8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 1, 2018

PARKER-HANNIFIN CORPORATION

(Exact Name of Registrant as Specified in Charter)

Ohio	34-0451060
(State or other jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
6035 Parkland Boulevard, Cleveland, Ohio	44124-4141
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code: (216) 896-3000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

• Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

• Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

• Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

• Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On February 1, 2018, Parker-Hannifin Corporation issued a press release and presented a Webcast announcing results of operations for the quarter ended December 31, 2017. A copy of the press release is furnished as Exhibit 99.1 to this report. A copy of the Webcast presentation is furnished as Exhibit 99.2 to this report.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits:

99.1    Press release issued by Parker-Hannifin Corporation, dated February 1, 2018.

99.2    Webcast presentation by Parker-Hannifin Corporation, dated February 1, 2018.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	PARKER-HANNIFIN CORPORATION
	By: /s/ Catherine A. Suever
	Catherine A. Suever
	Executive Vice President - Finance &
	Administration and Chief Financial Officer
Date: February 1, 2018

EX-99.1

Exhibit 99.1    

For Release:    Immediately                    

Contact:	Media -
	Aidan Gormley -Director, Global Communications and Branding	216-896-3258
	aidan.gormley@parker.com
	Financial Analysts -
	Robin J. Davenport, Vice President, Corporate Finance	216-896-2265
	rjdavenport@parker.com
Stock symbol:	PH - NYSE

Parker Reports Fiscal 2018 Second Quarter Results

– Sales increased 26% to $3.37 billion, a second quarter record

– Organic sales increased 10%, order rates increased 13%

– As reported EPS were $0.41; or $2.15 adjusted

– As reported EPS include a one-time, tax expense adjustment of $1.65

– Total segment operating margins were 14.2%, or 14.9% adjusted

– Adjusted EBITDA margins increased from 15.2% to 16.3%, excluding divestiture gain in prior year

– Company increases fiscal 2018 full year guidance for adjusted EPS

CLEVELAND, February 1, 2018 -- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2018 second quarter ended December 31, 2017. Fiscal 2018 second quarter sales increased 26% to $3.37 billion compared with $2.67 billion in the prior year quarter. Net income was $56.3 million compared with $241.4 million in the fiscal 2017 second quarter. Fiscal 2018 second quarter earnings per share were $0.41, compared with $1.78 in the prior year quarter. Adjusted earnings per share were $2.15, compared with adjusted earnings per share of $1.91 in the prior year quarter, which included a divestiture resulting in a pre-tax gain of $45.0 million or $0.21 per share. During the fiscal 2018 second quarter, the company recognized a net one-time adjustment to income tax expense of $224.5 million, or $1.65 per share related to U.S. Tax Reform and recorded a net pre-tax gain on the sale and writedown of assets of $8.4 million, or $0.05 per share. Business realignment expenses and CLARCOR costs to achieve totaled $25.4 million, or $0.14 per share in the current quarter. A reconciliation of earnings per share to adjusted earnings per share is included in the financial tables of this press release. Cash flow from operations for the first half of fiscal 2018 was $460.3 million or 6.8% of sales, compared with $404.2 million or 7.5% of sales in the prior year period, or 11.5% excluding a discretionary pension contribution in fiscal 2017.

“Improved market conditions together with the ongoing benefits of implementing the new Win Strategy^TM continue to deliver widespread improvements across our company,” said Chairman and Chief Executive Officer, Tom Williams. “Sales were a second quarter record and increased 10% organically, while order rates increased 13% year-over-year. Solid margin performance continued. We are firmly positioned to build on the financial progress that we have made in recent years and to deliver record sales and earnings in fiscal 2018.”

Second Quarter Fiscal 2018 Segment Results

Diversified Industrial Segment: North American second quarter sales increased 40% to $1.6 billion and operating income increased 23% to $225.8 million, compared with $184.0 million in the same period a year ago. International second quarter sales increased 25% to $1.3 billion and operating income increased 29% to $164.8 million, compared with $127.5 million in the same period a year ago.

Aerospace Systems Segment: Second quarter sales were $549.7 million, compared with $543.8 million in the prior year period and operating income increased 20% to $87.1 million, compared with $72.5 million in the same period a year ago.

Parker reported the following orders for the quarter ending December 31, 2017, compared with the same quarter a year ago:

• Orders increased 13% for total Parker

• Orders increased 15% in the Diversified Industrial North America businesses

• Orders increased 13% in the Diversified Industrial International businesses

• Orders increased 8% in the Aerospace Systems Segment on a rolling 12-month average basis

Outlook

For the fiscal year ending June 30, 2018, the company has revised guidance for earnings from continuing operations to the range of $7.38 to $7.78 per share, or $9.65 to $10.05 per share on an adjusted basis.

The revised fiscal 2018 earnings guidance reflects a reduction in the U.S. Federal income tax rate, which has lowered the average effective tax rate for Parker in fiscal 2018. On an adjusted basis, forecasted earnings reflect the net one-time adjustment in income tax expense of $224.5 million, or $1.65 per share recorded in the second quarter of fiscal 2018, as well as expected business realignment expenses of approximately $58 million and CLARCOR costs to achieve of approximately $52 million. A reconciliation of forecasted earnings per share to adjusted forecasted earnings per share is included in the financial tables of this press release.

