Financial Analysis

Debt The following table summarizes the components of long-term debt: June 30, 2026 2025 Domestic: 4.20% Fixed-rate medium term notes, due 2035 $ 500 $ 500 6.25% Fixed-rate medium term notes, due 2038 325 325 4.45% Fixed-rate medium term notes, due 2045 500 500 3.25% Senior Notes, due 2027 700 700 4.25% Senior Notes, due 2028 1,200 1,200 3.25% Senior Notes, due 2029 1,000 1,000 4.50% Senior Notes, due 2030 1,000 1,000 4.10% Senior Notes, due 2047 600 600 4.00% Senior Notes, due 2049 800 800 Foreign: 2.90% Euro Senior Notes, due 2030 800 821 Other long-term debt (includes finance leases) 92 109 Deferred debt issuance costs (45) (54) Total 7,472 7,501 Less: Long-term debt payable within one year 706 7 Long-term debt $ 6,766 $ 7,494 Credit Facilities During 2026, the Company entered into a 364-Day Term Loan Agreement and a Three-Year Term Loan Agreement, which provide for senior unsecured delayed draw term loan facilities in aggregate principal amounts of $5.25 billion and $2.50 billion, respectively. The Credit Facilities mature 364 days and three years, respectively, following August 13, 2026. Borrowings under the Credit Facilities are expected to bear interest at a secured overnight financing rate plus an applicable margin, and we were obligated to pay certain fees on the undrawn portion of the commitments until the closing of the FGC acquisition. As of June 30, 2026, the Company had not borrowed any funds under the Credit Facilities. Subsequent to June 30, 2026, to finance t …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Diversified Industrial Segment revenues by technology platform: For the years ended June 30, 2026 2025 2024 Motion Systems $ 3,580 $ 3,341 $ 3,706 Flow and Process Control 4,810 4,518 4,673 Filtration and Engineered Materials 6,048 5,806 6,079 Total $ 14,438 $ 13,665 $ 14,458 Aerospace Systems Segment revenues by market segment: For the years ended June 30, 2026 2025 2024 Commercial OEM $ 2,330 $ 1,915 $ 1,779 Commercial aftermarket 2,523 2,214 1,814 Defense OEM 1,271 1,138 1,125 Defense aftermarket 937 918 754 Total $ 7,061 $ 6,185 $ 5,472 Total revenues by geographic region based on the Company's selling operation's location: For the years ended June 30, 2026 2025 2024 North America $ 14,386 $ 13,406 $ 13,512 EMEA 4,178 3,862 3,916 Asia Pacific 2,711 2,364 2,278 Latin America 224 218 224 Total $ 21,499 $ 19,850 $ 19,930

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"Stock Incentive Plans The Company's 2023 Omnibus Stock Incentive Plan (""2023 SIP"") provides for the granting of stock-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, 2026, 6.7 million common stock shares were available for future issuance. The Company also maintains a Global Employee Stock Purchase Plan (""ESPP""), which is offered in a limited number of international countries. The ESPP is intended to provide eligible employees with the opportunity to acquire interest in the Company's common shares for 90% of the fair market value per share. The maximum number of shares that may be issued under the ESPP is 10.0 million shares, of which approximately 9.9 million shares are still available for future issuance. Activity under this plan is not material. We satisfy stock-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 13, or through the issuance of previously unissued common stock. Total stock-based compensation expense and the related tax benefits were as follows: For the years ended June 30, 2026 2025 2024 Stock-based compensation expense $ 179 $ 159 $ 156 Income ta …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Financial Instruments The Company utilizes derivative and non-derivative financial instruments, including forward exchange contracts, cross-currency swap contracts and certain foreign currency denominated debt, to manage foreign currency transaction and translation risk. 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. Net Investment Hedges The Company uses cross-currency swap contracts and foreign currency denominated debt, a non-derivative financial instrument, to hedge portions of the Company's investments in foreign subsidiaries and manage foreign exchange risk. The effect of translating the debt into U.S. dollars is recorded in foreign currency translation within accumulated other comprehensive loss and remains there until the underlying net investment is sold or substantially liquidated. For the cross-currency swap contracts that are designated as, and qualify as, net investment hedges, we assess the effectiveness using the spot method and the net gains or losses attributable to changes in the spot rate are recorded in foreign currency translation within accumulated other comprehensive loss. Any ineffective portions of the net investment hedges are reclassified from accumulated other comprehensive loss into earnings through interest exp …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

