Parker-hannifin Corporation · NYSE:PH
Parker-hannifin — Q2 FY2014 Earnings Presentation
23 slides from Parker-hannifin's earnings presentation, Jan 22, 2014
Slide 1: 2nd Quarter Fiscal Year 2014 Earnings Release
2nd Quarter Fiscal Year 2014 Earnings Release Parker Hannifin Corporation January 22, 2014 Exhibit 99.2
Slide 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 performanc
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation reconciles (a) sales amounts reported in accordance with U.S. GAAP to sales amounts adjusted to remove the effects of acquisitions & deconsolidation of subsidiaries (Joint Venture with JV Aviation) made within the prior four quarters and the effects of c
Slide 4: Agenda
Agenda 4 • CEO 2nd Quarter Highlights • Key Performance Measures & Outlook • CEO Closing Comments • Questions and Answers
Slide 5: Highlights 2nd Quarter FY2014
Highlights 2nd Quarter FY2014 Sales & Orders • Sales of $3.1B, growth of 3% adjusted for Joint Venture with GE Aviation • Global economy gaining momentum • Orders rates continue to be positive, +5% Earnings & Margins • Segment Operating Margins of 12.2% vs 12.0% prior year • Adjusted Net Income & Ea
Slide 6: Diluted Earnings Per Share 2nd Quarter FY2014
Diluted Earnings Per Share 2nd Quarter FY2014 6 $1.66 $1.19 FY14 Q2 FY13 Q2 As Reported EPS $1.24 $1.19 FY14 Q2* FY13 Q2 Adjusted EPS* *Adjusted for Joint Venture with GE Aviation and Asset Write Downs
Slide 7: Influences on Earnings 2nd Quarter FY2014 vs. 2nd Quarter FY2013
Influences on Earnings 2nd Quarter FY2014 vs. 2nd Quarter FY2013 7
Slide 8: Sales & Operating Margin 2nd Quarter FY2014 - Total Parker
Sales & Operating Margin 2nd Quarter FY2014 - Total Parker 8 $ in millions 2nd Quarter FY2014 % Change FY2013 % Change Adjusted Sales As reported 3,106$ 1.3 % 3,066$ 3,066$ Acquisitions 9 0.3 % JV with GE Aviation (40) Currency (23) (0.7)% Adjusted Sales 3,120$ 1.7 % 3.1 % 3,026$ Operating Margin As
Slide 9: Sales & Operating Margin - Diversified Industrial North America
Sales & Operating Margin 2nd Quarter FY2014 – Diversified Industrial North America 9 $ in millions 2nd Quarter FY2014 % Change FY2013 Sales As reported 1,325$ 0.6 % 1,317$ Acquisitions 8 0.6 % Currency (6) (0.4)% Adjusted Sales 1,323$ 0.4 % Operating Margin As reported 201$ 190$ % of Sales 15.1 % 14
Slide 10: Sales & Operating Margin - Diversified Industrial International
Sales & Operating Margin 2nd Quarter FY2014 – Diversified Industrial International 10 $ in millions 2nd Quarter FY2014 % Change FY2013 Sales As reported 1,277$ 4.7 % 1,219$ Acquisitions 1 0.0 % Currency (18) (1.5)% Adjusted Sales 1,294$ 6.2 % Operating Margin As reported 134$ 125$ % of Sales 10.5 %
Slide 11: Sales & Operating Margin - Aerospace Systems
Sales & Operating Margin 2nd Quarter FY2014 – Aerospace Systems 11 $ in millions 2nd Quarter FY2014 % Change FY2013 % Change Adjusted Sales As reported 504$ (4.7)% 529$ 529$ Acquisitions - - % JV with GE Aviation (40) Currency 1 0.2 % Adjusted Sales 503$ (4.9)% 2.9 % 489$ Operating Margin As reporte
Slide 12: Order Rates
Dec 2013 Sep 2013 Dec 2012 Sep 2012 Total Parker 5 %+ 5 %+ 2 %- 6 %- Diversified Industrial North America 3 %+ 3 %+ 6 %- 11 %- Diversified Industrial International 6 %+ 5 %+ 5 %- 8 %- Aerospace Systems 7 %+ 11 %+ 14 %+ 5 %+ Order Rates 12 Excludes Acquisitions, Divestitures & Currency 3-month year-o
Slide 13: Balance Sheet Summary
Balance Sheet Summary • Cash • Working capital • Accounts receivable • Inventory • Accounts payable 13
Slide 14: Cash Flow from Operating Activities 2nd Quarter YTD FY2014
$615 $573 FY14 YTD FY13 YTD Cash Flow from Operating Activities 2nd Quarter YTD FY2014 14 Cash Flow From Operating Activities YTD FY2014 FY2013 As Reported 540$ 347$ As Reported % Sales 8.5% 5.5% Discretionary Pension Plan Contribution 75$ 226$ Adjusted Cash From Operating Activities 615$ 573$ Adjus
Slide 15: FY2014 Guidance at Midpoint
FY2014 Guidance at Midpoint Prior Guidance of $6.40 Maintained 15 Sales Growth vs. Prior Year Diversified Industrial North America 2.0% Diversified Industrial International 2.0% Aerospace Systems * -2.0% Total Parker ** 1.5% Segment Operating Margins Diversified Industrial North America 16.5% Divers
Slide 16: [LISTED ]
[LISTED ] NYSE
Slide 17: Appendix
Appendix • Consolidated Statement of Income • Business Segment Information By Industry • Net Income & EPS Reconciliation • Consolidated Balance Sheet • Consolidated Statement of Cash Flows • Supplemental Sales Information – Global Technology Platforms
Slide 18: Consolidated Statement of Income (Unaudited)
Consolidated Statement of Income 18 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands except per share amounts) 2013 2012 2013 2012 Net sales 3,106,006$ 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 6
Slide 19: Net Income & EPS Reconciliation (Unaudited)
Net Income & EPS Reconciliation 19 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands except per share amounts) 2013 2012 2013 2012 Net income 253,404$ 181,114$ 497,724$ 421,062$ Adjustments: Asset w ritedow ns 192,188 - 192,188 - Gain related to joint ve
Slide 20: Business Segment Information By Industry (Unaudited)
Business Segment Information By Industry 20 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2013 2012 2013 2012 Net sales Diversif ied 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,
Slide 21: Consolidated Balance Sheet (Unaudited)
Consolidated Balance Sheet 21 (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
Slide 22: Consolidated Statement of Cash Flows (Unaudited)
Consolidated Statement of Cash Flows 22 (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 Goodw ill and intangible
Slide 23: Supplemental Sales Information Global Technology Platforms
Supplemental Sales Information Global Technology Platforms 23 (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2013 2012 2013 2012 Net sales Diversif ied Industrial: Motion Systems 928,466$ 934,647$ 1,862,654$ 1,929,793$ Flow and Process Control 1,001,