Williams added, “We see strong market conditions continuing into the second half of our fiscal year. We remain committed to driving operational improvements through our execution of the Win Strategy, progressing toward our stated long-term financial goals and delivering a record year.”

NOTICE OF CONFERENCE CALL: Parker Hannifin's conference call and slide presentation to discuss its fiscal 2018 second quarter results are available to all interested parties via live webcast today at 11:00 a.m. ET, on the company's investor information web site at www.phstock.com. To access the call, click on the "Live Webcast" link. From this link, users also may complete a pre-call system test. A replay of the webcast will be accessible on Parker's investor relation website, www.phstock.com, approximately one hour after the completion of the call, and will remain available for one year thereafter. To register for e-mail notification of future events and information available from Parker please visit www.phstock.com.

Parker Hannifin is a Fortune 250 global leader in motion and control technologies. For 100 years the company has engineered the success of its customers in a wide range of diversified industrial and aerospace markets. Parker has increased its annual dividend per share paid to shareholders for 61 consecutive fiscal years, among the top five longest-running dividend-increase records in the S&P 500 index. Learn more at www.parker.com or @parkerhannifin.

Note on Orders

Orders provide near-term perspective on the company's outlook, particularly when viewed in the context of prior and future quarterly order rates. However, orders are not in themselves an indication of future performance. All comparisons are at constant currency exchange rates, with the prior year restated to the current-year rates. All exclude acquisitions until they can be reflected in both the numerator and denominator. Aerospace comparisons are rolling 12-month average computations. The total Parker orders number is derived from a weighted average of the year-over-year quarterly % change in orders for Diversified Industrial North America and Diversified Industrial International, and the year-over-year 12-month rolling average of orders for the Aerospace Systems Segment.

Note on Non-GAAP Numbers

This press release contains references to (a) earnings per share and segment operating margins without the effect of business realignment charges, CLARCOR costs to achieve, U.S. Tax Reform adjustments, the gain on sale and writedown of assets, net,and acquisition-related expenses; (b) the effect of business realignment charges, CLARCOR costs to achieve, U.S. Tax Reform adjustments, the gain on sale and writedown of assets, net, and acquisition-related expenses on forecasted earnings from continuing operations per share; (c) and cash flows from operations without the effect of a discretionary pension contribution. The effects of business realignment charges, CLARCOR costs to achieve, U.S. Tax Reform adjustments, gain on sale and writedown of assets, net, acquisition-related expenses and discretionary pension contribution are removed to allow investors and the company to meaningfully evaluate changes in earnings per share, segment operating margins and cash flows from operations on a comparable basis from period to period. This press release also contains references to EBITDA and adjusted EBITDA. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before business realignment charges, CLARCOR costs to achieve, U.S. Tax Reform adjustments, the gain on sale and writedown of assets, net, gain on sale of a product lineand acquisition-related expenses. Although EBITDA and Adjusted EBITDA are not measures of performance calculated in accordance with GAAP, we believe that it is useful to an investor in evaluating the results of this quarter versus one year ago.

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 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. 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 and earnings projections are: economic conditions within the company’s key 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 the U.S. Tax Cuts and Jobs Act may affect future performance and earnings projections as the amounts reflected in this period are preliminary estimates and exact amounts will not be determined until a later date, and there may be other judicial or regulatory interpretations of the U.S. Tax Cuts and Jobs Act that may also affect these estimates and the actual impact on the company. 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 of the company are, as applicable: 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; 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; competitive market conditions 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. The company makes these statements as of the date of this disclosure, and undertakes no obligation to update them unless otherwise required by law.

