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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________________ to_______________________
Commission File No. 1-4982
PARKER-HANNIFIN CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 34-0451060
(State of Incorporation) (I.R.S. Employer
Identification No.)
17325 Euclid Avenue, Cleveland, Ohio 44112
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (216) 531-3000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class which Registered
Common Shares, $.50 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, during the preceding 12 months, and (2) has been
subject to such filing requirements for the past 90 days.
Yes X . No .
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K [ ].
The aggregate market value of the voting stock held by non-
affiliates of the Registrant as of August 22, 1996, excluding, for
purposes of this computation, only stock holdings of the Registrant's
Directors and Officers. $2,809,472,777.
The number of Common Shares outstanding on August 22, 1996 was 74,296,222.
Portions of the following documents are incorporated by reference:
(1) Annual Report to Shareholders of the Company for the fiscal year
ended June 30, 1996. Incorporated by reference into Parts I, II
and IV hereof.
(2) Definitive Proxy Statement for the Company's 1996 Annual Meeting of
Shareholders. Incorporated by reference into Part III hereof.
PARKER-HANNIFIN CORPORATION
FORM 10-K
Fiscal Year Ended June 30, 1996
PART I
------
ITEM 1. Business. Parker-Hannifin Corporation is a leading
worldwide full-line manufacturer of motion control products, including
fluid power systems, electromechanical controls and related components.
Fluid power involves the transfer and control of power through the medium
of liquid, gas or air, in both hydraulic and pneumatic applications. Fluid
power systems move and position materials, control machines, vehicles and
equipment and improve industrial efficiency and productivity. Components of
a simple fluid power system include a pump which generates pressure, valves
which control the fluid's flow, an actuator which translates the pressure in
the fluid into mechanical energy, a filter to remove contaminants and numerous
hoses, couplings, fittings and seals. Electromechanical control involves the
use of electronic components and systems to control motion and precisely locate
or vary speed in automation applications. In addition to motion control
products, the Company also is a leading worldwide producer of fluid
purification, air conditioning, refrigeration, and electromagnetic shielding
and thermal management products.
The Company was incorporated in Ohio in 1938. Its principal executive
offices are located at 17325 Euclid Avenue, Cleveland, Ohio 44112, telephone
(216) 531-3000. As used in this Report, unless the context otherwise requires,
the term "Company" or "Parker" refers to Parker-Hannifin Corporation and its
subsidiaries.
The Company's manufacturing, service, distribution and administrative
facilities are located in 35 states, Puerto Rico and worldwide in 30 foreign
countries. Its motion control technology is used in the products of its two
business Segments: Industrial and Aerospace. The products are sold as original
and replacement equipment through product and distribution centers worldwide.
The Company markets its products through its direct-sales employees and more
than 7,000 independent distributors. Parker products are supplied to over
300,000 customers in virtually every major manufacturing, transportation and
processing industry. For the fiscal year ended June 30, 1996, net sales were
$3,586,448,000; Industrial Segment products accounted for 83% of net sales and
Aerospace Segment products for 17%.
Markets
- - -------
Motion control systems are used throughout industry in applications
which include moving of materials, controlling machines, vehicles and equipment
and positioning materials during the manufacturing process. Motion control
systems contribute to the efficient use of energy and improve industrial
productivity.
The more than 300,000 customers which carry the Company's parts are
found throughout virtually every significant manufacturing, transportation and
processing industry. No customer accounted for more than 3% of the Company's
total net sales for the fiscal year.
- 3 -
The major markets for products of the Fluid Connector, Motion &
Control, Seal and Filtration Groups of the Industrial Segment are agricultural
machinery, construction equipment, electronic equipment, fabricated metals,
food production, industrial machinery, instrumentation, lumber and paper,
machine tools, marine, medical equipment, mining, mobile equipment, chemicals,
petrochemicals, robotics, semi-conductor equipment, textiles, transportation
and every other major production and processing industry. Products
manufactured by the Industrial Segment's Climate and Industrial Controls
Group are utilized principally in automotive and mobile air conditioning
systems, industrial refrigeration systems and home and commercial air
conditioning equipment. Sales of Industrial Segment products are made to
original equipment manufacturers and their replacement markets.
