• Parker Reports Fiscal 2024 Fourth Quarter and Full Year Results and Issues Guidance for Fiscal 2025

    Source: Nasdaq GlobeNewswire / 08 Aug 2024 06:30:39   America/Chicago

    CLEVELAND, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the quarter and year ended June 30, 2024, that included the following highlights (compared with the prior year period):

    Fiscal 2024 Fourth Quarter Highlights:

    • Sales increased 2% to a record $5.2 billion; Organic sales growth was 3%
    • Net income was $785 million, or $884 million adjusted
    • EPS were $6.01, an increase of 10%, or a record $6.77 adjusted, an increase of 11%
    • EBITDA margin was 25.8%, an increase of 90 bps, or 26.3% adjusted, an increase of 190 bps
    • Segment operating margin was 22.2%, an increase of 10 bps, or a record 25.3% adjusted, an increase of 130 bps

    Fiscal 2024 Full Year Highlights:

    • Sales increased 5% to a record $19.9 billion; Organic sales growth was 2%
    • Net income was $2.8 billion, or $3.3 billion adjusted
    • EPS were $21.84, an increase of 36%, or a record $25.44 adjusted, an increase of 18%
    • EBITDA margin was 25.2%, an increase of 380 bps, or 25.6% adjusted, an increase of 200 bps
    • Segment operating margin was 21.5%, an increase of 240 bps, or a record 24.9% adjusted, an increase of 200 bps
    • Cash flow from operations increased 14% to $3.4 billion, or 17.0% of sales

    “We delivered an exceptionally strong fourth quarter capping another year of record performance,” said Chairman and Chief Executive Officer, Jenny Parmentier. “Our ability to drive outstanding results reflects the dedication and commitment of our people, the strength and balance of our portfolio, and the power of our business system, The Win Strategy™.

    “For the year, we delivered on our commitments with respect to safety and financial targets. We had record sales approaching $20 billion, record adjusted segment operating margin, which increased 200 basis points compared to the prior year, adjusted earnings per share growth of 18%, and record free cash flow of $3 billion. Parker has a very bright future ahead as indicated by our strong outlook for fiscal year 2025, which puts us on track to achieve our financial targets for fiscal year 2029.”

    This news release contains non-GAAP financial measures. Reconciliations of adjusted numbers and certain non-GAAP financial measures are included in the financial tables of this press release.

    Outlook

    Parker issued guidance for the fiscal year ending June 30, 2025. The company expects:

    • Total sales growth in fiscal 2025 of 1.5% - 4.5%, with organic sales growth of 2% to 5%
    • Total segment operating margin of 22.1% to 22.5%, or 25.2% to 25.6% on an adjusted basis
    • EPS of $22.65 to $23.35, or $26.30 to $27.00 on an adjusted basis

    Segment Results

    Diversified Industrial Segment

    North America Businesses                                       
    $ in mm    		FY24 Q4 FY23 Q4 Change Organic Growth
    Sales$2,228  $2,301  -3.2%         -2.8%
    Segment Operating Income$506  $491  3.0%  
    Segment Operating Margin 22.7%  21.3% 140 bps  
    Adjusted Segment Operating Income$558  $541  3.2%  
    Adjusted Segment Operating Margin 25.0%  23.5% 150 bps  
                
    • Achieved record segment operating margin on lower sales
    • Softness continues in transportation and off-highway markets
    International Businesses
    $ in mm    		FY24 Q4 FY23 Q4 Change Organic Growth
    Sales$1,430  $1,512  -5.4% -2.5%
    Segment Operating Income$312  $309  0.7%  
    Segment Operating Margin 21.8%  20.5% 130 bps  
    Adjusted Segment Operating Income$342  $352  -2.9%  
    Adjusted Segment Operating Margin 23.9%  23.3% 60 bps  
                
    • Achieved record segment operating margin on lower sales
    • Market softness continues in Europe
    • Asia sales declined at a decreasing rate

