Parker Hannifin

“Our Aerospace Systems Segment products are used in commercial and defense airframe and engine programs and include: •Avionics •Fuel Systems & Components •Electric & Hydraulic Braking Systems •Fuel Tank Inerting Systems •Electric Power •Hydraulic Pumps & Motors •Electromechanical Actuators •Hydraulic Valves & Actuators •Engine Exhaust Systems & Components •Pneumatics •Fire Detection & Suppression •Seals •Flight Control Systems •Sensors •Fluid Conveyance •Thermal Management We market our Aerospace Systems Segment products through our regional sales organizations, which sell directly to OEMs and end users throughout the world.”

Annual report 2026A · The company itself

“For example, our Aerospace Systems Segment produces aircraft components and systems that are critical to flight safety, and accordingly, the adverse impact of product quality issues, actual or perceived, can be significant. Our operations expose us to potential liabilities for personal injury or death as a result of the failure of an aircraft product that we have designed or manufactured, and such liabilities could be substantial given the catastrophic nature of potential aerospace incidents.”

Annual report 2026A · The company itself

“The major market verticals served by our Diversified Industrial Segment are listed below: •Aerospace & Defense •Off-highway •In-plant & Industrial Equipment •Energy •Transportation •HVAC & Refrigeration Our Aerospace Systems Segment sells highly engineered, differentiated airframe and engine components and systems to OEMs and aftermarket parts and maintenance directly to end users primarily in the commercial aerospace and defense market verticals.”

Annual report 2026A · The company itself

“Our Aerospace Systems Segment products are used in commercial and defense airframe and engine programs and include: •Avionics •Fuel Systems & Components •Electric & Hydraulic Braking Systems •Fuel Tank Inerting Systems •Electric Power •Hydraulic Pumps & Motors •Electromechanical Actuators •Hydraulic Valves & Actuators •Engine Exhaust Systems & Components •Pneumatics •Fire Detection & Suppression •Seals •Flight Control Systems •Sensors •Fluid Conveyance •Thermal Management We market our Aerospace Systems Segment products through our regional sales organizations, which sell directly to OEMs and end users throughout the world.”

Annual report 2026A · The company itself

“As of June 30, 2026, we employed approximately 59,850 persons that we refer to as “team members,” of whom approximately 30,830 were employed by foreign subsidiaries.”

Annual report 2026A · The company itself

“Safety The safety and well-being of Parker team members is our highest priority. Our safety goal is simple: to be the safest industrial company in the world, which we define as having the lowest annual recordable incident rate among our proxy peers.”

Annual report 2026A · The company itself

“The major market verticals served by our Diversified Industrial Segment are listed below: •Aerospace & Defense •Off-highway •In-plant & Industrial Equipment •Energy •Transportation •HVAC & Refrigeration Our Aerospace Systems Segment sells highly engineered, differentiated airframe and engine components and systems to OEMs and aftermarket parts and maintenance directly to end users primarily in the commercial aerospace and defense market verticals.”

Annual report 2026A · The company itself

“Markets Our interconnected technologies and solutions provide value for customers across our market verticals including aerospace & defense, in-plant & industrial equipment, transportation, off-highway, energy, and HVAC and refrigeration.”

Annual report 2026A · The company itself

“For example, artificial intelligence technologies are rapidly developing and our business may be adversely affected if we cannot successfully integrate such technologies into our internal business processes and product and service offerings, or if we cannot effectively position our products to serve the needs of artificial intelligence technology providers, including data center infrastructure, in a timely, cost-effective, compliant and responsible manner.”

Annual report 2026A · The company itself

“The major market verticals served by our Diversified Industrial Segment are listed below: •Aerospace & Defense •Off-highway •In-plant & Industrial Equipment •Energy •Transportation •HVAC & Refrigeration Our Aerospace Systems Segment sells highly engineered, differentiated airframe and engine components and systems to OEMs and aftermarket parts and maintenance directly to end users primarily in the commercial aerospace and defense market verticals.”

