Parker Hannifin Corporation
Quarterly Earnings Release
2nd Quarter FY 2006
January 18, 2006
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
and
individual
segments
may
differ
materially
from
current
expectations,
depending
on
economic
conditions
within
both
its
industrial
and
aerospace
markets,
and
the
company's
ability
to
achieve
anticipated
benefits
associated
with
announced
realignment
activities,
strategic
initiatives
to
improve
operating
margins,
and
growth
and
innovation
initiatives.
A
change
in
economic
conditions
in
individual
markets
may
have
a
particularly
volatile
effect
on
segment
results.
Among
the
other
factors
which
may
affect
future
performance
are:
changes
in
business
relationships
with
and
purchases
by
or
from
major
customers
or
suppliers,
including
delays
or
cancellations
in
shipments;
uncertainties
surrounding
timing,
successful
completion
or
integration
of
acquisitions;
threats
associated
with
and
efforts
to
combat
terrorism;
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
employee
retirement
and
health
care
benefits
and
insurance;
and
global
economic
factors,
including
manufacturing
activity,
air
travel
trends,
currency
exchange
rates,
difficulties
entering
new
markets
and
general
economic
conditions
such
as
inflation
and
interest
rates.
The
company
makes
these
statements
as
of
the
date
of
this
disclosure,
and
undertakes
no
obligation
to
update
them.

Non-GAAP Financial Measure
This
presentation
reconciles
sales
amounts
reported
in
accordance
with
U.S.
GAAP
to
sales
amounts
adjusted
to
remove
the
effects
of
acquisitions
and
divestitures
made
within
the
prior
four
quarters
as
well
as
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.
This
presentation
contains
references
to
earnings
per
share
amounts
excluding
the
effect
of
the
adoption
of
FAS
123R
and/or
a
loss
recognized
on
the
sale
of
a
division.
The
removal
of
both
the
FAS
123R
effect
and
the
loss
on
the
sale
of
a
division
allows
investors
and
the
company
to
meaningfully
evaluate
performance
on
a
comparable
basis
with
the
prior
period,
which
was
not
impacted
by
FAS
123R
or
the
sale
of
a
division.

Discussion Agenda
Financial Highlights
Outlook
Questions & Answers
CEO Comments

Financial Highlights
EPS –
2nd Quarter and YTD as of Dec 31st
FY2006
FY2005
FY 2006
FY 2005
EPS as Reported
1.07
$          
1.41
$          
2.51
$          
2.52
$          
Discontinued Operations
-
              
0.50
            
0.24
            
0.56
            
EPS from Continuing Operations as reported
1.07
$          
0.91
$          
2.27
$          
1.96
$          
Loss on Sale of Thermoplastics
0.08
            
-
               
0.08
            
-
             
FAS 123R expense
0.03
            
-
              
0.13
            
-
             
EPS from Continuing Operations Adjusted
1.18
$          
0.91
$          
2.48
$          
1.96
$          
First Six Months
Second Quarter

Financial Highlights
EPS  from Continuing Operations
2nd Quarter and YTD as of Dec 31st
$0.91
$1.96
$2.27
$1.07
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
Q2 FY06
Q2 FY05
YTD FY06
YTD FY05

Influences on Earnings
Increased Volume
Win Strategy
Restructuring/Move to Low Cost Countries
Sales Mix –
Aerospace
Inventory Changes

Financial Highlights
Sales –
2nd Quarter and YTD through December 31
FY06
FY05
FY06
FY05
Sales
$2,158
$1,906
$4,271
$3,784
% change
13%
13%
Sales from acquisitions & divestitures
$162
$298
Sales without acquisitions & divestitures
$1,996
$1,906
$3,973
$3,784
% change
5%
5%
Currency effects
($46)
($30)
Sales without acquisitions, divestitures & currency
$2,042
$1,906
$4,003
$3,784
% change
7%
6%
2nd  Quarter
YTD

Influences on Sales
Continued Industrial End Market Strength
Aerospace
Commercial OEM
Globalization Trends
Acquisitions

