Item 8. . Financial Statements and Supplementary Data.

						Page Number in Form 10-K
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)						32
Financial Statements
			Consolidated Statement of Income			34
			Consolidated Statement of Comprehensive Income			35
			Consolidated Balance Sheet			36
			Consolidated Statement of Cash Flows			37
			Consolidated Statement of Equity			38
			Notes to Consolidated Financial Statements			39

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Parker-Hannifin Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Parker-Hannifin Corporation and subsidiaries (the "Company") as of June 30, 2024 and 2023, the related consolidated statements of income, comprehensive income, cash flows, and equity, for each of the three years in the period ended June 30, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole,

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and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue — Refer to Notes 1 and 2 to the financial statements

Critical Audit Matter Description

The Company recognizes revenue from the sale of products to customers primarily in aerospace & defense, in-plant & industrial equipment, transportation, off-highway, energy, and HVAC & refrigeration markets around the world. The Company’s business activities are carried out by a large number of individual business units collectively offering hundreds of thousands of individual products in over forty countries globally.

We identified revenue from product shipments as a critical audit matter due to the geographic dispersion of the Company’s operations and business units generating revenue. Extensive audit effort is required due to the volume of the underlying transactions and number of individual business units. High levels of auditor judgment were necessary to determine the nature, timing, and extent of audit procedures performed to audit revenue from product shipments.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s revenue from product shipments included the following, among others:

• We tested the operating effectiveness of internal controls over the recognition of revenue from product shipments, including controls over the quantity and price of products shipped and timing of revenue recognition.

• We performed detail transaction testing for revenue from product shipments by making a sample of transactions and comparing the transactions selected to source documents such as purchase orders and shipping records.

• We tested the completeness of revenue from product shipments by making a sample from a listing of sales orders and comparing the sample transactions to source documentation such as shipping records to determine whether the transactions selected were appropriately included in revenue from product shipments.

• We tested the timing of revenue recognition by making a sample from a list of products shipped prior to and subsequent to year end and used source documentation such as shipping records to determine whether the transactions selected were appropriately recorded in the correct period.

• We performed substantive analytical procedures for certain revenue transactions by developing independent expectations of revenue based on data derived from the results of our detail revenue testing and comparing these expectations to the revenue recorded by management.

/s/ DELOITTE & TOUCHE LLP

Cleveland, Ohio

August 22, 2024

We have served as the Company's auditor since 2008.

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CONSOLIDATED STATEMENT OF INCOME

						For the years ended June 30,
(Dollars in thousands, except per share amounts)						2024						2023						2022
Net Sales						$	19,929,606					$	19,065,194					$	15,861,608
Cost of sales						12,801,816						12,635,892						10,550,309
Selling, general and administrative expenses						3,315,177						3,354,103						2,504,061
Interest expense						506,495						573,894						255,252
Other (income) expense, net						(276,888)						184,167						944,881
Gain on sale of businesses and assets, net						(11,597)						(362,526)						(7,121)
Income before income taxes						3,594,603						2,679,664						1,614,226
Income taxes						749,667						596,128						298,040
Net Income						2,844,936						2,083,536						1,316,186
Less: Noncontrolling interest in subsidiaries' earnings						721						600						581
Net Income Attributable to Common Shareholders						$	2,844,215					$	2,082,936					$	1,315,605
Earnings per Share Attributable to Common Shareholders
Basic earnings per share						$	22.13					$	16.23					$	10.24
Diluted earnings per share						$	21.84					$	16.04					$	10.09

The accompanying notes are an integral part of the consolidated financial statements.

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

						For the years ended June 30,
(Dollars in thousands)						2024						2023						2022
Net Income						$	2,844,936					$	2,083,536					$	1,316,186
Less: Noncontrolling interests in subsidiaries' earnings						721						600						581
Net income attributable to common shareholders						2,844,215						2,082,936						1,315,605
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustment and other (net of tax of $(15,443), $(38,322) and $(3,236) in 2024, 2023 and 2022, respectively)						(167,784)						186,721						(284,732)
Retirement benefits plan activity (net of tax of $(8,071), $(26,019) and $(95,574) in 2024, 2023 and 2022, respectively)						22,813						63,299						306,735
Other comprehensive (loss) income						(144,971)						250,020						22,003
Less: Other comprehensive income (loss) for noncontrolling interests						169						(306)						(1,526)
Other comprehensive (loss) income attributable to common shareholders						(145,140)						250,326						23,529
Total Comprehensive Income Attributable to Common Shareholders						$	2,699,075					$	2,333,262					$	1,339,134

The accompanying notes are an integral part of the consolidated financial statements.

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CONSOLIDATED BALANCE SHEET

(Dollars in thousands)
June 30,						2024						2023
Assets
Current Assets
Cash and cash equivalents						$	422,027					$	475,182
Trade accounts receivable, net						2,865,546						2,827,297
Non-trade and notes receivable						331,429						309,167
Inventories						2,786,800						2,907,879
Prepaid expenses and other						392,822						314,704
Total Current Assets						6,798,624						6,834,229
Property, plant and equipment						7,074,574						6,865,545
Less: Accumulated depreciation						4,198,906						4,000,515
Property, plant and equipment, net						2,875,668						2,865,030
Deferred income taxes						92,704						81,429
Investments and other assets						1,207,232						1,104,576
Intangible assets, net						7,816,181						8,450,614
Goodwill						10,507,433						10,628,594
Total Assets						$	29,297,842					$	29,964,472
Liabilities and Equity
Current Liabilities
Notes payable and long-term debt payable within one year						$	3,403,065					$	3,763,175
Accounts payable, trade						1,991,639						2,050,934
Accrued payrolls and other compensation						581,251						651,319
Accrued domestic and foreign taxes						354,659						374,571
Other accrued liabilities						982,695						895,371
Total Current Liabilities						7,313,309						7,735,370
Long-term debt						7,157,034						8,796,284
Pensions and other postretirement benefits						437,490						551,510
Deferred income taxes						1,583,923						1,649,674
Other liabilities						725,193						893,355
Total Liabilities						17,216,949						19,626,193
Equity
Shareholders' Equity
Serial preferred stock, $.50 par value, authorized 3,000,000 shares; none issued						—						—
Common stock, $.50 par value, authorized 600,000,000 shares; issued 181,046,128 shares in 2024 and 2023						90,523						90,523
Additional paid-in capital						264,508						305,522
Retained earnings						19,104,599						17,041,502
Accumulated other comprehensive (loss)						(1,438,012)						(1,292,872)
Treasury shares at cost: 52,442,162 in 2024 and 52,613,046 in 2023						(5,949,646)						(5,817,787)
Total Shareholders' Equity						12,071,972						10,326,888
Noncontrolling interests						8,921						11,391
Total Equity						12,080,893						10,338,279
Total Liabilities and Equity						$	29,297,842					$	29,964,472

The accompanying notes are an integral part of the consolidated financial statements.

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CONSOLIDATED STATEMENT OF CASH FLOWS

						For the years ended June 30,
(Dollars in thousands)						2024						2023						2022
Cash Flows From Operating Activities
Net income						$	2,844,936					$	2,083,536					$	1,316,186
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation						349,136						317,416						257,314
Amortization						577,995						500,713						314,450
Stock incentive plan compensation						155,175						142,720						137,093
Deferred income taxes						32,476						91,865						(351,201)
Foreign currency transaction (gain) loss						(38,480)						45,647						(39,987)
Loss (gain) on disposal of property, plant and equipment						12,382						3,819						(5,727)
Gain on sale of businesses						(23,979)						(366,345)						(1,394)
(Gain) loss on marketable securities and other investments						(5,708)						(6,176)						1,159
Other, net						25,385						25,524						70,443
Changes in assets and liabilities, net of effects from acquisitions and divestitures:
Accounts receivable, net						(85,091)						(16,675)						(179,126)
Inventories						101,385						53,124						(212,134)
Prepaid expenses and other						(63,512)						1,550						37,630
Other assets						(117,009)						(109,032)						(11,167)
Accounts payable, trade						(44,429)						91,551						131,384
Accrued payrolls and other compensation						(63,893)						87,375						(15,524)
Accrued domestic and foreign taxes						26,597						102,476						32,514
Other accrued liabilities						(72,596)						112,822						999,831
Pensions and other postretirement benefits						(79,919)						(109,481)						1,822
Other liabilities						(146,522)						(72,499)						(41,836)
Net cash provided by operating activities						3,384,329						2,979,930						2,441,730
Cash Flows From Investing Activities
Acquisitions (net of cash acquired of $89,704 in 2023)						—						(7,146,110)						—
Capital expenditures						(400,112)						(380,747)						(230,044)
Proceeds from sale of property, plant and equipment						9,065						13,244						39,353
Proceeds from sale of businesses						77,666						473,207						3,366
Purchase of marketable securities and other investments						(17,186)						(37,791)						(27,895)
Maturities and sales of marketable securities and other investments						24,292						56,786						31,809
Payments of deal-contingent forward contracts						—						(1,405,418)						—
Other, net						7,687						250,017						(235,426)
Net cash used in investing activities						(298,588)						(8,176,812)						(418,837)
Cash Flows From Financing Activities
Proceeds from exercise of stock options						3,606						3,476						2,831
Payments for common shares						(332,055)						(297,323)						(460,056)
Acquisition of noncontrolling interests						(2,883)						—						—
Proceeds from notes payable, net						359,275						357,636						1,422,026
Proceeds from long-term borrowings						24,011						2,023,400						3,598,056
Payments for long-term borrowings						(2,384,805)						(2,340,566)						(18,737)
Financing fees paid						—						(13,605)						(58,629)
Dividends paid						(782,048)						(704,054)						(569,855)
Net cash (used in) provided by financing activities						(3,114,899)						(971,036)						3,915,636
Effect of exchange rate changes on cash						(23,997)						(4,776)						(23,770)
Net (decrease) increase in cash and cash equivalents and restricted cash						(53,155)						(6,172,694)						5,914,759
Cash, cash equivalents and restricted cash at beginning of year						475,182						6,647,876						733,117
Cash, cash equivalents and restricted cash at end of year						$	422,027					$	475,182					$	6,647,876
Supplemental Data:
Cash paid during the year for:
Interest						$	491,423					$	464,701					$	240,313
Income taxes and related interest, penalties and purchased credits, net of refunds						851,899						411,440						549,223

The accompanying notes are an integral part of the consolidated financial statements.

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CONSOLIDATED STATEMENT OF EQUITY

(Dollars in thousands)						Common Stock						Additional Paid-in Capital						Retained Earnings						Accumulated Other Comprehensive (Loss)						Treasury Shares						Noncontrolling Interests						Total
Balance June 30, 2021						$	90,523					$	329,619					$	14,915,497					$	(1,566,727)					$	(5,370,605)					$	15,363					$	8,413,670
Net income																		1,315,605																		581						1,316,186
Other comprehensive income (loss)																								23,529												(1,526)						22,003
Dividends paid ($4.42 per share)																		(569,294)																		(561)						(569,855)
Stock incentive plan activity												(2,312)																		62,510												60,198
Liquidation Activity																																				(1,948)						(1,948)
Shares purchased at cost																														(380,334)												(380,334)
Balance June 30, 2022						$	90,523					$	327,307					$	15,661,808					$	(1,543,198)					$	(5,688,429)					$	11,909					$	8,859,920
Net income																		2,082,936																		600						2,083,536
Other comprehensive income (loss)																								250,326												(306)						250,020
Dividends paid ($5.47 per share)																		(703,242)																		(812)						(704,054)
Stock incentive plan activity												(21,785)																		70,641												48,856
Shares purchased at cost																														(199,999)												(199,999)
Balance June 30, 2023						$	90,523					$	305,522					$	17,041,502					$	(1,292,872)					$	(5,817,787)					$	11,391					$	10,338,279
Net income																		2,844,215																		721						2,844,936
Other comprehensive (loss) income																								(145,140)												169						(144,971)
Dividends paid ($6.07 per share)																		(781,118)																		(930)						(782,048)
Stock incentive plan activity												(41,429)																		68,141												26,712
Acquisition activity												415																								(2,430)						(2,015)
Shares purchased at cost																														(200,000)												(200,000)
Balance June 30, 2024						$	90,523					$	264,508					$	19,104,599					$	(1,438,012)					$	(5,949,646)					$	8,921					$	12,080,893

The accompanying notes are an integral part of the consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts or as otherwise noted)

The term "year" and references to specific years refer to the applicable fiscal years.