    Aerospace Systems Segment

    $ in mmFY24 Q4 FY23 Q4 Change Organic Growth
    Sales$1,528  $1,283  19.2% 19.1%
    Segment Operating Income$332  $328  1.4%  
    Segment Operating Margin 21.7%  25.5% -380 bps  
    Adjusted Segment Operating Income$415  $331  25.1%  
    Adjusted Segment Operating Margin 27.1%  25.8% 130 bps  
                
    • Quarterly sales surpassed $1.5 billion for the first time
    • Broad based strength across all commercial and defense markets
    • Aftermarket strength drove record adjusted segment operating margin

    Order Rates

     FY24 Q4
    Parker+1%
    Diversified Industrial Segment - North America Businesses0%
    Diversified Industrial Segment - International Businesses-1%
    Aerospace Systems Segment+7%
       
    • Company order rates improved sequentially
    • Aerospace orders remained strong against a tough prior year comparison

    About Parker Hannifin
    Parker Hannifin is a Fortune 250 global leader in motion and control technologies. For more than a century the company has been enabling engineering breakthroughs that lead to a better tomorrow. Learn more at www.parker.com or @parkerhannifin.

    Contacts: 
    Media:Financial Analysts:
    Aidan GormleyJeff Miller
    216-896-3258216-896-2708
    aidan.gormley@parker.comjeffrey.miller@parker.com
      

    Notice of Webcast
    Parker Hannifin's conference call and slide presentation to discuss its fiscal 2024 fourth quarter and full year results are available to all interested parties via live webcast today at 11:00 a.m. ET, at investors.parker.com. A replay of the webcast will be available on the site approximately one hour after the completion of the call and will remain available for one year. To register for e-mail notification of future events please visit investors.parker.com.

    Note on Orders The company reported orders for the quarter ending June 30, 2024, compared with the same quarter a year ago. All comparisons are at constant currency exchange rates, with the prior year quarter restated to the current-year rates. Diversified Industrial comparisons are on 3-month average computations and Aerospace Systems comparisons are on rolling 12-month average computations.

    Note on Non-GAAP Financial Measures
    This press release contains references to non-GAAP financial information including (a) adjusted net income; (b) adjusted earnings per share; (c) adjusted operating margin and segment operating margins; (d) adjusted operating income and segment operating income; (e) EBITDA margin; (f) adjusted EBITDA margin; (g) organic sales growth and (h) free cash flow. The adjusted net income, adjusted earnings per share, adjusted operating margin, adjusted segment operating margin, adjusted operating income, adjusted segment operating income and organic sales measures are presented to allow investors and the company to meaningfully evaluate changes in net income, earnings per share and segment operating margins on a comparable basis from period to period. This press release also contains references to EBITDA margin, adjusted EBITDA margin and free cash flow. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Free cash flow is defined as cash flow from operations less capital expenditures. Although adjusted net income, adjusted earnings per share, adjusted operating margin and segment operating margins, adjusted operating income and segment operating income, EBITDA margin, adjusted EBITDA margin, organic sales growth and free cash flow are not measures of performance calculated in accordance with GAAP, we believe that they are useful to an investor in evaluating the results of this quarter and fiscal year versus the prior periods. Comparable descriptions of record adjusted results in this release refer only to the period from the first quarter of FY2011 to the periods presented in this release. This period coincides with recast historical financial results provided in association with our FY2014 change in segment reporting. A reconciliation of non-GAAP measures is included in the financial tables of this press release.

    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. Often but not always, these statements may be identified from the use of forward-looking terminology such as “anticipates,” “believes,” “may,” “should,” “could,” “expects,” “targets,” “is likely,” “will,” or the negative of these terms and similar expressions, and may also include statements regarding future performance, orders, earnings projections, events or developments. Parker cautions readers not to place undue reliance on these statements. It is possible that the future performance may differ materially from expectations, including those based on past performance.