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, 2024 $ 7,607 $ 2,900 $ 10,507 Divestitures (90) (90) Foreign currency translation 211 66 277 Balance June 30, 2025 $ 7,728 $ 2,966 $ 10,694 Acquisition 486 486 Divestitures (1) (1) Foreign currency translation (51) (19) (70) Balance June 30, 2026 $ 8,162 $ 2,947 $ 11,109 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 2026, 2025 and 2024 resulted in no impairment loss being recognized. 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 are as follows: 2026 2025 June 30, Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Patents and technology $ 2,338 $ 666 $ 2,134 $ 556 Trade names 1,085 550 1,037 499 Customer relationships and other 8,404 3,331 8,194 2,936 Total $ 11,827 $ 4,547 $ 11,365 $ 3,991 Total intangible asset amortization expense in 2026, 2025 and 2024 was $584 million, $553 million and $578 million, respectively. The estimated future amortization expense for intangible assets over the next five years is as f …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

Income Taxes Provision for Income Taxes Income before income taxes was derived from the following sources: For the years ended June 30, 2026 2025 2024 United States $ 2,891 $ 2,514 $ 2,120 Foreign 1,672 1,593 1,475 Total $ 4,563 $ 4,107 $ 3,595 Income tax expense (benefit) consisted of the following: For the years ended June 30, 2026 2025 2024 Current: Federal $ 415 $ 424 $ 328 State and local 76 81 34 Foreign 427 374 356 Total 918 879 718 Deferred: Federal 26 (98) 11 State and local (11) (52) 6 Foreign (19) (154) 15 Total (4) (304) 32 Total expense (benefit) $ 914 $ 575 $ 750 Effective Tax Rate Reconciliation of the statutory federal income tax rate to the effective income tax rate after the adoption of ASU 2023-09 follows: 2026 For the year ended June 30, Amount Percent Statutory federal income tax $ 958 21.0 % State and local income taxes net of federal benefit (1) 51 1.1 Foreign tax effects 48 1.0 Effect of cross-border tax laws: Foreign derived intangible income deduction (50) (1.1) Other (2) 0.0 Tax credits (39) (0.9) Changes in valuation allowances (1) 0.0 Nontaxable or nondeductible items: Share-based compensation (72) (1.6) Other 7 0.2 Worldwide changes in unrecognized tax benefits 6 0.1 Other reconciling items 8 0.2 Total expense (benefit) and effective rate $ 914 20.0 % (1) State taxes in California, Connecticut, Illinois, and Minnesota comprised greater than 50% of the tax effect in this category. Reconciliation of the statutory federal income tax rate to the effe …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

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 Sheets. 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: For the years ended June 30, 2026 2025 2024 Operating lease expense $ 65 $ 64 $ 68 Finance lease cost: Amortization of lease assets 8 8 7 Interest on lease liabilities 5 5 5 Short-term lease cost 17 13 9 Variable lease cost 7 6 6 Total lease cost $ 102 $ 96 $ 95 Supplemental cash flow information related to leases is as follows: For the years ended June 30, 2026 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows - payments on operati …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

"Recent Accounting Pronouncements In December 2025, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (""ASU"") 2025-10, ""Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities,"" which adds guidance on the recognition, measurement, and presentation of government grants. The amendments are effective for fiscal years beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures and consolidated financial statements. In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements,"" which includes amendments intended to more closely align hedge accounting with the underlying economics of the Companys risk management activities. The amendments are effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures and consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,"" which modernizes the accounting for costs related to internal-use software by remo …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

"Retirement Benefits Pensions and Other Postretirement Benefits 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. The Company provides postretirement medical and life insurance benefits to certain retirees and eligible dependents through an unfunded plan. The plan is contributory, with retiree contributions adjusted annually, and pays 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. The Company has established cost maximums to more effectively control future health care costs. We have reserved the right to change this benefit plan. Components of Net Periodic Benefit Cost (Credit) U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits For the years ended June 30, 2026 2025 2024 2026 2025 2024 2026 2025 2024 Service cost $ 25 $ 28 $ 2 …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

Business Realignment The Company incurred business realignment charges in 2026, 2025 and 2024. 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 2026, 2025 and 2024, a majority of the business realignment charges were incurred in EMEA. 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: For the years ended June 30, 2026 2025 2024 Diversified Industrial $ 71 $ 53 $ 51 Aerospace Systems 1 Corporate general and administrative expenses 1 Other expense (income), net 2 2 The business realignment charges are presented in the Consolidated Statements of Income as follows: For the years ended June 30, 2026 2025 2024 Cost of sales $ 43 $ 31 $ 30 Selling, general and administrative expenses 29 23 21 Other expense (income), net 2 2 During 2026, approximately $66 million in payments were made relating to business realignment charges. Remaining payments related to current-year and prior-year business realignment actions of approximately $32 million, a majority of which are expected to be paid by March 31, 2027, are primarily reflected within the accrued payrolls and other compensation and other current liabilities captions in the Consolidated Balance Sh …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