Aerospace Segment sales are made primarily to the commercial, military
and general aviation markets and are made to original equipment
manufacturers and to end users for maintenance, repair and overhaul.
Principal Products, Methods of Distribution and Competitive Conditions
- - ----------------------------------------------------------------------
Industrial Segment. The product lines of the Company's Industrial
Segment cover most of the components of motion control systems. The Fluid
Connectors Group manufactures connectors, including tube fittings and hose
fittings, valves, hoses and couplers which control, transmit and contain fluid.
The Motion & Control Group manufactures components and systems used to provide
motion, control and conditioning through the medium of pressurized fluids and
electricity. Products include hydraulic, pneumatic and precision metering
pumps, power units, control valves, general purpose valves, accumulators,
cylinders, servo actuators, rotary actuators and motors, pneumatic control
valves, pressure regulators, lubricators, hydrostatic steering components,
electronic controls and systems and automation devices. The Climate and
Industrial Controls Group manufactures components for use in industrial,
residential and automotive air conditioning and refrigeration systems and
other automotive applications, including pressure regulators, solenoid valves,
expansion valves, filter-dryers, gerotors and hose assemblies. The Seal Group
manufactures sealing devices, including o-rings and o-seals, gaskets and
packings which insure leak proof connections and electromagnetic interference
shielding and thermal management products. The Filtration Group manufactures
filters to remove contaminants from fuel, air, oil, water and other fluids in
industrial, process, mobile, marine and environmental applications.
Industrial Segment products include both standard items which are
produced in large quantities and custom units which are engineered and produced
to original equipment manufacturers' specifications for application to a
particular end product. Both standard and custom products are also used in the
replacement of original motion control system components. Industrial Segment
products are marketed primarily through field sales employees and more than
7,000 independent distributors.
Aerospace Segment. The principal products of the Company's Aerospace
Segment are hydraulic, fuel and pneumatic systems and components that are
used on virtually every commercial and military airframe and engine program
in production in the Western world today.
- 4 -
The Aerospace Segment offers complete hydraulic systems, as well as
components that include hydraulic and electrohydraulic systems used for precise
control of aircraft rudders, elevators, ailerons and other aerodynamic control
surfaces and utility hydraulic components such as reservoirs, accumulators,
selector valves, electrohydraulic servovalves, thrust-reverser actuators,
engine-driven pumps, nosewheel steering systems, electromechanical actuators,
engine controls and electronic controllers. The Aerospace Segment also designs
and manufactures aircraft wheels and brakes for the general aviation and
military markets.
The Aerospace fuel product line includes complete fuel systems as well
as components such as fuel transfer and pressurization controls, in-flight
refueling systems, fuel pumps and valves, fuel measurement and management
systems and center of gravity controls, engine fuel injection atomization
nozzles and augmentor controls, fuel tank ducting and hose assemblies, and
electronic monitoring computers.
Pneumatic components include bleed air control systems, pressure
regulators, low-pressure pneumatic controls, heat transfer systems, engine
start systems, engine bleed control and anti-ice systems, and electronic
control and monitoring computers.
Aerospace Segment products are marketed by the Company's regional
sales organization and are sold directly to manufacturers and end users.
Competition. All aspects of the Company's business are highly
competitive. No single manufacturer competes with respect to all products
manufactured and sold by the Company and the degree of competition varies with
different products. In the Industrial Segment, the Company competes on the
basis of product quality and innovation, customer service, its manufacturing
and distribution capability, and price. The Company believes that, in most of
its major product markets, it is one of the principal suppliers of motion
control systems and components.
In the Aerospace Segment, the Company has developed partnerships with
key customers based on Parker's advanced technological capability, superior
performance in quality, delivery, and service, and price competitiveness,
which has enabled Parker to obtain significant original equipment business on
new aircraft programs for its fluid control systems and components and,
thereby, to obtain the follow-on repair and replacement business for these
programs. The Company believes that it is one of the primary suppliers in the
aerospace marketplace.
Research and Product Development
- - --------------------------------
The Company continually researches the feasibility of new products
through its development laboratories and testing facilities in many of its
worldwide manufacturing locations. Its research and product development
staff includes chemists, mechanical, electronic and electrical engineers and
physicists.
