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PHParker Hannifin

Industrials · Metal Products · NYSE
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The 10-K against last year's

113 changes: 25 added, 31 removed, 56 reworded, 1 quiet changes

10-K Aug 21, 2026 vs Aug 22, 2025
Risk FactorsRedline ↓
24.1%
of the text changed · 5,744 words now
38.9%
of the text changed · 5,493 words now
Legal ProceedingsRedline ↓
4.7%
of the text changed · 379 words now
Accounting PoliciesRedline ↓
22.2%
of the text changed · 2,199 words now

10-K 0000076334-26-000105 (2026-08-21) vs 10-K 0000076334-25-000035 (2025-08-22)

The redline

The paragraph that changed most in each section

Marked against last year's 10-K: cut words struck through, new words highlighted and underlined.

Risk Factors 264 words changed in this paragraph; it is 59% similar to last year's version.
We rely extensively on information technology systems to manage and operate our business, some of which are managed or accessible by third parties. The security and functionality of these information technology systems, and the processing of data by these systems, are critical to our business operations. If these systems, or any part of the systems, are damaged, intruded upon, attacked, shutdown shut down or cease to function properly (whether by planned upgrades, force majeure, telecommunications failures, criminal acts, including hardware or software break-ins or extortion attempts, or viruses, or other cybersecurity incidents) and we suffer any resulting interruption in our ability to manage and operate our business or if our products are affected, our results of operations and financial condition could be materially adversely affected. The sophistication of cyber threats continues to evolve and grow, including the risk associated with the use of artificial intelligence and quantum computing by threat actors to conduct more targeted and evasive attacks. There can be no guarantee that the actions and controls we have implemented and are implementing, or which we cause or have caused third-parties third parties with access to our systems to implement, will be sufficient to protect and mitigate risks associated with our information technology systems. Additionally, our increasing use of digital technologies within our operations as well as other evolving practices such as certain of our employees working remotely at times and the increased adoption of generative artificial intelligence may increase our vulnerability to cyber and data protection risks. In addition to existing risks, any adoption or deployment of or exposure to new technologies via acquisitions or internal initiatives or changes to our information technology systems as a result of divestitures may increase our exposure to risks, breaches, or failures, which could materially adversely affect our results of operations or financial condition. Furthermore, the Company has access to sensitive, confidential, or personal data or information that is subject to privacy and security laws, regulations, or other contractually-imposed controls. Despite our use of reasonable and appropriate controls, security breaches, theft, misplaced, lost or corrupted data, programming, or employee errors and/or malfeasance have led and could in the future lead to the compromise or improper use of such sensitive, confidential, or personal data or information. Such events may result in possible negative consequences, such as fines, ransom demands, penalties, failure to comply with laws governing sensitive data, loss of reputation, intellectual property, competitiveness or customers, increased security and compliance costs or other negative consequences. Further, the amount of insurance coverage that we maintain may be inadequate to cover claims or liabilities relating to a cybersecurity incident. Depending on the nature and magnitude of these events, they may have an adverse impact on our results of operations or financial condition.

Source: Item 1A, 10-K 0000076334-26-000105 vs Item 1A, 10-K 0000076334-25-000035

MD&A 255 words changed in this paragraph; it is 30% similar to last year's version.
As of June 30, 2025, the Company had a line of credit totaling $3.0 billion through a multi-currency During 2026, we amended our revolving credit agreement with a group of banks with $1.2 billion available for borrowing under the credit agreement. On August 21, 2025, the multi-currency revolving credit agreement was amended to increase the total line of credit by $750 million to $3.75 billion, and authorized a corresponding increase in the commercial paper program size to $3.75 billion. The revolving credit agreement expires in June 2028; however, we have the right to request a one-year extension of the expiration date. Advances from the revolving 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 Issuances of commercial paper reduce the amount of credit available under the revolving credit agreement. The As of June 30, 2026, there were no borrowings outstanding under the revolving credit agreement, and commercial paper notes outstanding were $1.0 billion. Taking into account outstanding commercial paper notes, $2.7 billion was available for borrowing under the revolving credit agreement expires in as of June 2028; however, the Company has the right to request a one-year extension of the expiration date on an annual basis, which request may result in changes to the current terms and conditions of the credit agreement. The credit agreement requires the payment of an annual facility fee, the amount of which is dependent upon the Company’s credit ratings. Although a lowering of the Company’s credit ratings would increase the cost of future debt, it would not limit the Company’s ability to use the credit agreement nor would it accelerate the repayment of any outstanding borrowings. Refer to Note 10 to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further discussion. 30, 2026.

