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Parker Reports Fiscal 2023 Second Quarter Results
ソース: Nasdaq GlobeNewswire / 02 2 2023 07:30:54 America/New_York
- Record sales, record adjusted net income and record adjusted EPS
- Sales increased 22% to $4.67 billion; organic sales increased 10%
- Total segment operating margin was 15.3%, or 21.5% adjusted
- Net income was $395.2 million, or $618.9 million adjusted
- EBITDA margin was 19.1%, or 22.4% adjusted
- EPS were $3.04, or $4.76 adjusted
- Company increases full year organic growth and adjusted EPS guidance
CLEVELAND, Feb. 02, 2023 (GLOBE NEWSWIRE) -- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the fiscal 2023 second quarter ended December 31, 2022. Fiscal 2023 second quarter sales were a record at $4.67 billion, an increase of 22%, compared with $3.82 billion in the second quarter of fiscal 2022. Net income was $395.2 million compared with $387.6 million in the prior year quarter. Adjusted net income was $618.9 million, an increase of 6% compared with $582.2 million in the second quarter of fiscal 2022. Earnings per share were $3.04 compared with $2.97 in the second quarter of fiscal 2022. Adjusted earnings per share increased 7% to a record of $4.76 compared with $4.46 in the prior year quarter. Fiscal 2023 year-to-date cash flow from operations was $1.08 billion, or 12.1% of sales, compared with $1.01 billion, or 13.3% of sales, in the prior year. A reconciliation of non-GAAP measures is included in the financial tables of this press release and includes various expenses associated with the completion of the acquisition of Meggitt plc and the related divestiture of the Aircraft Wheel and Brake Division during fiscal 2023.
“This was another quarter that highlights the consistency with which Parker is able to achieve record levels of performance,” said Chief Executive Officer, Jenny Parmentier. “Our results include the first full quarter of the Meggitt acquisition, which performed very well as our integration teams continue to make great progress. Overall organic sales growth was impressive, with increased organic sales in every segment. Our strong sales and segment margin performance contributed to record adjusted earnings per share for the quarter. Our team continues to drive excellent performance.”
Segment Results
Diversified Industrial Segment: North American second quarter sales increased 18% to $2.14 billion and operating income was $419.9 million compared with $337.4 million in the same period a year ago. On an adjusted basis, North American operating income was $466.9 million, or 21.8% of sales, a 50 basis point increase compared with the prior year quarter. International second quarter sales were flat at $1.40 billion and operating income was $285.5 million compared with $291.6 million in the same period a year ago. On an adjusted basis, International operating income was $305.8 million, or 21.9% of sales.Aerospace Systems Segment: Second quarter sales increased 84% to $1.14 billion and operating income was $8.8 million compared with $114.8 million in the same period a year ago. On an adjusted basis, operating income was $234.6 million, or 20.6% of sales.
Parker reported the following orders for the quarter ending December 31, 2022, compared with the same quarter a year ago:
- Orders increased 3% for total Parker
- Orders increased 2% in the Diversified Industrial North America businesses
- Orders decreased 4% in the Diversified Industrial International businesses
- Orders increased 22% in the Aerospace Systems Segment on a rolling 12-month average basis.
Outlook
Parker's outlook for the fiscal year ending June 30, 2023 has been updated. The company expects fiscal 2023 organic sales growth to be in the range of 6% to 8% and earnings per share in the range of $13.50 to $14.00, or $19.20 to $19.70 on an adjusted basis. A reconciliation of forecasted earnings per share to adjusted forecasted earnings per share is included in the financial tables of this press release.Parmentier added, "We expect another year of record performance in fiscal 2023. Longer term, we feel very positive about our plans to deliver $300 million of synergies from the acquisition of Meggitt and remain committed to our fiscal year 2027 financial targets. We have a bright future ahead driven by our business system The Win Strategy™, a transformed portfolio and secular growth trends.”
NOTICE OF CONFERENCE CALL: Parker Hannifin's conference call and slide presentation to discuss its fiscal 2023 second quarter results are available to all interested parties via live webcast today at 11:00 a.m. ET, at www.phstock.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 www.phstock.com.