1. Significant Accounting Policies

The significant accounting policies followed in the preparation of the accompanying consolidated financial statements are summarized below.

Nature of Operations - The Company is a global leader in motion and control technologies. Leveraging a unique combination of interconnected technologies, we design, manufacture, and provide aftermarket support for highly engineered solutions that create value for customers primarily in aerospace & defense, in-plant & industrial equipment, transportation, off-highway, energy, and HVAC & refrigeration markets around the world. We evaluate performance based on segment operating income before corporate administrative expenses, interest expense and income taxes.

There are no individual customers to whom sales are more than four percent of the Company's consolidated sales. Due to our diverse group of customers throughout the world, we do not consider ourself exposed to any concentration of credit risks.

The Company manufactures and markets its products throughout the world. Although certain risks and uncertainties exist, the diversity and breadth of our products and geographic operations mitigate the risk that adverse changes with respect to any particular product and geographic operation would materially affect our operating results.

Use of Estimates - The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Basis of Consolidation - The consolidated financial statements include the accounts of all majority-owned domestic and foreign subsidiaries. All intercompany transactions and profits have been eliminated in the consolidated financial statements. The Company does not have off-balance sheet arrangements. Within the business segment information, inter-segment and inter-area sales have been eliminated.

Revenue Recognition - Revenues are recognized when control of performance obligations, which are distinct goods or services within the contract, is transferred to the customer. Control is transferred when the customer has the ability to direct the use of and obtain the benefits from the goods or services. When revenue is recognized at a point in time, control generally transfers at time of shipment. Revenues are recognized over time if the customer simultaneously receives control as the Company performs work under a contract, if the customer controls the asset as it is being produced or if the product produced for the customer has no alternative use and the Company has a contractual right to payment.

For contracts where revenue is recognized over time, we use the cost-to-cost, efforts expended or units of delivery method depending on the nature of the contract, including length of production time. The estimation of these costs and efforts expended requires judgment on the part of management due to the duration of the contractual agreements as well as the technical nature of the products involved. We make adjustments to these estimates on a consistent basis and establish a contract reserve when the estimated costs to complete a contract exceed the expected contract revenues.

A contract’s transaction price is allocated to each distinct performance obligation. When there are multiple performance obligations within a contract, the transaction price is allocated to each performance obligation based on its standalone selling price. The primary method used to estimate a standalone selling price is the price observed in standalone sales to customers of the same product or service. Revenue is recognized when control of the individual performance obligations is transferred to the customer.

We consider the contractual consideration payable by the customer and assess variable consideration that may affect the total transaction price. Variable consideration primarily includes prompt pay discounts, rebates and volume discounts and is included in the estimated transaction price when there is a basis to reasonably estimate the amount, including whether the estimate should be constrained in order to avoid a significant reversal of revenue in a future period. These estimates are based on historical experience, anticipated performance under the terms of the contract and our best judgment at the time.

Payment terms vary by customer and the geographic location of the customer. The time between when revenue is recognized and payment is due is not significant. Our contracts with customers generally do not include significant financing components or noncash consideration.

Taxes collected from customers and remitted to governmental authorities are excluded from revenue. Shipping and handling costs are treated as fulfillment costs and are included in cost of sales. The costs to obtain a contract where the amortization period for the related asset is one year or less are expensed as incurred.

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There is generally no unilateral right to return products. The Company primarily offers an assurance-type standard warranty that the product will conform to certain specifications for a defined period of time or usage after delivery. This type of warranty does not represent a separate performance obligation.

Cash and Cash Equivalents - Cash equivalents consist of short-term, highly liquid investments with a maturity of three months or less. These investments are carried at cost plus accrued interest and are readily convertible into cash.

Trade Accounts Receivable, Net - Trade accounts receivable are initially recorded at their net collectible amount and are generally recorded at the time the revenue from the sales transaction is recorded. We evaluate the collectibility of our receivables based on historical experience and current and forecasted economic conditions based on management's judgment. Additionally, receivables are written off to bad debt when management makes a final determination of uncollectibility. Allowance for credit losses was $21 million and $32 million at June 30, 2024 and 2023, respectively.

Non-Trade and Notes Receivable - The non-trade and notes receivable caption in the Consolidated Balance Sheet is comprised of the following components:

June 30,						2024						2023
Notes receivable						$	93,114					$	102,288
Accounts receivable, other						238,315						206,879
Total						$	331,429					$	309,167

Property, Plant and Equipment and Depreciation - Property, plant and equipment are recorded at cost and are depreciated principally using the straight-line method for financial reporting purposes. Depreciation rates are based on estimated useful lives of the assets, generally 40 years for buildings, 15 years for land improvements and building equipment, seven to 10 years for machinery and equipment, and three to eight years for vehicles and office equipment. Improvements, which extend the useful life of property, are capitalized. Maintenance and repairs are expensed. We review property, plant and equipment for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. When property, plant and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the appropriate accounts and any gain or loss is included in current income.

The property, plant and equipment caption in the Consolidated Balance Sheet is comprised of the following components:

June 30,						2024						2023
Land and land improvements						$	379,316					$	385,376
Buildings and building equipment						2,129,378						2,051,546
Machinery and equipment						4,216,942						4,086,334
Construction in progress						348,938						342,289
Total						$	7,074,574					$	6,865,545

Investments and Other Assets - Investments in joint-venture companies in which ownership is 50 percent or less and in which the Company does not have operating control are stated at cost plus the Company's equity in undistributed earnings and amounted to $294 million and $297 million at June 30, 2024 and 2023, respectively. A significant portion of the underlying net assets of the joint ventures are related to goodwill. The Company's share of earnings from investments in joint-venture companies were $152 million, $124 million and $76 million in 2024, 2023 and 2022, respectively, and are included within other (income) expense, net in the Consolidated Statement of Income. Sales to and services performed for joint venture companies totaled $74 million, $64 million and $47 million in 2024, 2023 and 2022, respectively. We received cash dividends from joint venture companies of $148 million, $114 million and $82 million in 2024, 2023 and 2022, respectively.

Intangible Assets - Intangible assets primarily include patents and technology, trade names and customer relationships and contracts and are recorded at cost and amortized on a straight-line method. Patents and technology are amortized over the shorter of their remaining useful or legal life. Trade names are amortized over the estimated time period over which an economic benefit is expected to be received. Customer relationships are amortized over a period based on anticipated customer attrition rates or contractual lives. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable.

Goodwill - The Company conducts a formal impairment test of goodwill on an annual basis and between annual tests if an event occurs or circumstances change that would, more likely than not, reduce the fair value of a reporting unit below its carrying value.

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Income Taxes - Income taxes are provided based upon income for financial reporting purposes. Taxes related to Global Intangible Low-Taxed Income ("GILTI") are treated as a current period expense when incurred. Tax credits and similar tax incentives are applied to reduce the provision for income taxes in the year in which the credits arise. We recognize accrued interest related to unrecognized tax benefits in income tax expense. Penalties, if incurred, are recognized in income tax expense. Deferred income taxes arise from temporary differences in the recognition of income and expense for tax purposes. Income tax effects resulting from adjusting temporary differences recorded in accumulated other comprehensive (loss) are released when the circumstances on which they are based cease to exist.

Foreign Currency Translation - Assets and liabilities of foreign subsidiaries are translated at current exchange rates, and income and expenses are translated using weighted-average exchange rates. The effects of these translation adjustments, as well as gains and losses from certain hedging and intercompany transactions, are reported in accumulated other comprehensive (loss). Such adjustments will affect net income only upon sale or liquidation of the underlying foreign investments. Exchange (gains) losses from transactions in a currency other than the local currency of the entity involved are included within other (income) expense, net in the Consolidated Statement of Income and were $(38) million, $46 million and $(40) million, in 2024, 2023 and 2022, respectively.

Business Combinations - From time to time, we may enter into business combinations. Business acquisitions are accounted for using the acquisition method of accounting, which allocates the fair value of the purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The acquisition method of accounting also requires us to refine these estimates over a measurement period not to exceed one year to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Transaction costs associated with these acquisitions are expensed as incurred.

Subsequent Events - We evaluated subsequent events that have occurred through the date of filing of this Annual Report on Form 10-K for the year ended June 30, 2024. On July 28, 2024, the Company signed an agreement to divest its Meggitt composites and fuel containment ("CFC") business within the North America businesses of the Diversified Industrial Segment for an enterprise value of $560 million on a cash-free, debt-free basis and subject to a working capital adjustment. The CFC business has annual sales of approximately $350 million. Closing of this divestiture is subject to customary closing conditions, including regulatory clearance, and is anticipated to occur prior to December 31, 2024.

Recent Accounting Pronouncements - In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," which enhances the disclosure requirements for income taxes primarily related to the rate reconciliation and income taxes paid information. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendment should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact this guidance will have on the Company's disclosures.

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact this guidance will have on the Company's disclosures.

In September 2022, the FASB issued ASU 2022-04, "Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations," which requires a buyer in a supplier finance program to disclose information about the program’s nature, activity during the period, changes from period to period, and potential magnitude. To achieve that objective, the buyer should disclose qualitative and quantitative information about its supplier finance programs, including the outstanding amount under the program, the balance sheet presentation of the outstanding amount, and a rollforward of the obligations in the program. This ASU should be adopted retrospectively for each balance sheet period presented; however, the rollforward information should be provided prospectively. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company adopted the guidance on July 1, 2023, except for the rollforward requirement, which becomes effective July 1, 2024. The adoption did not have a material impact on the Company's consolidated financial statements.

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2. Revenue recognition

Revenue is derived primarily from the sale of products in the aerospace & defense, in-plant & industrial equipment, transportation, off-highway, energy, and HVAC & refrigeration markets. A majority of the Company’s revenues are recognized at a point in time. However, a portion of the Company’s revenues are recognized over time.

Disaggregation of revenue

Revenue from contracts with customers is disaggregated by technology platform for the Diversified Industrial Segment, by market segment for the Aerospace Systems Segment and by geographic location for the total Company.

The Diversified Industrial Segment is an aggregation of several business units, which manufacture a broad range of motion-control systems and components for builders and users of various types of manufacturing, packaging, processing, transportation, agricultural, construction, and military vehicles and equipment. Contracts consist of individual purchase orders for standard product, blanket purchase orders and production contracts. Blanket purchase orders are often associated with individual purchase orders and have terms and conditions which are subject to a master supply or distributor agreement. Individual production contracts, some of which may include multiple performance obligations, are typically for products manufactured to the customer's specifications. Revenue in the Diversified Industrial Segment is typically recognized at the time of product shipment, but a portion of revenue may be recognized over time for installation services or in situations where the product has no alternative use and we have an enforceable right to payment.

