Parker-Hannifin Corp

Previous wording

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2025

Current wording

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2026

Previous wording

Over the long term, the extent to which our business and results of operations will be impacted by global economic and political uncertainty and geopolitical risks depends on future developments that remain uncertain. We will continue to monitor the global environment and manage our business with the goal to minimize unfavorable impacts on operations and financial results.

Current wording

Over the long term, the extent to which our business and results of operations will be impacted by global economic and political uncertainty and geopolitical risks depends on future developments that remain uncertain. In particular, the tariff environment continues to be very dynamic. In February 2026, the U.S. Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") on goods imported into the U.S. were unauthorized. We will continue to monitor developments; however, given the uncertainty surrounding potential refunds, we have not recorded a receivable for IEEPA tariffs paid as of March 31, 2026. Additionally, geopolitical tensions in the Middle East, including the ongoing conflict involving Iran, could adversely affect global supply chains and exert upward pressure on commodity, energy and logistic costs. We will continue to monitor the global environment and manage our business with the goal to minimize unfavorable impacts on operations and financial results.

Previous wording

Net sales increased in the current-year quarter due to higher sales in both the Aerospace Systems and Diversified Industrial Segments. The effect of currency exchange rate changes increased net sales during the current-year quarter by approximately $84 million. The impact of prior-year divestiture activity decreased net sales by approximately $38 million during the current-year quarter. The impact of the acquisition of Curtis increased net sales by approximately $74 million during the current-year quarter.

Current wording

Net sales increased in the current-year quarter due to higher sales in both the Aerospace Systems and Diversified Industrial Segments. The effect of currency exchange rate changes increased net sales during the current-year quarter by approximately $125 million. The impact of the acquisition of Curtis increased net sales by approximately $76 million during the current-year quarter.

Previous wording

Net sales increased in the first six months of fiscal 2026 due to higher sales in both the Aerospace Systems and Diversified Industrial Segments. The effect of currency exchange rate changes increased net sales during the first six months of fiscal 2026 by approximately $117 million. The impact of divestiture activity decreased net sales by approximately $146 million during the first six months of fiscal 2026. The impact of the acquisition of Curtis increased net sales by approximately $85 million during the first six months of fiscal 2026.

Current wording

Net sales increased in the first nine months of fiscal 2026 due to higher sales in both the Aerospace Systems and Diversified Industrial Segments. The effect of currency exchange rate changes increased net sales during the first nine months of fiscal 2026 by approximately $242 million. The impact of divestiture activity decreased net sales by approximately $146 million during the first nine months of fiscal 2026. The impact of the acquisition of Curtis increased net sales by approximately $161 million during the first nine months of fiscal 2026.

Previous wording

Gross profit margin (calculated as net sales minus cost of sales, divided by net sales) increased in the current-year quarter and first six months of fiscal 2026 due to higher margins in both segments primarily due to favorable product mix, cost containment initiatives and benefits from prior-year business realignment activities.

Current wording

Gross profit margin (calculated as net sales minus cost of sales, divided by net sales) remained flat in the current-year quarter and increased in the first nine months of fiscal 2026. During the current-year quarter, gross profit margin increased in the Aerospace Systems Segment, which was primarily driven by higher sales volumes and aftermarket profitability as well as benefits from cost containment initiatives, offset by lower gross margin within the Diversified Industrial Segment. The Diversified Industrial Segment's gross profit margin decreased primarily due to unfavorable product mix, higher business realignment charges, as well as increased material costs offset by favorable pricing. During the first nine months of fiscal 2026, the increase in margin was driven by higher margins in both segments primarily due to higher sales volumes, favorable product mix, cost containment initiatives and benefits from prior-year business realignment activities.

Previous wording

Cost of sales also included business realignment and acquisition integration charges of $9 million and $12 million for the current and prior-year quarter, respectively, and $18 million and $17 million for the first six months of fiscal 2026 and 2025, respectively.

