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Todd Leombruno | Chief Financial Officer Parker Hannifin Corporation Barclays Industrial Select Conference
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2 Forward-looking statementscontainedin this and other written and oral reports are made based on known events and circumstancesat the time of release,and as such, are subject in the future to unforeseenuncertainties and risks. Often but not always,these statementsmay be identifiedfrom the use of forward-lookingterminologysuch as “anticipates,”“believes,”“may,” “should,”“could,”“expects,”“targets,”“is likely,” “will,” or the negativeof these terms and similar expressions,and may also include statementsregardingfuture performance,orders, earningsprojections,events or developments. Parker cautionsreadersnot to place undue relianceon these statements. It is possiblethat the future performancemay differ materiallyfrom expectations,includingthose based on past performance. Amongother factors that may affect future performanceare: changesin businessrelationshipswith and orders by or from major customers,suppliersor distributors,includingdelays or cancellationsin shipments; disputes regardingcontractterms, changesin contractcosts and revenueestimatesfor new developmentprograms; changesin product mix; ability to identify acceptablestrategicacquisitiontargets; uncertaintiessurroundingtiming, successful completion or integration of acquisitions and similar transactions, including the pending acquisition of Filtration Group Corporation and the integration of Curtis Instruments, Inc; ability to successfully divest businesses planned for divestiture and realize the anticipated benefits of such divestitures; the determination and ability to successfully undertake business realignment activities and the expected costs, including cost savings,thereof; ability to implementsuccessfullybusinessand operatinginitiatives,includingthe timing, price and executionof share repurchasesand other capital initiatives; availability,cost increasesof or other limitations on our access to raw materials, component products and/or commoditiesif associated costs cannot be recovered in product pricing; ability to manage costs related to insurance and employee retirement and health care benefits; legal and regulatory developmentsand other governmentactions, including related to environmentalprotection,and associatedcompliancecosts; supply chain and labor disruptions,including as a result of tariffs and labor shortages; threats associated with internationalconflicts and cybersecurityrisks and risks associated with protecting our intellectual property; uncertaintiessurroundingthe ultimate resolution of outstandinglegal proceedings,includingthe outcome of any appeals; effects on market conditions,includingsales and pricing, resulting from global reactionsto U.S. trade policies; manufacturingactivity, air travel trends, currency exchange rates, difficulties entering new markets and economic conditions such as inflation, deflation, interest rates and credit availability; inability to obtain, or meet conditions imposed for, required governmentaland regulatory approvals; changes in the tax laws in the United States and foreign jurisdictionsand judicial or regulatory interpretationsthereof; and large scale disasters, such as floods, earthquakes,hurricanes,industrial accidents and pandemics. Readers should also consider forward-looking statementsin light of risk factors discussedin Parker’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 and other periodic filings made with the SEC. This presentationcontains references to non-GAAP financial information including adjusted net income, organic sales growth, adjusted earnings per share, adjusted segment operating margin for Parker and by segment, EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, free cash flow, and free cash flow margin. As used in this presentation, EBITDA is defined as earnings before interest, taxes, depreciation and amortization. AdjustedEBITDAis defined as EBITDAbefore businessrealignment,integrationcosts to achieve,acquisitionrelated expenses,and other one-time items. Free cash flow is defined as cash flow from operations less capital expenditures. Althoughthe above listed measuresare not measuresof performancecalculatedin accordancewith GAAP, we believe that they are useful to an investor in evaluatingthe companyperformancefor the periodspresented. Detailedreconciliationsof these non-GAAP financialmeasuresto the comparableGAAP financialmeasureshave been includedin the appendixto this presentation. Please visit investors.parker.com for more information. Forward-Looking Statements and Non-GAAP Financial Measures
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3 Parker Hannifin at-a-Glance Engineering Customer Success in Motion & Control Industry for over 100 years ▪ Decentralized operating structure ▪ A technology powerhouse of Interconnected solutions ▪ Global distribution network▪ The Win Strategy TM Industrial North America 41% Businesses Motion Systems 17% Technology Platforms ~$20B FY25G Revenue Filtration & Engineered Materials 29% Aerospace Systems 31% Flow & Process Control 23% Motion Systems 17% Diversified Industrial International 28% Aerospace Systems 31% Diversified Industrial North America 41%