###

PARKER HANNIFIN CORPORATION - DECEMBER 31, 2017										Exhibit 99.1
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)	Three Months Ended December 31,						Six Months Ended December 31,
(Dollars in thousands except per share amounts)	2017			2016			2017			2016
Net sales	$	3,370,673		$	2,670,804		$	6,735,324		$	5,413,935
Cost of sales	2,569,070			2,044,484			5,101,948			4,150,490
Selling, general and administrative expenses	412,462			336,578			814,134			659,547
Interest expense	53,133			33,444			106,688			67,592
Other (income), net	(24,213		)	(64,424		)	(21,969		)	(76,661		)
Income before income taxes	360,221			320,722			734,523			612,967
Income taxes	303,899			79,322			392,666			161,329
Net income	56,322			241,400			341,857			451,638
Less: Noncontrolling interests	163			95			301			204
Net income attributable to common shareholders	$	56,159		$	241,305		$	341,556		$	451,434
Earnings per share attributable to common shareholders:
Basic earnings per share	$	0.42		$	1.81		$	2.57		$	3.38
Diluted earnings per share	$	0.41		$	1.78		$	2.51		$	3.33
Average shares outstanding during period - Basic	133,112,568			133,320,109			133,144,766			133,499,744
Average shares outstanding during period - Diluted	136,194,919			135,812,760			135,874,530			135,596,707
Cash dividends per common share	$	0.66		$	0.63		$	1.32		$	1.26
RECONCILIATION OF EARNINGS PER DILUTED SHARE TO ADJUSTED EARNINGS PER DILUTED SHARE
(Unaudited)	Three Months Ended December 31,						Six Months Ended December 31,
(Amounts in dollars)	2017			2016			2017			2016
Earnings per diluted share	$	0.41		$	1.78		$	2.51		$	3.33
Adjustments:
Business realignment charges	0.07			0.04			0.12			0.10
Clarcor costs to achieve	0.07			—			0.10			—
Gain on sale and writedown of assets, net	(0.05		)	—			0.02			—
U.S. Tax Reform one-time impact, net	1.65			—			1.65			—
Acquisition-related expenses	—			0.09			—			0.09
Adjusted earnings per diluted share	$	2.15		$	1.91		$	4.40		$	3.52
RECONCILIATION OF EBITDA TO ADJUSTED EBITDA
(Unaudited)
(Dollars in thousands)	Three Months Ended December 31,
	2017			2016
Net sales	$	3,370,673		$	2,670,804
Earnings before income taxes	$	360,221		$	320,722
Depreciation and amortization	118,109			73,752
Interest expense	53,133			33,444
EBITDA	531,463			427,918
Adjustments:
Gain on sale and writedown of assets, net	(8,453		)	—
Business realignment charges	13,428			7,897
Clarcor costs to achieve	11,948			—
Acquisition-related expenses	—			15,963
Gain on sale of a product line	—			(45,053		)
Adjusted EBITDA	$	548,386		$	406,725
EBITDA margin	15.8		%	16.0		%
Adjusted EBITDA margin	16.3		%	15.2		%

PARKER HANNIFIN CORPORATION - DECEMBER 31, 2017								Exhibit 99.1
BUSINESS SEGMENT INFORMATION
(Unaudited)	Three Months Ended December 31,					Six Months Ended December 31,
(Dollars in thousands)	2017		2016			2017		2016
Net sales
Diversified Industrial:
North America	$	1,565,416	$	1,121,053		$	3,160,107	$	2,288,024
International	1,255,569		1,005,968			2,494,343		2,020,891
Aerospace Systems	549,688		543,783			1,080,874		1,105,020
Total net sales	$	3,370,673	$	2,670,804		$	6,735,324	$	5,413,935
Segment operating income
Diversified Industrial:
North America	$	225,807	$	184,013		$	481,834	$	384,624
International	164,806		127,517			356,597		264,713
Aerospace Systems	87,148		72,516			164,582		145,797
Total segment operating income	477,761		384,046			1,003,013		795,134
Corporate general and administrative expenses	46,942		43,926			88,292		74,960
Income before interest expense and other expense	430,819		340,120			914,721		720,174
Interest expense	53,133		33,444			106,688		67,592
Other expense (income)	17,465		(14,046		)	73,510		39,615
Income before income taxes	$	360,221	$	320,722		$	734,523	$	612,967
RECONCILIATION OF TOTAL SEGMENT OPERATING MARGIN TO ADJUSTED TOTAL SEGMENT OPERATING MARGIN
(Unaudited)
(Dollars in thousands)	Three Months Ended					Three Months Ended
	December 31, 2017					December 31, 2016
	Operating income		Operating margin			Operating income		Operating margin
Total segment operating income	$	477,761	14.2		%	$	384,046	14.4		%
Adjustments:
Business realignment charges	13,428					7,897
Clarcor costs to achieve	11,948					—
Adjusted total segment operating income	$	503,137	14.9		%	$	391,943	14.7		%
	Six Months Ended					Six Months Ended
	December 31, 2017					December 31, 2016
	Operating income		Operating margin			Operating income		Operating margin
Total segment operating income	$	1,003,013	14.9		%	$	795,134	14.7		%
Adjustments:
Business realignment charges	21,654					18,642
Clarcor costs to achieve	17,748					—
Adjusted total segment operating income	$	1,042,415	15.5		%	$	813,776	15.0		%

					Exhibit 99.1
PARKER HANNIFIN CORPORATION - DECEMBER 31, 2017
CONSOLIDATED BALANCE SHEET
(Unaudited)	December 31,		June 30,		December 31,
(Dollars in thousands)	2017		2017		2016
Assets
Current assets:
Cash and cash equivalents	$	1,024,770	$	884,886	$	1,520,736
Marketable securities and other investments	107,976		39,318		684,299
Trade accounts receivable, net	1,857,282		1,930,751		1,411,074
Non-trade and notes receivable	313,221		254,987		256,545
Inventories	1,780,262		1,549,494		1,241,593
Prepaid expenses	202,848		120,282		133,592
Total current assets	5,286,359		4,779,718		5,247,839
Plant and equipment, net	1,937,074		1,937,292		1,506,201
Deferred income taxes	36,668		36,057		482,136
Goodwill	5,698,707		5,586,878		2,813,238
Intangible assets, net	2,174,104		2,307,484		849,692
Other assets	832,269		842,475		832,507
Total assets	$	15,965,181	$	15,489,904	$	11,731,613
Liabilities and equity
Current liabilities:
Notes payable	$	1,248,212	$	1,008,465	$	581,487
Accounts payable	1,229,336		1,300,496		997,189
Accrued liabilities	896,750		933,762		720,844
Accrued domestic and foreign taxes	163,405		153,137		125,954
Total current liabilities	3,537,703		3,395,860		2,425,474
Long-term debt	4,798,371		4,861,895		2,653,560
Pensions and other postretirement benefits	1,363,466		1,406,082		1,766,209
Deferred income taxes	137,196		221,790		50,809
Other liabilities	609,235		336,931		304,583
Shareholders' equity	5,513,401		5,261,649		4,527,709
Noncontrolling interests	5,809		5,697		3,269
Total liabilities and equity	$	15,965,181	$	15,489,904	$	11,731,613