Source: Item 7, 10-K 0000076334-26-000105 vs Item 7, 10-K 0000076334-25-000035

Accounting Policies 143 words changed in this paragraph; it is 37% similar to last year's version.
In November 2024, September 2025, the Financial FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” for Internal-Use Software," which requires expanded interim modernizes the accounting for costs related to internal-use software by removing all references to prescriptive and annual disclosures of expense information, including the amounts of inventory purchases, employee compensation, depreciation, amortization and depletion within commonly presented expense captions during the period. sequential software development stages. The amendments are effective for annual reporting periods fiscal years beginning after December 15, 2026, 2027, and interim reporting periods beginning after December 15, 2027. Early within those annual reporting periods, with early adoption is permitted. The amendments should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the ASU to determine its impact on the Company's disclosures. disclosures and consolidated financial statements.

Source: Item 8, Note 1 – Significant Accounting Policies, 10-K 0000076334-26-000105 vs Item 8, Note 1 – Significant Accounting Policies, 10-K 0000076334-25-000035

Legal Proceedings 2 words changed in this paragraph; it is 98% similar to last year's version.
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.

Source: Item 3, via Note 17 – Contingencies, 10-K 0000076334-26-000105 vs Item 3, via Note 18 – Contingencies, 10-K 0000076334-25-000035

Every change, by type

Sentences and paragraphs added, removed or reworded

Sentences and paragraphs of PH's Risk Factors and MD&A, 10-K 2026-08-21 against 10-K 2025-08-22. Each links to the text at sec.gov.

Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier (may, could, will, not, significant, material…). A year or date rolling forward is not counted.

The full word listadverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
We rely on a limited number of suppliers for certain critical components, such as specialty electronics, rare earths, specialty chemicals, aerospace super alloys and filtration media, and recent and planned acquisitions may increase our exposure to supply concentration risk. Any disruption in supply from these sources could require us to seek alternative suppliers, potentially at higher cost or with delays that could impact production schedules. Furthermore, our suppliers of component parts may significantly and quickly increase their prices in response to increases in

Read it in 10-K 2026-08-21 at sec.gov ↗

AddedRisk Factors
Increased public awareness and concern regarding environmental risks, including global climate change, may result in more international, regional and/or federal requirements or industry standards to reduce or mitigate global warming and other environmental risks. These regulations or standards could mandate more restrictive requirements, such as stricter limits on greenhouse gas emissions, than the voluntary commitments that we have made or require such changes on a more accelerated time frame. There continues to be a lack of consistent climate legislation across jurisdictions, which creates economic and regulatory uncertainty. Conversely, changes in governmental policy or leadership could lead to the rollback of existing climate regulations, potentially exposing the Company to stranded investments in compliance infrastructure or creating competitive disparities relative to companies that did not make such investments. If environmental laws or regulations or industry standards are either changed or adopted and impose significant operational restrictions and compliance requirements upon the Company or its products, or if anticipated regulations fail to materialize after we have made substantial compliance investments, our business, operations and financial condition could be negatively impacted.

Read it in 10-K 2026-08-21 at sec.gov ↗

AddedRisk Factors
cost pressures for labor. These challenges in labor markets could have material adverse effects on our results of operations, financial condition and cash flows.

Read it in 10-K 2026-08-21 at sec.gov ↗

AddedRisk Factors
We continually assess the strategic fit of our existing businesses and may divest or otherwise dispose of businesses that are deemed not to fit within our strategic plan or are not achieving the desired return on investment. These transactions pose risks and challenges that could negatively impact our business. For example, when we decide to sell or otherwise dispose of a business or assets, we may be unable to do so on satisfactory terms within our anticipated timeframe or at all, and even after reaching a definitive agreement to sell or dispose of a business, the sale is typically subject to satisfaction of pre-closing conditions which may not become satisfied. The divestiture process may also result in the disclosure of proprietary or competitively sensitive information to potential buyers, the incurrence of stranded costs that are not fully absorbed by the divested business, or the need to provide transition services that divert management attention and resources. Any strategic divestiture of a product line or business or exit of a product line or product category may reduce our revenue and earnings, result in material costs and expenses, create potential indemnification or retained liability obligations and cause disruption to our employees, customers, vendors and communities in which we operate.