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. Parker has increased its annual dividend per share paid to shareholders for 66 consecutive fiscal years, among the top five longest-running dividend-increase records in the S&P 500 index. Learn more at www.parker.com or @parkerhannifin.Note on Reclassification
Effective July 1, 2022, the company began classifying certain expenses, previously classified as cost of sales, as selling, general and administrative expenses (“SG&A”) or within other (income) expense, net. During the integration of recently acquired businesses, the company has seen diversity in practice of the classifications of certain expenses, and the reclassification was made to better align the presentation of expenses on the Consolidated Statement of Income with management’s internal reporting. The expenses reclassified from cost of sales to SG&A relate to certain administrative activities conducted in production facilities and research and development. Foreign currency transaction expense was also reclassified from cost of sales to other (income) expense, net on the Consolidated Statement of Income. These reclassifications had no impact on net income, earnings per share, cash flows, segment reporting or the financial position of the Company and were retrospectively applied to all periods presented in the financial tables of this press release.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, and divestitures. 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 % 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 Net Income
Net income referenced in this press release is equal to net income attributable to common shareholders.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 segment operating margins; (d) adjusted segment operating income; (e) EBITDA margin; (f) adjusted EBITDA margin and (g) organic sales growth. The adjusted net income, earnings per share, segment operating margin, 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, EBITDA margin and adjusted EBITDA margin. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Although EBITDA, EBITDA margin and adjusted EBITDA margin 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 versus the prior period. 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 include all statements regarding future performance, earnings projections, events or developments. Neither Parker nor any of its respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements will actually occur. Parker cautions readers not to place undue reliance on these statements. It is possible that the future performance and earnings projections of the company, including its individual segments, may differ materially from past performance or current expectations.Among other factors which may affect future performance are: the impact of the global outbreak of COVID-19 and governmental and other actions taken in response; 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, including the integration of Meggitt PLC; 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; 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 changes; compliance costs associated with environmental laws and regulations; potential supply chain and labor disruptions, including as a result of labor shortages; threats associated with international conflicts and efforts to combat terrorism and cyber security risks; uncertainties surrounding the ultimate resolution of outstanding legal proceedings, including the outcome of any appeals; local and global political and competitive market conditions, including global reactions to U.S. trade policies, and resulting effects on sales and pricing; 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 (including fluctuations associated with any potential credit rating decline) and credit availability; inability to obtain, or meet conditions imposed for, required governmental and regulatory approvals; changes in consumer habits and preferences; government actions, including the impact of changes in the tax laws in the United States and foreign jurisdictions and any judicial or regulatory interpretation thereof; and large scale disasters, such as floods, earthquakes, hurricanes, industrial accidents and pandemics. Readers should consider these 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, 2022 and other periodic filings made with the SEC.