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 Companys revenues are recognized at a point in time. However, a portion of the Companys 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 re …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

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 41 countries throughout EMEA, Asia Pacific and Latin America. 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, reg …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

"The term ""year"" and references to specific years refer to the applicable fiscal years. 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. Due to our diverse group of customers throughout the world, we do not consider ourselves 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 th …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Equity Changes in accumulated other comprehensive loss within Parker's shareholders' equity by component are as follows: 2026 2025 2024 Foreign Currency Translation Adjustment and Other Beginning balance $ (717) $ (1,130) $ (962) Other comprehensive income (loss) before reclassifications (81) 418 (153) Income tax 5 (5) (15) Other comprehensive income (loss), net of tax (76) 413 (168) Ending balance $ (793) $ (717) $ (1,130) Retirement Benefit Plans Beginning balance $ (166) $ (308) $ (331) Other comprehensive income (loss) before reclassifications 190 163 23 Income tax (45) (34) (6) Reclassified from accumulated other comprehensive loss: Amortization of net actuarial loss and other (1) 15 18 8 Tax benefit (4) (5) (2) Other comprehensive income (loss), net of tax 156 142 23 Ending balance $ (10) $ (166) $ (308) Total accumulated other comprehensive loss ending balance $ (803) $ (883) $ (1,438) (1) The amounts reclassified include the amortization of net actuarial loss, amortization of prior service cost and gains or losses related to settlements. These costs are included in the computation of net periodic benefit cost (credit) which is recorded in other expense (income), net. Refer to Note 12 for additional information. Share Repurchase Program On October 22, 2014, the Board of Directors approved a share repurchase program authorizing the repurchase of up to 35.0 million of the Company's common shares. On August 21, 2025, the Board of Directors approved an update to the number …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

Subsequent Event On August 13, 2026, the Company completed the FGC acquisition. FGC is a global provider of proprietary and complementary filtration technologies for critical applications across the life sciences, HVAC and refrigeration, and in-plant and industrial market verticals. The cash purchase price of $9.25 billion was funded with cash primarily through borrowings under the Credit Facilities and the commercial paper program. The Company is in the process of evaluating the purchase price allocation for the FGC acquisition and expects to provide the initial purchase price allocation in its Form 10-Q for the quarter ending September 30, 2026. FGC will be included in our consolidated financial statements beginning on the date of acquisition and reported as part of the Diversified Industrial segment.

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Debt Revolving Credit Agreement and Commercial Paper In August 2025, the Company amended its revolving credit agreement to increase the total line of credit to $3.75 billion, and authorized a corresponding increase in the commercial paper program size to $3.75 billion. The revolving credit agreement expires in June 2028; however, we have the right to request a one-year extension of the expiration date. The credit agreement supports our commercial paper program, and issuances of commercial paper reduce the amount of credit available under the agreement. As of December 31, 2025 and June 30, 2025, there were no borrowings outstanding under the revolving credit agreement, and commercial paper notes outstanding were $2.4 billion and $1.8 billion, respectively. Filtration Group Credit Facilities On December 10, 2025, the Company entered into a 364-Day Term Loan Agreement and a Three-Year Term Loan Agreement, which provide for senior unsecured delayed draw term loan facilities in aggregate principal amounts of $5.25 billion and $2.50 billion, respectively (together, the Filtration Group Credit Facilities). Proceeds from the Filtration Group Credit Facilities, if and when drawn, will be used to finance a portion of the consideration for the Company's proposed acquisition of Filtration Group. The Filtration Group Credit Facilities mature 364 days and three years, respectively, following the date of the initial funding of all or a portion of the applicable delayed draw term loan. Borro …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

"Diversified Industrial Segment revenues by technology platform: Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Motion Systems $ 893 $ 804 $ 1,717 $ 1,653 Flow and Process Control 1,114 1,059 2,272 2,185 Filtration and Engineered Materials 1,461 1,390 2,922 2,871 Total $ 3,468 $ 3,253 $ 6,911 $ 6,709 Aerospace Systems Segment revenues by market segment: Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Commercial original equipment manufacturer (""OEM"") $ 561 $ 447 $ 1,100 $ 881 Commercial aftermarket 619 531 1,213 1,052 Defense OEM 305 285 599 547 Defense aftermarket 221 227 435 458 Total $ 1,706 $ 1,490 $ 3,347 $ 2,938 Total Company revenues by geographic region based on the Company's selling operation's location: Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 North America $ 3,422 $ 3,199 $ 6,872 $ 6,532 Europe 1,019 897 1,979 1,832 Asia Pacific 680 596 1,296 1,176 Latin America 53 51 111 107 Total $ 5,174 $ 4,743 $ 10,258 $ 9,647"

