Parker-Hannifin (PH) 10-K risk factor changes: FY2021 vs FY2020

Disruptions to our customers in the aerospace industry, which is facing [removed: the consequences of travel][added: diminished demand, have been and may continue to be challenging.]

Moreover, because certain of our employees [removed: have transitioned] [added: continue] to [removed: working] [added: work] from home, we may be subject to increased vulnerability to cyber and other information technology risks.

Additionally, [removed: continued] weak economic conditions generally [added: as a result of the COVID-19 pandemic] could result in impairment in value of our tangible or intangible assets.

Our net sales derived from customers outside the United States were approximately [removed: 37] [added: 40] percent in [removed: 2020, 39] [added: 2021, 37] percent in [removed: 2019] [added: 2020] and [removed: 41] [added: 39] percent in [removed: 2018.][added: 2019.]

[removed: | • |] [added: -] fluctuations in currency exchange rates and/or changes in monetary policy; [removed: |]

[removed: | • |] [added: -] public health crises, including pandemics; [removed: |]

[removed: | • |] [added: -] limitations on ownership and on repatriation of earnings; [removed: |]

[removed: | • |] [added: -] transportation delays and interruptions; [removed: |]

[removed: | • |] [added: -] political, social and economic instability and disruptions; [removed: |]

[removed: | • |] [added: -] government embargoes or trade restrictions; [removed: |]

[removed: | • |] [added: -] the imposition of duties and tariffs and other trade barriers; [removed: |]

[removed: | • |] [added: -] import and export controls; [removed: |]

[removed: | • |] [added: -] labor unrest and current and changing regulatory environments; [removed: |]

[removed: | • |] [added: -] the potential for nationalization of enterprises; [removed: |]

[removed: | • |] [added: -] difficulties in staffing and managing multi-national operations; [removed: |]

[removed: | • |] [added: -] limitations on our ability to enforce legal rights and remedies; [removed: |]

[removed: | • |] [added: -] potentially adverse tax consequences; and [removed: |]

[removed: | • |] [added: -] difficulties in implementing restructuring actions on a timely basis. [removed: |]

We are subject to risks relating to acquisitions and joint ventures, and risks relating to the integration of acquired companies, including risks related to the integration of [removed: CLARCOR Inc. ("Clarcor"),] Lord Corporation ("Lord") and Exotic Metals Forming Company [removed: ("Exotic").][added: ("Exotic") and the potential acquisition of Meggitt.]

For example, we have devoted significant management attention and resources to integrating the business and operations of [removed: Clarcor,] Lord and Exotic.

[removed: | • |] [added: -] the consequences of a change in tax treatment, including the cost of integration and compliance and the possibility that the full benefits anticipated to result from the acquisitions may not be realized; [removed: |]

[removed: | • |] [added: -] delays in the integration of management teams, strategies, operations, products, and services; [removed: |]

[removed: | • |] [added: -] differences in business backgrounds, corporate cultures, and management philosophies that may delay successful integration; [removed: |]

[removed: | • |] [added: -] the ability to retain key employees; [removed: |]

[removed: | • |] [added: -] the ability to create and enforce uniform standards, controls, procedures, policies, and information systems; [removed: |]

[removed: | • |] [added: -] challenges of integrating complex systems, technologies, networks, and other assets of the acquired companies in a manner that minimizes any adverse impact or disruptions to customers, suppliers, employees, and other constituencies; and [removed: |]

[removed: | • |] [added: -] unknown liabilities and unforeseen increased expenses or delays associated with the integration beyond current estimates. [removed: |]

Our results may be adversely affected if expanded operations from the acquisition of [removed: Clarcor,] Lord and [removed: Exotic] [added: Exotic, and the potential acquisition of Meggitt,] are not effectively managed.

If these systems, or any part of the systems, are damaged, intruded upon, attacked, shutdown or cease to function properly (whether by planned upgrades, force majeure, telecommunications failures, [added: criminal acts, including] hardware or software break-ins or [added: 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 [added: could be materially adversely affected.]

As a result of the COVID-19 pandemic, certain of our employees [removed: have transitioned] [added: continue] to [removed: working] [added: work] from home, which may increase our vulnerability to cyber and other information technology risks.

