Parker Hannifin : Investor Overview

Investor Overview

Fiscal 2020 Update

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. 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: the impact of the global outbreak of COVID-19 and governmental and other actions taken in response; 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. The company makes these statements as of the date of this disclosure and undertakes no obligation to update them unless otherwise required by law.

Please visit www.PHstock.com for more information

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The Strength & Interconnectivity of the Parker Portfolio

Fortune 250 global leader in motion and control technologies and solutions

Robust business model with interconnected technologies and unparalleled distribution network

Aligned by our purpose statement and executing The Win Strategy™ 3.0

History of strong cash generation and strategic capital deployment

Drives a Compelling Investment Thesis

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The Global Leader in

Motion & Control Technologies

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Parker Hannifin at-a-Glance(NYSE: PH)

Engineering Customer Success in Motion & Control Markets for over 100 Years

FY20 FINANCIAL HIGHLIGHTS

	Revenue	$13.7B
	Adjusted Segment Margin	18.9%
	Adjusted EBITDA Margin	19.3%
	Operating Cash Flow	$2.1B
	Cash Flow Margin	15.1%
	Free Cash Flow Conversion	152%
	Annual Dividends Paid	65-year increase record
	DECENTRALIZED STRUCTURE
	Operating Groups	6
	Divisions	84 with P&L ownership

FY20 REVENUE SPLIT

BY REPORTING	BY MARKET
SEGMENT	CHANNEL
47%	38%

20%

20%

21%

33%21%

Diversified Industrial North America			Industrial Distribution
Diversified Industrial International			Industrial Stationary
Aerospace Systems				Industrial Mobile
				Aerospace

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