 Corporate Targets

Updated FY23 Target Metrics

Growth

150 bps > GIPI

Adj. Seg Op Margin

21%

Adj. EBITDA Margin

21%

FCF Conversion

> 100%

Adj. EPS CAGR

10%+

102

Key Takeaways

  • Margin transformation continues
  • Strong cash flows support deleveraging capability
  • Improved Earnings disclosures to commence FY21
  • On track to achieve updated FY23 targets

103

Key Messages

  • The Win Strategy 2.0 drove substantial performance improvements
  • Strategic portfolio transformation - CLARCOR, LORD & Exotic
  • Strength & interconnectivity of Parker's portfolio
  • Improving financial performance over the cycle
  • The Win Strategy 3.0 & Purpose Statement will accelerate performance

Confident in achieving updated FY23 Targets

105

"It is the Parker Culture & Values, more than any Strategy or Measure, that will determine our Success in the Future"

Tom Williams

Annual Report 2015

106

To see this and other videos and read more about Parker's Purpose please visit:

parker.com/purpose

Tom Williams

Lee Banks

Cathy Suever

Chairman & CEO

President & COO

EVP Finance & Admin. & CFO

Reconciliation of Total Segment Operating Margin to Adjusted Total Segment Operating Margin

(Unaudited) (Dollars in millions)

Guide:

12 Months

12 Months

12 Months

12 Months

12 Months

12 Months

12 Months

12 Months

ended

ended

ended

ended

ended

ended

ended

ended

6/30/02

6/30/09

6/30/13

6/30/16

6/30/17

6/30/18

6/30/19

6/30/20

Net Sales

$

6,149

$

10,309

$

13,016

$

11,361

$

12,029

$

14,302

$

14,320

$

14,324

Total segment operating income

$

446

$

1,004

$

1,791

$

1,576

$

1,790

$

2,239

$

2,431

$

2,188

Adjustments:

Voluntary retirement expense

Business realignment charges

37

45

12

107

56

46

16

40

Acquisition-related expenses & Costs to Achieve

58

37

13

94

Adjusted total segment operating income*

$

483

$

1,049

$

1,804

$

1,682

$

1,904

$

2,322

$

2,460

$

2,321

Total segment operating margin

7.3%

9.7%

13.8%

13.9%

14.9%

15.7%

17.0%

15.3%

Adjusted total segment operating margin

7.9%

10.2%

13.9%

14.8%

15.8%

16.2%

17.2%

16.2%

*Totals may not foot due to rounding

112

Reconciliation of EBITDA margin to Adjusted EBITDA margin

(Unaudited) (Dollars in millions)

Guide:

12 Months

12 Months

12 Months

12 Months

12 Months

ended

ended

ended

ended

ended

6/30/16

6/30/17

6/30/18

6/30/19

6/30/20

Net sales

11,361

12,029

14,302

14,320

14,324

Net income

807

984

1,061

1,513

1,185

Income taxes

308

345

641

420

339

Depreciation and Amortization

307

355

466

436

564

Interest Expense

137

162

214

190

319

EBITDA*

$

1,558

$

1,846

$

2,382

$

2,560

$

2,407

Adjustments:

Voluntary retirement expense

12

Business realignment charges

97

56

46

16

40

Acquisition-related expenses & Costs to Achieve

103

37

30

212

(Gain) / Loss on Sale and Writedown of Assets

32

Adjusted EBITDA*

$

1,667

$

2,006

$

2,497

$

2,605

$

2,658

EBITDA margin

13.7%

15.3%

16.7%

17.9%

16.8%

Adjusted EBITDA margin

14.7%

16.7%

17.5%

18.2%

18.6%

*Totals may not foot due to rounding

113

Reconciliation of Cash Flow from Operations to Adjusted Cash Flow from Operations and Free Cash Flow

Cash Provided by Operating Activities Reconciliation to GAAP

($MM) YTD

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

Cash Provided by Operating Activities - As Reported

631

558

662

854

951

957

1,317

1,129

1,219

1,167

1,530

1,191

1,388

1,363

1,211

1,302

1,597

1,730

Discretionary Pension Contribution

-

106

75

83

101

161

12

-

100

400

-

226

75

-

200

220

-

200

Cash Provided by Operating Activities - Adjusted

631

663

737

936

1,051

1,118

1,329

1,129

1,319

1,567

1,530

1,417

1,463

1,363

1,411

1,522

1,597

1,930

Free Cash Flow Reconciliation to GAAP ($MM) YTD

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

Cash Provided by Operating Activities - As Reported

631

558

662

854

951

957

1,317

1,129

1,219

1,167

1,530

1,191

1,388

1,363

1,211

1,302

1,597

1,730

Capital Expenditures

207

156

138

155

198

238

280

271

129

207

219

266

216

216

149

204

248

195

Free Cash Flow

424

401

524

699

753

719

1,036

858

1,090

960

1,312

925

1,172

1,148

1,061

1,099

1,349

1,535

Discretionary Pension Contribution

-

106

75

83

101

161

12

-

100

400

-

226

75

-

200

220

-

200

Free Cash Flow - Adjusted for Discretionary Pension

424

507

599

782

853

880

1,049

858

1,190

1,360

1,312

1,151

1,247

1,148

1,261

1,319

1,349

1,735

114

Reconciliation of EPS to Adjusted EPS

(Unaudited) (Amounts in Dollars)