Despite our use of reasonable and appropriate controls, material security breaches, theft, misplaced, lost or corrupted data, programming, or employee errors and/or malfeasance could lead to the compromise or improper use of such sensitive, confidential, or personal data or information, resulting in possible negative consequences, such as fines, [added: ransom demands,] penalties, loss of reputation, competitiveness or customers, or other negative consequences resulting in adverse impacts to our results of operations or financial condition.

[removed: | • |] [added: -] changes in business relationships with and purchases by or from major customers, suppliers or distributors, including delays or cancellations in shipments, disputes regarding contract terms or significant changes in financial condition, and changes in contract cost and revenue estimates for new development programs, including changes as a result of the COVID-19 pandemic; [removed: |]

[removed: | • |] [added: -] changes in product mix; [removed: |]

[removed: | • |] [added: -] changes in the market acceptance of our products; [removed: |]

[removed: | • |] [added: -] increased competition in the markets we serve; [removed: |]

[removed: | • |] [added: -] declines in the general level of industrial production, including as a result of the COVID-19 pandemic; [removed: |]

[removed: | • |] [added: -] weakness in the end-markets we serve, including as a result of the COVID-19 pandemic; [removed: |]

[removed: | • |] [added: -] fluctuations in the availability or the prices of raw materials; and [removed: |]

[removed: | • |] [added: -] fluctuations in currency exchange rates. [removed: |]

Furthermore, as required by U.S. [removed: generally accepted accounting principles,] [added: GAAP,] we establish reserves based on our assessment of contingencies, including contingencies related to legal claims asserted against us.

Business and Operational Risks

Strategic Transactions Risks

We are subject to risks relating to the pending acquisition of Meggitt.

On August 2, 2021, we announced our proposed acquisition of Meggitt.

Meggitt is a leader in design, manufacturing and aftermarket support of technically differentiated systems and equipment in aerospace, defense and selected energy markets.

The proposed acquisition of Meggitt would expand the size of our Aerospace Systems Segment relative to our other segment, increasing our susceptibility to conditions in the end markets served by our Aerospace Systems Segment.

There are numerous risks and uncertainties associated with the proposed acquisition, including:

- completion of the acquisition is subject to a number of conditions, some of which are outside of our control.

Among these conditions are the approval by Meggitt’s stockholders of the acquisition and the receipt of certain regulatory approvals, including the expiration or termination of any applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and under the antitrust and foreign investment/national security laws of certain other non-U.S. jurisdictions including the United Kingdom and European Union;

- the Company’s and Meggitt’s existing business relationships with third parties, including customers and service providers, may be disrupted due to uncertainty associated with the acquisition, which could have an adverse effect on our results of operations, cash flows and financial position or those of the combined company;

- failure to complete the acquisition could negatively impact our stock price and our future business and financial results;

- both we and Meggitt will incur significant transaction costs in connection with the acquisition, which costs may exceed those currently anticipated;

- we intend to pay for the acquisition of Meggitt and pay other fees and expenses required to be paid in connection with the acquisition with cash on hand and proceeds of new indebtedness.

There can be no assurance that we will be able to execute such financing transactions on acceptable terms, in a timely manner or at all;

- the COVID-19 pandemic may delay or prevent the completion of the acquisition;

- after completion of the acquisition, we may be unable to successfully integrate our and Meggitt’s business and, as a result, may fail to realize the anticipated benefits and cost savings of the transaction in the intended timeframe or at all, which could adversely affect the value of our common stock;

- our results after the proposed acquisition of Meggitt may suffer if we do not effectively manage our expanded operations following the acquisition; and

- Meggitt may have difficulty retaining, motivating, and attracting executives and other employees in light of the pending acquisition, and failure to do so could harm the company.

Any of the foregoing risks and uncertainties could have a material adverse effect on our earnings, cash flows and financial condition.

Financial Risks

Legal and Regulatory Risks

restrictions and severely diminished demand, have been and are expected to continue to be especially challenging.

| | |

| --- | --- |

could be materially adversely affected.