    Among other factors that may affect future performance are: changes in business relationships with and orders by or from major customers, suppliers or distributors, including delays or cancellations in shipments; disputes regarding contract terms, changes in contract costs and revenue estimates for new development programs; changes in product mix; ability to identify acceptable strategic acquisition targets; uncertainties surrounding timing, successful completion or integration of acquisitions and similar transactions; 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 implement successfully business and operating initiatives, including the timing, price and execution of share repurchases and other capital initiatives; availability, cost increases of or other limitations on our access to raw materials, component products and/or commodities if 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 developments and other government actions, including related to environmental protection, and associated compliance costs; supply chain and labor disruptions, including as a result of labor shortages; threats associated with international conflicts and cybersecurity risks and risks associated with protecting our intellectual property; uncertainties surrounding the ultimate resolution of outstanding legal proceedings, including the outcome of any appeals; effects on market conditions, including sales and pricing, resulting from global reactions to U.S. trade policies; manufacturing activity, 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 governmental and regulatory approvals; changes in the tax laws in the United States and foreign jurisdictions and judicial or regulatory interpretations thereof; and large scale disasters, such as floods, earthquakes, hurricanes, industrial accidents and pandemics. Readers should also consider forward-looking statements in light of risk factors discussed in Parker’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 and other periodic filings made with the SEC.

    CONSOLIDATED STATEMENT OF INCOME       
    (Unaudited) Three Months Ended June 30, Twelve Months Ended June 30,
    (Dollars in thousands, except per share amounts) 2024   2023   2024   2023 
    Net sales $5,186,815  $5,095,943  $19,929,606  $19,065,194 
    Cost of sales  3,322,855   3,262,860   12,801,816   12,635,892 
    Selling, general and administrative expenses 818,347   834,940   3,315,177   3,354,103 
    Interest expense  119,266   157,176   506,495   573,894 
    Other income, net  (59,613)  (62,228)  (288,485)  (178,359)
    Income before income taxes  985,960   903,195   3,594,603   2,679,664 
    Income taxes  200,887   194,117   749,667   596,128 
    Net income  785,073   709,078   2,844,936   2,083,536 
    Less: Noncontrolling interests  110   122   721   600 
    Net income attributable to common shareholders$784,963  $708,956  $2,844,215  $2,082,936 
             
    Earnings per share attributable to common shareholders:       
    Basic earnings per share $6.10  $5.52  $22.13  $16.23 
    Diluted earnings per share $6.01  $5.44  $21.84  $16.04 
             
    Average shares outstanding during period - Basic 128,627,781   128,440,007   128,507,352   128,367,842 
    Average shares outstanding during period - Diluted 130,643,758   130,222,542   130,239,737   129,822,085 
             
             
    CASH DIVIDENDS PER COMMON SHARE       
    (Unaudited) Three Months Ended June 30, Twelve Months Ended June 30,
    (Amounts in dollars)  2024   2023   2024   2023 
    Cash dividends per common share$1.63  $1.48  $6.07  $5.47 
             


    RECONCILIATION OF ORGANIC GROWTH        
    (Unaudited)Three Months Ended
     As Reported       Adjusted
     June 30, 2024 Currency Divestitures Acquisitions June 30, 2024
    Diversified Industrial Segment(4.1)% (1.2)% (0.2)% —% (2.7)%
    Aerospace Systems Segment19.2% 0.1% —% —% 19.1%
    Total1.8% (0.8)% (0.2)% —% 2.8%
              
    (Unaudited)Twelve Months Ended
     As Reported       Adjusted
     June 30, 2024 Currency Divestitures Acquisitions June 30, 2024
    Diversified Industrial Segment(1.7)% (0.2)% (0.2)% 0.8% (2.1)%
    Aerospace Systems Segment25.5% 0.4% (0.9)% 8.8% 17.2%
    Total4.5% (0.1)% (0.3)% 2.6% 2.3%
                 