Guide:

Guide:

12 Months

12 Months

12 Months

12 Months

12 Months

3 Months

ended

ended

ended

ended

ended

ended

6/30/16

6/30/17

6/30/18

6/30/19

6/30/20

3/31/20

Earnings per diluted share

$

5.89

$

7.25

$

7.83

$

11.48

$

9.08

$

2.10

Adjustments:

Business realignment charges

0.80

0.42

0.34

0.12

0.30

0.14

Acquisition-related expenses & Costs to Achieve

0.76

0.27

0.23

1.63

0.20

(Gain) / Loss on Sale and Writedown of Assets

0.24

Tax effect of adjustments

(0.23)

(0.32)

0.02

(0.09)

(0.46)

(0.08)

U.S. Tax Reform one-time impact, net

1.72

0.11

Adjusted earnings per diluted share

$

6.46

$

8.11

$

10.42

$

11.85

$

10.55

$

2.36

115

Thomas Williams

Chairman & Chief Executive Officer

Thomas Williams is Chairman & Chief Executive Officer of Parker Hannifin Corporation in Cleveland, Ohio.

Previous to his most recent position, he was Executive Vice President and Operating Officer with responsibility for Parker's Aerospace, Engineered Materials, Filtration, Instrumentation and Asia Pacific groups, along with the Strategic Pricing department.

Mr. Williams has demonstrated successful leadership in two of Parker's operating groups, as Vice President of Operations for the Hydraulics Group and then President of the Instrumentation Group. Mr. Williams joined Parker in 2003. Prior to that, he held a number of key management positions at General Electric.

He is an emeritus member of the Board of Directors for the Make-a-Wish Foundation, a non-profit organization making wishes come true for terminally ill children and a member of the Board of Directors for Goodyear Tire & Rubber Company. He is also a member of the Business Council, comprised of leading global CEO's, which provides a forum for continual learning and networking.

Mr. Williams earned a Mechanical Engineering degree from Bucknell University and his MBA from Xavier University.

116

Lee C. Banks

President & Chief Operating Officer

Lee Banks is President and Chief Operating Officer of Parker Hannifin Corporation in Cleveland, Ohio, a position he has held since 2015.

Mr. Banks joined Parker in 1991 and held increasingly responsible positions within sales and operations management, including several division general manager positions. He served as President of Parker's Hydraulics and Instrumentation Groups, and was Vice President of Operations for the Climate and Industrial Controls Group.

Prior to his current position, Mr. Banks was an Operating Officer of the company with leadership responsibility for the Filtration, Engineered Materials, Instrumentation, Climate and Industrial Controls, Hydraulics, Fluid Connectors and Automation product groups and the Europe, Middle East and Africa, and Latin America regional groups.

Mr. Banks serves on the Board of Directors of Nordson Corporation, a leader in precision dispensing equipment for industrial coatings. He earned a Bachelor of Arts degree in Economics from DePauw University and a Master of Business Administration from The Keller Graduate School of Management in Chicago.

117

Catherine A. Suever

Executive Vice President - Finance & Administration and Chief Financial Officer

Catherine Suever is Executive Vice President Finance & Administration and Chief Financial Officer of Parker Hannifin Corporation in Cleveland, Ohio, a position she has held since 2017.

Ms. Suever joined Parker in 1987 in External Reporting. She moved into operations as Division Controller of the Gas Turbine Fuel Systems Division, then was promoted to Business Unit Manager. In 2006, Ms. Suever was promoted to the corporate role of Director, Finance and Investor Relations Support, followed by a promotion to Assistant Treasurer in 2007. She assumed the role of Vice President and Controller of the Climate & Industrial Controls Group in 2008,

Prior to her current position, Ms. Suever was Vice President, Corporate Controller and Chief Accounting Officer and was elected as an Officer in 2010.

Ms. Suever serves on the Board of Directors of Hexcel Corporation, a global leader in advanced composites technology, and is on the Board of Trustees for the National Multiple Sclerosis Society Ohio Buckeye Chapter. She is also a member of the CFO Council of the Manufacturers Alliance for Productivity

  • Innovation (MAPI), the American Institute of Certified Public Accountants (AICPA), and Financial Executives International (FEI). Ms. Suever is a Certified Public Accountant. She earned a Bachelor of Science degree in Accounting from the University of Dayton.

118

Parker's Investor Relations Team

Robin Davenport

Jeff Miller

Vice President Corporate Finance

Director - Investor Relations

rjdavenport@parker.com

jeffrey.miller@parker.com

216 896 2265

216 896 2708

119

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Parker Hannifin Corporation published this content on 12 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 March 2020 20:05:23 UTC