				Exhibit 99.1
PARKER HANNIFIN CORPORATION - DECEMBER 31, 2017
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)	Six Months Ended December 31,
(Dollars in thousands)	2017			2016
Cash flows from operating activities:
Net income	$	341,857		$	451,638
Depreciation and amortization	234,216			149,085
Stock incentive plan compensation	64,267			47,161
(Gain) on sale of business	—			(44,930		)
(Gain) loss on disposal of assets	(26,529		)	310
(Gain) on sale of marketable securities	(1		)	(230		)
Loss on sale and impairment of investments	33,759			—
Net change in receivables, inventories, and trade payables	(249,615		)	44,802
Net change in other assets and liabilities	123,864			(313,783		)
Other, net	(61,481		)	70,123
Net cash provided by operating activities	460,337			404,176
Cash flows from investing activities:
Acquisitions (net of cash of $1,760 in 2016)	—			(29,927		)
Capital expenditures	(144,781		)	(71,356		)
Proceeds from sale of plant and equipment	59,848			4,991
Proceeds from sale of business	—			85,610
Purchases of marketable securities and other investments	(78,309		)	(393,909		)
Maturities and sales of marketable securities and other investments	12,710			506,642
Other, net	5,143			241
Net cash (used in) provided by investing activities	(145,389		)	102,292
Cash flows from financing activities:
Net payments for common stock activity	(134,360		)	(194,110		)
Net proceeds from debt	127,723			222,425
Dividends	(176,187		)	(168,990		)
Net cash (used in) financing activities	(182,824		)	(140,675		)
Effect of exchange rate changes on cash	7,760			(66,710		)
Net increase in cash and cash equivalents	139,884			299,083
Cash and cash equivalents at beginning of period	884,886			1,221,653
Cash and cash equivalents at end of period	$	1,024,770		$	1,520,736

			Exhibit 99.1
PARKER HANNIFIN CORPORATION - DECEMBER 31, 2017
RECONCILIATION OF CASH FLOW FROM OPERATIONS TO ADJUSTED CASH FLOW FROM OPERATIONS
(Unaudited)	Six Months Ended
(Dollars in thousands)	December 31, 2017		Percent of Sales
As reported cash flow from operations	$	460,337	6.8	%
Discretionary pension contribution	—
Adjusted cash flow from operations	$	460,337	6.8	%
	Six Months Ended
	December 31, 2016		Percent of Sales
As reported cash flow from operations	$	404,176	7.5	%
Discretionary pension contribution	220,000
Adjusted cash flow from operations	$	624,176	11.5	%

		Exhibit 99.1
PARKER HANNIFIN CORPORATION - DECEMBER 31, 2017
RECONCILIATION OF FORECASTED EARNINGS PER DILUTED SHARE TO ADJUSTED FORECASTED EARNINGS PER DILUTED SHARE
(Unaudited)
(Amounts in dollars)
	Fiscal Year 2018
Forecasted earnings per diluted share	$7.38 to $7.78
Adjustments:
Business realignment charges	0.32
Clarcor costs to achieve	0.28
Gain on sale and writedown of assets, net	0.02
U.S. Tax Reform one-time impact, net	1.65
Adjusted forecasted earnings per diluted share	$9.65 to $10.05

EX-99.2

2nd Quarter Fiscal Year 2018 Earnings Release Parker Hannifin Corporation February 1, 2018 Exhibit 99.2