Research and development costs relating to the development of new
products or services and the improvement of existing products or services
amounted to $91,706,000 in fiscal 1996, $74,129,000 in fiscal 1995, and
$64,518,000 in fiscal 1994.
- 5 -
Reimbursements of customer-sponsored research included in the total cost
for each of the respective years were $33,018,000, $21,202,000 and $22,640,000.
Patents, Trademarks, Licenses
- - -----------------------------
The Company owns a number of patents, trademarks and licenses related
to its products and has exclusive and non-exclusive rights under patents
owned by others. In addition, patent applications on certain products are now
pending, although there can be no assurance that patents will be issued. The
Company is not dependent to any material extent on any single patent or group
of patents.
Backlog and Seasonal Nature of Business
- - ---------------------------------------
The Company's backlog at June 30, 1996 was approximately $1,330,970,000
and at June 30, 1995 was approximately $1,025,669,000. Approximately 75% of
the Company's backlog at June 30, 1996 is scheduled for delivery in the
succeeding twelve months. The Company's business generally is not seasonal in
nature.
Environmental Regulation
- - ------------------------
The Company is subject to federal, state and local laws and regulations
designed to protect the environment and to regulate the discharge of materials
into the environment. Among other environmental laws, the Company is subject
to the federal "Superfund" law, under which the Company has been designated as
a "potentially responsible party" and may be liable for clean up costs
associated with various waste sites, some of which are on the U.S.
Environmental Protection Agency Superfund priority list. The Company believes
that its policies, practices and procedures are properly designed to prevent
unreasonable risk of environmental damage and the consequent financial
liability to the Company. Compliance with environmental laws and regulations
requires continuing management effort and expenditures by the Company.
Compliance with environmental laws and regulations has not had in the past,
and, the Company believes, will not have in the future, material effects on
the capital expenditures, earnings, or competitive position of the Company.
The information set forth in Footnote 13 to the Financial Statements contained
on page 41 of the Company's Annual Report to Shareholders for the fiscal year
ended June 30, 1996 ("Annual Report") as specifically excerpted on pages
13-30 of Exhibit 13 hereto is incorporated herein by reference.
Energy Matters and Sources and Availability of Raw Materials
- - ------------------------------------------------------------
The Company's primary energy source for each of its business segments
is electric power. While the Company cannot predict future costs of such
electric power, the primary source for production of the required electric
power will be coal from substantial, proven reserves available to electric
utilities. The Company is subject to governmental regulations in regard to
energy supplies both in the United States and elsewhere. To date the Company
has not experienced any significant disruptions of its operations due to
energy curtailments.
Steel, brass, aluminum and elastomeric materials are the principal raw
materials used by the Company. These materials are available from numerous
sources in quantities sufficient to meet the requirements of the Company.
- 6 -
Employees
- - ---------
The Company employed approximately 33,289 persons as of June 30, 1996,
of whom approximately 11,163 were employed by foreign subsidiaries.
Business Segment Information
- - ----------------------------
The net sales, income from operations before corporate general and
administrative expenses and identifiable assets by business segment and by
geographic area for the past three fiscal years, as set forth on page 33 of
the Annual Report and specifically excerpted on pages 13-16 and
13-17 of Exhibit 13 hereto is incorporated herein by reference.
Item 1A. Executive Officers of the Company
- - -------------------------------------------
The Company's Executive Officers are as follows:
Officer
Name Position Since(1) Age
- - ---- -------- -------- ---
Duane E. Collins President, Chief Executive Officer 1983 60
and Director
Dennis W. Sullivan Executive Vice President - Industrial 1978 57
and Director
Paul L. Carson Vice President - Information 1993 60
Services
Daniel T. Garey Vice President - Human Resources 1995 53
Stephen L. Hayes Vice President and President, 1993 55
Aerospace
Michael J. Hiemstra Vice President - Finance and 1987 49
Administration and Chief
Financial Officer
Lawrence J. Hopcraft Vice President and President, 1990 53
Climate and Industrial Controls
(formerly Automotive and Refrigeration)
Nickolas W. Vande Steeg Vice President and President, Seal 1995 53
Joseph D. Whiteman Vice President, General Counsel 1977 63
and Secretary
William D. Wilkerson Vice President - Technical Director 1987 60
- 7 -
Lawrence M. Zeno Vice President and President, 1993 54
Motion and Control
Donald A. Zito Vice President and President, 1988 56
Fluid Connectors
Harold C. Gueritey, Jr. Controller 1980 57
Timothy K. Pistell Treasurer 1993 49
(1) Officers of Parker-Hannifin serve for a term of office from the date of
election to the next organizational meeting of the Board of Directors and
until their respective successors are elected, except in the case of
death, resignation or removal. Messrs. Sullivan, Hiemstra, Hopcraft,
Whiteman, Wilkerson, Zito and Gueritey, have served in the executive
capacities indicated above during the past five years.