It is possible that the future performance and earnings projections of the Company, including its individual segments, may differ materially from [added: past performance or] current expectations, depending on economic conditions within its mobile, industrial and aerospace markets, and the [removed: Company's] [added: Company’s] ability to maintain and achieve anticipated benefits associated with announced realignment activities, strategic initiatives to improve operating margins, actions taken to combat the effects of the current economic environment, and growth, innovation and global diversification initiatives.

Additionally, the actual impact of changes in tax laws in the United States and foreign jurisdictions and any judicial or regulatory [removed: interpretations] [added: interpretation] thereof on future performance and earnings projections may impact the [removed: Company's] [added: Company’s] tax calculations.

[removed: | • |] [added: -] global economic [removed: and political] factors, including [removed: the impact of the global outbreak of COVID-19 and governmental and other actions taken in response,] manufacturing activity, air travel trends, currency exchange [removed: rates and monetary policy, trade policy and tariffs,] [added: rates,] difficulties entering new markets and general economic conditions such as inflation, deflation, interest [removed: rates and] [added: rates,] credit [removed: availability, as well as uncertainties associated with the timing] [added: availability] and [removed: conditions surrounding the return to service of the Boeing 737 MAX; |][added: changes in consumer habits and preferences;]

[removed: | • | our] [added: -] ability to identify acceptable strategic acquisition targets; uncertainties surrounding timing, successful completion or integration of acquisitions and similar transactions, including the [removed: integrations] [added: integration] of [removed: Clarcor,] Lord and [removed: EMFCO Holdings Incorporated, parent company] [added: Exotic and the proposed acquisition] of [removed: Exotic;] [added: Meggitt;] and our ability to [removed: successfully divest businesses planned for divestiture] [added: effectively manage expanded operations from the acquisitions of Lord] and [removed: realize] [added: Exotic and] the [removed: anticipated benefits] [added: proposed acquisition] of [removed: such divestitures; |][added: Meggitt;]

[removed: | • |] [added: -] the determination to undertake business realignment activities and the expected costs thereof and, if undertaken, the ability to complete such activities and realize the anticipated cost savings from such activities; [removed: |]

[removed: | • |] [added: -] increased [removed: cybersecurity] [added: cyber security] threats and sophisticated computer crime; [removed: |][added: and]

[removed: | • |] [added: - changes in] business relationships with and purchases by or from major customers, suppliers or distributors, including delays or cancellations in shipments; [removed: |]

[removed: | • |] [added: -] availability, limitations or cost increases of raw materials, component products and/or commodities that cannot be recovered in product pricing; [removed: |]

[removed: | • |] [added: -] disputes regarding contract terms or significant changes in financial condition, changes in contract cost and revenue estimates for new development [removed: programs,] [added: programs] and changes in product mix; [removed: |]

[removed: | • |] [added: -] uncertainties surrounding the ultimate resolution of outstanding legal [removed: and regulatory] proceedings, including the outcome of any appeals; [removed: |]

[removed: | • |] [added: -] additional liabilities relating to changes in tax rates or exposure to additional income tax liabilities; [removed: |]

[removed: | • | our] [added: -] ability to enter into, own, [removed: renew] [added: renew, protect] and maintain intellectual property and know-how; [removed: |]

[removed: | • | our] [added: -] leverage and future debt service obligations; [removed: |]

[removed: | • |] [added: -] potential impairment of goodwill; [removed: |]

[removed: | • |] [added: -] compliance costs associated with environmental laws and [removed: climate change] regulations; [removed: |]

[removed: | • | our] [added: -] ability to manage costs related to insurance and employee retirement and health care benefits; [removed: |]

[removed: | • | our] [added: -] ability to implement successfully [removed: the Company's] capital allocation initiatives, including timing, price and execution of share [removed: repurchases. |][added: repurchases;]

The Company makes these statements as of the date of the filing of its Annual Report on Form 10-K for the year ended June 30, [removed: 2020,] [added: 2021,] and undertakes no obligation to update them unless otherwise required by law.

[removed: During] [added: In March] 2020, the World Health Organization declared the [removed: recent] outbreak [added: of] COVID-19 a pandemic.

[removed: In the long-term, we] [added: We] believe many opportunities for profitable growth are available.

