Exhibit 99.1    
For Release:    Immediately                    

Contact:
Media -
 
 
Aidan Gormley -Director, Corporate Communications
216-896-3258
 
aidan.gormley@parker.com
 
 
Financial Analysts -
 
 
Pamela Huggins, Vice President - Treasurer
216-896-2240
 
phuggins@parker.com
 
 
 
 
Stock symbol:
PH - NYSE
 


Parker Reports Fiscal 2014 Second Quarter Sales, Net Income and Earnings per Share

Orders increase 5 percent, sales increase 1.3 percent, 3.1 percent organically
Earnings per diluted share reach $1.66, or $1.24 excluding non-recurring items
Non-recurring items consist of a joint venture gain of $1.68 per diluted share and asset write downs of $1.26 per diluted share
Company maintains full year adjusted earnings guidance at midpoint of $6.40 per diluted share

CLEVELAND, January 22, 2014 -- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2014 second quarter ended December 31, 2013. Fiscal 2014 second quarter sales increased 1.3 percent to $3.11 billion, compared with $3.07 billion in the prior year quarter. Organic growth was 3.1 percent, which excludes an increase of 0.3 percent from acquisitions, a decrease of 0.7 percent from foreign currency translation, and a decrease of 1.4 percent from a joint venture agreement with GE Aviation. Fiscal 2014 second quarter as reported net income was $253.4 million, or $1.66 earnings per diluted share compared with $181.1 million or $1.19 earnings per diluted share in the prior year quarter. Adjusted net income for the fiscal 2014 second quarter was $189.9 million, or $1.24 earnings per diluted share. Fiscal 2014 second quarter adjusted net income and earnings per diluted share exclude asset write downs and a previously announced gain associated with a joint venture agreement between Parker Aerospace and GE Aviation. A reconciliation





of adjusted net income and earnings per diluted share to as reported net income and earnings per diluted share is included with the financial tables attached to this news release.

Cash flow from operations was $540.1 million or 8.5 percent of sales for the first six months of fiscal 2014 compared with $347.3 million or 5.5 percent of sales in the prior year period. Excluding a discretionary contribution to the company’s pension plan of $75 million for the first six months of fiscal 2014 cash flow from operations was 9.7 percent of sales.
 
“Earnings on an adjusted basis were ahead of what we expected for this quarter as we continue to perform well operationally,” said Chairman, CEO and President, Don Washkewicz. “With continued positive order growth and modestly improved macro-economic trends, we remain optimistic about stronger operating performance in the second half of fiscal year 2014.”

Segment Results
Diversified Industrial Segment: North American second quarter sales increased 0.6 percent to $1.33 billion, and operating income was $200.6 million compared with $190.4 million in the same period a year ago. International second quarter sales increased 4.7 percent to $1.28 billion, and operating income was $134.2 million compared with $125.0 million in the same period a year ago.

Aerospace Systems Segment: Second quarter sales decreased 4.7 percent to $503.8 million, reflecting the impact of the previously announced joint venture between Parker Aerospace and GE Aviation, and operating income was $45.0 million compared with $52.2 million in the same period a year ago.

Orders
Parker reported an increase of 5 percent in orders for the quarter ending December 31, 2013, compared with the same quarter a year ago. The company reported the following orders by business:
Orders increased 3 percent in the Diversified Industrial North America businesses compared with the same quarter a year ago.





Orders increased 6 percent in the Diversified Industrial International businesses compared with the same quarter a year ago.
Orders increased 7 percent in Aerospace Systems segment on a rolling 12-month average basis.

Outlook
For the fiscal year ending June 30, 2014, the company has provided guidance for adjusted earnings per diluted share in the range of $6.20 to $6.60. Fiscal 2014 adjusted earnings guidance includes previously announced restructuring expenses of approximately $0.47 per diluted share, but does not include the following non-recurring items: a gain of $1.68 per diluted share associated with the previously announced joint venture agreement between Parker Aerospace and GE Aviation and asset write downs of $1.26 earnings per diluted share recorded in the quarter ended December 31, 2013. Restructuring expenses were $0.07 per diluted share in the second quarter of fiscal 2014 and $0.13 per diluted share year-to-date.