Current wording

Cost of sales also included business realignment and acquisition integration charges of $17 million and $4 million for the current and prior-year quarter, respectively, and $35 million and $21 million for the first nine months of fiscal 2026 and 2025, respectively.

Previous wording

Selling, general and administrative expenses("SG&A") increased in the current-year quarter and first six months of fiscal 2026 primarily due to higher acquisition-related expenses, stock-based compensation expense, research and development expenses, and intangible asset amortization.

Current wording

Selling, general and administrative expenses("SG&A") increased in the current-year quarter and first nine months of fiscal 2026 primarily due to higher stock-based compensation expense, acquisition-related expenses, research and development expenses, and intangible asset amortization.

Previous wording

SG&A also included business realignment and acquisition integration charges of $5 million and $16 million for the current and prior-year quarter, respectively, and $17 million and $26 million for the first six months of fiscal 2026 and 2025, respectively.

Current wording

SG&A also included business realignment and acquisition integration charges of $14 million and $12 million for the current and prior-year quarter, respectively, and $31 million and $38 million for the first nine months of fiscal 2026 and 2025, respectively.

Previous wording

Interest expense increased during the current-year quarter primarily due to higher average debt outstanding, and decreased in the first six months of fiscal 2026 primarily due to lower average debt outstanding and lower average interest rates.

Current wording

Interest expense increased during the current-year quarter primarily due to higher average debt outstanding, and decreased in the first nine months of fiscal 2026 primarily due to lower average interest rates.

Previous wording

Other income, netincluded the following:

Current wording

Other expense (income), netincluded the following:

Previous wording

Effective tax rate for the current-year quarter of fiscal 2026 was less than the U.S. Federal statutory rate of 21 percent due to tax benefits from share-based compensation, U.S. Federal tax credits, and foreign-derived intangible income, which were partially offset by taxes related to international activities and U.S. state and local taxes.

Current wording

Effective tax rate for the current-year quarter and first nine months of fiscal 2026 was less than the U.S. Federal statutory rate of 21 percent due to tax benefits from share-based compensation, foreign-derived intangible income, and U.S. Federal tax credits, which were partially offset by taxes related to international activities and U.S. state and local taxes.

Previous wording

The effective tax rate for the first six months of fiscal 2026 was greater than the U.S. Federal statutory rate of 21 percent due to taxes related to international activities and U.S. state and local taxes, which were partially offset by tax benefits from share-based compensation and foreign-derived intangible income.

Current wording

The effective tax rate for the comparable quarter of fiscal 2025 was lower than the U.S. Federal statutory rate of 21 percent due to tax benefits from the release of a foreign valuation allowance, share-based compensation, and foreign-derived intangible income, which were partially offset by U.S. state and local taxes and taxes related to international activities.

Previous wording

The effective tax rate for the comparable prior-year periods was lower than the U.S. Federal statutory rate of 21 percent due to tax benefits from share-based compensation, lower taxable gain on divestitures than gain under accounting principles generally accepted in the United States of America ("GAAP"), and foreign-derived intangible income, which were partially offset by U.S. state and local taxes and taxes related to international activities.

Current wording

The effective tax rate for the first nine months of fiscal 2025 was lower than the U.S. Federal statutory rate of 21 percent for the same reasons as those listed above for the comparable quarter of 2025, plus a tax benefit from a lower taxable gain on divestitures than gain under accounting principles generally accepted in the United States of America ("GAAP").

Previous wording

The fiscal 2026 effective tax rate is expected to be approximately 22 percent.

Current wording

The fiscal 2026 effective tax rate is expected to be approximately 21 percent.

Previous wording

Diversified Industrial Segment sales increased $215 million and $202 million from the prior-year quarter and first six months of fiscal 2025, respectively. The effect of the Curtis acquisition increased sales by approximately $74 million and $85 million in the current-year quarter and first six months of fiscal 2026, respectively. The effect of changes in currency exchange rates increased sales by approximately $69 million and $93 million in the current-year quarter and first six months of fiscal 2026, respectively. The impact of divestiture activity decreased sales by approximately $38 million and $146 million in the current-year quarter and first six months of fiscal 2026, respectively. Excluding the effects of the acquisition, changes in currency exchange rates and divestiture activity, sales increased $110 million and $170 million from the prior-year quarter and first six months of fiscal 2025, respectively.