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Financial instruments The Company utilizes derivative and non-derivative financial instruments, including forward exchange contracts, cross-currency swap contracts and certain foreign currency denominated debt, to manage foreign currency transaction and translation risk. 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. Net Investment Hedges The Company uses cross-currency swap contracts and foreign currency denominated debt, a non-derivative financial instrument, to hedge portions of the Company's investments in foreign subsidiaries and manage foreign exchange risk. The effect of translating the debt into U.S. dollars is recorded in foreign currency translation within accumulated other comprehensive loss and remains there until the underlying net investment is sold or substantially liquidated. For the cross-currency swap contracts that are designated as, and qualify as, net investment hedges, we assess the effectiveness using the spot method and the net gains or losses attributable to changes in the spot rate are recorded in foreign currency translation within accumulated other comprehensive loss. Any ineffective portions of the net investment hedges are reclassified from accumulated other comprehensive loss into earnings through interest exp …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Goodwill and intangible assets The changes in the carrying amount of goodwill for the six months ended December 31, 2025 are as follows: Diversified Industrial Segment Aerospace Systems Segment Total Balance at June 30, 2025 $ 7,728 $ 2,966 $ 10,694 Acquisition 475 475 Foreign currency translation (15) (5) (20) Balance at December 31, 2025 $ 8,188 $ 2,961 $ 11,149 Intangible assets are amortized using the straight-line method over their legal or estimated useful lives. The following summarizes the gross carrying value and accumulated amortization for each major category of intangible assets: December 31, 2025 June 30, 2025 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Patents and technology $ 2,348 $ 610 $ 2,134 $ 556 Trade names 1,090 526 1,037 499 Customer relationships and other 8,449 3,141 8,194 2,936 Total $ 11,887 $ 4,277 $ 11,365 $ 3,991 Total intangible asset amortization expense for the six months ended December 31, 2025 and 2024 was $288 million and $278 million, respectively. The estimated amortization expense for the five years ending June 30, 2026 through 2030 is $585 million, $586 million, $578 million, $557 million and $528 million, respectively. The increase in goodwill and intangible assets in fiscal 2026 relates to the acquisition of Curtis. Refer to Note 4 for more information. …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

"Income taxes On July 4, 2025, H.R. 1, commonly referred to as the One Big Beautiful Bill Act, (the ""Act""), was signed into law. The Act makes various provisions of the 2017 Tax Cuts and Jobs Act permanent while restoring full expensing of research and development costs and capital investments. The Act did not have a significant impact on our current period financial statements. Unrecognized tax benefits reflect the difference between positions taken or expected to be taken on income tax returns and the amounts reflected in the financial statements. As of December 31, 2025, we had gross unrecognized tax benefits of $94 million, all of which, if recognized, would impact the effective tax rate. The accrued interest and accrued penalties related to the gross unrecognized tax benefits, excluded from the amount above, is $25 million and $2 million, respectively. It is reasonably possible that within the next 12 months the amount of gross unrecognized tax benefits could be reduced by up to approximately $60 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 gross 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 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

"In December 2025, the Financial Accounting Standards Board (""FASB"") issued Accounting Standards Update (""ASU"") 2025-10, ""Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities,"" which adds guidance on the recognition, measurement, and presentation of government grants. The amendments are effective for fiscal years beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures and consolidated financial statements. In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements,"" which includes amendments intended to more closely align hedge accounting with the underlying economics of the Companys risk management activities. The amendments are effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures and consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,"" which modernizes the accounting for costs related to internal-use software by removing all references to prescripti …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Retirement benefits The components of net periodic benefit cost (income) for our defined benefit pension and other postretirement plans were as follows: U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits Three Months Ended Three Months Ended Three Months Ended December 31, December 31, December 31, 2025 2024 2025 2024 2025 2024 Service cost $ 6 $ 7 $ 5 $ 5 $ $ Interest cost 42 46 19 19 Expected return on plan assets (58) (61) (22) (21) Amortization of prior service cost 1 1 Amortization of net actuarial loss (gain) 1 2 1 1 Net periodic benefit cost (income) $ (8) $ (5) $ 3 $ 4 $ $ U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits Six Months Ended Six Months Ended Six Months Ended December 31, December 31, December 31, 2025 2024 2025 2024 2025 2024 Service cost $ 12 $ 14 $ 11 $ 11 $ $ Interest cost 84 92 37 38 1 1 Expected return on plan assets (116) (122) (45) (43) Amortization of prior service cost 2 2 Amortization of net actuarial loss (gain) 2 4 3 3 (1) Net periodic benefit cost (income) $ (16) $ (10) $ 6 $ 9 $ $ 1 Components of net periodic benefit cost (income), other than service cost, are included in other income, net in the Consolidated Statements of Income. …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