Washkewicz added, “Operationally, our outlook is essentially unchanged. We are optimistic that modestly improved macro-economic trends will continue and anticipate that we will deliver another strong year.”

NOTICE OF CONFERENCE CALL: Parker Hannifin's conference call and slide presentation to discuss its fiscal 2014 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 and register for e-mail notification of future events and information available from Parker. A replay of the conference call will also be available at www.phstock.com for one year after the call.

With annual sales of $13 billion in fiscal year 2013, Parker Hannifin is the world's leading diversified manufacturer of motion and control technologies and systems, providing precision-engineered solutions for a wide variety of mobile, industrial and aerospace markets. The company employs approximately





58,000 people in 49 countries around the world. Parker has increased its annual dividends paid to shareholders for 57 consecutive fiscal years, among the top five longest-running dividend-increase records in the S&P 500 index. For more information, visit the company's web site at www.parker.com, or its investor information web site at www.phstock.com.

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 percent 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) sales growth excluding the effects of acquisitions, divestitures and currency exchange rates, (b) net income without the effect of a gain associated with a joint venture agreement and asset write downs, (c) actual and forecasted earnings per diluted share without the effect of a gain associated with a joint venture agreement and asset write downs, and (d) cash flow excluding discretionary contributions to the company’s pension plan. The effects of acquisitions, divestitures, currency exchange rates, gain associated with a joint venture agreement, asset write downs, and pension plan contributions are removed to allow investors and the company to meaningfully evaluate changes in sales, net income, earnings per diluted share, and cash flow on a comparable basis from period to period.

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 and similar transactions; 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; the ability to realize anticipated benefits of the consolidation of the Climate and Industrial Controls Group; 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.



###






PARKER HANNIFIN CORPORATION - DECEMBER 31, 2013
 
 
 
 
 
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)
2013

 
2012

 
2013

 
2012

 
 
 
 
 
 
 
 
 
Net sales
 
$
3,106,006

 
$
3,065,495

 
$
6,332,150

 
$
6,280,430

Cost of sales
 
2,419,971

 
2,421,972

 
4,896,380

 
4,899,419

Gross profit
 
686,035

 
643,523

 
1,435,770

 
1,381,011

Selling, general and administrative expenses
398,636

 
381,100

 
805,566

 
762,222

Goodwill and intangible asset impairment
188,870

 

 
188,870

 

Interest expense
 
20,851

 
24,216

 
41,809

 
47,725

Other (income), net
 
(417,638
)
 
(24,422
)
 
(419,881
)
 
(27,623
)
Income before income taxes
 
495,316

 
262,629

 
819,406

 
598,687

Income taxes
 
241,912

 
81,515

 
321,682

 
177,625

Net income
 
253,404

 
181,114

 
497,724

 
421,062

Less: Noncontrolling interests
 
116

 
152

 
120

 
359

Net income attributable to common shareholders
$
253,288

 
$
180,962

 
$
497,604

 
$
420,703

 
 
 
 
 
 
 
 
 
Earnings per share attributable to common shareholders:
 
 
 
 
 
 
 
   Basic earnings per share
 
$
1.70

 
$
1.21

 
$
3.34

 
$
2.82

   Diluted earnings per share
 
$
1.66

 
$
1.19

 
$
3.28

 
$
2.77

 
 
 
 
 
 
 
 
 
Average shares outstanding during period - Basic
149,153,599

 
149,001,273

 
149,195,452

 
149,143,561

Average shares outstanding during period - Diluted
152,151,024

 
152,198,704

 
151,743,389

 
152,018,025

 
 
 
 
 
 
 
 
 
Cash dividends per common share
$
0.45

 
$
0.41

 
$
0.90

 
$
0.82

 
 
 
 
 
 
 
 