[removed: | • |] [added: -] Serving the customer and continuously enhancing its experience with the Company; [removed: |]

[removed: | • |] [added: -] Successfully executing The Win Strategy initiatives relating to engaged people, premier customer experience, profitable growth and financial performance; [removed: |]

[removed: | • |] [added: -] Maintaining a decentralized division and sales company structure; [removed: |]

[removed: | • |] [added: -] Fostering a [removed: safety first] [added: safety-first] and entrepreneurial culture; [removed: |]

[removed: | • |] [added: -] Engineering innovative systems and products to provide superior customer value through improved service, efficiency and productivity; [removed: |]

[removed: | • |] [added: -] Delivering products, systems and services that have demonstrable savings to customers and are priced by the value they deliver; [removed: |]

[removed: | • |] [added: -] Acquiring strategic businesses; [removed: |]

[removed: | • |] [added: -] Organizing around targeted regions, technologies and markets; [removed: |]

[removed: | • |] [added: -] Driving efficiency by implementing lean enterprise principles; and [removed: |]

[removed: | • |] [added: -] Creating a culture of empowerment through our values, inclusion and diversity, accountability and teamwork. [removed: |]

[removed: During 2020, the Company completed the Lord and Exotic acquisitions, which are further discussed in Note 3 to] [added: Discussion of] the [removed: Consolidated Financial Statements] [added: 2019 financial statements is] included in Part II, Item [removed: 8] [added: 7] of [removed: this] [added: the Company's 2020] Annual Report on Form 10-K.

The discussion below compares the operating performance in [removed: 2020] [added: 2021] and [removed: 2019.][added: 2020.]

| (dollars in millions) | | [removed: 2020] | | | | [removed: 2019] [added: 2021] | | | [added: | | | 2020* | | |]

| Net sales | | [added: | | | |] $ | [removed: 13,696] [added: 14,348] | | | [added: | |] $ | [removed: 14,320] [added: 13,696] | |

| Gross profit margin | | [removed: 24.9] | | [added: | | 27.2 | |] % | | [removed: 25.3] | | [added: 24.8 | |] % |

| Selling, general and administrative expenses | | [added: | | | |] $ | [removed: 1,657] [added: 1,527] | | | [added: | |] $ | [removed: 1,544] [added: 1,657] | |

| Selling, general and administrative expenses, as a percent of sales | | [removed: 12.1] | | [added: | | 10.6 | |] % | | [removed: 10.8] | | [added: 12.1 | |] % |

| Interest expense | | [added: | | | |] $ | [removed: 308] [added: 250] | | | [added: | |] $ | [removed: 190] [added: 308] | |

| Other [removed: (income) expense,] [added: (income),] net | | [removed: (67] | | [removed: )] | | [removed: (61] [added: (17)] | | [removed: )] | [added: | | | (67) | | |]

| [removed: (Gain) loss] [added: Gain] on disposal of assets | | [removed: (1] | | [removed: )] | | [removed: 11] [added: (109)] | | | [added: | | | (1) | | |]

Often but not always, these statements may be identified from the use of forward-looking terminology such as “anticipates,” “believes,” “may,” “should,” “could,” “potential,” “continues,” “plans,” “forecasts,” “estimates,” “projects,” “predicts,” “would,” “intends,” “expects,” “targets,” “is likely,” “will,” or the negative of these terms and similar expressions, and include all statements regarding future performance, earnings projections, events or developments.

Neither the Company nor any of its respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this document will actually occur.

The Company cautions readers not to place undue reliance on these statements.

- the impact of the global outbreak of COVID-19 and governmental and other actions taken in response;

- the ability to successfully divest businesses planned for divestiture and realize the anticipated benefits of such divestitures;

- legal and regulatory developments and changes;

- potential labor disruptions;

- global competitive market conditions, including U.S. trade policies and resulting effects on sales and pricing;

- local and global political and economic conditions;

- inability to obtain, or meet conditions imposed for, required governmental and regulatory approvals;

- government actions and natural phenomena such as floods, earthquakes, hurricanes and pandemics;

- success of business and operating initiatives.

The Company is a global leader in motion and control technologies.

For more than a century, the Company has engineered the success of its customers in a wide range of diversified industrial and aerospace markets.

By aligning around our purpose, Enabling Engineering Breakthroughs that Lead to a Better Tomorrow, Parker is better positioned for the challenges and opportunities of tomorrow.