Segment Reporting
Industrial North America
2nd Qtr
YTD
2nd Qtr
YTD
Sales
As reported
$930
$1,859
$819
$1,652
% change
13%
13%
Acquisitions
$65
$118
without Acquisitions
$865
$1,741
$819
$1,652
% change
6%
5%
Currency effects
$3
$7
without Acquisitions & Currency
$862
$1,734
$819
$1,652
% change
5%
5%
Operating Margin
As reported
$130
$267
$100
$220
% of sales
14%
14%
12%
13%
FY2006
FY2005

Segment Reporting
Industrial Rest of World
2nd Qtr
YTD
2nd Qtr
YTD
Sales
As reported
$677
$1,297
$583
$1,132
% change
16%
15%
Acquisitions
$95
$133
without Acquisitions
$582
$1,164
$583
$1,132
% change
0%
3%
Currency effects
($45)
($35)
without Acquisitions & Currency
$627
$1,199
$583
$1,132
% change
7%
6%
Operating Margin
As reported
$68
$149
$62
$128
% of sales
10%
11%
11%
11%
FY 2006
FY 2005

Segment Reporting
Aerospace
2nd Qtr
YTD
2nd Qtr
YTD
Sales
As reported
$345
$694
$327
$658
% change
6%
5%
Acquisitions
without Acquisitions
$345
$694
$327
$658
% change
6%
5%
Currency effects
($3)
($3)
without Acquisitions
$348
$697
$327
$658
% change
6%
6%
Operating Margin
As reported
$47
$102
$50
$101
% of sales
14%
15%
15%
15%
FY 2006
FY 2005

Segment Reporting
Climate & Industrial Controls
2nd Qtr
YTD
2nd Qtr
YTD
Sales
As reported
$206
$421
$177
$342
% change
17%
23%
Acquisitions
$2
$47
without Acquisitions
$204
$374
$177
$342
% change
15%
9%
Currency effects
($1)
$1
without Acquisitions & Currency
$205
$373
$177
$342
% change
16%
9%
Operating Margin
As reported
$10
$29
$9
$25
% of sales
5%
7%
5%
7%
FY 2006
FY 2005

Fiscal YTD Results
Sales Increased 12.9%
Cash flow from operations -
1
st
Half record,
reaching 10.1% of sales
Earnings from continuing operations per
diluted share of $2.27, up 16% from $1.96
last year

Current month vs. prior year
Parker New Order Rates
Industrial North America
13
-40
J
O
J
9
6
A
J
O
J
9
7
A
J
O
J
9
8
A
J
O
J
9
9
A
J
O
J
0
0
A
J
O
J
0
1
A
J
O
J
0
2
A
J
O
J
0
3
A
J
O
J
0
4
A
J
O
J
0
5
A
J
O
-30
-20
-10
0
10
20
30

Industrial R.O.W.
Current month vs. prior year
14
Parker New Order Rates
-15
-10
-5
0
5
10
15
20
25
30
J
O
J
A
J
O
J
A
J
O
J
A
J
O
J
A
J
O
J
A
J
O
J
A
J
O
J
A
J
O
J
A
J
O
J
A
J
O
J
A
J
O

Climate & Industrial Controls
Current month vs. prior year
-20
-15
-10
-5
0
5
10
15
20
25
30
J
O
J
0
2
A
J
O
J
0
3
A
J
O
J
0
4
A
J
O
J
0
5
A
J
O
20
Parker New Order Rates

Aerospace
Average last 12 months orders to previous 12 months orders
Parker New Order Rates
-30
-20
-10
0
10
20
30
J
9
6
A
J
O
J
9
7
A
J
O
J
9
8
A
J
O
J
9
9
A
J
O
J
0
0
A
J
O
J
0
1
A
J
O
J
0
2
A
J
O
J
0
3
A
J
O
J
0
4
A
J
O
J
0
5
A
J
O
13

Balance Sheet Summary
Cash
Working Capital
Inventory
Accounts Receivable
PP & E
Shareholders Equity