Forward-Looking Statements and Non-GAAP Financial Measures 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 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. 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 and earnings projections are: economic conditions within the company’s key 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 the U.S. Tax Cuts and Jobs Act may affect future performance and earnings projections as the amounts reflected in this period are preliminary estimates and exact amounts will not be determined until a later date, and there may be other judicial or regulatory interpretations of the U.S. Tax Cuts and Jobs Act that may also affect these estimates and the actual impact on the company. 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 of the company are, as applicable: 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; 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; competitive market conditions 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. The company makes these statements as of the date of this disclosure, and undertakes no obligation to update them unless otherwise required by law. This presentation reconciles (a) sales amounts reported in accordance with U.S. GAAP to organic sales, which are sales amounts adjusted to remove the effects of acquisitions and the effects of currency exchange rates, (b) cash flow from operating activities and cash flow from operating activities as a percent of sales in accordance with U.S. GAAP to cash flow from operating activities and cash flow from operating activities as a percent of sales without the effect of discretionary pension plan contributions, (c) as reported and forecast segment operating income and operating margins reported in accordance with U.S. GAAP to as reported and forecast segment operating income and operating margins without the effect of business realignment charges and CLARCOR costs to achieve, (d) Below the Line Items reported in accordance with U.S. GAAP to Below the Line Items without the effect of the gain on sale and write-down of assets, net, and (e) Income tax in accordance with U.S. GAAP to Income tax without the effect of U.S. Tax Reform one-time impact, net (f) as reported and forecast earnings per diluted share reported in accordance with U.S. GAAP to as reported and forecast earnings per diluted share without the effect of business realignment charges, CLARCOR costs to achieve and a loss related to the sale of an investment. This presentation also contains references to EBITDA and adjusted EBITDA. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before business realignment charges, CLARCOR costs to achieve, and a loss related to the sale of an investment. Although EBITDA and Adjusted EBITDA are not measures of performance calculated in accordance with GAAP, we believe that it is useful to an investor in evaluating the results of this quarter versus one year ago. The effects of acquisitions, currency exchange rates, discretionary pension plan contributions, business realignment charges, CLARCOR costs to achieve, gain on sale and write-down of assets, net and U.S. Tax Reform one-time impact, net are removed to allow investors and the company to meaningfully evaluate changes in sales, and cash flow from operating activities as a percent of sales, segment operating income, operating margins, Below the Line Items, Income Tax and earnings per diluted share on a comparable basis from period to period. Full year adjusted guidance removes business realignment charges, CLARCOR costs to achieve, a gain on sale and write-down of assets, net and U.S. Tax Reform one-time impact, net. Please visit www.PHstock.com for more information 2

Agenda 3 • Chairman & CEO Comments • Results & Outlook • Questions & Answers

Chairman and CEO Comments 4 Summary  Continued momentum for orders  Upside potential remains; Early days of New Win Strategy™ Second Quarter Results  Safety - 22% Reduction in recordable injuries  Second quarter sales record, up 26%; strongest organic growth since Q1FY12  Order rates increased 13%; margins continued to improve  $225 million net one-time charge for U.S. Tax Reform Going Forward  Near-term capital deployment priorities  Updated EPS midpoint outlook to $7.58 As Reported, $9.85 Adjusted  Continue to drive the Win Strategy™ initiatives

Diluted Earnings Per Share 2nd Quarter FY2018 5 ¹Adjusted for Business Realignment Charges, Clarcor Costs to Achieve, U.S. Tax Reform one-time impact, net and the Gain on Sale and Write- down of Assets, net ²Adjusted for Business Realignment Charges, Acquisition-related expenses ³Includes $.21 gain from sale of a product line ,

Influences on Adjusted Earnings Per Share 2nd Quarter FY2018 vs. 2nd Quarter FY2017 6 ¹Adjusted for Business Realignment Charges, Acquisition-related expenses ²Includes $.21 gain from sale of a product line ³Adjusted for Business Realignment Charges, Clarcor Costs to Achieve, U.S. Tax Reform one-time impact, net and the Gain on Sale and Write-down of Assets, net

Sales & Segment Operating Margin Total Parker 7 $ in millions 2nd Quarter FY2018 % Change FY2017 Sales As Reported 3,371$ 26.2 % 2,671$ Acquisitions 356 13.3 % Currency 90 3.4 % Organic Sales 2,925$ 9.5 % FY2018 % of Sales FY2017 % of Sales S gment Operating Margin As Reported 478$ 14.2 % 384$ 14.4 % Business Realignment 13 8 CLARCOR Costs to Achieve 12 Adjusted 503$ 14.9 % 392$ 14.7 %

Sales & Segment Operating Margin Diversified Industrial North America 8 $ in millions 2nd Quarter FY2018 % Change FY2017 Sales As Reported 1,565$ 39.6 % 1,121$ Acquisitions 295 26.3 % Currency 7 0.6 % Organic Sales 1,263$ 12.7 % FY2018 % of Sales FY2017 % of Sales Segment Operating Margin As Reported 226$ 14.4 % 184$ 16.4 % Business Realignment 2 2 CLARCOR Costs to Achieve 9 Adjusted 237$ 15.1 % 186$ 16.6 %

Sales & Segment Operating Margin Diversified Industrial International 9 $ in millions 2nd Quarter FY2018 % Change FY2017 Sales As Reported 1,256$ 24.8 % 1,006$ Acquisitions 61 6.0 % Currency 82 8.1 % Organic Sales 1,113$ 10.7 % FY2018 % of Sales FY2017 % of Sales S gment Operating Margin As Reported 165$ 13.1 % 128$ 12.7 % Business Realignment 10 4 CLARCOR Costs to Achieve 3 Adjusted 178$ 14.2 % 132$ 13.1 %

Sales & Segment Operating Margin Aerospace Systems 10 $ in millions 2nd Quarter FY2018 % Change FY2017 Sales As Reported 550$ 1.1 % 544$ Acquisitions - - % Currency 1 0.3 % Organic Sales 549$ 0.8 % FY2018 % of Sales FY2017 % of Sales Segment Operating Margin As Reported 87$ 15.9 % 73$ 13.3 % Business Realignment 1 1 Adjusted 88$ 16.0 % 74$ 13.5 %