    RECONCILIATION OF NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS TO ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS
    (Unaudited) Three Months Ended June 30, Twelve Months Ended June 30,
    (Dollars in thousands)  2024   2023   2024   2023 
    Net income attributable to common shareholders$784,963  $708,956  $2,844,215  $2,082,936 
    Adjustments:       
    Acquired intangible asset amortization expense 139,232   126,296   577,995   500,713 
    Business realignment charges 17,542   9,226   53,456   26,706 
    Integration costs to achieve  8,597   18,786   38,273   95,439 
    Acquisition-related expenses —   2,754   —   166,294 
    Loss on deal-contingent forward contracts —   —   —   389,992 
    Net gain on divestitures —   —   (25,651)  (362,003)
    Amortization of inventory step-up to fair value —   (57,992)  —   109,981 
    Meggitt early debt retirement  —   9,999   —   9,999 
    Tax effect of adjustments1  (39,358)  (26,613)  (147,761)  (222,379)
    Discrete Tax Benefit2  (27,068)  —   (27,068)  — 
    Adjusted net income attributable to common shareholders$883,908  $791,412  $3,313,459  $2,797,678 
             


    RECONCILIATION OF EARNINGS PER DILUTED SHARE TO ADJUSTED EARNINGS PER DILUTED SHARE
    (Unaudited) Three Months Ended June 30, Twelve Months Ended June 30,
    (Amounts in dollars)  2024   2023   2024   2023 
    Earnings per diluted share$6.01  $5.44  $21.84  $16.04 
    Adjustments:       
    Acquired intangible asset amortization expense 1.07   0.97   4.43   3.85 
    Business realignment charges 0.13   0.07   0.40   0.20 
    Integration costs to achieve 0.07   0.14   0.30   0.73 
    Acquisition-related expenses —   0.02   —   1.29 
    Loss on deal-contingent forward contracts —   —   —   3.00 
    Net gain on divestitures —   —   (0.20)  (2.78)
    Amortization of inventory step-up to fair value —   (0.45)  —   0.84 
    Meggitt early debt retirement  —   0.08   —   0.08 
    Tax effect of adjustments1  (0.30)  (0.19)  (1.12)  (1.70)
    Discrete Tax Benefit2  (0.21)  —   (0.21)  — 
    Adjusted earnings per diluted share$6.77  $6.08  $25.44  $21.55 
             
    1This 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 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 case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.
    2 A recent Swiss tax law change resulted in the recording of a deferred tax asset.
     


    RECONCILIATION OF EBITDA TO ADJUSTED EBITDA    
    (Unaudited) Three Months Ended June 30, Twelve Months Ended June 30,
    (Dollars in thousands)  2024   2023   2024   2023 
    Net sales $5,186,815  $5,095,943  $19,929,606  $19,065,194 
             
    Net income $785,073  $709,078  $2,844,936  $2,083,536 
    Income taxes  200,887   194,117   749,667   596,128 
    Depreciation  91,436   82,767   349,136   317,416 
    Amortization  139,232   126,296   577,995   500,713 
    Interest expense  119,266   157,176   506,495   573,894 
    EBITDA  1,335,894   1,269,434   5,028,229   4,071,687 
    Adjustments:        
    Business realignment charges  17,542   9,226   53,456   26,706 
    Integration costs to achieve 8,597   18,786   38,273   95,439 
    Acquisition-related expenses  —   2,754   —   166,294 
    Loss on deal-contingent forward contracts  —   —   —   389,992 
    Net gain on divestitures  —   —   (25,651)  (362,003)
    Amortization of inventory step-up to fair value  —   (57,992)  —   109,981 
    Adjusted EBITDA $1,362,033  $1,242,208  $5,094,307  $4,498,096 
             
    EBITDA margin  25.8%  24.9%  25.2%  21.4%
    Adjusted EBITDA margin  26.3%  24.4%  25.6%  23.6%
                     


    BUSINESS SEGMENT INFORMATION       
    (Unaudited) Three Months Ended June 30, Twelve Months Ended June 30,
    (Dollars in thousands)  2024   2023   2024   2023
    Net sales        
    Diversified Industrial $3,658,502  $3,813,431  $14,457,146  $14,705,693
    Aerospace Systems  1,528,313   1,282,512   5,472,460   4,359,501
    Total net sales $5,186,815  $5,095,943  $19,929,606  $19,065,194
    Segment operating income        
    Diversified Industrial $817,085  $800,196  $3,176,384  $3,071,410
    Aerospace Systems  332,035   327,595   1,110,746   562,444
    Total segment operating income 1,149,120   1,127,791   4,287,130   3,633,854
    Corporate general and administrative expenses 55,972   83,336   218,312   229,677
    Income before interest expense and other (income) expense, net 1,093,148   1,044,455   4,068,818   3,404,177
    Interest expense  119,266   157,176   506,495   573,894
    Other (income) expense, net  (12,078)  (15,916)  (32,280)  150,619
    Income before income taxes $985,960  $903,195  $3,594,603  $2,679,664
             