Current wording

Diversified Industrial Segment sales increased $283 million and $485 million from the prior-year quarter and first nine months of fiscal 2025, respectively. The effect of the Curtis acquisition increased sales by approximately $76 million and $161 million in the current-year quarter and first nine months of fiscal 2026, respectively. The effect of changes in currency exchange rates increased sales by approximately $105 million and $199 million in the current-year quarter and first nine months of fiscal 2026, respectively. The impact of divestiture activity decreased sales by approximately $146 million in the first nine months of fiscal 2026. Excluding the effects of the acquisition, changes in currency exchange rates and divestiture activity, sales increased $102 million and $271 million from the prior-year quarter and first nine months of fiscal 2025, respectively.

Previous wording

North America businesses - Sales increased $58 million from the prior-year quarter and remained flat when compared to the first six months of fiscal 2025. The effect of the Curtis acquisition increased sales by approximately $41 million and $47 million in the current-year quarter and first six months of fiscal 2026, respectively. The effects of divestiture activity decreased sales by approximately $38 million and $146 million in the current-year quarter and first six months of fiscal 2026, respectively. The effect of changes in currency exchange rates increased sales by approximately $7 million in both the current-year fiscal quarter and first six months of fiscal 2026, respectively. Excluding the effects of the Curtis acquisition, divestiture activity and changes in currency exchange rates, sales in the North America businesses increased $48 million and $94 million in the current-year quarter and first six months of fiscal 2026, respectively. In the current-year quarter and first six months of fiscal 2026, the increase in sales is primarily due to higher demand from end users in the in-plant and industrial equipment, aerospace and defense, HVAC and refrigeration and off-highway markets, partially offset by lower demand from end users in the transportation and energy markets.

Current wording

North America businesses - Sales increased $110 million and $112 million from the prior-year quarter and first nine months of fiscal 2025, respectively. The effect of the Curtis acquisition increased sales by approximately $40 million and $87 million in the current-year quarter and first nine months of fiscal 2026, respectively. The effects of divestiture activity decreased sales by approximately $146 million in the first nine months of fiscal 2026. The effect of changes in currency exchange rates increased sales by approximately $13 million and $21 million in the current-year quarter and first nine months of fiscal 2026, respectively. Excluding the effects of the Curtis acquisition, divestiture activity and changes in currency exchange rates, sales in the North America businesses increased $57 million and $150 million in the current-year quarter and first nine months of fiscal 2026, respectively, primarily due to higher demand from end users in the in-plant and industrial equipment, aerospace and defense, and off-highway markets, partially offset by lower demand from end users in the transportation market. During the first nine months of fiscal 2026, sales also increased due to higher demand from end users in the HVAC and refrigeration market.

Previous wording

International businesses - Sales increased $157 million and $200 million from the prior-year quarter and first six months of fiscal 2025, respectively. The effect of the Curtis acquisition increased sales by approximately $33 million and $38 million in the current-year quarter and first six months of fiscal 2026, respectively. The effect of changes in currency exchange rates increased sales by approximately $62 million and $86 million in the current-year quarter and first six months of fiscal 2026, respectively. Excluding the effects of the Curtis acquisition and changes in currency exchange rates, sales in the International businesses increased $62 million and $76 million in the current-year quarter and first six months of fiscal 2026, respectively, primarily due to higher sales in the Asia Pacific region, where we experienced higher demand within the electronics and semiconductor and in-plant and industrial equipment markets, partially offset by lower demand from end users in the transportation market. During the current-year quarter, sales also increased due to higher sales in Europe, primarily due to higher demand across the in-plant and industrial equipment and transportation and off-highway markets.