Financial Leverage
Debt to Debt Equity
31.0%
20.0%
22.0%
24.0%
26.0%
28.0%
30.0%
32.0%
34.0%
36.0%
38.0%
FY99
FY00
FY01
FY02
FY03
FY04
FY05
FY06
Target

Strong Cash Flow –
Cash From Operations
FY06 YTD $429
459
538
529
631
551
638
864
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
4.0%
6.0%
8.0%
10.0%
12.0%

FY 2006  Earnings Outlook Assumptions
Segment Sales & Operating Income
FY 2006 Sales Change versus FY 2005
18.5%
-
17.0%
CIC
7.8%
-
7.0%
Aerospace
18.0%
-
16.6%
Industrial ROW
12.8%
-
12.4%
NA Industrial
FY 2006 Operating Margin Percentages
9.1%
-
8.9%
CIC
14.7%
-
14.3%
Aerospace
11.8%
-
11.2%
Industrial ROW
14.6%
-
14.2%
NA Industrial

FY 2006  Earnings Outlook assumptions
below Operating Margin
Corporate Admin
+11.5% to +12.5%
vs. FY 2005
Interest Expense
+11.6% to  +12.5% vs. FY 2005
Other Exp. (Income) *
+25% to +35%
vs. FY 2005
Tax Rate
28.5%
*Adoption of FAS 123R by the Company will result in additional expense of approximately $.20 per diluted share in
Fiscal Year 2006 all of which will be reflected in the Other Expense (Income) line.  Loss on sale of Thermoplastics is also
included in the Other Expense (Income) line.

Earnings Outlook
Low
High
Previous guidance, income from continuing operations
$4.85
$5.30
Revised guidance, income from continuing operations
$4.97
$5.22
including loss from divestiture
Revised guidance, income from continuing operations
$5.05
$5.30
excluding loss from divestiture

Questions & Answers...

Appendix
Income Statements
&
Quarterly Segment Data
* * * * * * * * * * * * * * * *
*
*
*
*
*

Income Statement –
2nd Quarter
% of Sales
% of Sales
Net sales
$2,157.5
100.0%
$1,905.9
100.0%
Cost of sales
1,705.7
79.1%
1,516.9
79.6%
Gross profit
451.8
20.9%
389.0
20.4%
S, G & A
245.8
11.4%
217.8
11.4%
Interest expense
19.6
0.9%
17.2
0.9%
Other expense
10.9
0.5%
(1.4)
-0.1%
Income from Cont'g Operations b/f taxes
175.5
8.1%
155.4
8.2%
Income taxes
46.5
2.2%
45.0
2.4%
Income from Cont'g Operations
$129.0
6.0%
$110.5
5.8%
     Discontinued Operations
0.0%
60.7
             
3.2%
Net Income
$129.0
6.0%
$171.2
9.0%
FY 2006
FY 2005

Income Statement –
2nd Quarter YTD
% of Sales
% of Sales
Net sales
$4,271.1
100.0%
$3,783.8
100.0%
Cost of sales
3,361.4
78.7%
2,994.6
79.1%
Gross profit
909.7
21.3%
789.2
20.9%
S, G & A
482.9
11.3%
412.3
10.9%
Interest expense
36.1
0.8%
33.4
0.9%
Interest & other income
11.2
0.3%
9.5
0.3%
Income from Cont'g Operations b/f taxes
379.6
8.9%
334.0
8.8%
Income taxes
106.7
2.5%
97.6
2.6%
Income from Cont'g Operations
$272.9
6.4%
$236.4
6.2%
     Discontinued Operations
$28.9
0.7%
$67.5
1.8%
Net Income
$301.8
7.1%
$303.9
8.0%
FY 2006
FY 2005

Restated Income Statement
CONSOLIDATED STATEMENT OF INCOME - Restated
Restated to present divestiture of business units as discontinued operations
(Dollars in thousands, except per share amounts)
9/30/2004
12/31/2004
3/31/2005
6/30/2005
Total
Net sales
1,877,915
$ 
1,905,931
$
2,112,462
$ 
2,172,497
$
8,068,805
$    
Cost of sales
1,477,694
   