Order Rates 11 Excludes Acquisitions, Divestitures & Currency 3-month year-over-year comparisons of total dollars, except Aerospace Systems Aerospace Systems is calculated using a 12-month rolling average Dec 2017 Sep 2017 Dec 2016 Sep 2016 Total Parker 13 %+ 11 %+ 5 %+ 2 %+ Diversified Industrial North America 15 %+ 10 %+ 0% 4 %- Diversified Industrial International 13 %+ 15 %+ 10 %+ 3 %+ Aerospace Systems 8 %+ 4 %+ 9 %+ 14 %+

Cash Flow from Operating Activities FY2018 Q2 YTD 12 ¹Adjusted for Discretionary Pension Plan Contribution 2nd Quarter Full Year FY 2018 % of Sales FY 2017 % of Sales As Reported Cash Flow From Operating Activities 460$ 6.8% 404$ 7.5% Discretionary Pension Plan Contribution 220$ Adjusted Cash Flow From Operating Activities 460$ 6.8% 624$ 11.5%

Impact of U.S. Tax Reform 13 FY18  $225M net provisional charge o $287M one-time charge for deemed repatriation of non-US earnings o $62M benefit to adjust net deferred tax liabilities to new 21% federal rate  U.S. federal statutory tax rate of 28% o Blend of: 35% rate (1H’18) and 21% rate (2H’18)  Favorable to Cash Long Term Implications  Ongoing benefits o Increased Net Income o Improved mobility of international cash  Deemed repatriation payable over 8 years  Effective tax rate forecasted to be approximately 23%

FY2018 Guidance EPS Midpoint: $7.58 As Reported, $9.85 Adjusted 14 ¹Expected FY18 Adjusted Segment Operating Margins exclude FY18 Business Realignment Charges, Clarcor Costs to Achieve ²Expected FY18 Adjusted Below the Line Items exclude the Gain on Sale and Write-down of Assets, net ³Expected FY18 Tax Rate excludes U.S. Tax Reform one-time impact, net ⁴Expected FY18 Adjusted Earnings Per Share excludes FY18 Business Realignment Charges, Clarcor Costs to Achieve, the Gain on Sale and Write-down of Assets and U.S. Tax Reform one-time impact, net Sales Growth vs. Prior Year Diversified Industrial North America Diversified Industrial International Aerospace Systems Total Parker Segment Operating Margins As Reported Adjusted¹ Diversified Industrial North America 16.3% - 16.7% 17.0% - 17.4% Diversified Industrial International 14.0% - 14.4% 15.1% - 15.5% Aerospace Systems 15.5% - 15.9% 15.8% - 16.2% Total Parker 15.3% - 15.7% 16.1% - 16.5% Below the Line Items As Reported Adjusted² Corporate General & Administrative Expense, Interest and Other $516 $511 Tax Rate As Reported Adjusted³ Full Year 38% 25% Shares Diluted Shares Outstanding Earnings Per Share As Reported Adjusted⁴ Range $7.38 - $7.78 $9.65 - $10.05 136.1 M 21.6% - 25.6% 15.6% - 19.6% (0.1)% - 1.9% 15.3% - 18.9%

FY2018 Guidance Reconciliation to Prior Guidance 15 ¹Adjusted for Business Realignment Charges, Clarcor Costs to Achieve, U.S. Tax Reform one-time impact, net and the Gain on Sale and Write- down of Assets, net ²Adjusted for Business Realignment Charges, Clarcor Costs to Achieve, Loss related to sale of investment

16

Appendix • Consolidated Statement of Income • Adjusted Amounts Reconciliation • Reconciliation of EPS • Business Segment Information • Reconciliation of Total Segment Operating Margin to Adjusted Total Segment Operating Margin • Reconciliation of EBITDA to Adjusted EBITDA • Consolidated Balance Sheet • Consolidated Statement of Cash Flows • Reconciliation of Cash Flow from Operations to Adjusted Cash Flow from Operations • Reconciliation of Forecasted EPS • Supplemental Sales Information – Global Technology Platforms

Consolidated Statement of Income 18 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands except per share amounts) 2017 2016 2017 2016 Net sales 3,370,673$ 2,670,804$ 6,735,324$ 5,413,935$ Cost of sales 2,569,070 2,044,484 5,101,948 4,150,490 Selling, general and administrative expenses 412,462 336,578 814,134 659,547 Interest expense 53,133 33,444 106,688 67,592 Other (income), net (24,213) (64,424) (21,969) (76,661) Income before income taxes 360,221 320,722 734,523 612,967 Income taxes 303,899 79,322 392,666 161,329 Net income 56,322 241,400 341,857 451,638 Less: Noncontrolling interests 163 95 301 204 Net income attributable to common shareholders 56,159$ 241,305$ 341,556$ 451,434$ Earnings per share attributable to common shareholders: Basic earnings per share .42$ 1.81$ 2.57$ 3.38$ Diluted earnings per share .41$ 1.78$ 2.51$ 3.33$ Average shares outstanding during period - Basic 133,112,568 133,320,109 133,144,766 133,499,744 Average shares outstanding during period - Diluted 136,194,919 135,812,760 135,874,530 135,596,707 Cash dividends per common share .66$ .63$ 1.32$ 1.26$