 
RECONCILIATION OF NET INCOME AND EARNINGS PER DILUTED SHARE TO ADJUSTED NET INCOME AND EARNINGS PER DILUTED SHARE

Net income
$
253,404

 
$
181,114

 
$
497,724

 
$
421,062

Adjustments:
 
 
 
 
 
 
 
  Asset writedowns
192,188

 

 
192,188

 

  Gain related to joint venture agreement
(255,652
)
 

 
(255,652
)
 

Adjusted net income
$
189,940

 
$
181,114

 
$
434,260

 
$
421,062

 
 
 
 
 
 
 
 
 
Earnings per diluted share
$
1.66

 
$
1.19

 
$
3.28

 
$
2.77

Adjustments:
 
 
 
 
 
 
 
  Asset writedowns
1.26

 

 
1.26

 

  Gain related to joint venture agreement
(1.68
)
 

 
(1.68
)
 

Adjusted earnings per diluted share
$
1.24

 
$
1.19

 
$
2.86

 
$
2.77







PARKER HANNIFIN CORPORATION - DECEMBER 31, 2013
 
 
 
 
 
Exhibit 99.1

BUSINESS SEGMENT INFORMATION BY INDUSTRY
 
 
 
 
 
 
 
(Unaudited)
 
Three Months Ended December 31,
 
Six Months Ended December 31,
(Dollars in thousands)
 
2013

 
2012

 
2013

 
2012

Net sales
 
 
 
 
 
 
 
 
    Diversified Industrial:
 
 
 
 
 
 
 
 
       North America
 
$
1,325,402

 
$
1,317,380

 
$
2,713,277

 
$
2,742,659

       International
 
1,276,851

 
1,219,459

 
2,547,646

 
2,468,032

    Aerospace Systems
 
503,753

 
528,656

 
1,071,227

 
1,069,739

Total
 
$
3,106,006

 
$
3,065,495

 
$
6,332,150

 
$
6,280,430

Segment operating income
 
 
 
 
 
 
 
 
    Diversified Industrial:
 
 
 
 
 
 
 
 
       North America
 
$
200,628

 
$
190,431

 
$
434,826

 
$
434,506

       International
 
134,198

 
125,047

 
307,608

 
281,645

    Aerospace Systems
 
45,034

 
52,172

 
102,332

 
114,070

Total segment operating income
379,860

 
367,650

 
844,766

 
830,221

Corporate general and administrative expenses
46,819

 
45,401

 
94,029

 
85,168

Income before interest expense and other expense
333,041

 
322,249

 
750,737

 
745,053

Interest expense
 
20,851

 
24,216

 
41,809

 
47,725

Other (income) expense
 
(183,126
)
 
35,404

 
(110,478
)
 
98,641

Income before income taxes
 
$
495,316

 
$
262,629

 
$
819,406

 
$
598,687







 
 
 
 
Exhibit 99.1
 
PARKER HANNIFIN CORPORATION - DECEMBER 31, 2013
 
 
 
 
 
CONSOLIDATED BALANCE SHEET
 
 
 
 
 
 
(Unaudited)
 
December 31,

 
June 30,

 
December 31,

(Dollars in thousands)
 
2013

 
2013

 
2012

Assets
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
 
$
2,139,522

 
$
1,781,412

 
$
497,635

Accounts receivable, net
 
1,861,849

 
2,062,745

 
1,802,405

Inventories
 
1,448,628

 
1,377,405

 
1,515,325

Prepaid expenses
 
169,262

 
182,669

 
152,477

Deferred income taxes
 
125,612

 
126,955

 
127,905

Total current assets
 
5,744,873

 
5,531,186

 
4,095,747

Plant and equipment, net
 
1,820,312

 
1,808,240

 
1,844,643

Goodwill
 
3,161,699

 
3,223,515

 
3,295,141

Intangible assets, net
 
1,220,547

 
1,290,499

 
1,367,978

Other assets
 
916,505

 
687,458

 
857,852

Total assets
 
$
12,863,936

 
$
12,540,898

 
$
11,461,361

 
 