    RECONCILIATION OF SEGMENT OPERATING MARGINS TO ADJUSTED SEGMENT OPERATING MARGINS
    (Unaudited) Three Months Ended June 30, Twelve Months Ended June 30,
    (Dollars in thousands)  2024   2023   2024   2023 
    Diversified Industrial Segment sales $3,658,502  $3,813,431  $14,457,146  $14,705,693 
             
    Diversified Industrial Segment operating income $817,085  $800,196  $3,176,384  $3,071,410 
    Adjustments:        
    Acquired intangible asset amortization  64,550   82,073   266,219   267,779 
    Business realignment charges  17,198   9,177   50,075   23,641 
    Integration costs to achieve  628   1,235   3,930   8,511 
    Adjusted Diversified Industrial Segment operating income $899,461  $892,681  $3,496,608  $3,371,341 
             
    Diversified Industrial Segment operating margin  22.3%  21.0%  22.0%  20.9%
    Adjusted Diversified Industrial Segment operating margin  24.6%  23.4%  24.2%  22.9%
             
    (Unaudited) Three Months Ended June 30, Twelve Months Ended June 30,
    (Dollars in thousands)  2024   2023   2024   2023 
    Aerospace Systems Segment sales $1,528,313  $1,282,512  $5,472,460  $4,359,501 
             
    Aerospace Systems Segment operating income $332,035  $327,595  $1,110,746  $562,444 
    Adjustments:        
    Acquired intangible asset amortization  74,682   44,223   311,776   232,934 
    Business realignment charges  1   49   319   3,065 
    Integration costs to achieve  7,969   17,551   34,343   86,928 
    Amortization of inventory step-up to fair value  —   (57,992)  —   109,981 
    Adjusted Aerospace Systems Segment operating income $414,687  $331,426  $1,457,184  $995,352 
             
    Aerospace Systems Segment operating margin  21.7%  25.5%  20.3%  12.9%
    Adjusted Aerospace Systems Segment operating margin  27.1%  25.8%  26.6%  22.8%
             
    (Unaudited) Three Months Ended June 30, Twelve Months Ended June 30,
    (Dollars in thousands)  2024   2023   2024   2023 
    Total net sales $5,186,815  $5,095,943  $19,929,606  $19,065,194 
             
    Total segment operating income $1,149,120  $1,127,791  $4,287,130  $3,633,854 
    Adjustments:        
    Acquired intangible asset amortization  139,232   126,296   577,995   500,713 
    Business realignment charges  17,199   9,226   50,394   26,706 
    Integration costs to achieve  8,597   18,786   38,273   95,439 
    Amortization of inventory step-up to fair value  —   (57,992)  —   109,981 
    Adjusted total segment operating income $1,314,148  $1,224,107  $4,953,792  $4,366,693 
             
    Total segment operating margin  22.2%  22.1%  21.5%  19.1%
    Adjusted total segment operating margin  25.3%  24.0%  24.9%  22.9%
                     


    CONSOLIDATED BALANCE SHEET   
    (Unaudited) June 30, June 30,
    (Dollars in thousands) 2024 2023
    Assets    
    Current assets:    
    Cash and cash equivalents $422,027 $475,182
    Trade accounts receivable, net  2,865,546  2,827,297
    Non-trade and notes receivable  331,429  309,167
    Inventories  2,786,800  2,907,879
    Prepaid expenses and other  392,822  314,704
    Total current assets  6,798,624  6,834,229
    Property, plant and equipment, net  2,875,668  2,865,030
    Deferred income taxes  92,704  81,429
    Investments and other assets  1,207,232  1,104,576
    Intangible assets, net  7,816,181  8,450,614
    Goodwill  10,507,433  10,628,594
    Total assets $29,297,842 $29,964,472
         