Mr. Collins was elected as President and Chief Executive Officer of the
Company effective July, 1993. He was elected as Vice Chairman of the Board in
July, 1992 and Executive Vice President in July, 1988. He was President of the
International Sector from January, 1987 until June, 1992.
Mr. Carson was elected a Vice President in October, 1993. He was Vice
President of Management Information Systems from July 1, 1983 to October, 1993.
Mr. Garey was elected Vice President effective in January, 1995. He
was Group Vice President Human Resources of the Motion and Control Group
(formerly the Fluidpower Group) from July, 1982 to December, 1994.
Mr. Hayes was elected as Vice President and named President of the
Aerospace Group in April, 1993. He was a Group Vice President of the Aerospace
Group from February, 1985 to April, 1993.
Mr. Vande Steeg was elected as Vice President effective in September,
1995. He has been President of the Seal Group since May, 1986.
Mr. Zeno was elected a Vice President in October, 1993. He has been
President of the Motion and Control Group since January, 1994 and was Vice
President-Operations of the Motion and Control Group (formerly the Fluidpower
Group) from July, 1988 to December, 1993.
Mr. Pistell was elected as Treasurer of the Company in July, 1993.
He was Director of Business Planning from January, 1993 to July, 1993; and
Vice President-Finance/Controller of the International Sector from October,
1988 to December, 1992.
- 8 -
ITEM 2. Properties. The following table sets forth the principal
plants and other materially important properties of the Company and its
subsidiaries. The leased properties are indicated with an asterisk. A "(1)"
indicates that the property is occupied by the Company's industrial segment
and a "(2)" indicates properties occupied by the aerospace segment.
UNITED STATES
-------------
State City
----- ----
Alabama Boaz(1)
Decatur(1)
Huntsville(1)
Jacksonville(1)
Arizona Glendale(2)
Tolleson(2)
Tucson*(1)
Arkansas Siloam Springs(1)
Trumann(1)
California Irvine(1)(2)
Modesto(1)
Newbury Park*(1)
Rohnert Park(1)
San Diego(1)
Connecticut Enfield(1)
Florida Longwood(1)
Miami*(1)
Georgia Dublin(2)
Idaho Boise*(1)
Illinois Broadview(1)
Des Plaines(1)
Hampshire(1)
Niles*(1)
Rockford(1)
Indiana Albion(1)
Ashley(1)
Ft. Wayne(1)
Lebanon(1)
Tell City(1)
Iowa Red Oak(1)
Kansas Manhattan(1)
Kentucky Berea(1)
Lexington(1)
Louisiana Harvey*(1)
Maine Portland(1)
Massachusetts Waltham(2)
Woburn(1)
- 9 -
State City
----- ----
Michigan Kalamazoo(2)
Lakeview(1)
Otsego(1)
Oxford(1)
Richland(1)
Troy*(1)
Minnesota Golden Valley(1)
Mississippi Batesville(1)
Booneville(1)
Madison(1)
Missouri Kennett(1)
Nebraska Lincoln(1)
New Hampshire Portsmouth*(1)
Hollis*(1)
Hudson(1)
New Jersey Fairfield*(1)
New York Clyde(2)
Lyons(1)
Smithtown(2)
North Carolina Forest City(1)