Read it in 10-K 2026-08-21 at sec.gov ↗

AddedRisk Factors
Share repurchases generally constitute a component of our capital allocation strategy. We have historically funded our share repurchases with free cash flow and short-term borrowings. The amount and timing of share repurchases will be based on a variety of factors and past activity is not necessarily indicative of future repurchase levels. Important factors that could impact our decisions to pursue share repurchases include market conditions, the price of our shares, the nature and timing of other investment opportunities, such as acquisitions, changes in our business strategy, the terms of our financing arrangements, our outlook as to the ability to obtain financing at attractive rates, the impact on our credit ratings, legal and regulatory restrictions (including under the terms of financing arrangements), the availability of domestic cash, and overall business expectations. There can be no assurance that any share repurchases will enhance shareholder value because the market price of our shares may decline below the levels at which we repurchased our shares, and short-term stock price fluctuations could reduce the program’s effectiveness.

Read it in 10-K 2026-08-21 at sec.gov ↗

AddedRisk Factors
For example, our Aerospace Systems Segment produces aircraft components and systems that are critical to flight safety, and accordingly, the adverse impact of product quality issues, actual or perceived, can be significant. Our operations expose us to potential liabilities for personal injury or death as a result of the failure of an aircraft product that we have designed or manufactured, and such liabilities could be substantial given the catastrophic nature of potential aerospace incidents. In addition, a product safety issue could result in mandatory or voluntary recalls, airworthiness directives from the Federal Aviation Administration or other regulatory authorities, grounding of aircraft or temporary cessation of operations by our airline customers. If personal injury or death were to be caused by one of our products, or if we were to otherwise fail to maintain a satisfactory record of safety and reliability, our ability to retain and attract customers may be materially adversely affected.

Read it in 10-K 2026-08-21 at sec.gov ↗

RemovedRisk Factors
Company or that the Company currently believes are immaterial also may impair the Company’s business, financial condition, results of operations and cash flows.

Read it in 10-K 2025-08-22 at sec.gov ↗

Show the other 52
RemovedRisk Factors
In addition, worldwide focus on climate change issues has led to legislative and regulatory efforts to limit greenhouse gas emissions in the United States and in other countries in which we operate. Increased regulation of greenhouse gas emissions and other climate change concerns could subject us to additional costs and restrictions, including increased energy and raw material costs. We are not able to predict how such regulations would affect our business, operations or financial results, but increased regulation could have a material adverse effect on our business, operations and financial condition.

Read it in 10-K 2025-08-22 at sec.gov ↗

RemovedRisk Factors
Protecting our intellectual property is critical to our innovation efforts. We own a number of patents, trade secrets, copyrights, trademarks, trade names and other forms of intellectual property related to our products and services throughout the world and

Read it in 10-K 2025-08-22 at sec.gov ↗

RewordedRisk Factors
If the Company were charged with wrongdoing as a result of any such investigation, or failed to achieve or maintain required cybersecurity certifications, it could be suspended or debarred from bidding on or receiving awards of new government contracts, and we could be subject to fines or penalties associated with contract non-compliance or resulting from such investigations, investigations or lose its export privileges, which could have a material adverse effect on our results of operations. operations and financial condition.

Read it in 10-K 2026-08-21 at sec.gov ↗

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

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedRisk Factors
We have incurred significant indebtedness, and expect to incur a significant amount of additional debt for acquisitions, including in connection with the acquisition of FGC and the pending acquisition of CIRCOR Aerospace, as well as for operations, research and development and capital expenditures, or for other reasons related to our overall capital deployment strategy.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedRisk Factors
Our net sales attributable to selling locations outside of the United States were approximately 36 percent 36% in 2025, 36 percent in 2024 each of 2026, 2025 and 37 percent in 2023. 2024.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedRisk Factors
Additionally, our increasing use of digital technologies within our operations as well as other evolving practices such as certain of our employees working remotely at times and the increased adoption of generative artificial intelligence may increase our vulnerability to cyber and data protection risks.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedRisk Factors
Our future financial condition and cash flow could be adversely affected by changes in effective tax rate as a result of changes in tax laws and judicial or regulatory interpretation thereof (including regulations and other guidance promulgated under the One Big Beautiful Bill Act), thereof, the mix of earnings in countries with differing statutory tax rates, changes in overall profitability, changes in U.S. generally accepted accounting principles ("GAAP"), or changes in the valuation of deferred tax assets.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedRisk Factors
We are subject to risks relating to acquisitions and joint ventures, and risks relating to the integration of acquired companies. companies, and divestitures of certain product lines or categories.