1,516,905
  
1,688,804
   
1,708,074
  
6,391,477
      
Gross profit
400,221
      
389,026
     
423,658
      
464,423
     
1,677,328
      
Selling, general and
   administrative expenses
194,396
      
217,856
     
215,231
      
232,795
     
860,278
         
Interest expense
16,179
        
17,236
       
17,079
        
16,375
       
66,869
           
Other expense (income), net
10,975
        
(1,433)
        
2,026
          
342
            
11,910
           
Income from continuing operations
  before income taxes
178,671
      
155,367
     
189,322
      
214,911
     
738,271
         
Income taxes
52,635
        
44,954
       
48,676
        
58,840
       
205,105
         
Income from continuing operations
126,036
      
110,413
     
140,646
      
156,071
     
533,166
         
Income (loss) from discontinued operations
6,747
          
60,714
       
(1,276)
        
5,341
         
71,526
           
Net income
132,783
$    
171,127
$   
139,370
$    
161,412
$   
604,692
$       
Basic earnings per share:
  Income from continuing operations
1.06
$          
0.93
$         
1.18
$          
1.32
$         
4.49
$             
  Income (loss) from discontinued operations
0.06
            
0.51
           
(0.01)
          
0.04
           
0.60
               
  Net income per share
1.12
$          
1.44
$         
1.17
$          
1.36
$         
5.09
$             
Diluted earnings per share:
  Income from continuing operations
1.05
$          
0.91
$         
1.16
$          
1.30
$         
4.43
$             
  Income (loss) from discontinued operations
0.06
            
0.50
           
(0.01)
          
0.04
           
0.59
               
  Net income per share
1.11
$          
1.41
$         
1.15
$          
1.34
$         
5.02
$             
Note:  Basic and diluted earnings per share amounts are computed independently for each of the quarters
presented, therefore, the sum of the quarterly basic and diluted earnings per share amounts may not equal the total
computed for the year.
Fiscal 2005

Restated Quarterly Segment Data
BUSINESS SEGMENT INFORMATION BY INDUSTRY - Restated
Elimination of Other Segment due to divestiture of business units
(Dollars in thousands)
9/30/2004
12/31/2004
3/31/2005
6/30/2005
Total
Net sales
   Industrial:
       North America
832,338
$    
819,243
$   
924,975
$    
940,071
$   
3,516,627
$    
       International
548,973
      
583,221
     
623,343
      
642,902
     
2,398,439
      
   Aerospace
331,134
      
326,961
     
337,313
      
364,023
     
1,359,431
      
   Climate & Industrial Controls
165,470
      
176,506
     
226,831
      
225,501
     
794,308
         
Total
1,877,915
$ 
1,905,931
$
2,112,462
$ 
2,172,497
$
8,068,805
$    
Segment operating income
   Industrial:
       North America
119,809
$    
99,862
$     
120,133
$    
128,409
$   
468,213
$       
       International
66,473
        
61,615
       
63,079
        
76,040
       
267,207
         
   Aerospace
51,294
        
49,540
       
43,945
        
54,408
       
199,187
         
   Climate & Industrial Controls
15,817
        
8,911
         
26,513
        
23,602
       
74,843
           
Total segment operating income
253,393
      
219,928
     
253,670
      
282,459
     
1,009,450
      
Corporate general and administrative expenses
25,306
        
30,563
       
23,395
        
32,351
       
111,615
         
Income from continuing operations before
  interest expense and other
228,087
      
189,365
     
230,275
      
250,108
     
897,835
         
Interest expense
16,179
        
17,236
       
17,079
        
16,375
       
66,869
           
Other
33,237
        
16,762
       
23,874
        
18,822
       
92,695
           
Income from continuing operations
   before income taxes
178,671
$    
155,367
$   
189,322
$    
214,911
$   
738,271
$       
Fiscal 2005