    Liabilities and equity    
    Current liabilities:    
    Notes payable and long-term debt payable within one year $3,403,065 $3,763,175
    Accounts payable, trade  1,991,639  2,050,934
    Accrued payrolls and other compensation  581,251  651,319
    Accrued domestic and foreign taxes  354,659  374,571
    Other accrued liabilities  982,695  895,371
    Total current liabilities  7,313,309  7,735,370
    Long-term debt  7,157,034  8,796,284
    Pensions and other postretirement benefits  437,490  551,510
    Deferred income taxes  1,583,923  1,649,674
    Other liabilities  725,193  893,355
    Shareholders' equity  12,071,972  10,326,888
    Noncontrolling interests  8,921  11,391
    Total liabilities and equity $29,297,842 $29,964,472
         


    CONSOLIDATED STATEMENT OF CASH FLOWS    
    (Unaudited) Twelve Months Ended June 30,
    (Dollars in thousands)  2024   2023 
    Cash flows from operating activities:    
    Net income $2,844,936  $2,083,536 
    Depreciation and amortization  927,131   818,129 
    Stock incentive plan compensation  155,175   142,720 
    Gain on sale of businesses  (23,979)  (366,345)
    Loss on property, plant and equipment and intangible assets  12,382   3,819 
    Gain on marketable securities and other investments  (5,708)  (6,176)
    Net change in receivables, inventories and trade payables  (28,135)  128,000 
    Net change in other assets and liabilities  (516,854)  13,211 
    Other, net  19,381   163,036 
    Net cash provided by operating activities  3,384,329   2,979,930 
    Cash flows from investing activities:    
    Acquisitions (net of cash of $89,704 in 2023)  —   (7,146,110)
    Capital expenditures  (400,112)  (380,747)
    Proceeds from sale of property, plant and equipment  9,065   13,244 
    Proceeds from sale of businesses  77,666   473,207 
    Purchases of marketable securities and other investments  (17,186)  (37,791)
    Maturities and sales of marketable securities and other investments  24,292   56,786 
    Payments of deal-contingent forward contracts  —   (1,405,418)
    Other  7,687   250,017 
    Net cash used in investing activities  (298,588)  (8,176,812)
    Cash flows from financing activities:    
    Net payments for common stock activity  (328,449)  (293,847)
    Acquisition of noncontrolling interests  (2,883)  — 
    Net (payments for) proceeds from debt  (2,001,519)  40,470 
    Financing fees paid  —   (13,605)
    Dividends paid  (782,048)  (704,054)
    Net cash used in financing activities  (3,114,899)  (971,036)
    Effect of exchange rate changes on cash  (23,997)  (4,776)
    Net decrease in cash, cash equivalents and restricted cash  (53,155)  (6,172,694)
    Cash, cash equivalents and restricted cash at beginning of year  475,182   6,647,876 
    Cash and cash equivalents at end of period $422,027  $475,182 
         


       
    RECONCILIATION OF CASH FLOW FROM OPERATIONS TO FREE CASH FLOW
    (Unaudited) Twelve Months Ended
    (Dollars in thousands) June 30, 2024
    As reported cash flow from operations $3,384,329 
    Capital expenditures  (400,112)
    Free cash flow $2,984,217 
         


    RECONCILIATION OF FORECASTED ORGANIC GROWTH 
    (Unaudited)  
    (Amounts in percentages) Fiscal Year 2025
    Forecasted net sales 1.5% to 4.5%
    Adjustments:  
    Currency 0.5%
    Divestitures —%
    Adjusted forecasted net sales 2.0% to 5.0%
       
    RECONCILIATION OF FORECASTED SEGMENT OPERATING MARGIN TO ADJUSTED FORECASTED SEGMENT OPERATING MARGIN
       
    (Unaudited)  
    (Amounts in percentages) Fiscal Year 2025
    Forecasted segment operating margin22.1% to 22.5%
    Adjustments: 
    Business realignment charges0.2%
    Costs to achieve 0.1%
    Acquisition-related intangible asset amortization expense 2.7%
    Adjusted forecasted segment operating margin25.2% to 25.6%
       