Diversified Industrial Segment revenues by technology platform:

						2024						2023						2022
Motion Systems						$	3,706,055					$	3,830,062					$	3,489,431
Flow and Process Control						4,672,741						4,939,356						4,616,270
Filtration and Engineered Materials						6,078,350						5,936,275						5,236,345
Total						$	14,457,146					$	14,705,693					$	13,342,046

The Aerospace Systems Segment produces engine and airframe components and systems, which are utilized on virtually every major commercial and military aircraft. Contracts generally consist of blanket purchase orders and individual long-term production contracts. Blanket purchase orders, which have terms and conditions subject to long-term supply agreements, are typically associated with individual purchase orders. Revenue in the Aerospace Systems Segment is typically recognized at the time of product shipment, but a portion of revenue may be recognized over time in situations where the customer controls the asset as it is produced or the product has no alternative use and we have an enforceable right to payment.

Aerospace Systems Segment revenues by market segment:

						2024						2023						2022
Commercial original equipment manufacturer ("OEM")						$	1,778,928					$	1,461,279					$	889,649
Commercial aftermarket						1,814,395						1,363,965						514,727
Defense OEM						1,125,324						905,328						705,988
Defense aftermarket						753,813						628,929						409,198
Total						$	5,472,460					$	4,359,501					$	2,519,562

Total revenues by geographic region based on the Company's selling operation's location:

						2024						2023						2022
North America						$	13,512,303					$	12,689,719					$	10,216,292
Europe						3,915,691						3,777,507						3,156,024
Asia Pacific						2,277,466						2,379,791						2,290,557
Latin America						224,146						218,177						198,735
Total						$	19,929,606					$	19,065,194					$	15,861,608

The majority of revenues from the Aerospace Systems Segment is generated from sales within North America.

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Contract balances

Contract assets and contract liabilities are reported on a contract-by-contract basis. Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. Payments from customers are received based on the terms established in the contract with the customer.

Total contract assets and contract liabilities are as follows:

						2024						2023
Contract assets, current (included within Prepaid expenses and other)						$	136,814					$	123,705
Contract assets, noncurrent (included within Investments and other assets)						21,063						23,708
Total contract assets						157,877						147,413
Contract liabilities, current (included within Other accrued liabilities)						(183,868)						(244,799)
Contract liabilities, noncurrent (included within Other liabilities)						(77,957)						(78,239)
Total contract liabilities						(261,825)						(323,038)
Net contract liabilities						$	(103,948)					$	(175,625)

Net contract liabilities at June 30, 2024 decreased from the prior year amount due to timing differences between when revenue was recognized and the receipt of advance payments. During 2024, approximately $178 million of revenue was recognized that was included in the contract liabilities at June 30, 2023.

Remaining performance obligations

Our backlog represents written firm orders from a customer to deliver products and, in the case of blanket purchase orders, only includes the portion of the order for which a schedule or release has been agreed to with the customer. We believe our backlog represents our unsatisfied or partially unsatisfied performance obligations. Backlog at June 30, 2024 was $10.9 billion, of which approximately 73 percent is expected to be recognized as revenue within the next 12 months and the balance thereafter.

3. Acquisitions and Divestitures

Acquisitions

On September 12, 2022, we completed the Acquisition of all the outstanding ordinary shares of Meggitt for 800 pence per share, resulting in an aggregate cash purchase price of $7.2 billion, including the assumption of debt.

Meggitt is a leader in design, manufacturing and aftermarket support of technologically differentiated systems and equipment in aerospace, defense and selected energy markets with annual sales of approximately $2.1 billion for the year ended December 31, 2021. For segment reporting purposes, approximately 82 percent of Meggitt's sales are included in the Aerospace Systems Segment, while the remaining 18 percent are included in the Diversified Industrial Segment.

Assets acquired and liabilities assumed are recognized at their respective fair values as of the Acquisition date. The process of estimating the fair values of certain tangible assets, identifiable intangible assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates. During the measurement period which ended in September 2023, adjustments did not have a material impact on the Consolidated Statement of Income. The following table presents the final estimated fair values of Meggitt's assets acquired and liabilities assumed on the Acquisition date.

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			June 30, 2023 (previously reported)						Measurement Period Adjustments						September 12, 2022 (Final)
Assets:
Cash and cash equivalents			$	89,704					$	—					$	89,704
Accounts receivable			409,642						1,181						410,823
Inventories			739,304						13,580						752,884
Prepaid expenses and other			102,032						20,673						122,705
Property, plant and equipment, net			658,997						(1,428)						657,569
Deferred income taxes			34,198						(18,730)						15,468
Other assets			180,991						(647)						180,344
Intangible assets			5,679,200						(28,000)						5,651,200
Goodwill			2,789,080						10,891						2,799,971
Total assets acquired			$	10,683,148					$	(2,480)					$	10,680,668
Liabilities:
Notes payable and long-term debt payable within one year			$	308,176					$	—					$	308,176
Accounts payable, trade			219,842						(705)						219,137
Accrued payrolls and other compensation			87,074						(1)						87,073
Accrued domestic and foreign taxes			21,068						(818)						20,250
Other accrued liabilities			322,040						158,137						480,177
Long-term debt			711,703						—						711,703
Pensions and other postretirement benefits			99,553						(2,028)						97,525
Deferred income taxes			1,259,417						(19,700)						1,239,717
Other liabilities			418,461						(137,365)						281,096
Total liabilities assumed			3,447,334						(2,480)						3,444,854
Net assets acquired			$	7,235,814					$	—					$	7,235,814

Goodwill is calculated as the excess of the purchase price over the net assets acquired and represents cost synergies and enhancements to our existing technologies. For tax purposes, Meggitt's goodwill is not deductible. Based upon a final acquisition valuation, we acquired $4.2 billion of customer-related intangible assets, $1.1 billion of technology and $303 million of trade names, each with weighted-average estimated useful lives of 21, 22 and 18 years, respectively. These intangible assets were valued using the income approach, which includes significant assumptions around future revenue growth, earnings before interest, taxes, depreciation and amortization, royalty rates and discount rates. Such assumptions are classified as level 3 inputs within the fair value hierarchy.

Based upon a final acquisition valuation, the fair value of the assets acquired includes $115 million and $91 million of operating and finance lease right-of-use assets, respectively. The fair value of liabilities assumed includes $116 million and $90 million of operating and finance lease liabilities, respectively, of which, $18 million and $1 million of operating and finance lease liabilities, respectively, are current liabilities.

Debt assumed included $900 million aggregate principal amount of private placement notes with fixed interest rates ranging from 2.78 percent to 3.60 percent, and maturity dates ranging from July 2023 to July 2026. The private placement notes were recorded at fair value at acquisition. In October 2022, we paid off $300 million aggregate principal amount of private placement notes in two tranches pursuant to an offer to noteholders according to change in control provisions. In June 2023, the Company paid the remaining $600 million aggregate principal amount of private placement notes assumed in the Acquisition, which resulted in a $10 million charge recorded in interest expense in the Consolidated Statement of Income associated with the fair value discount.

Based upon a final acquisition valuation, we also assumed $142 million of liabilities associated with environmental matters. Approximately $102 million of environmental matters are included within other accrued liabilities, and the remainder is included within other liabilities in the Consolidated Balance Sheet. The environmental matters primarily relate to known exposures arising from environmental litigation, investigations and remediation of certain sites for which Meggitt has been identified as a potentially responsible party. The liabilities are based on outcomes of litigation and estimates of the level and timing of remediation costs, including the period of operating and monitoring activities required.

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Our consolidated financial statements for 2023 include the results of operations of Meggitt from the date of acquisition through June 30, 2023. Net sales and segment operating income attributable to Meggitt during 2023 were $2.1 billion and $23 million, respectively. Segment operating income attributable to Meggitt includes estimated amortization and depreciation expense associated with the preliminary fair value estimates of intangible assets, plant and equipment, inventory, as well as acquisition integration charges. Refer to Note 4 for further discussion of acquisition integration charges.

Acquisition-related transaction costs totaled $115 million in 2023. These costs are included in SG&A in the Consolidated Statement of Income.

The following table presents unaudited pro forma information for 2023 and 2022 as if the Acquisition had occurred on July 1, 2021.

(Unaudited)
															2023						2022
Net sales															$	19,446,524					$	17,911,409
Net income attributable to common shareholders															1,956,813						1,529,970

The historical consolidated financial information of Parker and Meggitt has been adjusted in the pro forma information in the table above to give effect to events that are directly attributable to the Acquisition and factually supportable. To reflect the occurrence of the Acquisition on July 1, 2021, the unaudited pro forma information includes adjustments for the amortization of the step-up of inventory to fair value and incremental depreciation and amortization expense resulting from the fair value adjustments to property, plant and equipment and intangible assets. These adjustments were based upon a preliminary purchase price allocation. Additionally, adjustments to financing costs and income tax expense were also made to reflect the capital structure and anticipated effective tax rate of the combined entity. Additionally, the pro forma information includes adjustments for non-recurring transactions directly related to the Acquisition, including the gain on the divestiture of the aircraft wheel and brake business, loss on deal-contingent forward contracts, and transaction costs. These non-recurring adjustments totaled $199 million and $654 million in 2023 and 2022, respectively. The resulting pro forma amounts are not necessarily indicative of the results that would have been obtained if the Acquisition had occurred as of the beginning of the period presented or that may occur in the future, and do not reflect future synergies, integration costs or other such costs or savings.

Divestitures

During December 2023, we divested our Filter Resources business, which was part of the Diversified Industrial Segment, for proceeds of $37 million. The resulting pre-tax gain of $12 million is included in gain on sale of businesses and assets, net in the Consolidated Statement of Income. The operating results and net assets of the Filter Resources business were immaterial to the Company's consolidated results of operations and financial position.

During September 2023, we divested the MicroStrain sensing systems business, which was part of the Diversified Industrial Segment, for proceeds of $37 million. The resulting pre-tax gain of $13 million is included in gain on sale of businesses and assets, net in the Consolidated Statement of Income. The operating results and net assets of the MicroStrain sensing systems business were immaterial to the Company's consolidated results of operations and financial position.

During March 2023, we divested a French aerospace business, which was part of the Aerospace Systems Segment, for proceeds of $27 million. The resulting pre-tax loss of $12 million is included in gain on sale of businesses and assets, net in the Consolidated Statement of Income. The operating results and net assets of the French aerospace business were immaterial to the Company's consolidated results of operations and financial position.

During September 2022, we divested our aircraft wheel and brake business, which was part of the Aerospace Systems Segment, for proceeds of $443 million. The resulting pre-tax gain of $374 million is included in gain on sale of businesses and assets, net in the Consolidated Statement of Income. The operating results and net assets of the aircraft wheel and brake business were immaterial to the Company's consolidated results of operations and financial position.

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4. Business Realignment and Acquisition Integration Charges

The Company incurred business realignment and acquisition integration charges in 2024, 2023 and 2022. Business realignment charges included severance costs related to actions taken under the Company's simplification initiative aimed at reducing organizational and process complexity, as well as plant closures. In 2024, 2023 and 2022, a majority of the business realignment charges were incurred in Europe. We believe the realignment actions will positively impact future results of operations but will not have a material effect on liquidity and sources and uses of capital.

Business realignment charges by business segment are as follows:

			2024						2023						2022
Diversified Industrial			$	50,075					$	23,641					$	13,787
Aerospace Systems			319						3,065						967
Other (income) expense, net			3,062						—						3

Workforce reductions in connection with such business realignment charges by business segment are as follows:

			2024						2023						2022
Diversified Industrial			1,064						728						300
Aerospace Systems			1						30						10

The business realignment charges are presented in the Consolidated Statement of Income as follows:

			2024						2023						2022
Cost of sales			$	29,585					$	15,993					$	5,007
Selling, general and administrative expenses			20,809						10,713						9,747
Loss (gain) on sale of businesses and assets, net			3,062						—						3

During 2024, approximately $49 million in payments were made relating to business realignment charges. Remaining payments related to current-year and prior-year business realignment actions of approximately $14 million, a majority of which are expected to be paid by December 31, 2024, are primarily reflected within the accrued payrolls and other compensation and other accrued liabilities captions in the Consolidated Balance Sheet. Additional charges may be recognized in future periods related to the business realignment and acquisition integration actions described above, the timing and amount of which are not known at this time.