Read it in 10-K 2026-08-21 at sec.gov ↗

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

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedRisk Factors
If we are unable to successfully introduce new commercial products, products or position our products for new product markets, our profitability could be adversely affected.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedRisk Factors
If we are unable to avoid these risks, risks relating to acquisitions, integrations of acquisitions, and divestitures, our results of operations and financial condition could be materially adversely affected.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedRisk Factors
Our ability to develop new products based on technological innovation and to position our existing products in new markets can affect our competitive position and often requires the investment of significant resources.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedRisk Factors
Our future success depends, in part, on the ability to manage this expanded business, which may pose or has posed substantial challenges for management, including challenges related to the management and monitoring of the expanded global operations and new manufacturing processes and products, and the associated costs and complexity.

Read it in 10-K 2026-08-21 at sec.gov ↗

AddedMD&A
The following discussion and accompanying table provide an analysis of our operating performance for 2026 and 2025, with selected Consolidated Statements of Income line items expressed as a percentage of revenue to enhance comparability between periods.

Read it in 10-K 2026-08-21 at sec.gov ↗

AddedMD&A
Throughout this discussion, both reported sales growth, determined in accordance with U.S. GAAP, and organic sales growth, a non-GAAP measure, are presented. Organic sales growth represents the percentage change in net sales adjusted to exclude the effects of acquisitions and divestitures for the twelve-month period following their completion, as well as the impact of changes in currency exchange rates. Management believes these adjustments provide management and investors with additional insight into underlying sales trends and facilitate meaningful period-to-period comparisons of operating performance. References to organic sales in this discussion reflect this measure and are presented as a percentage increase or decrease relative to the comparable prior-year period. Total Company net sales changed as follows:

Read it in 10-K 2026-08-21 at sec.gov ↗

AddedMD&A
Net sales in 2026 increased by $1,649 million, or 8.3%, compared to 2025, which was primarily driven by organic growth in both segments. Acquisitions net of divestitures increased sales by approximately $91 million in 2026. These changes are discussed in more detail within the business segment results section below.

Read it in 10-K 2026-08-21 at sec.gov ↗

AddedMD&A
For the years ended June 30, 2026 2025 Net sales Diversified Industrial $ 14,438 $ 13,665 Aerospace Systems 7,061 6,185 Total net sales $ 21,499 $ 19,850 Segment operating income Diversified Industrial $ 3,440 $ 3,120 Aerospace Systems 1,833 1,441 Total segment operating income 5,273 4,561 Corporate general and administrative expenses 205 214 Income before interest expense and other expense (income), net 5,068 4,347 Interest expense 401 409 Other expense (income), net 104 (169) Income before income taxes $ 4,563 $ 4,107

Read it in 10-K 2026-08-21 at sec.gov ↗

AddedMD&A
North America International Total 2026 Reported sales growth 3.2% 9.3% 5.7% Less: currency 0.4% 3.4% 1.7% Less: divestitures (1.8)% —% (1.1)% Less: acquisitions 1.5% 2.0% 1.7% Organic sales growth 3.1% 3.9% 3.4%

Read it in 10-K 2026-08-21 at sec.gov ↗

AddedMD&A
Corporate general and administrative expenses primarily included salaries, benefits and incentive compensation expense, professional service fees, information technology, charitable contributions and other discretionary spending.

Read it in 10-K 2026-08-21 at sec.gov ↗

AddedMD&A
For the years ended June 30, 2026 2025 Foreign currency transaction (gain) loss $ (31) $ 46 Stock-based compensation expense 179 97 Non-service components of retirement benefit cost (income) (64) (51) Acquisition-related expenses 30 — Gain on sale of businesses(1) (9) (253) Interest income (14) (11) Insurance-related charges (recoveries) (23) 8 Other items, net 36 (5) Total other expense (income), net $ 104 $ (169) (1) For further discussion of the gain on sale of businesses refer to Note 3 to the consolidated financial statements.