Current wording

International businesses - Sales increased $173 million and $373 million from the prior-year quarter and first nine months of fiscal 2025, respectively. The effect of the Curtis acquisition increased sales by approximately $36 million and $74 million in the current-year quarter and first nine months of fiscal 2026, respectively. The effect of changes in currency exchange rates increased sales by approximately $92 million and $178 million in the current-year quarter and first nine months of fiscal 2026, respectively. Excluding the effects of the Curtis acquisition and changes in currency exchange rates, sales in the International businesses increased $45 million and $121 million in the current-year quarter and first nine months of fiscal 2026, respectively, primarily due to higher sales in the Asia Pacific region, where we experienced higher demand within the electronics and semiconductor and in-plant and industrial equipment markets, partially offset by lower demand from end users in the transportation and off-highway markets.

Previous wording

Diversified Industrial Segment operating margin increased during the current-year quarter and first six months of fiscal 2026 in both the North America and International businesses primarily due to favorable product mix, price increases, and benefits from prior-year business realignment activities, partially offset by an increase in material costs.

Current wording

Diversified Industrial Segment operating margin decreased during the current-year quarter and increased during the first nine months of fiscal 2026. During the current-year quarter, operating margin decreased in both the North America and International businesses primarily due to unfavorable product mix, higher business realignment charges, higher amortization expense of acquired intangibles, as well as increased material costs offset by favorable pricing. Operating margin increased during the first nine months of fiscal 2026 in both the North America and International businesses primarily due to favorable product mix, benefits from prior-year business realignment activities, as well as favorable pricing offset by increased material costs.

Previous wording

We anticipate that cost savings realized from the workforce reduction measures taken in the first six months of fiscal 2026 will not materially impact operating income in fiscal 2026 and will increase operating income by approximately one percent in fiscal 2027. We expect to continue to take actions necessary to appropriately structure the operations of the Diversified Industrial Segment. We currently anticipate incurring approximately $40 million of additional business realignment charges in the remainder of fiscal 2026. However, continually changing business conditions could impact the ultimate costs we incur.

Current wording

We anticipate that cost savings realized from the workforce reduction measures taken in the first nine months of fiscal 2026 will not materially impact operating income in fiscal 2026 and will increase operating income by approximately one percent in fiscal 2027. We expect to continue to take actions necessary to appropriately structure the operations of the Diversified Industrial Segment. We currently anticipate incurring approximately $15 million of additional business realignment charges in the remainder of fiscal 2026. However, continually changing business conditions could impact the ultimate costs we incur.

Previous wording

Aerospace Systems Segment sales increased in both the current-year quarter and first six months of fiscal 2026 primarily due to higher volume in the commercial OEM and aftermarket, as well as the defense OEM market segment.

Current wording

Aerospace Systems Segment sales increased in the current-year quarter due to higher volume in all market segments. During the first nine months of fiscal 2026, sales increased primarily due to higher volume in the commercial OEM and aftermarket, as well as the defense OEM market segment.

Previous wording

Aerospace Systems Segment operating margin increased during the current-year quarter and first six months of fiscal 2026 due to higher sales volume, aftermarket profitability, as well as benefits from cost containment initiatives.

Current wording

Aerospace Systems Segment operating margin increased during the current-year quarter and first nine months of fiscal 2026 due to higher sales volume, aftermarket profitability, as well as benefits from cost containment initiatives.

Previous wording

Within the Aerospace Systems Segment, business realignment and acquisition integration charges were immaterial during the current-year quarter and first six months of fiscal 2026. During the prior-year quarter and first six months of fiscal 2025, business realignment and acquisition integration charges were $7 million and $12 million, respectively, and primarily related to acquisition integration activities. We do not expect to incur material business realignment or acquisition integration charges for the remainder of fiscal 2026. However, continually changing business conditions could impact the ultimate costs we incur.

Current wording

Within the Aerospace Systems Segment, business realignment and acquisition integration charges were immaterial during the current-year quarter and first nine months of fiscal 2026. During the prior-year quarter and first nine months of fiscal 2025, business realignment and acquisition integration charges were $3 million and $15 million, respectively, and primarily related to acquisition integration activities. We do not expect to incur material business realignment or acquisition integration charges for the remainder of fiscal 2026. However, continually changing business conditions could impact the ultimate costs we incur.