Business realignment We incurred business realignment charges in the first six months of fiscal 2026 and 2025, which 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 both fiscal 2026 and 2025, 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: Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Diversified Industrial $ 13 $ 20 $ 27 $ 29 Aerospace Systems 1 Corporate general and administrative expenses 1 1 Other expense, net 1 Reductions to our workforce made in connection with such business realignment charges by business segment are as follows: Three Months Ended Six Months Ended December 31, December 31, (Headcount in single units) 2025 2024 2025 2024 Diversified Industrial 409 393 599 720 Aerospace Systems 2 16 27 16 Corporate general and administrative expenses 14 14 The business realignment charges are presented in the Consolidated Statements of Income as follows: Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Cost of sales $ 8 $ 12 $ 17 $ 17 Selling, general and administrative expenses 5 9 11 13 Other income, net 1 During t …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

"Revenue recognition Revenue is derived primarily from the sale of products in the aerospace and defense, in-plant and industrial equipment, transportation, off-highway, energy and HVAC and refrigeration markets. A majority of the Companys revenues are recognized at a point in time. However, a portion of the Companys revenues are recognized over time. Diversified Industrial Segment revenues by technology platform: Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Motion Systems $ 893 $ 804 $ 1,717 $ 1,653 Flow and Process Control 1,114 1,059 2,272 2,185 Filtration and Engineered Materials 1,461 1,390 2,922 2,871 Total $ 3,468 $ 3,253 $ 6,911 $ 6,709 Aerospace Systems Segment revenues by market segment: Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Commercial original equipment manufacturer (""OEM"") $ 561 $ 447 $ 1,100 $ 881 Commercial aftermarket 619 531 1,213 1,052 Defense OEM 305 285 599 547 Defense aftermarket 221 227 435 458 Total $ 1,706 $ 1,490 $ 3,347 $ 2,938 Total Company revenues by geographic region based on the Company's selling operation's location: Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 North America $ 3,422 $ 3,199 $ 6,872 $ 6,532 Europe 1,019 897 1,979 1,832 Asia Pacific 680 596 1,296 1,176 Latin America 53 51 111 107 Total $ 5,174 $ 4,743 $ 10,258 $ 9,647 The majority of revenues from the Aerospace Systems Segment are generated from sales within Nort …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

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 and gas handling, process control, engineered materials and climate control, to drive superior customer problem solving and value creation. Diversified Industrial - This 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. Aerospace Systems - This 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 Companys Chief Operating Decision Maker (CODM) is the Chief Executive Officer. The CODM uses Segment Operating Income as a measure to assess performance, d …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Equity Changes in equity for the three months ended December 31, 2025 and 2024 are as follows: Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Shares Noncontrolling Interests Total Equity Balance at September 30, 2025 $ 91 $ 823 $ 22,355 $ (924) $ (8,568) $ 9 $ 13,786 Net income 845 845 Other comprehensive income 21 21 Dividends paid ($1.80 per share) (228) (228) Stock incentive plan activity (1) (28) (29) Shares purchased at cost, including excise tax (75) (75) Balance at December 31, 2025 $ 91 $ 822 $ 22,972 $ (903) $ (8,671) $ 9 $ 14,320 Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Shares Noncontrolling Interests Total Equity Balance at September 30, 2024 $ 91 $ 275 $ 19,593 $ (1,090) $ (5,977) $ 9 $ 12,901 Net income 949 949 Other comprehensive loss (445) (1) (446) Dividends paid ($1.63 per share) (210) (210) Stock incentive plan activity (31) 14 (17) Shares purchased at cost (50) (50) Balance at December 31, 2024 $ 91 $ 244 $ 20,332 $ (1,535) $ (6,013) $ 8 $ 13,127 Changes in equity for the six months ended December 31, 2025 and 2024 are as follows: Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Shares Noncontrolling Interests Total Equity Balance at June 30, 2025 $ 91 $ 194 $ 21,775 $ (883) $ (7,495) $ 9 $ 13,691 Net income 1,653 1,653 Other comprehensive loss (20) (20) Dividends paid ($3.60 per share …

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