BENJAMIN J. MONDICS NEIL A. SCHRIMSHER To Our Shareholders: Fiscal 2012 was a successful year on multiple fronts  for Applied Industrial Technologies. Our business  performance resulted from sound operating discipline  and a focus on operational excellence, including: Our Financial Highlights provide a snapshot of our  noteworthy achievements; however, there’s much more  to our story. Throughout Applied, we have a shared  belief that we can and will profitably grow our business. The future we envision for the Company is made possible  by our strong foundation and financial position, by our  dedicated associates, by our best-in-class suppliers,  and, of course, by our strong customer base. We are  confident and committed to expanding our value-add,  extending our reach, and enhancing our technology to  serve our customers and generate shareholder value. • 10 consecutive quarters of growth  – upon which we can build  • Excellent cash generation  – to support our growth initiatives • Ongoing reinforcement of our Four Cornerstones  – Margin Enhancement, Asset  Management, Cost Control and Profitable Sales Growth • Record sales of $2.4 billion – an increase of 7.3% • Record net income of $108.8 million, or $2.54 per share – an EPS increase of 13.4% • Operating margin of 7.1%  – solid improvement over last year’s 6.8% • Cash generated from operations of $90.4 million  – adding to our financial strength and  flexibility • Return of $64.8 million to shareholders in  dividends and share repurchases  – providing  enhanced shareholder value • Improved after-tax return on assets of 11.8% – evidence of our continued focus on asset  management When combined with results from prior years and viewed over time, these achievements equate to: 2012 Financial Highlights: 1 Applied Industrial Technologies, Inc. and Subsidiaries