Previous wording

Aerospace Systems Segment backlog as of December 31, 2025, increased from both the comparable prior-year quarter and the June 30, 2025 balance of $7.4 billion, primarily due to orders exceeding shipments in all market segments, especially in the commercial OEM and aftermarket market segments.

Current wording

Aerospace Systems Segment backlog as of March 31, 2026, increased from the prior-year quarter primarily due to orders exceeding shipments in the commercial and defense OEM market segments, as well as the commercial aftermarket market segment. The increase in backlog from the June 30, 2025 balance of $7.4 billion is primarily due to orders exceeding shipments in all market segments, especially in the commercial OEM and aftermarket market segments.

Previous wording

Corporate general and administrative expenses in both the current-year quarter and first six months of fiscal 2026 primarily included salaries, benefits and incentive compensation expense, professional service fees, information technology, charitable contributions and other discretionary spending.

Current wording

Corporate general and administrative expenses in both the current-year quarter and first nine months of fiscal 2026 primarily included salaries, benefits and incentive compensation expense, professional service fees, information technology, charitable contributions and other discretionary spending.

Previous wording

We expect that our cash and cash equivalents, cash flows from operations, availability under our commercial paper program, and access to capital markets will be sufficient to meet these liquidity needs for the next twelve months and the foreseeable future.

Current wording

We expect that our cash and cash equivalents, cash flows from operations, availability under our commercial paper program and Filtration Group Credit Facilities, and access to capital markets will be sufficient to meet these liquidity needs for the next twelve months and the foreseeable future.

Previous wording

At December 31, 2025, we had cash and cash equivalents totaling $427 million, of which $371 million was held by our foreign subsidiaries. We intend to repatriate certain foreign earnings, which may result in non-federal U.S. or foreign tax liabilities. All other undistributed foreign earnings are considered to be permanently reinvested.

Current wording

At March 31, 2026, we had cash and cash equivalents totaling $476 million, of which $423 million was held by our foreign subsidiaries. We intend to repatriate certain foreign earnings, which may result in non-federal U.S. or foreign tax liabilities. All other undistributed foreign earnings are considered to be permanently reinvested.

Previous wording

Net cash provided by operating activities decreased $35 million for the first six months of fiscal 2026 compared to the first six months of fiscal 2025. The decrease was primarily driven by higher cash tax payments and increased working capital requirements, specifically within accounts receivable and inventory, which more than offset the higher net income adjusted for non-cash items (including depreciation, amortization, stock-based compensation expense, deferred income taxes and gains on sale of businesses). We continue to focus on managing inventory and other working capital requirements.

Current wording

Net cash provided by operating activities increased $319 million for the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025. The increase was primarily driven by higher net income adjusted for non-cash items (including depreciation, amortization, stock-based compensation expense, deferred income taxes and gains on sale of businesses), which more than offset the increased working capital requirements, specifically within accounts receivable and inventory. We continue to focus on managing inventory and other working capital requirements.

Previous wording

•Days sales outstanding relating to trade accounts receivable was 49 days at December 31, 2025, 51 days at June 30, 2025 and 48 days at December 31, 2024.

Current wording

•Days sales outstanding relating to trade accounts receivable was 53 days at March 31, 2026, 51 days at June 30, 2025 and 53 days at March 31, 2025.

Previous wording

•Days supply of inventory on hand was 95 days at December 31, 2025, 82 days at June 30, 2025 and 89 days at December 31, 2024.

Current wording

•Days supply of inventory on hand was 88 days at March 31, 2026, 82 days at June 30, 2025 and 85 days at March 31, 2025.

Previous wording

Net cash (used in) provided by investing activities decreased by $1.6 billion in the first six months of fiscal 2026 compared to the first six months of fiscal 2025. The decrease was primarily attributable to $1.0 billion in cash used for the Curtis acquisition and lower proceeds from sale of businesses in fiscal 2026. Proceeds from sale of businesses in fiscal 2025 included net proceeds of $621 million related to the divestitures of the composites and fuel containment business and the non-core filtration business.