In addition to the business realignment charges discussed above, in 2022, we incurred $20 million of expense as a result of our exit of business operations in Russia. These charges primarily consist of write-downs of inventory and other working capital items and $8 million of foreign currency translation expense reclassified from accumulated other comprehensive income. Within the business segment information in Note 19, $7 million of expense was recorded in other (income) expense, net while the remainder of the charge was split evenly between the Aerospace Systems Segment and the international businesses within the Diversified Industrial Segment.

We also incurred acquisition integration charges related to the Meggitt and Lord acquisitions. Charges by business segment are as follows:

			2024						2023						2022
Diversified Industrial			$	3,930					$	8,511					$	3,589
Aerospace Systems			34,343						86,928						1,177

In both 2024 and 2023, acquisition integration charges relate to the acquisition of Meggitt. In 2022, charges within the Diversified Industrial and Aerospace Systems Segment relate to the acquisitions of Lord and Meggitt, respectively. These charges were primarily included in selling, general and administrative expenses within the Consolidated Statement of Income.

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5. Income Taxes

Income before income taxes was derived from the following sources:

			2024						2023						2022
United States			$	2,120,257					$	1,408,206					$	646,364
Foreign			1,474,346						1,271,458						967,862
			$	3,594,603					$	2,679,664					$	1,614,226

Income taxes include the following:

			2024						2023						2022
Federal
Current			$	327,714					$	161,465					$	297,672
Deferred			10,595						81,426						(253,123)
Foreign
Current			355,374						297,199						303,089
Deferred			15,981						(13,509)						(45,977)
State and local
Current			34,103						45,599						48,479
Deferred			5,900						23,948						(52,100)
			$	749,667					$	596,128					$	298,040

A reconciliation of the effective income tax rate to the statutory federal rate follows:

			2024						2023						2022
Statutory federal income tax rate			21.0		%				21.0		%				21.0		%
State and local income taxes			0.9						2.1						(0.2)
Tax related to international activities			2.3						1.2						2.7
Cash surrender value of life insurance			(0.1)						(0.1)						0.5
Foreign derived intangible income deduction			(1.5)						(1.1)						(3.7)
Research tax credit			(0.6)						(0.7)						(0.8)
Share-based compensation			(1.2)						(1.0)						(1.3)
Other			0.1						0.8						0.3
Effective income tax rate			20.9		%				22.2		%				18.5		%

In December 2021, the Organization for Economic Cooperation and Development (OECD) published a framework, known as Pillar Two, defining a global minimum tax of 15 percent on large corporations. The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax. Several countries have proposed or enacted legislation to implement core elements of the Pillar Two proposal effective for years beginning after December 31, 2023, which for us is fiscal year 2025. While we are monitoring developments and evaluating the potential impact on future periods, we do not expect Pillar Two to have a significant impact on our 2025 consolidated financial statements. Future legislation and guidance may result in a change to our current assessment.

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Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of assets and liabilities. The differences comprising the net deferred taxes shown on the Consolidated Balance Sheet at June 30 were as follows:

			2024						2023
Retirement benefits			$	123,951					$	158,560
Other liabilities and reserves			213,866						240,821
Long-term contracts			45,279						37,747
Stock-based compensation			34,141						33,374
Loss carryforwards			1,063,837						1,083,732
Inventory			67,917						96,501
Capitalized research and development			145,697						92,191
Tax credit carryforwards			36,062						18,773
Unrealized currency exchange gains and losses			(18,302)						(1,680)
Undistributed foreign earnings			(30,468)						(21,304)
Depreciation and amortization			(2,103,689)						(2,228,606)
Valuation allowance			(1,069,510)						(1,078,354)
Net deferred tax (liability)			$	(1,491,219)					$	(1,568,245)
Change in net deferred tax (liability):
Provision for deferred tax			$	(32,476)					$	(91,865)
Items of other comprehensive (loss) income			(23,514)						(64,342)
Acquisitions and other			133,016						(1,215,579)
Total change in net deferred tax			$	77,026					$	(1,371,786)

As of June 30, 2024, we recorded deferred tax assets of $1,064 million resulting from $4,443 million in loss carryforwards. A valuation allowance of $1,039 million related to the loss carryforwards has been established due to the uncertainty of their realization. Of this valuation allowance, $1,021 million relates to non-operating entities whose loss carryforward utilization is considered to be remote. Some of the loss carryforwards can be carried forward indefinitely; others can be carried forward from three years to 20 years. In addition, a valuation allowance of $30 million related to other future deductible items has been established due to the uncertainty of their realization.

Although future distributions of foreign earnings to the United States should not be subject to U.S. federal income taxes, other U.S. or foreign taxes may be imposed on such earnings. We have analyzed existing factors and determined we will no longer permanently reinvest certain foreign earnings. On these undistributed foreign earnings of approximately $1,006 million that are no longer permanently reinvested outside of the United States, we have recorded a deferred tax liability of $14 million. The remaining undistributed foreign earnings of approximately $1,133 million remain permanently reinvested outside the United States at June 30, 2024. Of these undistributed earnings, we have recorded a deferred tax liability of $16 million where certain foreign holding companies are not permanently reinvested in their subsidiaries. It is not practicable to estimate the additional taxes, including applicable foreign withholding taxes, that might be payable on the potential distribution of such permanently reinvested foreign earnings.

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A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

			2024						2023						2022
Balance July 1			$	113,503					$	90,669					$	100,759
Additions for tax positions related to current year			6,479						9,389						7,039
Additions for tax positions of prior years			—						6,171						1,415
Additions for acquisitions			4,195						25,957						—
Reductions for tax positions of prior years			(4,869)						(3,063)						(140)
Reductions for settlements			—						(6,923)						(3,127)
Reductions for expiration of statute of limitations			(15,019)						(11,199)						(6,647)
Effect of foreign currency translation			(2,185)						2,502						(8,630)
Balance June 30			$	102,104					$	113,503					$	90,669

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $102 million, $114 million and $91 million as of June 30, 2024, 2023 and 2022, respectively. The accrued interest related to the gross unrecognized tax benefits, excluded from the amounts above, was $27 million, $21 million, and $18 million as of June 30, 2024, 2023 and 2022, respectively. The accrued penalties related to the gross unrecognized tax benefits, excluded from the amounts above, was $2 million as of both June 30, 2024 and 2023. There were no accrued penalties related to the gross unrecognized tax benefits as of June 30, 2022.

It is reasonably possible that, within the next 12 months, the amount of gross unrecognized tax benefits could be reduced by up to approximately $40 million as a result of the revaluation of existing uncertain tax positions arising from developments in the examination process or the closure of tax statutes. Any increase in the amount of unrecognized tax benefits within the next 12 months is expected to be insignificant.

We file income tax returns in the United States and in various foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world. We are open to assessment of our U.S. federal income tax returns by the Internal Revenue Service for years after 2013, and our state and local income tax returns for years after 2016. We are open to assessment for significant foreign jurisdictions for years after 2011.

6. Earnings Per Share

Basic earnings per share are computed using the weighted-average number of common shares outstanding during the year. Diluted earnings per share are computed using the weighted-average number of common shares and common share equivalents outstanding during the year. Common share equivalents represent the dilutive effect of outstanding equity-based awards. The reconciliation of the numerator and denominator of basic and diluted earnings per share was as follows:

			2024						2023						2022
Numerator:
Net income attributable to common shareholders			$	2,844,215					$	2,082,936					$	1,315,605
Denominator:
Basic - weighted-average common shares			128,507,352						128,367,842						128,539,387
Increase in weighted-average common shares from dilutive effect of equity-based awards			1,732,385						1,454,243						1,816,556
Diluted - weighted-average common shares, assuming exercise of equity-based awards			130,239,737						129,822,085						130,355,943
Basic earnings per share			$	22.13					$	16.23					$	10.24
Diluted earnings per share			$	21.84					$	16.04					$	10.09

For 2024, 2023 and 2022, 0.4 million, 1.0 million and 0.4 million common shares, respectively, subject to equity-based awards were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive.

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7. Inventories

Inventories are stated at the lower of cost or net realizable value using the first-in, first-out ("FIFO") method. Cost components include raw materials, purchased components, labor and overhead.

The inventories caption in the Consolidated Balance Sheet is comprised of the following components:

June 30,						2024						2023
Finished products						$	777,775					$	794,128
Work in process						1,421,104						1,488,665
Raw materials						587,921						625,086
Total						$	2,786,800					$	2,907,879

8. Supply Chain Financing

We have supply chain financing ("SCF") programs with financial intermediaries, which provide certain suppliers the option to be paid by the financial intermediaries earlier than the due date on the applicable invoice. We are not a party to the agreements between the participating financial intermediaries and the suppliers in connection with the programs. The range of payment terms we negotiate with our suppliers is consistent, irrespective of whether a supplier participates in the SCF programs. We do not reimburse suppliers for any costs they incur for participation in the SCF programs and their participation is voluntary.

Amounts due to our suppliers that elected to participate in the SCF programs are included in accounts payable, trade on the Consolidated Balance Sheet and payments made under the SCF programs are included within operating activities on the Consolidated Statement of Cash Flows. Accounts payable, trade included approximately $116 million and $85 million payable to suppliers who have elected to participate in the SCF programs as of June 30, 2024 and June 30, 2023, respectively. The amounts settled through the SCF programs and paid to the participating financial intermediaries totaled $331 million and $284 million during 2024 and 2023, respectively.

9. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill are as follows:

			Diversified Industrial Segment						Aerospace Systems Segment						Total
Balance June 30, 2022			$	7,185,981					$	554,101					$	7,740,082
Acquisitions			452,008						2,337,072						2,789,080
Divestitures			(1,064)						(2,232)						(3,296)
Foreign currency translation and other			45,830						56,898						102,728
Balance June 30, 2023			$	7,682,755					$	2,945,839					$	10,628,594
Acquisitions			1,113						9,778						10,891
Divestitures			(25,387)						—						(25,387)
Foreign currency translation and other			(51,052)						(55,613)						(106,665)
Balance June 30, 2024			$	7,607,429					$	2,900,004					$	10,507,433

Acquisitions represent goodwill resulting from the purchase price allocation for the Acquisition during the measurement period. Refer to Note 3 for further discussion.

Divestitures represent goodwill associated with the sale of businesses during 2024 and 2023.

Goodwill is tested for impairment at the reporting unit level annually and between annual tests whenever events or circumstances indicate that the carrying value of a reporting unit may exceed its fair value. Our annual impairment tests performed in 2024, 2023 and 2022 resulted in no impairment loss being recognized.

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Intangible assets are amortized on a straight-line method over their legal or estimated useful lives. The gross carrying value and accumulated amortization for each major category of intangible asset at June 30 are as follows:

			2024												2023
			Gross Carrying Amount						Accumulated Amortization						Gross Carrying Amount						Accumulated Amortization
Patents and technology			$	2,116,999					$	451,908					$	2,128,847					$	352,040
Trade names			1,041,633						441,382						1,047,678						390,737
Customer relationships and other			8,044,208						2,493,369						8,109,063						2,092,197
Total			$	11,202,840					$	3,386,659					$	11,285,588					$	2,834,974

Total intangible asset amortization expense in 2024, 2023 and 2022 was $578 million, $501 million and $314 million, respectively. The estimated intangible asset amortization expense for the five years ending June 30, 2025 through 2029 is $550 million, $550 million, $542 million, $534 million and $506 million, respectively.

