Parker Hannifin : Non-GAAP Disclosures FY24 Q3 Q3 2024

Appendix

• FY24 Guidance Details
• Reconciliation of Organic Growth
• Adjusted Amounts Reconciliation - Consolidated
• Adjusted Amounts Reconciliation - Segment Operating Income
• Reconciliation of EBITDA to Adjusted EBITDA
• Reconciliation of Gross and Net Debt to Adjusted EBITDA
• Reconciliation of Year-to-Date Free Cash Flow
• Supplemental Sales Information - Global Technology Platforms
• Reconciliation of FY19 Financials
• Reconciliation of FY24 Guidance

1

FY24 Guidance Details

Sales Growth vs. Prior Year	As Reported	Organic1
Diversified Industrial North America	~(1.5%)	~(2.5%)
Diversified Industrial International	~(2.0%)	~(2.5%)
Aerospace Systems	~23%	~15%
Parker	~4.0%	~1.5%
Segment Operating Margins	As Reported	Adjusted1
Diversified Industrial North America	~22.0%	~24.2%
Diversified Industrial International	~21.2%	~23.5%
Aerospace Systems	~20.1%	~26.4%
Parker	~21.2%	~24.6%
Earnings Per Share	As Reported	Adjusted1
Midpoint	$20.90	$24.75
Range	$20.80 - $21.00	$24.65 - $24.85

1. Includes certain non-GAAP adjustments and financial measures.

Additional Items	As Reported
Corporate G&A	~$235M
Interest Expense	~$510M
Other (Income) Expense	~($20M)
Reported Tax Rate	~22%
Diluted Shares Outstanding	~130.5M
Detail of Pre-Tax Adjustments to:	Segment		Below
Margins		Segment
Acquired Intangible Asset Amortization	~$580M		-
Business Realignment Charges	~$57M		$3M
Integration Costs to Achieve	~$35M		-
Net Gain on Divestitures	-		($26M)

2

Reconciliation of Organic Growth

(Dollars in thousands) (Unaudited)

Quarter-to-Date

		As Reported									Adjusted			As Reported
Net Sales		March 31, 2024			Currency		Divestitures			March 31, 2024			March 31, 2023
Diversified Industrial:
North America	$	2,231,478	$	(6,471)	$	9,464	$	2,234,471	$	2,342,590
International
Europe		830,166			5,773			-			835,939			880,962
Asia Pacific		527,732			24,298			-			552,030			567,954
Latin America		76,267			13,706			-			89,973			75,599
International		1,434,165			43,777			-			1,477,942			1,524,515
Total Diversified Industrial		3,665,643			37,306			9,464			3,712,413			3,867,105
Aerospace Systems		1,408,713			(6,033)			6,078			1,408,758			1,194,560
Total Parker Hannifin	$	5,074,356		$	31,273		$	15,542		$	5,121,171		$	5,061,665
Diversified Industrial:		As reported			Currency			Divestitures			Organic
										(4.6)%
North America		(4.7)%			0.3 %			(0.4)%
International
Europe		(5.8)%			(0.7)%			0.0 %			(5.1)%
Asia Pacific		(7.1)%			(4.3)%			0.0 %			(2.8)%
Latin America		0.9 %			(18.1)%			0.0 %			19.0 %
International		(5.9)%			(2.8)%			0.0 %			(3.1)%
Total Diversified Industrial		(5.2)%			(1.0)%			(0.2)%			(4.0)%
Aerospace Systems		17.9 %			0.5 %			(0.5)%			17.9 %
Total Parker Hannifin		0.3 %			(0.6)%			(0.3)%			1.2 %