Contact: Media - Aidan Gormley - Director, Global Communications and Branding 216-896-3258 aidan.gormley@parker.com Financial Analysts - Jeff Miller - Vice President, Investor Relations 216-896-2708 jeffrey.miller@parker.com PARKER HANNIFIN CORPORATION - DECEMBER 31, 2022 CONSOLIDATED STATEMENT OF INCOME (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands, except per share amounts) 2022 2021* 2022 2021* Net sales $ 4,674,811 $ 3,824,580 $ 8,907,586 $ 7,587,389 Cost of sales 3,236,812 2,567,595 6,032,268 5,071,977 Selling, general and administrative expenses 814,966 585,858 1,650,770 1,212,607 Interest expense 146,931 61,360 264,725 120,710 Other (income) expense, net (40,641 ) 119,443 (60,265 ) 120,026 Income before income taxes 516,743 490,324 1,020,088 1,062,069 Income taxes 121,282 102,595 236,590 222,877 Net income 395,461 387,729 783,498 839,192 Less: Noncontrolling interests 224 129 407 435 Net income attributable to common shareholders $ 395,237 $ 387,600 $ 783,091 $ 838,757 *Prior period amounts have been reclassified to reflect the income statement reclassification, as described in the attached press release. Earnings per share attributable to common shareholders: Basic earnings per share $ 3.08 $ 3.02 $ 6.10 $ 6.52 Diluted earnings per share $ 3.04 $ 2.97 $ 6.03 $ 6.42 Average shares outstanding during period - Basic 128,313,322 128,493,725 128,369,162 128,610,223 Average shares outstanding during period - Diluted 130,045,013 130,581,665 129,961,696 130,585,212 CASH DIVIDENDS PER COMMON SHARE (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Amounts in dollars) 2022 2021 2022 2021 Cash dividends per common share $ 1.33 $ 1.03 $ 2.66 $ 2.06 RECONCILIATION OF ORGANIC GROWTH (Unaudited) Three Months Ended December 31, Six Months Ended December 31, 2022 2021 2022 2021 Sales growth - as reported 22.2 % 12.1 % 17.4 % 14.2 % Adjustments: Acquisitions 16.5 % — % 10.2 % — % Divestitures (0.5)% — % (0.3)% — % Currency (4.1)% (1.1)% (4.7)% (0.2)% Organic sales growth 10.3 % 13.2 % 12.2 % 14.4 % PARKER HANNIFIN CORPORATION - DECEMBER 31, 2022 RECONCILIATION OF NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS TO ADJUSTED NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2022 2021 2022 2021 Net income attributable to common shareholders $ 395,237 $ 387,600 $ 783,091 $ 838,757 Adjustments: Acquired intangible asset amortization expense 142,256 78,741 229,270 158,512 Business realignment charges 5,378 3,645 9,239 6,659 Integration costs to achieve 33,418 807 45,409 2,009 Acquisition-related expenses 1,983 19,142 162,241 71,341 Loss on deal-contingent forward contracts — 149,382 389,992 149,382 Gain on Aircraft Wheel and Brake divestiture — — (372,930 ) — Amortization of inventory step-up to fair value 111,973 — 130,331 — Tax effect of adjustments1 (71,391 ) (57,139 ) (142,246 ) (87,780 ) Adjusted net income attributable to common shareholders $ 618,854 $ 582,178 $ 1,234,397 $ 1,138,880 RECONCILIATION OF EARNINGS PER DILUTED SHARE TO ADJUSTED EARNINGS PER DILUTED SHARE (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Amounts in dollars) 2022 2021 2022 2021 Earnings per diluted share $ 3.04 $ 2.97 $ 6.03 $ 6.42 Adjustments: Acquired intangible asset amortization expense 1.09 0.60 1.76 1.21 Business realignment charges 0.04 0.03 0.07 0.05 Integration costs to achieve 0.26 0.01 0.35 0.02 Acquisition-related expenses 0.02 0.15 1.26 0.55 Loss on deal-contingent forward contracts — 1.14 3.00 1.14 Gain on Aircraft Wheel and Brake divestiture — — (2.87 ) — Amortization of inventory step-up to fair value 0.86 — 1.00 — Tax effect of adjustments1 (0.55 ) (0.44 ) (1.09 ) (0.67 ) Adjusted earnings per diluted share $ 4.76 $ 4.46 $ 9.51 $ 8.72 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. PARKER HANNIFIN CORPORATION - DECEMBER 31, 2022 RECONCILIATION OF EBITDA TO ADJUSTED EBITDA (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2022 2021 2022 2021 Net sales $ 4,674,811 $ 3,824,580 $ 8,907,586 $ 7,587,389 Net income $ 395,461 $ 387,729 $ 783,498 $ 839,192 Income taxes 121,282 102,595 236,590 222,877 Depreciation 87,488 65,362 154,455 131,113 Amortization 142,256 78,741 229,270 158,512 Interest expense 146,931 61,360 264,725 120,710 EBITDA 893,418 695,787 1,668,538 1,472,404 Adjustments: Business realignment charges 5,378 3,645 9,239 6,659 Integration costs to