Hillsborough(1)
Mooresville(1)
Sanford(1)
Wake Forest*(1)
Ohio Akron(1)
Andover(2)
Avon(2)
Brookville(1)
Cleveland(1)(2)
Columbus(1)
Cuyahoga Falls*(1)
Eaton(1)
Elyria(1)(2)
Forest(2)
Green Camp(1)
Kent(1)
Lewisburg(1)
Metamora(1)
Ravenna(1)
St. Marys(1)
Wadsworth(1)
Wickliffe(1)
Oklahoma Henryetta*(1)
Oregon Eugene(1)
Pennsylvania Canton(1)
Harrison City(1)
Reading(1)
- 10 -
State City
----- ----
South Carolina Beaufort(2)
Inman(1)
Spartanburg(1)
Tennessee Greenfield(1)
Greenville(1)
Memphis*(1)
Texas Cleburne(1)
Ft. Worth(1)
Mansfield(1)
Utah Ogden(2)
Salt Lake City(1)
Washington Seattle*(1)
Wisconsin Grantsburg(1)
Mauston(1)
Territory City
--------- ----
Puerto Rico Ponce*(2)
FOREIGN COUNTRIES
-----------------
Country City
------- ----
Argentina Buenos Aires(1)
Australia Castle Hill(1)
Wodonga(1)
Austria Wiener Neustadt(1)
Belgium Brussels*(1)
Brazil Jacarei(1)
Sao Paulo(1)
Canada Grimsby(1)
Owen Sound(1)
Czech Republic Prague*(1)
Denmark Copenhagen*(1)
Helsingor(1)
England Barnstaple(1)
Cannock(1)
Derby(1)
Hemel Hempstead(1)
Littlehampton(1)
Marlow*(1)
Morley(1)
Poole*(1)
Rotherham(1)
Stratford-upon-Avon*(1)
Watford(1)
- 11 -
FOREIGN COUNTRIES
-----------------
Country City
------- ----
Finland Helsinki*(1)
Hyrynsalmi(1)
Urjala(1)
France Annemasse(1)
Contamine(1)
Evreux(1)
Pontarlier(1)
Wissembourg(1)
Germany Berlin*(1)
Bielefeld(1)
Bietigheim-Bissingen(1)
Cologne(1)
Erfurt(1)
Hamburg*(2)
Hochmossingen(1)
Huttenfeld(1)
Kaarst(1)
Mainz-Kastel(2)
Mucke(1)
Offenburg*(1)
Pleidelsheim(1)
Queckborn(1)
Velbert(1)
Viernheim(1)
Hong Kong Hong Kong(1)
Hungary Budapest*(1)
India Bombay*(1)
Italy Adro(1)
Arsago Seprio(1)
Gessate(1)
Milan(1)
Japan Yokohama(1)(2)
Mexico Matamoros(1)
Monterrey(1)
Naucalpan*(1)
Tijuana(1)
Toluca(1)
Netherlands Hoogezand(1)
0ldenzaal(1)
New Zealand Mt. Wellington(1)
Norway Langhus(1)
Peoples Republic of China Beijing*(1)(2)
Shanghai*(1)
Poland Warsaw*(1)
Wroclaw*(1)
Singapore Singapore*(1)(2)
South Africa Johannesburg*(1)
- 12 -
FOREIGN COUNTRIES
-----------------
Country City
------- ----
South Korea Seoul*(1)
Spain Madrid*(1)
Sweden Boras(1)
Falkoping(1)
Stockholm(1)
Trollhatten(1)
Ulricehamn(1)
Taiwan Taipei*(1)
Venezuela Caracas*(1)
Puerto Ordaz*(1)
The Company believes that its properties have been adequately
maintained, are in good condition generally and are suitable and adequate
for its business as presently conducted. The extent of utilization of the
Company's properties varies among its plants and from time to time.
Additional capacity acquired through business combinations, offset by
restructuring efforts in prior years, has adjusted the Company's capacity
to proper levels for anticipated needs. The Company's material manufacturing
facilities remain capable of handling additional volume increases.
ITEM 3. Legal Proceedings. None.