Read it in 10-K 2026-08-21 at sec.gov ↗

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

Read it in 10-K 2026-08-21 at sec.gov ↗

RemovedMD&A
The Consolidated Statement of Income summarizes the Company's operating performance. The discussion below compares the operating performance in 2025 and 2024.

Read it in 10-K 2025-08-22 at sec.gov ↗

RemovedMD&A
Net sales in 2025 decreased from the 2024 amount due to lower sales in the Diversified Industrial Segment, partially offset by higher sales in the Aerospace Systems Segment resulting from strength across commercial and defense markets. Within the Diversified Industrial Segment, the impact of divestiture activity decreased sales by approximately $295 million in 2025. The effect of currency exchange rates decreased net sales in 2025 by approximately $41 million, which is primarily attributable to the Diversified Industrial Segment.

Read it in 10-K 2025-08-22 at sec.gov ↗

RemovedMD&A
Selling, general and administrative expenses also included business realignment and acquisition integration charges of $45 million and $55 million in 2025 and 2024, respectively.

Read it in 10-K 2025-08-22 at sec.gov ↗

RemovedMD&A
(1) Foreign currency transaction loss (gain) primarily relates to the impact of exchange rates on cash, forward contracts and intercompany transactions.

Read it in 10-K 2025-08-22 at sec.gov ↗

RemovedMD&A
(2) On February 9, 2025, a fire damaged a portion of our Saegertown, Pennsylvania facility, causing a pause in production. Some production and operations were re-established within days of the event. Global available capacity has been utilized to restore production, substantially fulfill demand and minimize customer disruption. There was no material impact as a result of this disruption during fiscal 2025 and none is expected during future periods. We maintain third-party insurance coverage for property damage, clean-up, replacement and business interruption, subject to an $8 million deductible and liability retention for the event, which was recorded in the third quarter of 2025. While we expect to be reimbursed for a significant portion of our business interruption impacts by our third-party insurance coverage, we will not record any associated gain until realized.

Read it in 10-K 2025-08-22 at sec.gov ↗

RemovedMD&A
The Diversified Industrial Segment operations experienced the following percentage changes in net sales: 2025 North America businesses – as reported (7.6)% Divestitures (3.4)% Currency (0.5)% North America businesses – without divestitures and currency(1) (3.7)% International businesses – as reported (2.2)% Currency (0.3)% International businesses – without currency(1) (1.9)% Diversified Industrial Segment – as reported (5.5)% Divestitures (2.0)% Currency (0.5)% Diversified Industrial Segment – without divestitures and currency(1) (3.0)% (1) This table reconciles the percentage changes in net sales of the Diversified Industrial Segment reported in accordance with GAAP to percentage changes in net sales adjusted to remove the effects of divestitures for 12 months after their completion as well as changes in currency exchange rates (a non-GAAP measure). The effects of divestitures and changes in currency exchange rates are removed to allow investors and the Company to meaningfully evaluate the percentage changes in net sales on a comparable basis from period to period.

Read it in 10-K 2025-08-22 at sec.gov ↗

RemovedMD&A
Diversified Industrial Segment sales in 2025 decreased $793 million from 2024. The effect of currency exchange rates decreased sales by approximately $63 million. The impact of divestiture activity decreased sales by approximately $295 million. Excluding the effects of changes in currency exchange rates and divestiture activity, sales in 2025 decreased $435 million from prior-year levels.

Read it in 10-K 2025-08-22 at sec.gov ↗

RemovedMD&A
North America businesses - Sales within the North America businesses of the Diversified Industrial Segment decreased $667 million in 2025. The effect of currency exchange rates decreased sales by approximately $43 million during the year. The impact of divestiture activity decreased sales by approximately $295 million. Excluding the effects of changes in the currency exchange rates and divestiture activity, sales in 2025 decreased $329 million from prior-year levels reflecting lower demand within the off-highway, transportation, in-plant and industrial equipment and energy markets, partially offset by an increase in demand in the HVAC and refrigeration and aerospace and defense markets.

Read it in 10-K 2025-08-22 at sec.gov ↗

RemovedMD&A
International businesses - Sales within the International businesses of the Diversified Industrial Segment decreased $126 million in 2025. The effect of currency exchange rates decreased sales by approximately $20 million, reflecting the strengthening of the U.S. dollar primarily against currencies in Mexico, Brazil and China, partially offset by the weakening of the U.S. dollar primarily against currencies in the United Kingdom and the Eurozone countries. Excluding changes in the currency exchange rates, sales in 2025 decreased $106 million from prior-year levels primarily due to lower sales in Europe, partially offset by an increase in sales in the Asia Pacific Region and Latin America.

