PARKER HANNIFIN CORP - FORM 8-K - EX-99.2 - January 20, 2012

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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

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