Intangible assets are evaluated for impairment whenever events or circumstances indicate that the undiscounted net cash flows to be generated by their use over their expected useful lives and eventual disposition may be less than their net carrying value. No material intangible asset impairments occurred in 2024, 2023 or 2022.

10. Financing Arrangements

The Company has a line of credit totaling $3.0 billion through a multi-currency revolving credit agreement with a group of banks, of which $0.9 billion was available for borrowing as of June 30, 2024. The credit agreement expires June 2028; however, the Company has the right to request a one-year extension of the expiration date on an annual basis, which may result in changes to the current terms and conditions of the credit agreement. Advances from the credit agreement can be used for general corporate purposes, including acquisitions, and for the refinancing of existing indebtedness. The credit agreement supports our commercial paper program, and issuances of commercial paper reduce the amount of credit available under the agreement. The credit agreement requires the payment of an annual facility fee, the amount of which may increase in the event our credit ratings are lowered. Although a lowering of our credit ratings would likely increase the cost of future debt, it would not limit our ability to use the credit agreement nor would it accelerate the repayment of any outstanding borrowings.

The Company is currently authorized to sell up to $3.0 billion of short-term commercial paper notes. Commercial paper notes outstanding as of June 30, 2024 and 2023 were $2.1 billion and $1.8 billion, respectively. The Company had no outstanding borrowings from foreign banks at June 30, 2024 and 2023. The weighted-average interest rate on notes payable outstanding at June 30, 2024 and 2023 was 5.5 percent and 5.6 percent, respectively.

In the ordinary course of business, some of our locations may enter into financial guarantees through financial institutions which enable customers to be reimbursed in the event of nonperformance by the Company.

The Company's credit agreements and indentures governing certain debt agreements contain various covenants, the violation of which would limit or preclude the use of the applicable agreements for future borrowings, or might accelerate the maturity of the related outstanding borrowings covered by the applicable agreements. Based on our rating level at June 30, 2024, the most restrictive financial covenant provides that the ratio of debt to debt-shareholders' equity cannot exceed 0.65 to 1.0. As of June 30, 2024, our debt to debt-shareholders' equity ratio was 0.47 to 1.0. We are in compliance with all covenants.

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11. Debt

June 30,						2024						2023
Domestic:
Fixed rate medium-term notes, 3.30% to 6.25%, due 2025 - 2045						$	1,825,000					$	1,825,000
Senior Notes, 2.70% to 4.50%, due 2024 - 2049						5,300,000						7,275,000
Term Loan Facility, due 2026						490,000						875,000
Foreign:
Euro Senior Notes, 1.125%, due 2025						749,945						763,770
Other long-term debt						104,794						106,598
Deferred debt issuance costs						(57,725)						(74,713)
Total long-term debt						8,412,014						10,770,655
Less: Long-term debt payable within one year						1,254,980						1,974,371
Long-term debt, net						$	7,157,034					$	8,796,284

In September 2022, the Company fully drew against the $2.0 billion delayed-draw Term Loan Facility (the "Term Loan Facility"), which will mature in its entirety in September 2025. We used the proceeds of the Term Loan Facility to finance a portion of the Acquisition. At June 30, 2024, the Term Loan Facility had an interest rate of Secured Overnight Financing Rate plus 122.5 bps. Interest payments are made at the interest reset dates, which are either one, three, or six months at the discretion of the Company. Additionally, the provisions of the Term Loan Facility allow for prepayments at the Company's discretion. During 2024, we made principal payments totaling $385 million related to the Term Loan Facility. We also repaid in full $575 million and $1.4 billion aggregate principal amount of Senior Notes, with interest rates of 2.70 percent and 3.65 percent, respectively, which matured in 2024.

Principal amounts of long-term debt payable in the five years ending June 30, 2025 through 2029 are $1,261 million, $500 million, $710 million, $1,209 million and $1,009 million, respectively. The principal amounts of long-term debt payable exclude the amortization of debt issuance costs.

12. Leases

We primarily enter into lease agreements for office space, distribution centers, certain manufacturing facilities and equipment. Certain leases contain options that provide us with the ability to extend the lease term. Such options are included in the lease term when it is reasonably certain that the option will be exercised. When accounting for leases, we combine payments for leased assets, related services and other components of a lease. Payments within certain lease agreements are adjusted periodically for changes in an index or rate. In addition, leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheet.

The discount rate implicit within our leases is generally not determinable, and therefore we determine the discount rate based on our incremental borrowing rate. The incremental borrowing rate for our leases is determined based on lease term and the currency in which lease payments are made.

The components of lease expense are as follows:

			2024						2023						2022
Operating lease expense			$	67,562					$	60,411					$	46,026
Finance lease cost:
Amortization of lease assets			7,511						5,604						1,861
Interest on lease liabilities			5,338						4,383						390
Short-term lease cost			8,653						7,577						7,041
Variable lease cost			6,051						5,747						5,849
Total lease cost			$	95,115					$	83,722					$	61,167

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Supplemental cash flow information related to leases is as follows:

			2024						2023						2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows - payments on operating leases			$	65,286					$	57,717					$	45,371
Operating cash outflows - interest payments on finance leases			5,338						4,383						390
Financing cash outflows - payments on finance lease obligations			4,658						5,141						1,992
Right-of-use assets obtained in exchange for operating lease obligations			41,965						45,365						50,925
Right-of-use assets obtained in exchange for finance lease obligations			4,084						1,340						—

Supplemental balance sheet information related to operating leases is as follows:

			2024						2023
Operating Leases
Operating lease right-of-use assets (included within Investments and other assets)			$	225,952					$	232,733
Current operating lease liabilities (included within Other accrued liabilities)			$	54,158					$	50,523
Long-term operating lease liabilities (included within Other liabilities)			179,849						187,445
Total operating lease liabilities			$	234,007					$	237,968
Finance Leases
Buildings and building equipment			$	106,667					$	107,910
Machinery and equipment			9,298						5,113
Accumulated depreciation			(15,443)						(8,196)
Property, plant and equipment, net			$	100,522					$	104,827
Notes payable and long-term debt payable within one year			$	5,042					$	4,198
Long-term debt			98,343						100,889
Total finance lease liabilities			$	103,385					$	105,087
Weighted-average remaining lease term
Operating leases			6.4 years						6.9 years
Finance leases			19.5 years						20.8 years
Weighted-average discount rate
Operating leases			4.2		%				3.9		%
Finance leases			5.2		%				5.2		%

Maturities of lease liabilities at June 30, 2024 are as follows:

			Operating Leases						Finance Leases
2025			$	62,573					$	10,243
2026			50,428						10,164
2027			38,914						9,728
2028			29,243						8,851
2029			20,245						8,932
Thereafter			70,756						118,354
Total lease payments			$	272,159					$	166,272
Less imputed interest			38,152						62,887
Total lease liabilities			$	234,007					$	103,385

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13. Retirement Benefits

Pensions - The Company has noncontributory defined benefit pension plans covering eligible employees, including certain employees in foreign countries. Our largest plans are generally closed to new participants. Plans for most salaried employees provide pay-related benefits based on years of service. Plans for hourly employees generally provide benefits based on flat-dollar amounts and years of service. We also have arrangements for certain key employees, which provide for supplemental retirement benefits. In general, the Company's policy is to fund these plans based on legal requirements, tax considerations, local practices and investment opportunities. We also sponsor defined contribution plans and participate in government-sponsored programs in certain foreign countries. During 2023, we acquired several U.S. and Non-U.S. defined benefit pension plans in connection with the Acquisition.

A summary of the Company's defined benefit pension plans follows:

			U.S. Pension Benefits																		Non-U.S. Pension Benefits
			2024						2023						2022						2024						2023						2022
Benefit cost
Service cost			$	29,303					$	34,705					$	48,382					$	22,033					$	22,713					$	28,256
Interest cost			189,505						165,074						92,475						79,489						60,394						17,775
Expected return on plan assets			(257,531)						(237,704)						(227,302)						(95,147)						(73,441)						(40,586)
Amortization of prior service cost			907						536						3,500						369						395						603
Amortization of unrecognized actuarial loss			1,605						8,316						140,735						6,389						8,862						16,553
Amortization of transition obligation			—						—						—						—						—						8
One-time charges related to divestitures			—						—						—						—						(2,480)						—
Net periodic benefit cost			$	(36,211)					$	(29,073)					$	57,790					$	13,133					$	16,443					$	22,609

Components of net pension benefit cost, other than service cost, are included in other (income) expense, net in the Consolidated Statement of Income.

			U.S. Pension Benefits												Non-U.S. Pension Benefits
			2024						2023						2024						2023
Change in benefit obligation
Benefit obligation at beginning of year			$	4,007,740					$	3,939,482					$	1,827,951					$	1,019,837
Service cost			29,303						34,705						22,033						22,713
Interest cost			189,505						165,074						79,489						60,394
Acquisition			—						320,401						—						860,738
Plan amendments			16,656						2,521						—						—
Divestiture			—						—						—						(1,779)
Actuarial gain			(105,971)						(210,414)						(5,863)						(139,062)
Benefits paid			(414,054)						(244,029)						(81,028)						(68,729)
Foreign currency translation and other			—						—						(26,060)						73,839
Benefit obligation at end of year			$	3,723,179					$	4,007,740					$	1,816,522					$	1,827,951
Change in plan assets
Fair value of plan assets at beginning of year			$	3,548,112					$	3,353,420					1,907,183						1,008,733
Actual gain (loss) on plan assets			179,145						161,568						97,737						(130,169)
Acquisition			—						263,927						—						876,780
Employer contributions			49,888						13,226						105,273						139,812
Benefits paid			(414,054)						(244,029)						(81,028)						(68,729)
Foreign currency translation and other			—						—						(26,149)						80,756
Fair value of plan assets at end of year			$	3,363,091					$	3,548,112					$	2,003,016					$	1,907,183
Funded status			$	(360,088)					$	(459,628)					$	186,494					$	79,232

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			U.S. Pension Benefits												Non-U.S. Pension Benefits
			2024						2023						2024						2023
Amounts recognized on the Consolidated Balance Sheet****1
Investments and other assets			$	—					$	—					$	243,783					$	145,809
Other accrued liabilities			(62,967)						(57,023)						(832)						(760)
Pensions and other postretirement benefits			(297,121)						(402,605)						(56,457)						(65,817)
Net amount recognized			$	(360,088)					$	(459,628)					$	186,494					$	79,232
**Amounts recognized in Accumulated Other Comprehensive (Loss)**1
Net actuarial loss			$	315,206					$	344,395					$	232,967					$	249,542
Prior service cost			20,259						4,511						1,619						1,978
Net amount recognized			$	335,465					$	348,906					$	234,586					$	251,520

1The presentation of the amounts recognized on the Consolidated Balance Sheet and in accumulated other comprehensive (loss) is on a debit (credit) basis and excludes the effect of income taxes.

As of the date of the Acquisition, the Meggitt plans were remeasured at fair value using accounting policies consistent with Parker plans.

At June 30, 2024, the U.S. benefit obligation decreased primarily due to higher discount rates. The Non-U.S. benefit obligation decreased slightly at June 30, 2024, primarily due to benefit payments and foreign currency translation, partially offset by service cost and interest cost related increases. At June 30, 2023, both the U.S. and Non-U.S. benefit obligations increased primarily due to plans acquired with the Acquisition, partially offset by increased discount rates.

In 2024, the predominant drivers of the decrease in U.S. plan assets are lump sum benefit payments and lower than expected actual return on assets. Contributions are the largest factor explaining the increase in Non-U.S. plan assets during 2024. The plans acquired with the Acquisition are the primary contributing factor for the increase in U.S. and Non-U.S. plan assets fair value during 2023.

The accumulated benefit obligation for all defined benefit plans was $5.4 billion and $5.7 billion at June 30, 2024 and 2023, respectively.