Current wording

Net cash (used in) provided by investing activities decreased by $1.6 billion in the first nine months of fiscal 2026 compared to the first nine months of fiscal 2025. The decrease was primarily attributable to $1.0 billion in cash used for the Curtis acquisition and lower proceeds from sale of businesses in fiscal 2026. Proceeds from sale of businesses in fiscal 2025 included net proceeds of $621 million related to the divestitures of the composites and fuel containment business and the non-core filtration business.

Previous wording

Net cash used in financing activities for the first six months of fiscal 2026 and 2025 were impacted by the following factors:

Current wording

Net cash used in financing activities for the first nine months of fiscal 2026 and 2025 were impacted by the following factors:

Previous wording

•Net commercial paper borrowings of $595 million in the first six months of fiscal 2026 compared to net commercial paper repayments of $515 million in the first six months of fiscal 2025.

Current wording

•Net commercial paper borrowings of $323 million in the first nine months of fiscal 2026 compared to net commercial paper repayments of $213 million in the first nine months of fiscal 2025.

Previous wording

•Repurchases under our share repurchase program amounted to 0.7 million common shares for $550 million during the first six months of fiscal 2026, compared to 0.2 million common shares for $100 million during the first six months of fiscal 2025.

Current wording

•Repurchases under our share repurchase program amounted to 1.0 million common shares for $825 million during the first nine months of fiscal 2026, compared to 1.2 million common shares for $750 million during the first nine months of fiscal 2025.

Previous wording

In August 2025, we amended our revolving credit agreement to increase the total line of credit to $3.75 billion, and authorized a corresponding increase in the commercial paper program size to $3.75 billion. The revolving credit agreement expires in June 2028; however, we have the right to request a one-year extension of the expiration date. Advances from the credit agreement can be used for general corporate purposes, including acquisitions, and for the refinancing of existing indebtedness. Issuances of commercial paper reduce the amount of credit available under the revolving credit agreement. As of December 31, 2025, there were no borrowings outstanding under the revolving credit agreement, and commercial paper notes outstanding were $2.4 billion. Taking into account outstanding commercial paper notes, $1.4 billion was available for borrowing under the credit agreement as of December 31, 2025.

Current wording

In August 2025, we amended our revolving credit agreement to increase the total line of credit to $3.75 billion, and authorized a corresponding increase in the commercial paper program size to $3.75 billion. The revolving credit agreement expires in June 2028; however, we have the right to request a one-year extension of the expiration date. Advances from the credit agreement can be used for general corporate purposes, including acquisitions, and for the refinancing of existing indebtedness. Issuances of commercial paper reduce the amount of credit available under the revolving credit agreement. As of March 31, 2026, there were no borrowings outstanding under the revolving credit agreement, and commercial paper notes outstanding were $2.1 billion. Taking into account outstanding commercial paper notes, $1.7 billion was available for borrowing under the credit agreement as of March 31, 2026.

Previous wording

Our credit agreements and indentures governing certain debt securities contain various covenants. Violation of these covenants would limit or preclude the use of the credit agreements for future borrowings or could accelerate the maturity of the related outstanding borrowings. Based on our rating level at December 31, 2025, the most restrictive financial covenant requires that the ratio of debt to debt-shareholders' equity not exceed 0.65 to 1.0. As of December 31, 2025, we are in compliance with all covenants, with a ratio of 0.41 to 1.0. We expect to remain in compliance with all covenants set forth in our credit agreements and indentures.

Current wording

Our credit agreements and indentures governing certain debt securities contain various covenants. Violation of these covenants would limit or preclude the use of the credit agreements for future borrowings or could accelerate the maturity of the related outstanding borrowings. Based on our rating level at March 31, 2026, the most restrictive financial covenant requires that the ratio of debt to debt-shareholders' equity not exceed 0.65 to 1.0. As of March 31, 2026, we are in compliance with all covenants, with a ratio of 0.40 to 1.0. We expect to remain in compliance with all covenants set forth in our credit agreements and indentures.

