Balance Sheet and Cash Flow

Cash flow from operations was $122.9 million (4.3% of sales) compared with $260.1 million (11.6% of sales) in 1Q10.  The current quarter cash flow from operations included a $200 million discretionary contribution to the Company's pension plan, excluding which cash flow from operations as a percent of sales was 11.4%.

At the end of 1Q11, cash and cash equivalents was $923.8 million with long-term debt of $1.7 billion and shareowner’s equity of $4.9 billion compared with $575.5 million, $1.4 billion and $4.4 billion at the end of 4Q10.

Parker sees the potential for acquisition activity to accelerate over the quarter or two, as management recently gave its division managers approval to restart their acquisition processes.  The analysts expect PH to use its higher debt capacity and rising cash levels to resume M&A and/or return to share buybacks after a two-year hiatus.

Dividend

On October 28, 2010, PH announced that its Board of Directors increased the Company's regular quarterly cash dividend to $0.29 per share of common stock and declared a dividend payable on December 3, 2010 to shareholders of record as of November 10, 2010.  This represents a 7% increase over the previous quarterly dividend of $0.27 per common share and is the Company's 242nd consecutive quarterly dividend, resulting in a total distribution to shareholders of approximately $47 million.