Annual report 2026A · The company itself

“Markets Our interconnected technologies and solutions provide value for customers across our market verticals including aerospace & defense, in-plant & industrial equipment, transportation, off-highway, energy, and HVAC and refrigeration.”

Annual report 2026A · The company itself

“For example, artificial intelligence technologies are rapidly developing and our business may be adversely affected if we cannot successfully integrate such technologies into our internal business processes and product and service offerings, or if we cannot effectively position our products to serve the needs of artificial intelligence technology providers, including data center infrastructure, in a timely, cost-effective, compliant and responsible manner.”

Annual report 2026A · The company itself

“Our Diversified Industrial Segment, which is an aggregation of several business units, sells highly engineered differentiated products to both OEMs and distributors who serve the aftermarket replacement markets.”

Annual report 2026A · The company itself

“We expect to continue our strategy of identifying and acquiring businesses with complementary products and services, and entering into joint ventures, which we believe will enhance our operations and profitability.”

Annual report 2026A · The company itself

“Among the economic factors which may have such an effect are manufacturing and other end-market activity, currency exchange rates, air travel trends, difficulties entering new markets, tariffs and governmental trade and monetary policies, changes in government spending priorities (including defense and infrastructure spending), global pandemics, and general economic conditions such as inflation, deflation, interest rates and credit availability.”

Annual report 2026A · The company itself

“The funding requirements and the amount of expenses recorded for our defined benefit pension plans are dependent on changes in market interest rates and the value of plan assets, which are dependent on actual plan asset returns. Significant changes in market interest rates and decreases in the fair value of plan assets and investment losses on plan assets would increase funding requirements and expenses and may adversely impact our results of operations.”

Annual report 2026A · The company itself

“We have incurred significant indebtedness, and expect to incur a significant amount of additional debt for acquisitions, including in connection with the acquisition of FGC and the pending acquisition of CIRCOR Aerospace, as well as for operations, research and development and capital expenditures, or for other reasons related to our overall capital deployment strategy. Our ability to make interest and scheduled principal payments and meet restrictive covenants could be adversely impacted by changes in the availability, terms and cost of capital, changes in interest rates or changes in our credit ratings or our outlook. These changes could increase our cost of financing and limit our debt capacity, thereby limiting our ability to pursue acquisition opportunities, react to market conditions and meet operational and capital needs, which may place us at a competitive disadvantage.”

Annual report 2026A · The company itself

“Among the economic factors which may have such an effect are manufacturing and other end-market activity, currency exchange rates, air travel trends, difficulties entering new markets, tariffs and governmental trade and monetary policies, changes in government spending priorities (including defense and infrastructure spending), global pandemics, and general economic conditions such as inflation, deflation, interest rates and credit availability.”

Annual report 2026A · The company itself

“Our non-U.S. operations are subject to risks in addition to those facing our domestic operations, including: •fluctuations in currency exchange rates and/or changes in monetary policy; •limitations on ownership and on repatriation of earnings; •transportation delays and other supply chain disruptions; •political, social and economic instability and disruptions, including armed conflicts; •the imposition of duties and tariffs and other trade barriers; •government import and export controls, embargoes, sanctions or trade restrictions, including possible restrictions on trade and/or obstacles to conducting business in China; •labor unrest and current and changing regulatory environments; •difficulties in implementing restructuring actions on a timely basis; •difficulties in staffing and managing multi-national operations; •limitations on our ability to enforce legal rights and remedies; •public health crises, including pandemics; •the potential for nationalization of enterprises; and •potentially adverse tax consequences.”

Annual report 2026A · The company itself

“Furthermore, changes to United States and other countries' tariff and import/export regulations have in the past and may in the future have a negative impact on the availability and pricing of raw materials.”

Annual report 2026A · The company itself

“Our business is sensitive to global macro-economic conditions. Macroeconomic downturns may have an adverse effect on our business, results of operations and financial condition, as well as our distributors, customers and suppliers, and on activity in many of the industries and markets we serve.”