Previous wording

Refer to the cash flows from financing activities section below and Note 13 to the consolidated financial statements for further discussion.

Current wording

Refer to the cash flows from financing activities section and Note 13 to the consolidated financial statements for further discussion.

Previous wording

We are targeting 2.5 percent of sales for capital expenditures for the remainder of fiscal 2026 and have an annual long-term target of 2.0 percent. We will continue to prioritize capital expenditures related to safety, productivity and strategic investments.

Current wording

We are targeting 2.0 to 2.5 percent of sales for capital expenditures for fiscal 2026 and have an annual long-term target of 2.0 percent. We will continue to prioritize capital expenditures related to safety, productivity and strategic investments.

Previous wording

We declared a quarterly cash dividend of $1.80 per share on October 22, 2025, which was paid on December 5, 2025. Dividends have been paid for 302 consecutive quarters, including a yearly increase in dividends for 69 consecutive fiscal years. Additionally, we declared a quarterly cash dividend of $1.80 per share on January 22, 2026, payable on March 6, 2026.

Current wording

We declared a quarterly cash dividend of $1.80 per share on January 22, 2026, which was paid on March 6, 2026. Dividends have been paid for 303 consecutive quarters. Additionally, we declared a quarterly cash dividend of $2.00 per share on April 23, 2026, payable on June 5, 2026, increasing our annual dividend per share paid to shareholders for 70 consecutive fiscal years.

Previous wording

On August 21, 2025, the Board of Directors approved an update to the number of shares available under our previous share repurchase authorization so that the aggregate number of shares available for repurchase as of such date was 20.0 million. There is no limitation on the number of shares that can be repurchased in a year and there is no expiration date for the program. As of December 31, 2025, 19.3 million shares remained available under the repurchase authorization. Refer to Note 10 to the consolidated financial statements for further discussion of share repurchases.

Current wording

On August 21, 2025, the Board of Directors approved an update to the number of shares available under our previous share repurchase authorization so that the aggregate number of shares available for repurchase as of such date was 20.0 million. There is no limitation on the number of shares that can be repurchased in a year and there is no expiration date for the program. As of March 31, 2026, 19.0 million shares remained available under the repurchase authorization. Refer to Note 10 to the consolidated financial statements for further discussion of share repurchases.

Previous wording

Acquisitions will be considered from time to time to the extent there is a strong strategic fit, while at the same time maintaining our strong financial position. In addition, we will continue to assess our existing businesses and initiate efforts to divest businesses that are not considered to be a good long-term strategic fit for Parker. On September 18, 2025, we completed the acquisition of Curtis, for approximately $1.0 billion, net of cash acquired. On November 11, 2025, we announced that we have agreed to acquire Filtration Group from Madison Industries for approximately $9.25 billion in cash. The transaction is subject to customary closing conditions, including receipt of applicable regulatory approvals, and is expected to close six to 12 months from the announcement date. We expect to fund the transaction with a combination of new debt and cash. Refer to Note 4 to the consolidated financial statements for further discussion.

Current wording

Acquisitions will be considered from time to time to the extent there is a strong strategic fit, while at the same time maintaining our strong financial position. In addition, we will continue to assess our existing businesses and initiate efforts to divest businesses that are not considered to be a good long-term strategic fit for Parker. On September 18, 2025, we completed the acquisition of Curtis, for approximately $1.0 billion, net of cash acquired. On November 11, 2025, we announced that we have agreed to acquire Filtration Group from Madison Industries for approximately $9.25 billion in cash. The transaction is subject to customary closing conditions, including receipt of applicable regulatory approvals, and is expected to close within 12 months from the announcement date. We expect to fund the transaction with a combination of new debt, including borrowings under the Filtration Group Credit Facilities and cash. Refer to Note 4 to the consolidated financial statements for further discussion.