    Note: Totals may not foot due to rounding
     


    RECONCILIATION OF FORECASTED EARNINGS PER DILUTED SHARE TO ADJUSTED FORECASTED EARNINGS PER DILUTED SHARE
       
    (Unaudited)  
    (Amounts in dollars) Fiscal Year 2025
    Forecasted earnings per diluted share$22.65 to $23.35
    Adjustments: 
    Business realignment charges0.38
    Costs to achieve 0.11
    Acquisition-related intangible asset amortization expense 4.25
    Tax effect of adjustments1 (1.09)
    Adjusted forecasted earnings per diluted share$26.30 to $27.00
       
    1This 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 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 case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.
     


    SUPPLEMENTAL INFORMATION       
    BUSINESS SEGMENT INFORMATION       
    (Unaudited) Three Months Ended June 30, Twelve Months Ended June 30,
    (Dollars in thousands)  2024  2023  2024  2023
    Net sales        
    Diversified Industrial:        
    North America businesses $2,228,449 $2,301,159 $8,800,036 $8,916,194
    International businesses  1,430,053  1,512,272  5,657,110  5,789,499
             
    Segment operating income       
    Diversified Industrial:        
    North America businesses $505,521 $490,823 $1,963,876 $1,853,079
    International businesses  311,564  309,373  1,212,508  1,218,331
                 


    RECONCILIATION OF ORGANIC GROWTH      
    (Unaudited)Three Months Ended
     As Reported       Adjusted
     June 30, 2024 Currency Divestitures Acquisitions June 30, 2024
    Diversified Industrial Segment:         
    North America businesses(3.2)% —% (0.4)% —% (2.8)%
    International businesses(5.4)% (2.9)% —% —% (2.5)%
              
    (Unaudited)Twelve Months Ended
     As Reported       Adjusted
     June 30, 2024 Currency Divestitures Acquisitions June 30, 2024
    Diversified Industrial Segment:         
    North America businesses(1.3)% 0.3% (0.3)% 0.9% (2.2)%
    International businesses(2.3)% (1.0)% —% 0.7% (2.0)%
               


    RECONCILIATION OF SEGMENT OPERATING MARGINS TO ADJUSTED SEGMENT OPERATING MARGINS
    (Unaudited) Three Months Ended June 30, Twelve Months Ended June 30,
    (Dollars in thousands)  2024   2023   2024   2023 
    Diversified Industrial Segment:        
    North America businesses sales $2,228,449  $2,301,159  $8,800,036  $8,916,194 
             
    North America businesses operating income $505,521  $490,823  $1,963,876  $1,853,079 
    Adjustments:        
    Acquired intangible asset amortization  43,010   47,138   176,337   181,954 
    Business realignment charges  8,857   1,792   17,749   4,024 
    Integration costs to achieve  295   877   2,643   4,636 
    Adjusted North America businesses operating income $557,683  $540,630  $2,160,605  $2,043,693 
             
    North America businesses operating margin  22.7%  21.3%  22.3%  20.8%
    Adjusted North America businesses operating margin  25.0%  23.5%  24.6%  22.9%
             
    (Unaudited) Three Months Ended June 30, Twelve Months Ended June 30,
    (Dollars in thousands)  2024   2023   2024   2023 
    Diversified Industrial Segment:        
    International businesses sales $1,430,053  $1,512,272  $5,657,110  $5,789,499 
             
    International businesses operating income $311,564  $309,373  $1,212,508  $1,218,331 
    Adjustments:        
    Acquired intangible asset amortization  21,540   34,935   89,882   85,825 
    Business realignment charges  8,341   7,385   32,326   19,617 
    Integration costs to achieve  333   358   1,287   3,875 
    Adjusted International businesses operating income $341,778  $352,051  $1,336,003  $1,327,648 
             
    International businesses operating margin  21.8%  20.5%  21.4%  21.0%
    Adjusted International businesses operating margin  23.9%  23.3%  23.6%  22.9%

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