Annual report 2026A · The company itself

“Demand for and supply of our products has been and may be adversely affected by numerous factors, some of which we cannot predict or control. Such factors include: •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, and changes in contract cost and revenue estimates for new development programs; •changes in product mix; •changes in the market acceptance of our products; •increased competition in the markets we serve; •declines in the general level of industrial production; •weakness in the end-markets we serve; •fluctuations in the availability or the prices of raw materials; and •fluctuations in currency exchange rates.”

Annual report 2026A · The company itself

“Among the economic factors which may have such an effect are manufacturing and other end-market activity, currency exchange rates, air travel trends, difficulties entering new markets, tariffs and governmental trade and monetary policies, changes in government spending priorities (including defense and infrastructure spending), global pandemics, and general economic conditions such as inflation, deflation, interest rates and credit availability.”

Annual report 2026A · The company itself

“Our non-U.S. operations are subject to risks in addition to those facing our domestic operations, including: •fluctuations in currency exchange rates and/or changes in monetary policy; •limitations on ownership and on repatriation of earnings; •transportation delays and other supply chain disruptions; •political, social and economic instability and disruptions, including armed conflicts; •the imposition of duties and tariffs and other trade barriers; •government import and export controls, embargoes, sanctions or trade restrictions, including possible restrictions on trade and/or obstacles to conducting business in China; •labor unrest and current and changing regulatory environments; •difficulties in implementing restructuring actions on a timely basis; •difficulties in staffing and managing multi-national operations; •limitations on our ability to enforce legal rights and remedies; •public health crises, including pandemics; •the potential for nationalization of enterprises; and •potentially adverse tax consequences.”

Annual report 2026A · The company itself

“If these systems, or any part of the systems, are damaged, intruded upon, attacked, shut down or cease to function properly (whether by planned upgrades, force majeure, telecommunications failures, criminal acts, including hardware or software break-ins or extortion attempts, or viruses, or other cybersecurity incidents) and we suffer any resulting interruption in our ability to manage and operate our business or if our products are affected, our results of operations and financial condition could be materially adversely affected. The sophistication of cyber threats continues to evolve and grow, including the risk associated with the use of artificial intelligence and quantum computing by threat actors to conduct more targeted and evasive attacks.”

Annual report 2026A · The company itself

“Our non-U.S. operations are subject to risks in addition to those facing our domestic operations, including: •fluctuations in currency exchange rates and/or changes in monetary policy; •limitations on ownership and on repatriation of earnings; •transportation delays and other supply chain disruptions; •political, social and economic instability and disruptions, including armed conflicts; •the imposition of duties and tariffs and other trade barriers; •government import and export controls, embargoes, sanctions or trade restrictions, including possible restrictions on trade and/or obstacles to conducting business in China; •labor unrest and current and changing regulatory environments; •difficulties in implementing restructuring actions on a timely basis; •difficulties in staffing and managing multi-national operations; •limitations on our ability to enforce legal rights and remedies; •public health crises, including pandemics; •the potential for nationalization of enterprises; and •potentially adverse tax consequences.”

Annual report 2026A · The company itself

“We rely on a limited number of suppliers for certain critical components, such as specialty electronics, rare earths, specialty chemicals, aerospace super alloys and filtration media, and recent and planned acquisitions may increase our exposure to supply concentration risk.”

Annual report 2026A · The company itself

“We rely on a limited number of suppliers for certain critical components, such as specialty electronics, rare earths, specialty chemicals, aerospace super alloys and filtration media, and recent and planned acquisitions may increase our exposure to supply concentration risk.”

Annual report 2026A · The company itself

“Among the economic factors which may have such an effect are manufacturing and other end-market activity, currency exchange rates, air travel trends, difficulties entering new markets, tariffs and governmental trade and monetary policies, changes in government spending priorities (including defense and infrastructure spending), global pandemics, and general economic conditions such as inflation, deflation, interest rates and credit availability.”