3

Adjusted Amounts Reconciliation

Consolidated Statement of Income

(Dollars in thousands, except per share data)
(Unaudited)													Quarter-to-Date FY 2024
							Acquired			Business			Meggitt
		As Reported					Intangible Asset			Realignment			Costs to												Adjusted
		March 31, 2024		% of Sales			Amortization			Charges			Achieve												March 31, 2024		% of Sales
Net sales	$	5,074,356	100.0 %	$	-	$	-	$	-	$	-	$	-	$	-	$	5,074,356	100.0 %
Cost of sales		3,279,650	64.6 %			27,193			3,014			743			-			-			-			3,248,700	64.0 %
Selling, general and admin. expenses		816,337	16.1 %			114,023			3,927			12,513			-			-			-			685,874	13.5 %
Interest expense		123,732	2.4 %			-			-			-			-			-			-			123,732	2.4 %
Other (income) expense, net		(65,406)		(1.3)%			-			1,527			-			-			-			-			(66,933)		(1.3)%
Income before income taxes		920,043	18.1 %			(141,216)			(8,468)			(13,256)			-			-			-			1,082,983	21.3 %
Income taxes		193,309		3.8 %			33,609			2,015			3,155			-			-			-			232,088		4.6 %
Net income		726,734	14.3 %			(107,607)			(6,453)			(10,101)			-			-			-			850,895	16.8 %
Less: Noncontrolling interests		160		0.0 %			-			-			-			-			-			-			160		0.0 %
Net income - common shareholders	$	726,574		14.3 %		$	(107,607)		$	(6,453)		$	(10,101)		$	-		$	-		$	-	$	850,735		16.8 %
Diluted earnings per share
$	5.56			$	(0.82)	$	(0.05)	$	(0.08)	$	-	$	-	$	-	$	6.51
(Dollars in thousands, except per share data)
(Unaudited)													Quarter-to-Date FY 2023
							Acquired			Business			Meggitt			Acquisition						Amortization
		As Reported					Intangible Asset			Realignment			Costs to			Related			Net Loss on			of Inventory			Adjusted
		March 31, 2023		% of Sales			Amortization			Charges			Achieve			Expenses			Divestitures			Step-Up to FV			March 31, 2023		% of Sales
Net sales	$	5,061,665	100.0 %	$	-	$	-	$	-	$	-	$	-	$	-	$	5,061,665	100.0 %
Cost of sales		3,340,764	66.0 %			15,345			5,033			3,575			-			-			37,642			3,279,169	64.8 %
Selling, general and admin. Expenses		868,393	17.2 %			129,802			3,208			27,669			1,299			-			-			706,415	14.0 %
Interest expense		151,993	3.0 %			-			-			-			-			-			-			151,993	3.0 %
Other (income) expense, net		(55,866)		(1.1)%			-			-			-			-			10,927			-			(66,793)		(1.3)%
Income before income taxes		756,381	14.9 %			(145,147)			(8,241)			(31,244)			(1,299)			(10,927)			(37,642)			990,881	19.6 %
Income taxes		165,421		3.3 %			34,980			1,986			7,530			313			(361)			9,072			218,941		4.3 %
Net income		590,960	11.7 %			(110,167)			(6,255)			(23,714)			(986)			(11,288)			(28,570)			771,940	15.3 %
Less: Noncontrolling interests		71		0.0 %			-			-			-			-			-			-			71		0.0 %
Net income - common shareholders	$	590,889		11.7 %		$	(110,167)		$	(6,255)		$	(23,714)		$	(986)		$	(11,288)		$	(28,570)		$	771,869		15.2 %
Diluted earnings per share
$	4.54			$	(0.84)	$	(0.05)	$	(0.18)	$	(0.01)	$	(0.09)	$	(0.22)	$	5.93

