Attached files
| file | filename |
|---|---|
| 8-K - 8-K - PARKER HANNIFIN CORP | d338571d8k.htm |
| EX-99.1 - EX-99.1 - PARKER HANNIFIN CORP | d338571dex991.htm |
 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 |