 
 
 
 
 
Liabilities and equity
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
Notes payable
 
$
1,217,292

 
$
1,333,826

 
$
510,006

Accounts payable
 
1,074,512

 
1,156,002

 
1,073,233

Accrued liabilities
 
839,095

 
894,296

 
810,546

Accrued domestic and foreign taxes
 
172,204

 
136,079

 
94,475

Total current liabilities
 
3,303,103

 
3,520,203

 
2,488,260

Long-term debt
 
1,507,019

 
1,495,960

 
1,509,238

Pensions and other postretirement benefits
 
1,303,527

 
1,372,437

 
1,704,349

Deferred income taxes
 
112,561

 
102,920

 
128,892

Other liabilities
 
339,440

 
307,897

 
301,633

Shareholders' equity
 
6,295,226

 
5,738,426

 
5,325,717

Noncontrolling interests
 
3,060

 
3,055

 
3,272

Total liabilities and equity
 
$
12,863,936

 
$
12,540,898

 
$
11,461,361






 
 
 
 
Exhibit 99.1

PARKER HANNIFIN CORPORATION - DECEMBER 31, 2013
 
 
 
 
CONSOLIDATED STATEMENT OF CASH FLOWS
 
 
 
 
(Unaudited)
 
Six Months Ended December 31,
(Dollars in thousands)
 
2013

 
2012

 
 
 
 
 
Cash flows from operating activities:
 
 
 
 
Net income
 
$
497,724

 
$
421,062

Depreciation and amortization
 
170,090

 
163,827

Stock incentive plan compensation
 
75,370

 
46,527

Goodwill and intangible asset impairment
 
188,870

 

Gain on sale of deconsolidation of subsidiary
 
(412,612
)
 

Gain on sale of businesses
 

 
(12,708
)
Net change in receivables, inventories, and trade payables
 
53,841

 
102,612

Net change in other assets and liabilities
 
(80,362
)
 
(408,895
)
Other, net
 
47,188

 
34,913

Net cash provided by operating activities
 
540,109

 
347,338

Cash flows from investing activities:
 
 
 
 
Acquisitions (net of cash of $33,160 in 2012)
 
728

 
(621,716
)
Capital expenditures
 
(111,847
)
 
(140,221
)
Proceeds from sale of plant and equipment
 
8,790

 
14,173

Proceeds from sale of businesses
 

 
68,569

Proceeds from deconsolidation of subsidiary
 
202,498

 

Other, net
 
(728
)
 
(7,765
)
Net cash provided by (used in) investing activities
 
99,441

 
(686,960
)
Cash flows from financing activities:
 
 
 
 
Net payments for common stock activity
 
(81,784
)
 
(101,160
)
Acquisition of noncontrolling interests
 

 
(1,072
)
Net (payments for) proceeds from debt
 
(116,834
)
 
168,712

Dividends
 
(134,718
)
 
(123,328
)
Net cash (used in) financing activities
 
(333,336
)
 
(56,848
)
Effect of exchange rate changes on cash
 
51,896

 
55,788

Net increase (decrease) in cash and cash equivalents
 
358,110

 
(340,682
)
Cash and cash equivalents at beginning of period
 
1,781,412

 
838,317

Cash and cash equivalents at end of period
 
$
2,139,522

 
$
497,635






 
 
 
 
Exhibit 99.1
PARKER HANNIFIN CORPORATION
 
 
 
 
RECONCILIATION OF FORECASTED EARNINGS PER DILUTED SHARE TO ADJUSTED FORECASTED EARNINGS PER DILUTED SHARE
(Unaudited)
 
 
 
 
(Amounts in dollars)
 
 
 
 
 
 
Fiscal Year 2014
 
 
Forecasted earnings per diluted share
$6.62 to $7.02
 
 
Adjustments:
 
 
 
  Asset writedowns
$1.26
 
 
  Gain related to joint venture agreement
$(1.68)
 
 
Adjusted forecasted earnings per diluted share
$6.20 to $6.60