Adjusted Amounts Reconciliation 19 SECOND QUARTER FY 2018 U.S. GAAP TO ADJUSTED AMOUNTS RECONCILIATION SEGMENTS (Amounts in thousands) (Unaudited) As Reported December 31, 2017 Business realignment charges Clarcor costs to achieve Gain on sale and writedown of assets, net Adjusted December 31, 2017 Segment Operating Income Industrial: North America 225,807$ 2,016$ 9,012$ -$ 236,835$ International 164,806 10,720 2,936 178,462 Aerospace 87,148 692 87,840 Total segment operating income 477,761 (13,428) (11,948) - 503,137 Corporate administration 46,942 46,942 Income before interest expense and other 430,819 (13,428) (11,948) - 456,195 Interest expense 53,133 53,133 Other (income) expense 17,465 (8,453) 25,918 Income before income taxes 360,221$ (13,428)$ (11,948)$ 8,453$ 377,144$ SECOND QUARTER FY 2018 SECOND QUARTER 2018 U.S. GAAP TO ADJUSTED AMOUNTS RECONCILIATION INCOME STATEMENT (Amounts in thousands, except per share amounts) (Unaudited) As Reported December 31, 2017 Business realignment charges Clarcor costs to achieve Gain on sale and writedown of assets, net U.S. Tax Reform one-time impact, net Adjusted December 31, 2017 Net sales 3,370,673$ -$ -$ -$ -$ 3,370,673$ Cost of sales 2,569,070 6,951 6,706 2,555,413 elling, general and administrative expenses 412,462 6,477 5,242 400,743 Interest expense 53,133 53,133 Other (income), net (24,213) (8,453) (15,760) Income before income taxes 360,221 (13,428) (11,948) 8,453 - 377,144 Income taxes 303,899 3,491 3,106 (2,235) (224,498) 83,764 Net income 56,322 (9,937) (8,842) 6,218 (224,498) 293,380 Less: Noncontrolling interests 163 163 Net income attributable to common shareholders 56,159$ (9,937)$ (8,842)$ 6,218$ (224,498)$ 293,217$ EPS attributable to common shareholders: Diluted earnings per share 0.41$ (0.07)$ (0.07)$ 0.05$ (1.65)$ 2.15$ SECOND QUARTER FY 2018

Reconciliation of EPS 20 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Amounts in dollars) 2017 2016 2017 2016 Earnings per diluted share .41$ 1.78$ 2.51$ 3.33$ Adjustments: Business realignment charges 0.07 0.04 0.12 0.10 Clarcor costs to achieve 0.07 - 0.10 - Gain on sale and w ritedow n of assets, net (0.05) - 0.02 - U.S. Tax Reform one-time impact, net 1.65 - 1.65 - Acquisition-related expenses - 0.09 - 0.09 Adjusted earnings per diluted share 2.15$ 1.91$ 4.40$ 3.52$

Business Segment Information 21 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2017 2016 2017 2016 Net sales Diversif ied Industrial: North America 1,565,416$ 1,121,053$ 3,160,107$ 2,288,024$ International 1,255,569 1,005,968 2,494,343 2,020,891 Aerospace Systems 549,688 543,783 1,080,874 1,105,020 Total 3,370,673$ 2,670,804$ 6,735,324$ 5,413,935$ Segment operating income Diversif ied Industrial: North America 225,807$ 184,013$ 481,834$ 384,624$ Int rnatio al 164,806 127,517 356,597 264,713 Aerospace Systems 87,148 72,516 164,582 145,797 Total segment operating income 477,761 384,046 1,003,013 795,134 Corporate general and administrative expenses 46,942 43,926 88,292 74,960 Income before interest and other expense 430,819 340,120 914,721 720,174 Interest expense 53,133 33,444 106,688 67,592 Other expense (income) 17,465 (14,046) 73,510 39,615 Income before income taxes 360,221$ 320,722$ 734,523$ 612,967$

22 Reconciliation of Total Segment Operating Margin to Adjusted Total Segment Operating Margin (Unaudited) (Dollars in thousands) Operating income Operating margin Operating income Operating margin Total segment operating income 477,761$ 14.2% 384,046$ 14.4% Adjustments: Business realignment charges 13,428 7,897 Clarcor costs to achieve 11,948 - Adjusted total segment operating income 503,137$ 14.9% 391,943$ 14.7% Three months ended December 31, 2017 Three months ended December 31, 2016

23 Reconciliation of Total Segment Operating Margin to Adjusted Total Segment Operating Margin (Unaudited) Operating income Operating margin Operating income Operating margin Total segment operating income 1,003,013$ 14.9% 795,134$ 14.7% Adjustments: Business realignment charges 21,654 18,642 Clarcor costs to achieve 17,748 - Adjusted total segment operating income 1,042,415$ 15.5% 813,776$ 15.0% December 31, 2017 December 31, 2016 Six months ended Six months ended

Reconciliation of EBITDA to Adjusted EBITDA 24 (Dollars in thousands) (Unaudited) Three Months Ended December 31, 2017 2016 Net sales 3,370,673$ 2,670,804$ Earnings before income taxes 360,221$ 320,722$ Depreciation and amortization 118,109 73,752 Interest expense 53,133 33,444 EBITDA 531,463 427,918 Adjustments: Gain on sale and w ritedow n of assets, net (8,453) - Business realignment charges 13,428 7,897 Clarcor costs to achieve 11,948 - Acquisition-related expenses - 15,963 Gain on sale of a product line - (45,053) Adjusted EBITDA 548,386$ 406,725$ EBITDA margin 15.8% 16.0% Adjusted EBITDA margin 16.3% 15.2%