ITEM 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
-------
ITEM 5. Market for the Registrant's Common Equity and Related
Stockholder Matters. As of August 29, 1996, the approximate number of
shareholders of record of the Company was 3,694 and the approximate number
of beneficial owners was 35,403. The Company's common shares are traded on
the New York Stock Exchange ("NYSE"). Set forth below is a quarterly summary
of the high and low sales prices on the NYSE for the Company's common shares
and dividends declared for the two most recent fiscal years (adjusted to
reflect the 3-shares-for-2 stock split paid on June 2, 1995):
Fiscal Year 1st 2nd 3rd 4th Full Year
- - ----------- --- --- --- --- ---------
1996 High $ 41-1/2 $ 38-3/8 $ 39-3/4 $ 44-1/8 $ 44-1/8
Low 35-3/8 30-7/8 31-7/8 37 30-7/8
Dividends .18 .18 .18 .18 .72
1995 High $ 30-1/8 $ 31-3/8 $ 32-7/8 $ 39-1/2 $ 39-1/2
Low 25 25-1/2 27-5/8 29-1/8 25
Dividends .167 .167 .167 .180 .667
- 13 -
ITEM 6. Selected Financial Data. The information set forth on pages
42 and 43 of the Annual Report as specifically excerpted on page 13-33 of
Exhibit 13 hereto is incorporated herein by reference.
ITEM 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations. The information set forth on pages 25, 26, 28, 30
and 32 of the Annual Report as specifically excerpted on pages 13-1 through
13-9 of Exhibit 13 hereto is incorporated herein by reference.
ITEM 8. Financial Statements and Supplementary Data. The
information set forth on pages 24, 27, 29, 31 and 33 through 41 of the Annual
Report as specifically excerpted on pages 13-10 to 13-32 of Exhibit 13
hereto is incorporated herein by reference.
ITEM 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure. Not applicable.
PART III
--------
ITEM 10. Directors and Executive Officers of the Registrant.
Information required as to the Directors of the Company is contained on pages
1 to 3 of the Company's definitive Proxy Statement dated September 23, 1996
(the "Proxy Statement") under the caption "Election of Directors."
Information required with respect to compliance with Section 16(a) of the
Securities Exchange Act of 1934 is contained in the first paragraph on page 14
of the Proxy Statement under the Caption "Section 16(a) Beneficial Ownership
Reporting Compliance." The foregoing information is incorporated herein by
reference. Information as to the executive officers of the Company is
included in Part I hereof.
ITEM 11. Executive Compensation. The information set forth under
the caption "Compensation of Directors" on page 4 of the Proxy Statement,
under the caption "Executive Compensation" on pages 8 to 12 of the Proxy
Statement and under the caption "Common Share Price Performance Graph" on
page 12 of the Proxy Statement is incorporated herein by reference.
ITEM 12. Security Ownership of Certain Beneficial Owners and
Management. The information set forth under the caption ""Change in Control"
Severance Agreements with Officers" on pages 11 and 12 of the Proxy
Statement and under the caption "Principal Shareholders of the Corporation"
on page 13 of the Proxy Statement is incorporated herein by reference.
ITEM 13. Certain Relationships and Related Transactions.
Not applicable.
- 14 -
PART IV
-------
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
a. The following are filed as part of this report:
1. Financial Statements and Schedules
The financial statements and schedule listed in the
accompanying Index to Consolidated Financial Statements and
Schedules are filed or incorporated by reference as part of
this Report.
2. The exhibits listed in the accompanying Exhibit Index and
required by Item 601 of Regulation S-K (numbered in
accordance with Item 601 of Regulation S-K) are filed or
incorporated by reference as part of this Report.
b. The Registrant filed a Current Report on Form 8-K on June 19,
1996 for the purpose of filing certain exhibits to its
Registration Statement on Form S-3 which was declared effective
on May 2, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
PARKER-HANNIFIN CORPORATION
Michael J. Hiemstra
Michael J. Hiemstra
Vice President - Finance and
Administration
September 30, 1996
- 15 -
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report on Form 10-K has been signed below by the following persons in the
capacities and on the date indicated.
Signature and Title
-------------------
PATRICK S. PARKER, Chairman of the Board of Directors;
DUANE E. COLLINS, President, Chief Executive Officer and
Director; HAROLD C. GUERITEY, JR., Controller and
Principal Accounting Officer; JOHN G. BREEN, Director;
PAUL C. ELY, JR., Director; ALLEN H. FORD, Director;
FRANK A. LePAGE, Director; PETER W. LIKINS, Director;
ALLAN L. RAYFIELD, Director; PAUL G. SCHLOEMER,
Director; WOLFGANG R. SCHMITT, Director; STEPHANIE A.
STREETER, Director; DENNIS W. SULLIVAN, Director; and
MICHAEL A. TRESCHOW, Director.