Information for pension plans with accumulated benefit obligations in excess of plan assets:

			2024						2023
Accumulated benefit obligation			$	3,778,330					$	4,352,952
Fair value of plan assets			3,502,313						3,955,284

Information for pension plans with projected benefit obligations in excess of plan assets:

			2024						2023
Projected benefit obligation			$	4,211,478					$	4,545,650
Fair value of plan assets			3,794,100						4,019,445

We expect to make cash contributions of approximately $141 million to our defined benefit pension plans in 2025, of which $63 million and $78 million relate to U.S. and non-U.S. plans, respectively.

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The following benefit payments are expected to be paid during each respective year:

			Estimated U.S. Benefit Payments						Estimated Non-U.S. Benefit Payments
2025			$	320,196					$	90,611
2026			271,372						94,139
2027			275,091						96,586
2028			275,915						98,000
2029			285,845						101,622
2030 - 2034			1,401,115						531,742

The assumptions used to measure net periodic benefit cost for the Company's defined benefit plans are:

			2024						2023						2022
U.S. defined benefit plan
Discount rate			4.88		%				4.36		%				2.55		%
Average increase in compensation			3.81		%				3.35		%				3.05		%
Expected return on plan assets			7.00		%				6.50		%				6.50		%
Non-U.S. defined benefit plans
Discount rate			0.90% to 5.20%						0.60% to 5.06%						0.25% to 2.95%
Average increase in compensation			2.00% to 4.40%						1.75% to 4.00%						1.75% to 4.50%
Expected return on plan assets			0.30% to 6.80%						1.00% to 5.10%						1.00% to 4.50%

The assumptions used to measure the benefit obligation for the Company's defined benefit plans are:

			2024						2023
U.S. defined benefit plan
Discount rate			5.27		%				4.88		%
Average increase in compensation			3.76		%				3.81		%
Non-U.S. defined benefit plans
Discount rate			1.46% to 5.23%						0.90% to 5.20%
Average increase in compensation			2.00% to 4.50%						2.00% to 4.40%

The discount rate assumption is based on current rates of high-quality, long-term corporate bonds over the same estimated time period that benefit payments will be required to be made. The expected return on plan assets assumption is based on the weighted-average expected return of the various asset classes in the plans' portfolio. The asset class return is developed using historical asset return performance as well as current market conditions such as inflation, interest rates and equity market performance.

The weighted-average allocation of the majority of the assets related to the defined benefit plans is as follows:

			2024						2023
Equity securities			26		%				30		%
Debt securities			49		%				45		%
Other investments			25		%				25		%
			100		%				100		%

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The weighted-average target asset allocation as of June 30, 2024 is 36 percent equity securities, 48 percent debt securities and 16 percent other investments. The investment strategy for the Company's worldwide defined benefit pension plan assets focuses on achieving prudent actuarial funding ratios while maintaining acceptable levels of risk in order to provide adequate liquidity to meet immediate and future benefit requirements. This strategy requires investment portfolios that are broadly diversified across various asset classes and external investment managers. Assets held in the U.S. and U.K. defined benefit plans account for 63 percent and 24 percent, respectively, of our total defined benefit plan assets. The overall investment strategy with respect to our U.S. defined benefit plan is to use a funding strategy more heavily weighted toward liability-hedging assets as the funded status improves. Over time, we will continue to add long duration fixed income investments to the portfolio. These securities are highly correlated with our pension liabilities and will be managed in a liability framework. For the U.K. defined benefit plans, the overall investment strategy is primarily to utilize growth assets to achieve a return in excess of the risk-free rate and to utilize fixed income investments to achieve a rate of return that is at least commensurate with the changes in the cost of providing fixed and index-linked annuities.

The fair values of pension plan assets at June 30, 2024 and at June 30, 2023, by asset class, are as follows:

			June 30, 2024						Quoted Prices In Active Markets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Cash and cash equivalents			$	454,659					$	448,510					$	6,149					$	—
Equity securities
U.S. based companies			679,972						679,972						—						—
Non-U.S. based companies			144,760						85,692						59,068						—
Fixed income securities
Corporate debt securities			933,191						28,790						904,401						—
Government issued securities			809,892						556,599						253,293						—
Mutual funds
Equity funds			12,494						12,494						—						—
Mutual funds measured at net asset value			331,215
Common/Collective trusts measured at net asset value			1,561,752
Limited Partnerships measured at net asset value			125,695
Other financial instruments			312,477						12,717						299,760						—
Total at June 30, 2024			$	5,366,107					$	1,824,774					$	1,522,671					$	—

			June 30, 2023						Quoted Prices In Active Markets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Cash and cash equivalents			$	341,812					$	333,978					$	7,834					$	—
Equity securities
U.S. based companies			538,118						523,649						14,469						—
Non-U.S. based companies			152,354						76,173						76,181						—
Fixed income securities
Corporate debt securities			464,056						118,536						345,520						—
Government issued securities			610,326						570,368						39,958						—
Mutual funds
Equity funds			11,406						11,406						—						—
Fixed income funds			357						357						—						—
Mutual funds measured at net asset value			264,346
Common/Collective trusts measured at net asset value			2,626,832
Limited Partnerships measured at net asset value			137,077
Other financial instruments			308,610						—						308,610						—
Total at June 30, 2023			$	5,455,294					$	1,634,467					$	792,572					$	—

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Cash and cash equivalents are valued at cost, which approximates fair value. The U.S. defined benefit plan uses a liability-hedging initiative that requires the plan to maintain a certain cash balance. At June 30, 2024, this required cash balance totaled approximately $51 million.

Equity securities are valued at the closing price reported on the active market on which the individual securities are traded. U.S. based companies include Parker stock with a fair value of $672 million and $519 million as of June 30, 2024 and 2023, respectively.

Fixed income securities are valued using both market observable inputs for similar assets that are traded on an active market and the closing price on the active market on which the individual securities are traded.

Mutual funds are valued using the closing market price reported on the active market on which the fund is traded or at net asset value per share and primarily consist of equity and fixed income funds. The equity funds primarily provide exposure to U.S. and international equities, real estate and commodities. The fixed income funds primarily provide exposure to high-yield securities and emerging market fixed income instruments. Mutual funds measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are presented in the tables above to permit reconciliation of the fair value hierarchy to total pension plan assets. Redemption of a certain mutual fund is subject to a lock-up period, lasting throughout its duration, scheduled to terminate July 2026. However, this mutual fund may extend its duration up to an additional two years under certain conditions.

Common/Collective trusts primarily consist of equity, fixed income and real estate funds and are valued using the closing market price reported on the active market on which the fund is traded or at net asset value per share. Common/Collective trust investments can be redeemed without restriction after giving appropriate notice to the issuer. Generally, redemption of the entire investment balance of all common/collective trusts requires no more than a 90-day notice period. The equity funds provide exposure to large, mid and small cap U.S. equities, international large and small cap equities and emerging market equities. The fixed income funds provide exposure to U.S., international and emerging market debt securities. Common/Collective trusts measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are presented in the tables above to permit reconciliation of the fair value hierarchy to total pension plan assets.

Limited Partnerships' interest in venture capital investments are measured at fair value based on net asset value as determined by the respective fund investment. A certain limited partnership investment is restricted to a maximum redemption of 20 percent of its account balance every six months upon a 90-day notification period. Limited Partnerships measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy and are presented in the tables above to permit reconciliation of the fair value hierarchy to total pension plan assets.

Other financial instruments primarily include insurance contracts within the Non-U.S. pension plans' asset portfolio, as well as derivative instruments associated with our liability hedging strategies. Insurance contracts are valued at the present value of future cash flows promised under the terms of the insurance contracts. Derivative instruments are valued based on the closing prices of contracts or market observable inputs. Other financial instruments also include net payables for securities purchased but not settled associated with the U.S. pension plan asset portfolio.

The primary investment objective of equity securities and equity funds, within both the mutual fund and common/collective trust asset class, is to obtain capital appreciation in an amount that at least equals various market-based benchmarks. The primary investment objective of fixed income securities and fixed income funds, within both the mutual fund and common/collective trust asset class, is to provide for a constant stream of income while preserving capital. The primary investment objective of limited partnerships is to achieve capital appreciation through an investment program focused on specialized investment strategies. The primary investment objective of the investments in the other financial instruments category is to provide a stable rate of return over a specified period of time and execute the liability hedging strategies.

Employee Savings Plan - We sponsor an employee stock ownership plan ("ESOP") as part of our legacy savings and investment 401(k) plan. The ESOP is available to eligible domestic employees. Effective January 1, 2022, the Company matching contributions were increased, up to a maximum of five percent of eligible compensation from the previous maximum of four percent of eligible compensation. These contributions are recorded as compensation expense. Participants may direct company matching contributions to any investment option within the savings and investment 401(k) plan.

			2024						2023						2022
Shares held by ESOP			3,422,781						3,779,985						4,125,214
Company matching contributions			$	116,867					$	104,237					$	87,554

In addition to shares within the ESOP, as of June 30, 2024, employees have elected to invest in 1,081,148 shares of common stock within a company stock fund of the savings and investment 401(k) plan.

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The Company has a retirement income account ("RIA") within our legacy savings and investment 401(k) plan. We make a cash contribution to the participant's RIA each year. Most participants receive a flat three percent annual contribution of eligible compensation, with some grandfathered participants receiving annual contributions calculated at a higher percent of eligible compensation. No participant receives less than the flat three percent contribution. Participants do not contribute to the RIA. The Company recognized $77 million, $63 million and $57 million in expense related to the RIA in 2024, 2023 and 2022, respectively.

In September 2022, we acquired several defined contribution plans relating to the Meggitt acquisition, which were comprised of similar company matching contributions and RIA features as our legacy plan. During 2023, we recorded additional company matching expense of $9 million and additional RIA type expense of $11 million for the acquired plans. These plans were merged into our legacy savings and investment 401(k) plan during 2024.

Other Postretirement Benefits - The Company provides postretirement medical and life insurance benefits to certain retirees and eligible dependents. Most plans are contributory, with retiree contributions adjusted annually. The plans are unfunded and pay stated percentages of covered medically necessary expenses incurred by retirees after subtracting payments by Medicare or other providers and after stated deductibles have been met. For most plans, the Company has established cost maximums to more effectively control future medical costs. We have reserved the right to change these benefit plans. During 2023, we acquired postretirement medical and life insurance plans in connection with the Acquisition.

The Company recognized $2 million, $2 million and $1 million in expense related to other postretirement benefits in 2024, 2023 and 2022, respectively. Components of net other postretirement benefit cost, other than service cost, are included in other (income) expense, net in the Consolidated Statement of Income.

			2024						2023
Change in benefit obligation
Benefit obligation at beginning of year			$	78,567					$	48,876
Service cost			279						330
Interest cost			3,571						3,004
Acquisition			—						39,112
Actuarial gain			(3,952)						(4,403)
Benefits paid			(7,057)						(8,352)
Benefit obligation at end of year			$	71,408					$	78,567
Funded status			$	(71,408)					$	(78,567)

Amounts recognized on the Consolidated Balance Sheet****1
Other accrued liabilities			$	(7,173)					$	(7,831)
Pensions and other postretirement benefits			(64,235)						(70,736)
Net amount recognized			$	(71,408)					$	(78,567)
**Amounts recognized in Accumulated Other Comprehensive (Loss)**1
Net actuarial gain			$	(20,155)					$	(17,952)

1The presentation of the amounts recognized on the Consolidated Balance Sheet and in accumulated other comprehensive (loss) is on a debit (credit) basis and is before the effect of income taxes.

As of the date of the Acquisition, the Meggitt plans were remeasured at fair value using accounting policies consistent with Parker plans.

