![]() Parker Hannifin Corporation Quarterly Earnings Release 3 rd Quarter FY2012 April 24, 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 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. 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 3 rd Quarter Highlights Key Performance Measures & Outlook Questions & Answers CEO Closing Comments |
![]() Slide 5 Third Quarter FY12 Highlights Record 3 rd Quarter Sales: Q3 Sales Increased 4.7% Year- over-Year to $3.4B due to Industrial North America and Aerospace End Market Demand: Order Improvement of 2% Year-over- Year Against Tougher Comparables driven by North America and Aerospace Operating Margin: 15.1% as compared to 14.8% in Q3 FY11 NA Industrial Increased to 17.3% from 16.1% in Q3 FY11; a Third Quarter Record Net Income: All-time Quarterly Record of $313 million Earnings Per Share: All-time Quarterly Record of $2.01 vs. $1.68 in Q3 FY11 Strong Balance Sheet: Cash Balance of $773M and Debt/Total Capitalization Metric of 24.3% Continued Strong Cash Flow: Q3 FY12 Operating Cash Flow/Sales of 13.1%; YTD FY12 of 10.3% |
![]() Slide 6 Financial Highlights Diluted Earnings per Share 3 rd Quarter and Year-to-Date $2.01 $1.68 $5.49 $4.58 $.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 Q3 FY12 Q3 FY11 FY12 YTD FY11 YTD |
![]() Slide 7 Influences on 3 rd Quarter Earnings Diluted Earnings Per Share Increase Year-over-Year of $.33 or 20% Primarily Driven By: Improved Segment Operating Margins to 15.1% from 14.8% ($.13 EPS Impact) driven by Industrial North America and Climate & Industrial Controls Lower Tax Rate due to Favorable Resolution of Prior Year Tax Filings ($.13 EPS Impact) Lower Shares Outstanding due to Share Repurchase ($.14 EPS Impact) Offset by: Increased Expense Below Segment Operating Income Mainly due to Negative Currency Impact and Prior Year Favorable Insurance Recoveries ($.08 EPS Impact) |
![]() Slide 8 Financial Highlights Sales – 3 rd Quarter |
![]() Slide 9 Segment Reporting Industrial North America |
![]() Slide 10 Segment Reporting Industrial International |
![]() Slide 11 Segment Reporting Aerospace |
![]() Slide 12 Segment Reporting Climate & Industrial Controls |
![]() 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 MAR '12 DEC '11 MAR '11 DEC '10 Total Parker 2 % + 3 % + 24 % + 29 % + Industrial North America 7 % + 8 % + 20 % + 26 % + Industrial International 1 % - 1 % + 22 % + 29 % + Aerospace 4 % + 0 % + 44 % + 37 % + Climate & Industrial Controls 6 % - 5 % - 14 % + 26 % + 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 3 rd Quarter and Year-To- Date |
![]() 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 24.3% Debt to Debt Equity (15.4% net Debt) 24.3% |
![]() Slide 17 FY 2012 Earnings Outlook Assumptions Segment Sales & Operating Margins FY 2012 Sales change versus FY 2011 Industrial North America 11.0 % -- 11.5 % Industrial International 3.3 % -- 4.1 % Aerospace 8.0 % -- 9.0 % Climate & Industrial Controls (3.9)% -- (2.8)% FY 2012 Operating margin percentages Industrial North America 17.3 % -- 17.5 % Industrial International 14.9 % -- 15.1 % Aerospace 13.2 % -- 13.4 % Climate & Industrial Controls 8.0 % -- 8.2 % |
![]() Slide 18 FY 2012 Earnings Outlook Assumptions below Operating Margin (+/-.7%) Expenses Below Segment Operating Margin* $429M at Midpoint Tax Rate = 26.5% *Corporate Admin, Interest and Other Expense (Income) |
![]() Slide 19 Earnings Outlook – FY12 |
Slide 20 Questions & Answers... * * * * |
![]() Appendix Income Statement 3 rd Quarter FY2012 3 rd Quarter YTD FY2012 ****************** * * * * |
![]() Slide 22 Income Statement – 3 rd Quarter |
![]() Slide 23 Income Statement – 3 rd Quarter YTD |