The Win Strategy 3.0 is Parker's business system that defines the goals and initiatives that drive growth, transformation and success.

It works with our purpose, which is a foundational element of The Win Strategy, to engage team members and create responsible and sustainable growth.

Our shared values shape our culture and our interactions with stakeholders and the communities in which we operate and live.

- Enabling a sustainable future by providing innovative technology solutions that offer a positive, global environmental impact and operating responsibly by reducing our energy use and emissions;

We continue to monitor the impact of the COVID-19 pandemic, which has negatively impacted demand and continues to create economic uncertainty.

The extent to which our business and results of operations will be impacted by the pandemic over the long term will depend on future developments that cannot be accurately predicted at this time.

These developments include the availability, acceptance, distribution and effectiveness of vaccines; new information concerning the severity and spread of COVID-19 and its variants; and actions by government authorities to contain the pandemic or mitigate its economic, public health and other impacts.

We continue to prioritize the safety of our team members.

To minimize the spread of COVID-19 in our workplaces, we implemented rigorous prevention, screening and hygiene protocols.

Additionally, we are strategically managing costs through reductions in discretionary spending.

We continue to prioritize capital expenditures related to safety and strategic investments.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | |

*Year ended June 30, 2020 amounts have been adjusted to reflect the change in inventory accounting method, as described in Notes 1 and 7 to the Consolidated Financial Statements.

Net sales in 2021 increased from the 2020 amount due to higher volume in both the Diversified Industrial International and Diversified Industrial North American businesses, partially offset by lower volume in the Aerospace Systems Segment.

Prior-year acquisitions contributed approximately $394 million in net sales during 2021.

Gross profit margin also benefited from the absence of acquisition-related expenses, which were included in cost of sales in 2020, of $69 million.

During 2021, SG&A also benefited from the absence of acquisition-related expenses of $119 million, which were incurred in 2020.

These benefits were partially offset by higher intangible asset amortization expense related to prior-year acquisitions and higher stock compensation expense.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | $ | (17) | | | | | $ | (67) | |

Gain on disposal of assets in 2021 primarily consists of a gain of $101 million on the sale of land.

Effective tax rate in 2021 was higher than 2020 primarily due to an overall decrease in discrete tax benefits.

All statements regarding future performance, earnings projections, events or developments are forward-looking statements.

| | |

| --- | --- |

| • | our ability to effectively manage expanded operations from the acquisitions of Clarcor, Lord and Exotic; |

| • | the development of new products and technologies requiring substantial investment; |

| • | potential product liability risks; |

| • | compliance with federal rules, regulations, audits and investigations associated with being a provider of products to the United States government; and |

The Company is a leading worldwide diversified manufacturer of motion and control technologies and systems, providing precision engineered solutions for a wide variety of mobile, industrial and aerospace markets.

We believe the leading economic indicators of these markets that have a correlation to the Company's future order rates are as follows:

| • | Purchasing Managers Index ("PMI") on manufacturing activity specific to regions around the world with respect to most mobile and industrial markets; |

| • | Global aircraft miles flown and global revenue passenger miles for commercial aerospace markets and Department of Defense spending for military aerospace markets; and |

| • | Housing starts with respect to the North American residential air conditioning market and certain mobile construction markets. |

A PMI above 50 indicates that the manufacturing activity specific to a region of the world in the mobile and industrial markets is expanding.

A PMI below 50 indicates the opposite.

Recent PMI levels for some regions around the world were as follows:

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | June 30, 2020 | | | March 31, 2020 | | | June 30, 2019 | |

| United States | 52.6 | | | 49.1 | | | 50.6 | |

| Eurozone countries | 47.4 | | | 44.5 | | | 47.6 | |

| China | 51.2 | | | 50.1 | | | 49.4 | |

| Brazil | 51.6 | | | 48.4 | | | 51.0 | |

Global aircraft miles flown decreased by approximately 45 percent and global revenue passenger miles decreased by approximately 52 percent from their comparable 2019 levels.

The Company anticipates that U.S. Department of Defense spending with regard to appropriations and operations and maintenance for the U.S. Government's fiscal year 2020 will increase by approximately two percent from its fiscal 2019 level.