The decrease in the benefit obligation in 2024 is due to higher discount rates, partially offset by a loss from updated medical rate trends. The increase in the benefit obligation in 2023 is due to the Acquisition.

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The assumptions used to measure the net periodic benefit cost for postretirement benefit obligations are:

			2024						2023						2022
Discount rate			4.86		%				4.26		%				2.36		%
Current medical cost trend rate (Pre-65 participants)			7.85		%				6.73		%				6.45		%
Current medical cost trend rate (Post-65 participants)			8.18		%				6.81		%				6.72		%
Ultimate medical cost trend rate			4.50		%				4.50		%				4.50		%
Medical cost trend rate decreases to ultimate in year			2033						2031						2029

The discount rate assumption used to measure the benefit obligation was 5.23 percent and 4.86 percent in 2024 and 2023, respectively.

Estimated future benefit payments for other postretirement benefits are as follows:

2025			$	7,173
2026			6,942
2027			6,740
2028			6,495
2029			6,223
2030 - 2034			27,418

Other - The Company has established nonqualified deferred compensation programs, which permit officers, directors and certain management employees to annually elect to defer a portion of their compensation, on a pre-tax basis, until their retirement. The retirement benefit to be provided is based on the amount of compensation deferred, company matching contributions and earnings on the deferrals. In addition, we maintain a defined contribution nonqualified supplemental executive pension plan in which the Company is the only contributor. During 2024, 2023 and 2022, we recorded expense (income) relating to these programs of $23 million, $20 million and $(21) million, respectively.

The Company has invested in corporate-owned life insurance policies to assist in meeting the obligations under these programs. The policies are held in a rabbi trust and are recorded as assets of the Company.

14. Equity

Changes in accumulated other comprehensive (loss) in shareholders' equity by component:

			Foreign Currency Translation Adjustment and Other						Retirement Benefit Plans						Total
Balance June 30, 2022			$	(1,149,071)					$	(394,127)					$	(1,543,198)
Other comprehensive income before reclassifications			187,027						53,172						240,199
Amounts reclassified from accumulated other comprehensive (loss)			—						10,127						10,127
Balance June 30, 2023			$	(962,044)					$	(330,828)					$	(1,292,872)
Other comprehensive (loss) income before reclassifications			(167,953)						17,217						(150,736)
Amounts reclassified from accumulated other comprehensive (loss)			—						5,596						5,596
Balance June 30, 2024			$	(1,129,997)					$	(308,015)					$	(1,438,012)

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Significant reclassifications out of accumulated other comprehensive (loss) in shareholders' equity during 2024:

Details about Accumulated Other Comprehensive (Loss) Components						Income (Expense) Reclassified from Accumulated Other Comprehensive (Loss)						Consolidated Statement of Income Classification
Retirement benefit plans
Amortization of prior service cost and initial net obligation						$	(1,277)					Other (income) expense, net
Recognized actuarial loss						(6,245)						Other (income) expense, net
Total before tax						(7,522)
Tax benefit						1,926
Net of tax						$	(5,596)

Significant reclassifications out of accumulated other comprehensive (loss) in shareholders' equity during 2023:

Details about Accumulated Other Comprehensive (Loss) Components						Income (Expense) Reclassified from Accumulated Other Comprehensive (Loss)						Consolidated Statement of Income Classification
Retirement benefit plans
Amortization of prior service cost and initial net obligation						$	(931)					Other (income) expense, net
Recognized actuarial loss						(15,573)						Other (income) expense, net
Divestiture activity						2,480						Other (income) expense, net
Total before tax						(14,024)
Tax benefit						3,897
Net of tax						$	(10,127)

Share Repurchases - The Company has a program to repurchase its common shares. On October 22, 2014, the Board of Directors of the Company approved an increase in the overall number of shares authorized to repurchase under the program so that, beginning on such date, the aggregate number of shares authorized for repurchase was 35 million. There is no limitation on the number of shares that can be repurchased in a year. Repurchases may be funded primarily from operating cash flows and commercial paper borrowings and the shares are initially held as treasury shares.

The number of common shares repurchased at the average purchase price follows:

			2024						2023						2022
Shares repurchased			438,229						663,599						1,281,818
Average price per share, including commissions			$	456.38					$	301.39					$	296.71

15. Stock Incentive Plans

The Company's 2023 Omnibus Stock Incentive Plan ("2023 SIP") provides for the granting of share-based incentive awards in the form of nonqualified stock options, stock appreciation rights ("SARs"), restricted stock units ("RSUs") and restricted and unrestricted stock to officers and key employees of the Company. The aggregate number of shares of common stock authorized for issuance under the 2023 SIP is 11.3 million. At June 30, 2024, 8.5 million common stock shares were available for future issuance. Effective as of October 25, 2023, no further awards may be granted under the Amended and Restated 2016 Omnibus Stock Incentive Plan.

We satisfy share-based incentive award obligations by issuing shares of common stock out of treasury, which have been repurchased pursuant to our share repurchase program described in Note 14, or through the issuance of previously unissued common stock.

SARs - Upon exercise, SARs entitle the participant to receive shares of common stock equal to the increase in value of the award between the grant date and the exercise date. SARs are exercisable from one to three years after the date of grant and expire no more than 10 years after grant.

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The fair value of each SAR award granted in 2024, 2023 and 2022 was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:

			2024						2023						2022
Risk-free interest rate			4.4		%				3.0		%				0.8		%
Expected life of award			5.5 years						5.6 years						5.6 years
Expected dividend yield of stock			1.8		%				1.8		%				1.9		%
Expected volatility of stock			39.0		%				37.1		%				35.7		%
Weighted-average fair value			$	146.72					$	97.70					$	81.71

The risk-free interest rate was based on U.S. Treasury yields with a term similar to the expected life of the award. The expected life of the award was derived by referring to actual exercise and post-vesting employment termination experience. The expected dividend yield was based on our historical dividend rate and stock price over a period similar to the expected life of the award. The expected volatility of stock was derived by referring to changes in our historical common stock prices over a time-frame similar to the expected life of the award.

SAR activity during 2024 is as follows (aggregate intrinsic value in millions):

			Number of Shares						Weighted-Average Exercise Price						Weighted-Average Remaining Contractual Term						Aggregate Intrinsic Value
Outstanding June 30, 2023			3,873,429						$	199.08
Granted			519,305						$	406.18
Exercised			(877,243)						$	162.31
Canceled			(20,708)						$	355.27
Outstanding June 30, 2024			3,494,783						$	238.15					5.96 years						$	935.4
Exercisable June 30, 2024			2,444,988						$	189.92					4.89 years						$	772.3

A summary of the status and changes of shares subject to SAR awards and the related average price per share follows:

			Number of Shares						Weighted-Average Grant Date Fair Value
Nonvested June 30, 2023			1,136,093						$	84.36
Granted			519,305						$	146.66
Vested			(584,895)						$	76.14
Canceled			(20,708)						$	120.19
Nonvested June 30, 2024			1,049,795						$	119.05

During 2024, 2023 and 2022, we recognized stock-based compensation expense of $65 million, $51 million and $37 million, respectively, relating to SAR awards. The Company derives a tax deduction measured by the excess of the market value over the grant price at the date stock-based awards are exercised. The related income tax benefit was credited to income tax expense.

At June 30, 2024, $26 million of expense with respect to nonvested SAR awards has yet to be recognized and will be amortized into expense over a weighted-average period of approximately 23 months. The total fair value of shares vested during 2024, 2023 and 2022 was $45 million, $34 million and $29 million, respectively.

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Information related to SAR awards exercised during 2024, 2023 and 2022 is as follows:

			2024						2023						2022
Net cash proceeds			$	3,606					$	3,476					$	2,831
Intrinsic value			$	269,535					$	158,452					$	97,002
Income tax benefit			$	44,453					$	26,854					$	15,845
Number of shares surrendered			177,707						152,835						98,673

RSUs - RSUs constitute an agreement to deliver shares of common stock to the participant at the end of a vesting period. Generally, the RSUs granted to employees vest, and the underlying stock is issued ratably, over a three-year graded vesting period. Nonvested RSUs may not be transferred and do not have dividend or voting rights. For each nonvested RSU, recipients are entitled to receive a dividend equivalent, payable in cash or common shares, equal to the cash dividend per share paid to common shareholders.

The fair value of each RSU award granted in 2024, 2023 and 2022 was based on the fair market value of our common stock on the date of grant. A summary of the status and changes of shares subject to RSU awards for employees and the related average price per share follows:

			Number of Shares						Weighted-Average Grant Date Fair Value
Nonvested June 30, 2023			205,521						$	278.88
Granted			84,008						$	403.27
Vested			(105,855)						$	263.14
Canceled			(5,855)						$	344.65
Nonvested June 30, 2024			177,819						$	344.85

During 2024, 2023 and 2022, we recognized stock-based compensation expense of $30 million, $27 million and $26 million, respectively, relating to RSU awards for employees. At June 30, 2024, $19 million of expense with respect to nonvested RSU awards has yet to be recognized and will be amortized into expense over a weighted-average period of approximately 23 months. The total fair value of RSU awards vested during 2024, 2023 and 2022 was $28 million, $30 million and $26 million, respectively. We recognized an income tax benefit of $3 million, $2 million and $4 million relating to the issuance of common stock for RSU awards that vested during 2024, 2023 and 2022, respectively.

Additionally, we granted RSUs with a one-year vesting period to non-employee members of the Board of Directors. Recipients receive a dividend equivalent payable in common shares, equal to the cash dividend per share paid to common shareholders. A summary of the status and changes of shares subject to Board of Directors RSU awards and the related average price per share follows:

			Number of Shares						Weighted-Average Grant Date Fair Value
Nonvested June 30, 2023			6,225						$	278.90
Granted			4,658						$	367.97
Vested			(6,244)						$	278.90
Nonvested June 30, 2024			4,639						$	368.34

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The fair value of each RSU award granted to the Board of Directors in 2024, 2023 and 2022 was based on the fair market value of our common stock on the date of grant. In 2024, 2023 and 2022, we recognized stock-based compensation expense of $1.7 million, $1.9 million and $1.8 million, respectively, relating to these awards. During 2024, 2023 and 2022, we recognized an income tax benefit (cost) of $0.1 million, $(0.02) million and $0.2 million, respectively, related to the vesting of Board of Directors RSU awards. At June 30, 2024, $0.4 million of expense with respect to nonvested RSU awards granted to the Board of Directors has yet to be recognized and will be amortized into expense over a weighted-average period of approximately three months.

LTIP - The Company's Long Term Incentive Plans ("LTIP") provide for the issuance of unrestricted stock to certain officers and key employees based on the attainment of certain goals relating to our revenue growth, earnings per share growth and return on invested capital during the three-year performance period.

Stock issued and surrendered for LTIP						2024						2023						2022
LTIP three-year plan						2021-22-23						2020-21-22						2019-20-21
Number of shares issued						122,837						204,175						251,783
Number of shares surrendered						64,340						102,120						124,007
Share value on date of issuance						$	546.26					$	311.65					$	271.38
Total value of shares issued						$	67,102					$	63,631					$	68,329

Under the Company's 2022-23-24 LTIP, a payout of unrestricted stock will be issued in April 2025.

The fair value of each LTIP award granted in 2024, 2023 and 2022 was based on the fair market value of our common stock on the date of grant. These nonvested LTIP awards entitle participants to earn a dividend equivalent unit, payable in common shares, equal to the cash dividend per share paid to common shareholders. These dividend equivalent units do not have dividend or voting rights and are subject to the same performance goals as the initial award granted. A summary of shares relating to the LTIP and the related average price per share follows:

			Number of Shares						Weighted-Average Grant Date Fair Value
Nonvested June 30, 2023			392,607						$	292.32
Granted			149,988						$	380.97
Vested			(187,177)						$	249.97
Canceled			(7,841)						$	329.54
Nonvested June 30, 2024			347,577						$	350.75

During 2024, 2023 and 2022, we recorded stock-based compensation expense of $59 million, $63 million and $72 million, respectively, relating to the LTIP. During 2024, 2023 and 2022, we recognized an income tax benefit of $5 million, $4 million and $5 million, respectively, relating to the LTIP.