Consolidated Balance Sheet 25 (Unaudited) December 31, June 30, December 31, (Dollars in thousands) 2017 2017 2016 Assets Current assets: Cash and cash equivalents 1,024,770$ 884,886$ 1,520,736$ Marketable securities and other investments 107,976 39,318 684,299 Trade accounts receivable, net 1,857,282 1,930,751 1,411,074 Non-trade and notes receivable 313,221 254,987 256,545 Inventories 1,780,262 1,549,494 1,241,593 Prepaid expenses 202,848 120,282 133,592 Total current assets 5,286,359 4,779,718 5,247,839 Plant and equipment, net 1,937,074 1,937,292 1,506,201 Deferred income taxes 36,668 36,057 482,136 Goodw ill 5,698,707 5,586,878 2,813,238 Intangible assets, net 2,174,104 2,307,484 849,692 Other assets 832,269 842,475 832,507 Total assets 15,965,181$ 15,489,904$ 11,731,613$ Liabilities and equity Current liabilities: Notes payable 1,248,212$ 1,008,465$ 581,487$ Accounts payable 1,229,336 1,300,496 997,189 Accrued liabilities 896,750 933,762 720,844 Accrued domestic and foreign taxes 163,405 153,137 125,954 Total current liabilities 3,537,703 3,395,860 2,425,474 Long-term debt 4,798,371 4,861,895 2,653,560 Pensions and other postretirement benefits 1,363,466 1,406,082 1,766,209 Deferred income taxes 137,196 221,790 50,809 Other liabilities 609,235 336,931 304,583 Shareholders' equity 5,513,401 5,261,649 4,527,709 Noncontrolling interests 5,809 5,697 3,269 Total liabilities and equity 15,965,181$ 15,489,904$ 11,731,613$

Consolidated Statement of Cash Flows 26 (Unaudited) Six Months Ended December 31, (Dollars in thousands) 2017 2016 Cash flows from operating activities: Net income 341,857$ 451,638$ Depreciation and amortization 234,216 149,085 Stock incentive plan compensation 64,267 47,161 (Gain) on sale of business - (44,930) (Gain) loss on disposal of assets (26,529) 310 (Gain) on sale of marketable securities (1) (230) Loss on sale and impairment of investments 33,759 - Net change in receivables, inventories, and trade payables (249,615) 44,802 Net change in other assets and liabilities 123,864 (313,783) Other, net (61,481) 70,123 Net cash provided by operating activities 460,337 404,176 Cash flows from investing activities: Acquisitions (net of cash of $1,760 in 2016) - (29,927) Capital expenditures (144,781) (71,356) Proceeds from sale of plant and equipment 59,848 4,991 Proceeds from sale of business - 85,610 Purchases of marketable securities and other investments (78,309) (393,909) Maturities and sales of marketable securities and other investments 12,710 506,642 Other, net 5,143 241 Net cash (used in) provided by investing activities (145,389) 102,292 Cash flows from financing activities: Net payments for common stock activity (134,360) (194,110) Net proceeds from debt 127,723 222,425 Divi ends (176,187) (168,990) Net cash (used in) financing activities (182,824) (140,675) Effect of exchange rate changes on cash 7,760 (66,710) Net increase in cash and cash equivalents 139,884 299,083 Cash and cash equivalents at beginning of period 884,886 1,221,653 Cash and cash equivalents at end of period 1,024,770$ 1,520,736$

Reconciliation of Cash Flow from Operations to Adjusted Cash Flow from Operations 27 (Unaudited) (Amounts in thousands) Six Months Ended December 31, 2017 Six Months Ended December 31, 2016 Percent of sales Percent of sales As reported cash flow from operations 460,337$ 6.8% 404,176$ 7.5% Discretionary pension contribution - 220,000 Adjusted cash flow from operations 460,337$ 6.8% 624,176$ 11.5%

Reconciliation of Forecasted EPS 28 (Unaudited) (Amounts in dollars) Fiscal Year 2018 Forecasted earnings per diluted share $7.38 to $7.78 Adjustments: Business realignment charges 0.32 Clarcor costs to achieve 0.28 Gain on sale and w ritedow n of assets, net 0.02 U.S. Tax Reform one-time impact, net 1.65 Adjusted forecasted earnings per diluted share $9.65 to $10.05

Supplemental Sales Information Global Technology Platforms 29 (Unaudited) (Dollars in thousands) December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Net sales Diversif ied Industrial: Motion Systems 825,695$ 754,772$ 1,635,442$ $ 1,496,422 Flow and Process Control 997,837 783,864 1,993,184 1,608,178 Filtration and Engineered Materials 997,453 588,385 2,025,824 1,204,315 Aerospace Systems 549,688 543,783 1,080,874 1,105,020 Total 3,370,673$ 2,670,804$ 6,735,324$ 5,413,935$ Fiscal Year-to-DateThree Months Ending