4

Adjusted Amounts Reconciliation

Segment Operating Income

(Dollars in thousands)
(Unaudited)													Quarter-to-Date FY 2024
							Acquired			Business			Meggitt
		As Reported					Intangible Asset		Realignment			Costs to												Adjusted
Diversified Industrial:		March 31, 2024		% of Sales			Amortization			Charges			Achieve												March 31, 2024		% of Sales2
																						$	538,296	24.1%
North America1	$	490,452	22.0%	$	43,945	$	3,058	$	841	$	-	$	-	$	-
International1		309,759	21.6%			22,464			3,895			451			-			-			-			336,569	23.5%
Total Diversified Industrial1		800,211		21.8%			66,409			6,953			1,292			-			-			-			874,865		23.9%
Aerospace Systems1		289,339	20.5%			74,807			(12)			11,964			-			-			-			376,098	26.7%
Total segment operating income		1,089,550		21.5%			(141,216)			(6,941)			(13,256)			-			-			-			1,250,963		24.7%
Corporate administration		56,782	1.1%			-			-			-			-			-			-			56,782	1.1%
Income before interest and other		1,032,768		20.4%			(141,216)			(6,941)			(13,256)			-			-			-			1,194,181		23.5%
Interest expense		123,732	2.4%			-			-			-			-			-			-			123,732	2.4%
Other (income) expense		(11,007)	-0.2%			-			1,527			-			-			-			-			(12,534)	-0.2%
Income before income taxes	$	920,043		18.1%		$	(141,216)		$	(8,468)		$	(13,256)		$	-		$	-		$	-		$	1,082,983		21.3%
(Dollars in thousands)
(Unaudited)													Quarter-to-Date FY 2023
							Acquired			Business			Meggitt			Acquisition			Amortization
		As Reported					Intangible Asset		Realignment			Cost to			Related			of Inventory			Net Loss on			Adjusted
Diversified Industrial:		March 31, 2023		% of Sales			Amortization			Charges			Achieve			Expenses			Step-Up to FV			Divestitures			March 31, 2023		% of Sales2
																						$	536,736	22.9%
North America1	$	489,349	20.9%	$	44,184	$	761	$	2,442	$	-	$	-	$	-
International1		329,498	21.6%			17,266			7,314			2,953			-			-			-			357,031	23.4%
Total Diversified Industrial1		818,847		21.2%			61,450			8,075			5,395			-			-			-			893,767		23.1%
Aerospace Systems1		133,905	11.2%			83,697			166			25,849			-			37,642			-			281,259	23.5%
Total segment operating income		952,752		18.8%			(145,147)			(8,241)			(31,244)			-			(37,642)			-			1,175,026		23.2%
Corporate administration		45,780	0.9%			-			-			-			-			-			-			45,780	0.9%
Income before interest and other		906,972		17.9%			(145,147)			(8,241)			(31,244)			-			(37,642)			-			1,129,246		22.3%
Interest expense		151,993	3.0%			-			-			-			-			-			-			151,993	3.0%
Other (income) expense		(1,402)	0.0%			-			-			-			1,299			-			10,927			(13,628)	-0.3%
Income before income taxes	$	756,381		14.9%		$	(145,147)		$	(8,241)		$	(31,244)		$	(1,299)		$	(37,642)		$	(10,927)		$	990,881		19.6%

1. Segment operating income as a percent of sales is calculated on segment sales.
2. Adjusted amounts as a percent of sales are calculated on as reported sales.

5

Reconciliation of EBITDA to Adjusted EBITDA

(Dollars in thousands)				Three Months Ended
(Unaudited)				March 31,
Net sales		2024		% of Sales			2023		% of Sales
$	5,074,356		100.0%		$	5,061,665		100.0%
Net income	$	726,734	14.3%	$	590,960	11.7%
Income taxes		193,309	3.8%			165,421	3.3%
Depreciation		87,082	1.7%			80,194	1.6%
Amortization		141,216	2.8%			145,147	2.9%
Interest expense		123,732	2.4%			151,993	3.0%
EBITDA		1,272,073		25.1%			1,133,715		22.4%
Adjustments:
Business realignment charges		8,468	0.2%			8,241	0.2%
Meggitt costs to achieve		13,256	0.3%			31,244	0.6%
Acquisition-related expenses		-	0.0%			1,299	0.0%
Amortization of inventory step-up to FV		-	0.0%			37,642	0.7%
Net loss on divestitures		-	0.0%			10,927	0.2%
EBITDA - Adjusted	$	1,293,797		25.5%		$	1,223,068		24.2%
EBITDA margin
	25.1 %					22.4 %
EBITDA margin - Adjusted		25.5 %					24.2 %