Date: September 30, 1996
Michael J. Hiemstra
Michael J. Hiemstra, Vice President - Finance and
Administration, Principal Financial Officer and
Attorney-in-Fact
- 16 -
PARKER-HANNIFIN CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
Reference
---------
Excerpt from Annual
Form 10-K Report as set forth
Annual Report in Exhibit 13
(Page) (Page)
------------- -------------------
Data incorporated by reference from the
Annual Report as specifically excerpted
in Exhibit 13 hereto:
Report of Independent Accountants --- 13-32
Consolidated Statement of Income for the
years ended June 30, 1996, 1995 and 1994 --- 13-10
Consolidated Balance Sheet at June 30, 1996
and 1995 --- 13-12 and 13-13
Consolidated Statement of Cash Flows for
the years ended June 30, 1996,
1995 and 1994 --- 13-14 and 13-15
Notes to Consolidated Financial Statements --- 13-18 to 13-30
Consent and Report of Independent
Accountants F-2 ---
Schedule:
II - Valuation and Qualifying Accounts F-3 ---
Individual financial statements and related applicable schedules
for the Registrant (separately) have been omitted because the Registrant
is primarily an operating company and its subsidiaries are considered to
be totally-held.
Schedules other than those listed above have been omitted from this
Annual Report because they are not required, are not applicable, or the
required information is included in the consolidated financial
statements or the notes thereto.
F-1
COOPERS Coopers & Lybrand L.L.P.
& LYBRAND
a professional services firm
CONSENT AND REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
Parker Hannifin Corporation
Our report on the consolidated financial statements of Parker Hannifin
Corporation has been incorporated by reference from page 24 of the 1996
Annual Report to Shareholders of Parker Hannifin Corporation, as specifically
excerpted on page 13-32 of Exhibit 13 to this Form 10-K. In connection with
our audits of such financial statements, we have also audited the related
financial statement schedule listed in the index on page F-1 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
We consent to the incorporation by reference in the registration statement of
Parker Hannifin Corporation on Form S-3 (File No. 333-2761) and Forms S-8
(File Nos. 33-53193, 33-43938 and 2-66732) of our report dated August 1, 1996
on our audits of the consolidated financial statements and financial statement
schedule of Parker Hannifin Corporation as of June 30, 1996 and 1995, and for
the years ended June 30, 1996, 1995, and 1994, which report is included in
Exhibit 13 of this Form 10-K.
Coopers & Lybrand L.L.P.
Cleveland, Ohio
September 30, 1996
F-2(
Coopers & Lybrand L.L.P. is a member of Coopers & Lybrand International,
a limited liability association incorporated in Switzerland.
PARKER-HANNIFIN CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JUNE 30, 1994, 1995 and 1996
(Dollars in Thousands)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Additions
Balance at Charged to Other Balance
Beginning Costs and (Deductions)/ At End
Description Of Period Expenses Additions (A) Of Period
----------- --------- ---------- ------------- ---------
Allowance for doubtful accounts:
- - --------------------------------
Year ended June 30,1994 $ 4,146 $ 2,597 $ (2,012) $ 4,731
Year ended June 30,1995 4,731 2,411 (529) 6,613
Year ended June 30,1996 6,613 2,158 (2,326) 6,445
(A) Net balance of deductions due to uncollectible accounts charged off
and additions due to acquisitions or recoveries.
F-3
Exhibit Index
-------------
Exhibit No. Description of Exhibit
- - ----------- ----------------------
(3) Articles of Incorporation and By-Laws
------ -------------------------------------
(3)(a) Amended Articles of Incorporation.
(3)(b) Code of Regulations, as amended (A).
(4) Instruments Defining Rights of Security Holders:
------ ------------------------------------------------
(4)(a) Rights Agreement, dated February 10, 1987, between the
Registrant and Society National Bank (as successor to
Ameritrust Company National Association) (A).
The Registrant is a party to other instruments, copies of
which will be furnished to the Commission upon request,
defining the rights of holders of its long-term debt
identified in Note 7 of the Notes to Consolidated Financial
Statements appearing on page 37 in the Annual Report as
specifically excerpted on pages 13-23 and 13-24 of
Exhibit 13 hereto, which Note is incorporated herein by
reference.