achieve 33,418 807 45,409 2,009 Acquisition-related expenses 1,983 19,142 162,241 71,341 Loss on deal-contingent forward contracts — 149,382 389,992 149,382 Gain on Aircraft Wheel and Brake divestiture — — (372,930 ) — Amortization of inventory step-up to fair value 111,973 — 130,331 — Adjusted EBITDA $ 1,046,170 $ 868,763 $ 2,032,820 $ 1,701,795 EBITDA margin 19.1 % 18.2 % 18.7 % 19.4 % Adjusted EBITDA margin 22.4 % 22.7 % 22.8 % 22.4 % BUSINESS SEGMENT INFORMATION (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2022 2021 2022 2021 Net sales Diversified Industrial: North America $ 2,140,685 $ 1,807,024 $ 4,272,445 $ 3,600,739 International 1,397,699 1,399,179 2,752,712 2,775,615 Aerospace Systems 1,136,427 618,377 1,882,429 1,211,035 Total net sales $ 4,674,811 $ 3,824,580 $ 8,907,586 $ 7,587,389 Segment operating income Diversified Industrial: North America $ 419,921 $ 337,417 $ 872,907 $ 671,119 International 285,520 291,555 579,460 582,731 Aerospace Systems 8,793 114,796 100,944 233,047 Total segment operating income 714,234 743,768 1,553,311 1,486,897 Corporate general and administrative expenses 48,901 42,587 100,561 91,659 Income before interest expense and other expense 665,333 701,181 1,452,750 1,395,238 Interest expense 146,931 61,360 264,725 120,710 Other expense 1,659 149,497 167,937 212,459 Income before income taxes $ 516,743 $ 490,324 $ 1,020,088 $ 1,062,069 PARKER HANNIFIN CORPORATION - DECEMBER 31, 2022 RECONCILIATION OF SEGMENT OPERATING MARGINS TO ADJUSTED SEGMENT OPERATING MARGINS (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2022 2021 2022 2021 Diversified Industrial North America sales $ 2,140,685 $ 1,807,024 $ 4,272,445 $ 3,600,739 Diversified Industrial North America operating income $ 419,921 $ 337,417 $ 872,907 $ 671,119 Adjustments: Acquired intangible asset amortization 44,358 47,024 90,632 94,287 Business realignment charges 1,338 660 1,471 1,613 Integration costs to achieve 1,270 329 1,317 660 Adjusted Diversified Industrial North America operating income $ 466,887 $ 385,430 $ 966,327 $ 767,679 Diversified Industrial North America operating margin 19.6 % 18.7 % 20.4 % 18.6 % Adjusted Diversified Industrial North America operating margin 21.8 % 21.3 % 22.6 % 21.3 % (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2022 2021 2022 2021 Diversified Industrial International sales $ 1,397,699 $ 1,399,179 $ 2,752,712 $ 2,775,615 Diversified Industrial International operating income $ 285,520 $ 291,555 $ 579,460 $ 582,731 Adjustments: Acquired intangible asset amortization 16,819 18,958 33,624 38,700 Business realignment charges 3,039 2,387 4,918 4,451 Integration costs to achieve 425 478 564 1,349 Adjusted Diversified Industrial International operating income $ 305,803 $ 313,378 $ 618,566 $ 627,231 Diversified Industrial International operating margin 20.4 % 20.8 % 21.1 % 21.0 % Adjusted Diversified Industrial International operating margin 21.9 % 22.4 % 22.5 % 22.6 % (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2022 2021 2022 2021 Aerospace Systems sales $ 1,136,427 $ 618,377 $ 1,882,429 $ 1,211,035 Aerospace Systems operating income $ 8,793 $ 114,796 $ 100,944 $ 233,047 Adjustments: Acquired intangible asset amortization 81,079 12,759 105,014 25,525 Business realignment charges 1,001 598 2,850 595 Integration costs to achieve 31,723 — 43,528 — Amortization of inventory step-up to fair value 111,973 — 130,331 — Adjusted Aerospace Systems operating income $ 234,569 $ 128,153 $ 382,667 $ 259,167 Aerospace Systems operating margin 0.8 % 18.6 % 5.4 % 19.2 % Adjusted Aerospace Systems operating margin 20.6 % 20.7 % 20.3 % 21.4 % PARKER HANNIFIN CORPORATION - DECEMBER 31, 2022 RECONCILIATION OF SEGMENT OPERATING MARGINS TO ADJUSTED SEGMENT OPERATING MARGINS (Unaudited) Three Months Ended December 31, Six Months Ended December 31, (Dollars in thousands) 2022 2021 2022 2021 Total segment sales $ 4,674,811 $ 3,824,580 $ 8,907,586 $ 7,587,389 Total segment operating income $ 714,234 $ 743,768 $ 1,553,311 $ 1,486,897 Adjustments: Acquired intangible asset amortization 142,256 78,741 229,270 158,512 Business realignment charges 5,378 3,645 9,239 6,659 Integration costs to achieve 33,418 807 45,409 2,009 Amortization of inventory step-up to fair value 111,973 — 130,331 — Adjusted total segment operating income $ 1,007,259 $ 826,961 $ 1,967,560 $ 1,654,077 Total