6

Reconciliation of Gross and Net Debt / Adjusted EBITDA

(Unaudited)		March 31, 2024			March 31, 2023
(Dollars in thousands)
Notes payable and long-term debt payable within one year	$	4,080,759	$	1,992,919
Long-term debt		7,290,208			11,412,304
Add: Deferred debt issuance costs		61,794			79,018
Total gross debt	$	11,432,761		$	13,484,241
Cash and cash equivalents	$	405,484	$	534,831
Marketable securities and other investments		9,968			23,466
Total cash	$	415,452		$	558,297
Net debt (Gross debt less total cash)
$	11,017,309	$	12,925,944
TTM Net Sales	$	19,838,734	$	18,157,083
Net income	$	2,768,941	$	1,503,364
Income tax		742,897			391,273
Depreciation		340,467			297,018
Amortization		565,059			451,490
Interest Expense		544,405			487,988
TTM EBITDA	$	4,961,769		$	3,131,133
Adjustments:
Business realignment charges		45,140			22,426
Costs to achieve		48,462			78,477
Acquisition-related costs		2,754			175,202
Loss on deal-contingent forward contracts		0			1,009,053
Gain on divestitures		(25,651)			(372,930)
Amortization of inventory step-up to FV		(57,992)			167,973
Net loss on divestitures		0			10,927
Russia liquidation		0			0
TTM Adjusted EBITDA	$	4,974,482		$	4,222,261
Gross Debt/TTM Adjusted EBITDA		2.3			3.2
Net Debt/TTM Adjusted EBITDA		2.2			3.1

7

Reconciliation of Year-to-Date Free Cash Flow

(Unaudited)		Nine Months Ended March 31,
(Dollars in thousands)		2024			2023
Net Sales	$	14,742,791	$	13,969,251
Cash Flow from Operations	$	2,147,077	$	1,794,894
Capital Expenditures		(283,328)			(272,603)
Free Cash Flow	$	1,863,749		$	1,522,291
Cash Flow from Operations Margin		14.6%			12.8%
Free Cash Flow Margin		12.6%			10.9%

*Totals may not foot due to rounding

8

Supplemental Sales Information

Global Technology Platforms

(Unaudited)		Three Months Ended March 31,
(Dollars in thousands)		2024			2023
Net sales
Diversified Industrial:
Motion Systems	$	942,667	$	1,017,974
Flow and Process Control		1,185,622			1,298,204
Filtration and Engineered Materials		1,537,354			1,550,927
Aerospace Systems		1,408,713			1,194,560
Total	$	5,074,356	$	5,061,665

9

Reconciliation of FY19 Financials

RECONCILIATION OF OPERATING INCOME TO ADJUSTED OPERATING INCOME

RECONCILIATION OF EPS TO ADJUSTED EPS

RECONCILIATION OF CASH FLOW FROM OPERATIONS TO FREE CASH FLOW

(Unaudited) (Dollars in millions)

		12 Months
		ended
		6/30/19
Net sales	$	14,320
Segment Operating Income		2,431
Adjustments:
Acquisition-related intangible asset amortization expense		200
Business realignment charges		16
Acquisition-related expenses & costs to achieve		13
Adjusted Segment Operating Income	$	2,660
Segment Operating margin1		17.0%
Adjusted Segment Operating margin2		18.6%

(Unaudited)

(Amounts in Dollars)			(Unaudited)
		(Dollars in thousands)
	12 Months
		ended	Cash Flow from Operations
		6/30/19*
		Capital Expenditures
Earnings per diluted share	$	11.57	Free Cash Flow
Adjustments:
Acquisition-related intangible asset amortization expense		1.51
Business realignment charges		0.12
Acquisition-related expenses & costs to achieve		0.23
Tax expense related to U.S. tax reform		0.11
Tax effect of adjustments3		(0.44)
Adjusted earnings per diluted share	$	13.10

Twelve Months Ended

June 30, 2019

• 1,730,140

(195,089)

• 1,535,051

1. Segment operating income as a percent of sales is calculated on segment sales.
2. Adjusted amounts as a percent of sales are calculated on as reported sales.
3. This line item reflects the aggregate tax effect of all non-tax adjustments reflected in the preceding line items of the table. We estimate the tax effect of each adjustment

item by applying our overall effective tax rate for continuing operations to the pre-tax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.

*Amounts have been adjusted to reflect the change in inventory accounting method. **Totals may not foot due to rounding

10