(10) Material Contracts:
------- -------------------
(10)(a) Form of Change in Control Severance Agreement entered into
by the Registrant and certain executive officers, dated as
of August 15, 1996.*
(10)(b) Parker-Hannifin Corporation Change in Control Severance
Plan, as amended as of August 15, 1996.*
(10)(c) Form of Indemnification Agreement entered into by the
Registrant and its directors and certain executive
officers (B).
(10)(d) Executive Liability and Indemnification Insurance
Policy (C).
(10)(e) Parker-Hannifin Corporation Supplemental Executive
Retirement Benefits Program (August 15, 1996 Restatement).*
(10)(f) Parker-Hannifin Corporation 1987 Employees Stock Option
Plan, as amended as of August 15, 1996.*
(10)(g) Parker-Hannifin Corporation 1990 Employees Stock Option
Plan, as amended as of October 28, 1993 and
August 15, 1996.*
(10)(h) Parker-Hannifin Corporation 1993 Stock Incentive Program,
as amended as of August 15, 1996.*
(10)(i) Parker-Hannifin Corporation 1996 Target Incentive Bonus
Plan Description (D).*
Exhibit No. Description of Exhibit
- - ----------- ----------------------
(10)(j) Parker-Hannifin Corporation 1997 Target Incentive Bonus
Plan Description.*
(10)(k) Parker-Hannifin Corporation 1994-95-96 Long Term Incentive
Plan Description, as amended as of August 17, 1995 (E).*
(10)(l) Parker-Hannifin Corporation 1995-96-97 Long Term Incentive
Plan Description, as amended as of August 17, 1995 and
August 15, 1996.*
(10)(m) Parker-Hannifin Corporation 1996-97-98 Long Term Incentive
Plan Description, as amended as of August 15, 1996.*
(10)(n) Parker-Hannifin Corporation 1997-98-99 Long Term Incentive
Plan Description.*
(10)(o) Parker-Hannifin Corporation Savings Restoration Plan, as
amended as of August 17, 1995 and August 15, 1996.*
(10)(p) Parker-Hannifin Corporation Pension Restoration Plan, as
amended as of August 17, 1995 and August 15, 1996.*
(10)(q) Parker-Hannifin Corporation Executive Deferral Plan, as
amended as of August 17, 1995 and August 15, 1996.*
(10)(r) Parker-Hannifin Corporation Volume Incentive Plan.*
(10)(s) Parker-Hannifin Corporation Non-Employee Directors'
Stock Plan, as amended as of August 17, 1995 and
August 15, 1996.*
(10)(t) Parker-Hannifin Corporation Non-Employee Directors Stock
Option Plan.*
(10)(u) Parker-Hannifin Corporation Deferred Compensation Plan for
Directors, as amended as of August 15, 1996.*
(11) Computation of Common Shares Outstanding and Earnings Per
Share.
(13) Excerpts from Annual Report to Shareholders for the fiscal
year ended June 30, 1996 which are incorporated herein by
reference thereto.
(21) List of subsidiaries of the Registrant.
(24) Consents of Experts (contained in Consent and Report of
Independent Accountants appearing on Page F-2 of this
Form 10-K).
Exhibit No. Description of Exhibit
- - ----------- ----------------------
(25) Power of Attorney
(27) Financial Data Schedule
*Management contracts or compensatory plans or arrangements.
- - ------------
(A) Incorporated by reference to Exhibits to the Registrant's
Registration Statement on Form S-8 (No. 33-53193) filed
with the Commission on April 20, 1994.
(B) Incorporated by reference to Exhibit 10(f) to the
Registrant's Report on Form 10-K for the fiscal year ended
June 30, 1994.
(C) Incorporated by reference to Exhibit 10(g) to the
Registrant's Report on Form 10-K for the fiscal year ended
June 30, 1994.
(D) Incorporated by reference to Exhibit 10(l) to the
Registrant's Report on Form 10-K for the fiscal year ended
June 30, 1995.
(E) Incorporated by reference to Exhibit 10(n) to the
Registrant's Report on Form 10-K for the fiscal year ended
June 30, 1995.
Shareholders may request a copy of any of the exhibits to this Annual Report
on Form 10-K by writing to the Secretary, Parker-Hannifin Corporation, 17325
Euclid Avenue, Cleveland, Ohio 44112.