16. Research and Development

Independent research and development costs amounted to $253 million in 2024, $258 million in 2023 and $191 million in 2022. Pre-production expense incurred in connection with development contracts amounted to $45 million in 2024, $73 million in 2023 and $74 million in 2022.

17. Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, marketable securities and other investments, accounts receivable and long-term investments, as well as obligations under accounts payable, trade, notes payable and long-term debt. Due to their short-term nature, the carrying values for cash and cash equivalents, accounts receivable, accounts payable, trade and notes payable approximate fair value. Marketable securities and other investments include deposits, which are recorded at cost.

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The carrying value of long-term debt, which excludes the impact of net unamortized debt issuance costs, and estimated fair value of long-term debt at June 30 are as follows:

						2024						2023
Carrying value of long-term debt						$	8,469,739					$	10,845,359
Estimated fair value of long-term debt						7,884,556						10,221,563

The fair value of long-term debt is classified within level 2 of the fair value hierarchy.

The Company utilizes derivative and non-derivative financial instruments, including forward exchange contracts, costless collar contracts, cross-currency swap contracts and certain foreign currency denominated debt designated as net investment hedges, to manage foreign currency transaction and translation risk. Additionally, we acquired forward exchange contracts and cross-currency swap contracts in connection with the Acquisition. The derivative financial instrument contracts are with major investment grade financial institutions, and the Company does not anticipate any material non-performance by any of the counterparties. The Company does not hold or issue derivative financial instruments for trading purposes.

The Company’s €700 million aggregate principal amount of Senior Notes due 2025 have been designated as a hedge of the Company’s net investment in certain foreign subsidiaries. The effect of translating the Senior Notes due 2025 into U.S. dollars is recorded in accumulated other comprehensive (loss) and remains there until the underlying net investment is sold or substantially liquidated.

In connection with the Acquisition, the Company entered into deal-contingent forward contracts during October 2021 to mitigate the risk of appreciation in the GBP-denominated purchase price. The deal-contingent forward contracts had an aggregate notional amount of £6.4 billion, and were settled in September 2022 in connection with the Acquisition. In June 2022, we amended the agreement to include a credit support annex ("CSA") obligating Parker to post $250 million of cash collateral. In July 2022, the Company received the $250 million cash collateral previously posted. Cash flows associated with the cash collateral are recorded in cash flow from investing activities on the Consolidated Statement of Cash Flows.

Derivative financial instruments are recognized on the Consolidated Balance Sheet as either assets or liabilities and are measured at fair value.

The location and fair value of derivative financial instruments reported on the Consolidated Balance Sheet are as follows:

			Balance Sheet Caption						2024						2023
Net investment hedges
Cross-currency swap contracts			Investments and other assets						$	16,325					$	21,578
Cross-currency swap contracts			Other liabilities						208						—
Other derivative contracts
Forward exchange contracts			Non-trade and notes receivable						7,625						—
Forward exchange contracts			Other accrued liabilities						72						—

The cross-currency swap and forward exchange contracts are reflected on a gross basis in the Consolidated Balance Sheet. The Company has not entered into any master netting arrangements.

The €69 million, €290 million and ¥2.1 billion cross-currency swap contracts have been designated as hedging instruments. The forward exchange, deal-contingent forward and costless collar contracts, as well as cross-currency swap contracts acquired as part of the Acquisition, have not been designated as hedging instruments and are considered to be economic hedges of forecasted transactions.

The forward exchange, costless collar, and deal-contingent forward contracts, as well as the cross-currency swap contracts acquired as part of the Acquisition, are adjusted to fair value by recording gains and losses through the other (income) expense, net caption in the Consolidated Statement of Income.

Derivatives designated as hedges are adjusted to fair value by recording gains and losses through accumulated other comprehensive (loss) on the Consolidated Balance Sheet until the hedged item is recognized in earnings. We assess the effectiveness of the €69 million, €290 million and ¥2.1 billion cross-currency swap hedging instruments using the spot method. Under this method, the periodic interest settlements are recognized directly in earnings through interest expense.

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Gains (losses) on derivative financial instruments were recorded in the Consolidated Statement of Income as follows:

			2024						2023						2022
Deal-contingent forward contracts			$	—					$	(389,992)					$	(1,015,426)
Forward exchange contracts			11,096						(7,259)						55,860
Costless collar contracts			—						11,528						(4,364)
Cross-currency swap contracts			—						(18,739)						—

Gains (losses) on derivative and non-derivative financial instruments that were recorded in accumulated other comprehensive (loss) in the Consolidated Balance Sheet are as follows:

			2024						2023
Cross-currency swap contracts			$	(4,122)					$	451
Foreign currency denominated debt			10,455						(22,534)

During 2024, 2023, and 2022, the periodic interest settlements related to the cross-currency swaps were not material.

A summary of financial assets and liabilities that were measured at fair value on a recurring basis at June 30, 2024 and 2023 are as follows:

						June 30, 2024						Quoted Prices In Active Markets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Assets:
Derivatives						$	23,950					$	—					$	23,950					$	—
Liabilities:
Derivatives						280						—						280						—

						June 30, 2023						Quoted Prices In Active Markets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
Assets:
Derivatives						$	21,578					$	—					$	21,578					$	—

Derivatives consist of forward exchange and cross-currency swap contracts, the fair values of which are calculated using market observable inputs including both spot and forward prices for the same underlying currencies. The calculation of fair value of the cross-currency swap contracts also utilizes a present value cash flow model.

The primary investment objective for all derivatives is to manage foreign currency transaction and translation risk.

There are no other financial assets or financial liabilities that are marked to market on a recurring basis.

18. Contingencies

The Company is involved in various litigation matters arising in the normal course of business, including proceedings based on product liability claims, workers' compensation claims, employee claims, class action lawsuits, and alleged violations of various environmental laws. We are self-insured in the United States for health care, workers' compensation, general liability and product liability up to predetermined amounts, above which third-party insurance applies. Management regularly reviews the probable outcome of these proceedings, the expenses expected to be incurred, the availability and limits of the insurance coverage and the established accruals for liabilities. While the outcome of pending proceedings cannot be predicted with certainty, management believes that any liabilities that may result from these proceedings will not have a material adverse effect on our liquidity, financial condition or results of operations.

Environmental - We are currently responsible for environmental matters primarily relating to known exposures arising from environmental litigation, investigations, and remediation at various manufacturing facilities presently or formerly operated by Parker and for which we have been named as a “potentially responsible party,” along with other companies, at off-site waste disposal facilities and regional sites.

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As of June 30, 2024, we had an accrual of $85.9 million for environmental matters, which are probable and reasonably estimable. The accrual is recorded based upon the best estimate of costs to be incurred in light of the progress made in determining the magnitude of remediation costs, the timing and extent of remedial actions required by governmental authorities, the amount of our liability in proportion to other responsible parties, and outcomes of litigation.

Our estimated total liability for environmental matters ranges from a minimum of $85.9 million to a maximum of $259.5 million. The largest range for any one site is approximately $66.5 million. The actual costs we will incur are dependent on final determination of contamination and required remedial action, negotiations with governmental authorities with respect to cleanup levels, changes in regulatory requirements, innovations in investigatory and remedial technologies, effectiveness of remedial technologies employed, the ability of other responsible parties to pay, outcomes of litigation, and any insurance or other third-party recoveries.

19. Business Segment Information

The Company operates in two reportable business segments: Diversified Industrial and Aerospace Systems. Both segments utilize eight core technologies, including hydraulics, pneumatics, electromechanical, filtration, fluid & gas handling, process control, engineered materials, and climate control, to drive superior customer problem solving and value creation.

The Diversified Industrial Segment is an aggregation of several business units that design, manufacture, and provide aftermarket support for highly engineered solutions that create value for customers primarily in aerospace and defense, in-plant and industrial equipment, transportation, off-highway, energy, and HVAC and refrigeration markets around the world. Diversified Industrial Segment products are marketed direct to OEMs and independent distributors through field sales employees. The Diversified Industrial North America businesses have manufacturing plants and distribution networks throughout the United States, Canada and Mexico and primarily service North America. The Diversified Industrial International businesses provide Parker products and services to 40 countries throughout Europe, Asia Pacific, Latin America, the Middle East and Africa.

The Aerospace Systems Segment designs, manufactures and provides aftermarket support for highly engineered airframe and engine solutions for both OEMs and end users. Our components and systems are utilized across commercial transport, defense fixed wing, business jets, regional transport, helicopter and energy applications. Aerospace Systems Segment products are marketed by field sales employees and are sold directly to manufacturers and end users.

The accounting policies of the business segments are the same as those described in the Significant Accounting Policies footnote. The business segment results are prepared on a basis that is consistent with the manner in which the Company’s management disaggregates financial information for internal review and decision-making.

						2024						2023						2022
Net Sales:
Diversified Industrial						$	14,457,146					$	14,705,693					$	13,342,046
Aerospace Systems						5,472,460						4,359,501						2,519,562
						$	19,929,606					$	19,065,194					$	15,861,608
Segment Operating Income:
Diversified Industrial						$	3,176,384					$	3,071,410					$	2,693,303
Aerospace Systems						1,110,746						562,444						501,431
Total segment operating income						4,287,130						3,633,854						3,194,734
Corporate general and administrative expense						218,312						229,677						219,699
Income before interest expense and other (income) expense, net						4,068,818						3,404,177						2,975,035
Interest expense						506,495						573,894						255,252
Other (income) expense, net						(32,280)						150,619						1,105,557
Income before income taxes						$	3,594,603					$	2,679,664					$	1,614,226
Assets:
Diversified Industrial						$	16,173,560					$	15,572,849					$	15,838,512
Aerospace Systems(a)						12,016,287						13,661,086						3,020,606
Corporate						1,107,995						730,537						7,084,825
						$	29,297,842					$	29,964,472					$	25,943,943

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						2024						2023						2022
Property Additions:
Diversified Industrial						$	303,494					$	292,456					$	197,675
Aerospace Systems						89,862						81,456						27,452
Corporate						6,756						6,835						4,917
						$	400,112					$	380,747					$	230,044
Depreciation:
Diversified Industrial						$	232,299					$	204,632					$	219,206
Aerospace Systems						107,795						104,286						29,576
Corporate						9,042						8,498						8,532
						$	349,136					$	317,416					$	257,314
Amortization:
Diversified Industrial						$	266,219					$	267,779					$	263,430
Aerospace Systems						311,776						232,934						51,020
						$	577,995					$	500,713					$	314,450
By Geographic Area**(b)**
Net Sales:
North America						$	13,512,303					$	12,689,719					$	10,216,292
International						6,417,303						6,375,475						5,645,316
						$	19,929,606					$	19,065,194					$	15,861,608
Long-Lived Assets:
North America						$	1,864,059					$	1,828,457					$	1,398,966
International						1,011,609						1,036,573						723,792
						$	2,875,668					$	2,865,030					$	2,122,758

(a) Includes an investment in a joint venture in which ownership is 50 percent or less and in which the Company does not have operating control (2024 - $218 million; 2023 - $216 million; 2022 - $211 million) and assets held for sale (2022 - $66 million).

(b) Net sales are attributed to countries based on the location of the selling unit. North America includes the United States, Canada and Mexico. No country other than the United States represents greater than 10 percent of consolidated sales. Long-lived assets are comprised of property, plant and equipment based on physical location.

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