segment operating margin 15.3 % 19.4 % 17.4 % 19.6 % Adjusted total segment operating margin 21.5 % 21.6 % 22.1 % 21.8 % PARKER HANNIFIN CORPORATION - DECEMBER 31, 2022 CONSOLIDATED BALANCE SHEET (Unaudited) December 31, June 30, December 31, (Dollars in thousands) 2022 2022 2021 Assets Current assets: Cash and cash equivalents $ 756,055 $ 535,799 $ 449,481 Marketable securities and other investments 21,611 27,862 40,511 Trade accounts receivable, net 2,578,045 2,341,504 2,041,953 Non-trade and notes receivable 371,474 543,757 314,897 Inventories 3,095,722 2,214,553 2,307,306 Prepaid expenses and other 462,093 6,383,169 2,753,501 Total current assets 7,285,000 12,046,644 7,907,649 Property, plant and equipment, net 2,839,524 2,122,758 2,202,932 Deferred income taxes 133,348 110,585 146,567 Investments and other assets 1,206,194 788,057 794,814 Intangible assets, net 8,387,917 3,135,817 3,343,612 Goodwill 10,668,904 7,740,082 7,999,901 Total assets $ 30,520,887 $ 25,943,943 $ 22,395,475 Liabilities and equity Current liabilities: Notes payable and long-term debt payable within one year $ 1,994,333 $ 1,724,310 $ 2,201,653 Accounts payable, trade 1,966,757 1,731,925 1,597,025 Accrued payrolls and other compensation 453,037 470,132 335,417 Accrued domestic and foreign taxes 236,227 250,292 294,255 Other accrued liabilities 1,053,049 1,682,659 829,141 Total current liabilities 5,703,403 5,859,318 5,257,491 Long-term debt 12,025,860 9,755,825 6,250,525 Pensions and other postretirement benefits 807,124 639,939 959,741 Deferred income taxes 1,751,321 307,044 558,986 Other liabilities 898,703 521,897 600,452 Shareholders' equity 9,322,380 8,848,011 8,755,082 Noncontrolling interests 12,096 11,909 13,198 Total liabilities and equity $ 30,520,887 $ 25,943,943 $ 22,395,475 PARKER HANNIFIN CORPORATION - DECEMBER 31, 2022 CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Six Months Ended December 31, (Dollars in thousands) 2022 2021 Cash flows from operating activities: Net income $ 783,498 $ 839,192 Depreciation and amortization 383,725 289,625 Share incentive plan compensation 89,709 79,385 Gain on sale of businesses (377,251 ) (1,520 ) Gain on disposal of property, plant and equipment (2,551 ) (7,880 ) Gain on marketable securities (1,354 ) (4,948 ) Gain on investments (2,929 ) (1,487 ) Net change in receivables, inventories and trade payables 112,216 (147,481 ) Net change in other assets and liabilities (112,066 ) (16,498 ) Other, net 203,137 (22,919 ) Net cash provided by operating activities 1,076,134 1,005,469 Cash flows from investing activities: Acquisitions (net of cash of $89,704 in 2022) (7,146,110 ) — Capital expenditures (185,704 ) (105,606 ) Proceeds from sale of property, plant and equipment 11,632 22,392 Proceeds from sale of businesses 447,300 2,466 Purchases of marketable securities and other investments (25,198 ) (10,150 ) Maturities and sales of marketable securities and other investments 30,594 13,742 Payments of deal-contingent forward contracts (1,405,418 ) — Other 251,174 2,789 Net cash used in investing activities (8,021,730 ) (74,367 ) Cash flows from financing activities: Net payments for common stock activity (119,944 ) (317,512 ) Net proceeds from debt 1,536,211 1,900,844 Financing fees paid (8,911 ) (52,108 ) Dividends paid (342,360 ) (265,556 ) Net cash provided by financing activities 1,064,996 1,265,668 Effect of exchange rate changes on cash (11,221 ) 6,978 Net (decrease) increase in cash, cash equivalents and restricted cash (5,891,821 ) 2,203,748 Cash, cash equivalents and restricted cash at beginning of year 6,647,876 733,117 Cash, cash equivalents and restricted cash at end of period $ 756,055 $ 2,936,865 PARKER HANNIFIN CORPORATION - DECEMBER 31, 2022 RECONCILIATION OF FORECASTED EARNINGS PER DILUTED SHARE TO ADJUSTED FORECASTED EARNINGS PER DILUTED SHARE (Unaudited) (Amounts in dollars) Fiscal Year 2023 Forecasted earnings per diluted share $13.50 to $14.00 Adjustments: Business realignment charges 0.23 Costs to achieve 0.54 Acquisition-related intangible asset amortization expense 4.00 Acquisition-related expenses 2.55 Loss on deal-contingent forward contracts 3.00 Gain on Aircraft Wheel & Brake divestiture (2.87) Tax effect of adjustments1 (1.75) Adjusted forecasted earnings per diluted share $19.20 to $19.70 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.