The acquisition of Meggitt increased sales by approximately $501 million during the current year. The company continues to integrate the acquired business.

The impact of divestiture activity decreased sales by approximately $62 million in 2024. The company continues to assess its existing businesses and initiate efforts to divest businesses that are not considered to be a good long-term strategic fit.

The Company intends to focus primarily on business opportunities in the areas of aerospace & defense, in-plant & industrial equipment, transportation, off-highway, energy, and HVAC and refrigeration. The Win Strategy 3.0 is deployed to achieve top quartile performance.

The company cites operational efficiencies as a key factor in the improvement of gross profit margin. This is supported by the company's focus on lean enterprise principles and continuous improvement.

The company continues to take actions to integrate acquisitions and appropriately structure the operations of the Diversified Industrial Segment, which are expected to result in approximately $53 million in business realignment and acquisition integration charges in 2025.

The recordable incident rate per 100 team members was 0.31 in fiscal year 2024, a 14% reduction since fiscal year 2023. The company strives to reach zero recordable incidents by 2030.

The company acknowledges risks arising from uncertainty in worldwide and regional economic conditions, including geopolitical risks such as the conflict between Russia and Ukraine, which may harm the business and make it difficult to project long-term performance.

The company recognizes the risk posed by increased cybersecurity threats and the potential for disruption or breaches in information technology systems, which could have adverse effects on operations and financial condition.

The company notes the potential for interruptions in the supply of raw materials, as well as price fluctuations, which could negatively impact financial results. Changes to tariff and import/export regulations also pose a risk.

Parker operates in highly competitive markets and industries with numerous competitors across various markets and product offerings. The degree of competition varies widely by product lines, end markets, geographic scope and/or geographic locations.

The company believes its broad-based portfolio of core technologies, which consist of hydraulics, pneumatics, electromechanical, filtration, fluid & gas handling, process control, engineered materials, and climate control, is a positive factor in its ability to compete effectively.

Parker competes based on product quality and innovation, customer experience, manufacturing and distribution capability, aftermarket support, and price competitiveness. The company believes it is a market leader in most major markets for its most significant products.

The company manages its supply chain through a "local for local" manufacturing strategy, ongoing supplier management process, and broadened supply base. They are also monitoring inflation and managing its impact through various cost and pricing measures.

The company is driving efficiency by implementing lean enterprise principles, which is expected to contribute to cost savings and improved productivity.

The company incurred business realignment charges of $54 million in the Diversified Industrial segment and expects to incur approximately $53 million in business realignment and acquisition integration charges in 2025.

The company emphasizes its technology powerhouse of interconnected solutions as a key factor in its ability to compete effectively. This is a core element of its business system.

The company has deep partnerships with its customers to develop innovative products and is engineering innovative systems and products to provide superior customer value through improved service, efficiency and productivity.

While the company highlights its technological capabilities, specific details on R&D investments are not provided in this section of the report.

The company repurchased 0.4 million common shares for $200 million during 2024. The company has a program to repurchase its common shares, with 35 million shares authorized for repurchase.

The company has paid cash dividends for 296 consecutive quarters, including a yearly increase in dividends for the last 68 years. The current annual dividend rate is $6.52 per common share.

The company expects to continue its strategy of identifying and acquiring businesses with complementary products and services. However, there is no assurance that suitable opportunities will be found or that acquisitions will be completed on acceptable terms.

The company is working towards and intends to meet its goal of making its own operations carbon neutral by 2040. This may require significant resources, which could increase operational costs.

The company is subject to various environmental laws and regulations, including the U.S. federal "Superfund" law. The company could incur substantial costs as a result of non-compliance or liability for cleanup or other costs or damages under environmental laws.

An inclusive environment is a core tenet of the company's values and one of its key measures of success within The Win Strategy. The company has an ongoing commitment to an inclusive and welcoming workplace where everyone feels valued and adds value.

The company's business is sensitive to global macroeconomic conditions and macroeconomic downturns may have an adverse effect on its business, results of operations and financial condition.

As a global business, the company is exposed to economic, political and other risks in different countries, including fluctuations in currency exchange rates, political and social instability, and government embargoes and sanctions.

The company is subject to various federal, state, local, and foreign government regulations relating to the development, manufacture, marketing, sale and distribution of its products and services. Compliance with these laws and regulations often requires time, effort and financial resources.