Read it in 10-K 2025-08-22 at sec.gov ↗

RemovedMD&A
Within Europe, the decrease in sales was primarily due to lower demand from end users across the in-plant and industrial equipment, off-highway and transportation markets.

Read it in 10-K 2025-08-22 at sec.gov ↗

RemovedMD&A
Within Latin America, the increase in sales was primarily due to higher demand within the in-plant and industrial equipment, transportation and off-highway markets, partially offset by lower demand from end users in the energy market.

Read it in 10-K 2025-08-22 at sec.gov ↗

RewordedMD&A
(dollars in millions) For the years ended June 30, 2026 2025 2024 Net sales $ 21,499 $ 19,850 $ 19,930 Gross profit margin 37.7 % 36.9 % 35.8 % Selling, general and administrative expenses $ 3,468 $ 3,255 $ 3,315 Selling, general and administrative expenses, as a percent of sales 16.1 % 16.4 % 16.6 % Interest expense $ 401 $ 409 $ 506 Other (income) expense, expense (income), net (183) (276) Gain on sale of businesses and assets, net $ (273) $ (12) (330) (456) Effective tax rate 20.0 % 14.0 % 20.9 % Net income attributable to common shareholders $ 3,648 $ 3,531 $ 2,844

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedMD&A
Within Organic sales growth within our international businesses in 2026 increased by 3.9%, or $218 million, from prior-year levels primarily due to higher sales in the Asia Pacific region, the increase in sales was primarily due to where we experienced higher demand within the electronics and semiconductor and in-plant and industrial equipment markets, partially offset by lower demand from end users in within the transportation, energy and off-highway markets. transportation market.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedMD&A
Gross profit margin (calculated is calculated as net sales less cost of sales, divided by net sales) sales, and increased in 2025 2026 primarily due to higher margins in both segments resulting from price increases, favorable primarily driven by sales volume, partially offset by unfavorable product mix, cost containment mix and continued execution of the Win Strategy. increased material costs.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedMD&A
Discussion of For a discussion comparing the 2023 financial statements is included in year ended 2025 to the year ended 2024, refer to Part II, Item 7 of the Company's 2024 Annual Report on Form 10-K. 10-K for the year ended June 30, 2025.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedMD&A
The Company’s credit agreements and indentures governing certain debt securities contain various covenants, the violation Violation of which these covenants would limit or preclude the use of the credit agreements for future borrowings, borrowings or might could accelerate the maturity of the related outstanding borrowings covered by the indentures. borrowings.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedMD&A
Selling, general and administrative expenses decreased increased in 2025 2026 compared to 2024 2025 primarily due to benefits from prior-year restructuring and acquisition-integration activities, lower higher stock-based compensation expense, acquisition-related expenses, research and development expenses expenses, and cost containment initiatives. intangible asset amortization.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedMD&A
The revolving credit agreement expires in June 2028; however, the Company has we have the right to request a one-year extension of the expiration date on an annual basis, which request may result in changes to the current terms and conditions of the credit agreement. date.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedMD&A
Federal statutory rate of 21 percent due to share-based compensation and foreign-derived intangible income, income tax credits, which were partially offset by U.S. state and local taxes and taxes related to international activities. tax effects in foreign jurisdictions.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedMD&A
Federal statutory rate of 21 percent 21% due to share-based compensation and compensation, foreign-derived intangible income, which were partially offset by income and U.S. state and local taxes and taxes related to international activities.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedMD&A
Refer (1) For further discussion of the gain on sale of businesses refer to Note 3 to the Consolidated Financial Statements for further discussion. consolidated financial statements.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedMD&A
Further information on pensions is provided in Note 13 12 to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. consolidated financial statements.

Read it in 10-K 2026-08-21 at sec.gov ↗

RewordedMD&A
Recently issued accounting pronouncements are described in Note 1 to the Consolidated Financial Statements, included in Part II, Item 8 of this Annual Report on Form 10-K. consolidated financial statements.

Read it in 10-K 2026-08-21 at sec.gov ↗

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