Annual report 2026A · The company itself

“Our efforts to manage these fluctuations by, among other things, passing along price increases to our customers, may be subject to a time delay between raw material prices increasing and our ability to increase the price of our products, or we may be unable to increase the prices of our products due to pricing pressure, contract terms (including fixed-price contracts) or other factors. Any such inability to manage fluctuations could adversely impact our results of operations and cash flows.”

Annual report 2026A · The company itself

“The Company absorbs a portion of healthcare costs for its employees. If healthcare costs rise significantly and we continue to absorb the majority of these costs, these increasing costs may adversely impact our future results of operations.”

Annual report 2026A · The company itself

“Among the economic factors which may have such an effect are manufacturing and other end-market activity, currency exchange rates, air travel trends, difficulties entering new markets, tariffs and governmental trade and monetary policies, changes in government spending priorities (including defense and infrastructure spending), global pandemics, and general economic conditions such as inflation, deflation, interest rates and credit availability.”

Annual report 2026A · The company itself

“Legal and Regulatory Risks As a provider of products to the U.S. government, we are subject to additional risks related to future government spending as well as unusual performance conditions and enhanced compliance risks. In addition to the risks identified herein, doing business with the U.S. government subjects us to unusual risks, including dependence on the level of government spending and compliance with and changes in governmental acquisition regulations.”

Annual report 2026A · The company itself

“Our non-U.S. operations are subject to risks in addition to those facing our domestic operations, including: •fluctuations in currency exchange rates and/or changes in monetary policy; •limitations on ownership and on repatriation of earnings; •transportation delays and other supply chain disruptions; •political, social and economic instability and disruptions, including armed conflicts; •the imposition of duties and tariffs and other trade barriers; •government import and export controls, embargoes, sanctions or trade restrictions, including possible restrictions on trade and/or obstacles to conducting business in China; •labor unrest and current and changing regulatory environments; •difficulties in implementing restructuring actions on a timely basis; •difficulties in staffing and managing multi-national operations; •limitations on our ability to enforce legal rights and remedies; •public health crises, including pandemics; •the potential for nationalization of enterprises; and •potentially adverse tax consequences.”

Annual report 2026A · The company itself

“Government contractors are subject to extensive legal and regulatory requirements, including the International Traffic in Arms Regulations (“ITAR”), the Export Administration Regulations, the U.S. Foreign Corrupt Practices Act and evolving cybersecurity requirements such as the Cybersecurity Maturity Model Certification framework.”

Annual report 2026A · The company itself

“We primarily use steel, brass, copper, aluminum, nickel, rubber and thermoplastic materials and chemicals as the principal raw materials in our products.”

Annual report 2026A · The company itself

“Further, although we are working towards and intend to meet our goal of achieving near-total decarbonization (scope 1 and 2 emissions) within our operations by 2040, we may be required to expend significant resources to do so, which could increase our operational costs, and there can be no assurance that recently completed or future acquisitions will not make the achievement of this goal more difficult or costly.”

Annual report 2026A · The company itself

“We rely on a limited number of suppliers for certain critical components, such as specialty electronics, rare earths, specialty chemicals, aerospace super alloys and filtration media, and recent and planned acquisitions may increase our exposure to supply concentration risk.”

Annual report 2026A · The company itself

“Extreme weather events linked to climate change, including hurricanes, flooding, wildfires, high heat and water scarcity, among others, create physical risks to our operating locations and supply chains.”

Annual report 2026A · The company itself

“We primarily use steel, brass, copper, aluminum, nickel, rubber and thermoplastic materials and chemicals as the principal raw materials in our products.”

Annual report 2026A · The company itself

“Such factors include: •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, and changes in contract cost and revenue estimates for new development programs; •changes in product mix; •changes in the market acceptance of our products; •increased competition in the markets we serve; •declines in the general level of industrial production; •weakness in the end-markets we serve; •fluctuations in the availability or the prices of raw materials; and •fluctuations in currency exchange rates.”