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4 #1 Position in Motion & Control Industry • Interconnected technologies and solutions across market verticals • 2/3’s of our sales come from customers who buy 4 or more technologies • Growth focused on faster growing, longer cycle markets and secular trends In-plant & Industrial Equipment 20% Other 6% HVAC/R 4% Energy 7% Aerospace & Defense 35% Off Highway 13% Transportation 15% ~$21B FY26G Sales Note: Sales by market as of FY25. Aerospace & Defense market includes sales reported both in the Aerospace Systems segment and Diversified Industrial segment. A Technology Powerhouse of Interconnected Solutions Focused Portfolio Creating Distinct Value for Customers
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5 Strong Competitive Advantages Application Engineering Innovative Products Interconnected Technologies Distribution Network Serving global aftermarket & small to mid-sized OEMs Enables comprehensive solutions for customers Deep customer partnership to uncover unmet needs Technical expertise creates competitive advantage Decentralized structure, strategic positioning & operational excellence Parker’s Business System Why We Win
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6 People, Strategy & Portfolio Drive Top Quartile Performance Adjusted Operating Margin1 Revenue Adjusted EPS1 Free Cash Flow1 $11.4B $21.2B 15.7% $6.99 27.2% $30.70 $1.3B $3.4B FY16 FY26G +6% Revenue CAGR +1,150 bps Adjusted Operating Margin1 Expansion +16% Adjusted EPS 1 CAGR +10% Free Cash Flow 1 CAGR 1. Adjusted numbers include certain non -GAAP adjustments and financial measures. See Appendix for additional details and reconcilia tions. Note: FY16 As reported: Operating Margin of 13.9 %, EPS of $5.89, Cash Flow from Operations : $1.2B. FY26G As reported: Operating Margin of 23.9%, EPS of $26.56, Cash Flow from Operations: $3.9B. Note: FY26 guidance numbers are as of January 29 th, 2026, and do not include Filtration Group Corporation FY16 FY26G FY16 FY26G FY16 FY26G
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7 7 $6.99 $13.10 $18.72 $27.33 $30.70 FY16 FY19 FY22 FY25 FY26G Compounds EPS Growth Over Time The Win Strategy Coupled with Disciplined Capital Allocation Adjusted EPS 1 1. Adjusted numbers include certain non -GAAP adjustments and financial measures. See Appendix for additional details and reconcilia tions. $5.89 $11.57 $10.09 $27.12 $26.56 As Reported EPS
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9 Reconciliation of FY26 Guidance Fiscal Year 2026 Forecasted Net Sales Currency Acquisitions Divestitures Adjusted Forecasted Net Sales Diversified Industrial North America Businesses 1.5% to 3.5% ~(0.5%) ~(1.5%) ~2.0% 1.5% to 3.5% International Businesses 6.0% to 8.0% ~(3.0%) ~(2.0%) -- 1.0% to 3.0% Aerospace Systems 10.5% to 12.5% ~(0.5%) -- -- 10.0% to 12.0% Parker 5.5% to 7.5% ~(1.5%) ~(1.0%) ~1.0% 4.0% to 6.0% RECONCILIATION OF FORECASTED SALES GROWTH TO ORGANIC SALES GROWTH (Unaudited) (Amounts in percentages) Fiscal Year 2026 Forecasted earnings per diluted share $26.26 to $26.86 Adjustments: Business realignment charges 0.55 Amortization of acquired intangibles 4.57 Acquisition related expenses 0.25 Costs to achieve 0.12 Gain on insurance recoveries (0.16) Tax effect of adjustments1 (1.19) Adjusted forecasted earnings per diluted share $30.40 to $31.00 RECONCILIATION OF FORECASTED EARNINGS PER DILUTED SHARE TO ADJUSTED FORECASTED EARNINGS PER DILUTED SHARE (Unaudited) 1. This line 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 cast the tax effect of such item is estimated by applying such specific tax rate or tax treatment. * Totals may not foot due to rounding
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10 Adjusted Amounts Reconciliation FY16 Segment Operating Margin and Free Cash Flow RECONCILIA TION OF OPERATING MARGIN TO ADJUSTED OPERATING MARGIN (Amounts in percentages) (Unaudited) 12 Months Ended 6/30/16 Total segment operating margin 13.9% Adjustments: Acquisition-related intangible asset amortization 0.9% Business realignment charges 0.9% Adjusted total segment operating margin 15.7% RECONCILIA TION OF FREE CASH FLOW (Dollars in Millions) (Unaudited) 12 Months Ended 6/30/16 Cash provided by Operating Activities – As Reported $1,211 Capital expenditures (149) Free cash flow 1,061 Discretionary pension contribution 200 Free cash flow – adjusted for discretionary pension $1,261
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11 Reconciliation of Earnings Per Diluted Share to Adjusted Earnings Per Diluted Share FY16 – FY25 (Amounts in dollars) (Unaudited) 12 Months Ended 6/30/16 12 Months Ended 6/30/19 12 Months Ended 6/30/22 12 Months Ended 6/30/25 Earnings per diluted share $5.89 $11.57 $10.09 $27.12 Adjustments: Acquisition-related intangible asset amortization expense 0.74 1.51 2.41 4.25 Business realignment charges 0.80 0.12 0.11 0.43 Acquisition related expenses and costs to achieve -- 0.23 0.78 0.17 T ax expense related to U.S. tax reform 0.11 -- -- Loss on deal-contingent forward contracts -- -- 7.79 -- Russia liquidation -- -- 0.15 -- Gain on sale of buildings -- -- -- (0.18) Gain on divestitures -- -- -- (1.94) Saegertown incident -- -- -- 0.06 T ax effect of adjustments1 (0.44) (0.44) (2.61) (0.93) Discrete tax benefits -- -- -- (1.65) Adjusted earnings per diluted share $6.99 $13.10 $18.72 $27.33 1.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 adjustments 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 ite m has been recorded requires application of 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.