Annual report 2026A · The company itself

“Energy Matters and Sources and Availability of Raw Materials Our primary energy source for both of our business segments is electric power.”

Annual report 2026A · The company itself

“Increased public awareness and concern regarding environmental risks, including global climate change, may result in more international, regional and/or federal requirements or industry standards to reduce or mitigate global warming and other environmental risks. These regulations or standards could mandate more restrictive requirements, such as stricter limits on greenhouse gas emissions, than the voluntary commitments that we have made or require such changes on a more accelerated time frame.”

Annual report 2026A · The company itself

“Our non-U.S. operations are subject to risks in addition to those facing our domestic operations, including: •fluctuations in currency exchange rates and/or changes in monetary policy; •limitations on ownership and on repatriation of earnings; •transportation delays and other supply chain disruptions; •political, social and economic instability and disruptions, including armed conflicts; •the imposition of duties and tariffs and other trade barriers; •government import and export controls, embargoes, sanctions or trade restrictions, including possible restrictions on trade and/or obstacles to conducting business in China; •labor unrest and current and changing regulatory environments; •difficulties in implementing restructuring actions on a timely basis; •difficulties in staffing and managing multi-national operations; •limitations on our ability to enforce legal rights and remedies; •public health crises, including pandemics; •the potential for nationalization of enterprises; and •potentially adverse tax consequences.”

Annual report 2026A · The company itself

“Our non-U.S. operations are subject to risks in addition to those facing our domestic operations, including: •fluctuations in currency exchange rates and/or changes in monetary policy; •limitations on ownership and on repatriation of earnings; •transportation delays and other supply chain disruptions; •political, social and economic instability and disruptions, including armed conflicts; •the imposition of duties and tariffs and other trade barriers; •government import and export controls, embargoes, sanctions or trade restrictions, including possible restrictions on trade and/or obstacles to conducting business in China; •labor unrest and current and changing regulatory environments; •difficulties in implementing restructuring actions on a timely basis; •difficulties in staffing and managing multi-national operations; •limitations on our ability to enforce legal rights and remedies; •public health crises, including pandemics; •the potential for nationalization of enterprises; and •potentially adverse tax consequences.”

Annual report 2026A · The company itself

“Among the economic factors which may have such an effect are manufacturing and other end-market activity, currency exchange rates, air travel trends, difficulties entering new markets, tariffs and governmental trade and monetary policies, changes in government spending priorities (including defense and infrastructure spending), global pandemics, and general economic conditions such as inflation, deflation, interest rates and credit availability.”

Annual report 2026A · The company itself

“We primarily use steel, brass, copper, aluminum, nickel, rubber and thermoplastic materials and chemicals as the principal raw materials in our products.”

Annual report 2026A · The company itself

“To align our operations and achieve our goal of top quartile performance, we deploy our business system, The Win StrategyTM, which establishes goals and strategies for engaged people, customer experience, profitable growth and financial performance.”

Annual report 2026A · The company itself

“Such factors include: •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, and changes in contract cost and revenue estimates for new development programs; •changes in product mix; •changes in the market acceptance of our products; •increased competition in the markets we serve; •declines in the general level of industrial production; •weakness in the end-markets we serve; •fluctuations in the availability or the prices of raw materials; and •fluctuations in currency exchange rates.”

Annual report 2026A · The company itself

“Our net sales attributable to selling locations outside of the United States were approximately 36% in each of 2026, 2025 and 2024.”

Annual report 2026A · The company itself

“We offer our products over numerous, varied markets through our divisions operating in 44 countries.”

Annual report 2026A · The company itself

“We offer our products over numerous, varied markets through our divisions operating in 44 countries.”

Annual report 2026A · The company itself

“We offer our products over numerous, varied markets through our divisions operating in 44 countries.”

Annual report 2026A · The company itself

“Our net sales attributable to selling locations outside of the United States were approximately 36% in each of 2026, 2025 and 2024.”

Annual report 2026A · The company itself