Housing starts in June 2020 were approximately two percent lower than housing starts in March 2020 and approximately four percent lower than housing starts in June 2019.

Given the unpredictable nature of COVID-19's impact on the global economy, the statistics included above may not be reflective of recent or future activity.

We are actively monitoring the impact of the COVID-19 outbreak, which has negatively impacted, and we expect will continue to negatively impact, our business and results of operations.

The ultimate extent to which our business and results of operations will be impacted by the outbreak will depend largely on future developments, which are highly uncertain and cannot be accurately predicted at this time, including new information which may emerge concerning the severity of the outbreak and actions by government authorities to contain the outbreak or mitigate its economic, public health and other impacts.

We took immediate and aggressive action to minimize the spread of COVID-19 in our workplaces and are taking measures to preserve cash and reduce costs, including but not limited to, global salary reductions, reduced work schedules, elimination of discretionary spending, targeted restructuring and limiting capital expenditures to safety-related issues and strategic investments.

Acquisitions will be considered from time to time to the extent there is a strong strategic fit, while at the same time maintaining the Company’s strong financial position.

We continue to assess our existing businesses and may initiate efforts to divest businesses that are not considered to be a good long-term strategic fit for the Company.

Future business divestitures could have a negative effect on the Company’s results of operations.

Discussion of the 2018 financial statements is included in Part II, Item 7 of the Company's 2019 Annual Report on Form 10-K.

Net sales in 2020 decreased from the 2019 amount due to lower volume in all segments, partially offset by an increase in sales from acquisitions made within the last 12 months of $949 million.

Lower volume and current-year acquisition-related expenses of $69 million were partially offset by lower operating costs resulting from current and prior-year business realignment, acquisition integration and simplification activities, lower raw material costs and favorable product mix.

Selling, general and administrative expenses ("SG&A") increased seven percent in 2020 primarily due to acquisition-related transaction costs of $119 million in the current year compared to $17 million in 2019 and higher intangible asset amortization expense related to the Lord and Exotic acquisitions.

These expenses were partially offset by a net benefit associated with the Company's deferred compensation plan and related investments.

| | | $ | (67 | ) | | $ | (61 | ) |

Effective tax rate in 2020 was lower than 2019 primarily due to favorable one-time adjustments that were recorded in the current year as a result of a favorable foreign audit settlement.

| | | | |

[removed: A] [added: However, a] 100 basis point increase in near-term interest rates would increase annual interest expense on [removed: variable rate debt existing at June 30, 2020] [added: weighted average commercial paper balances during 2021] by approximately [removed: $24] [added: $5] million.

As we cannot [removed: predict] [added: anticipate] the ultimate duration or scope of the COVID-19 pandemic, the ultimate [removed: negative] financial impact to our results cannot be reasonably estimated, but could be material.

At June 30, 2021, our debt portfolio did not include any variable rate debt.

As discussed elsewhere in this report, the COVID-19 pandemic is having, and likely will continue to have, an adverse effect on our business, and its future impacts remain unpredictable.

As discussed elsewhere in this report, the recent outbreak of COVID-19 has negatively impacted and we expect it to continue to negatively impact our business and results of operations.

[removed: FORM 10-K][added: FORM 10-K]

| ☒ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year [removed: ended June] [added: ended June] 30, [removed: 2020][added: 2021]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

Commission File [removed: No. 1-4982][added: No. 1-4982]

| Ohio | | | [added: | | | | | |] 34-0451060 | [added: | |]

| (State or other jurisdiction [removed: of Incorporation] [added: of Incorporation] or Organization) | | | [added: | | | | | |] (I.R.S. [removed: Employer Identification] [added: Employer Identification] No.) | [added: | |]

| 6035 Parkland Boulevard, | [added: | |] Cleveland, | [added: | |] Ohio | [added: | |] 44124-4141 | [added: | |]

| (Address of Principal Executive Offices) | | | [added: | | | | | |] (Zip Code) | [added: | |]

Registrant’s telephone number, including area code [removed: (216) 896-3000][added: (216) 896-3000]

| Title of Each Class | | [added: | | | |] Trading Symbol | | [added: | | | |] Name of Each [removed: Exchange on] [added: Exchange on] which Registered | [added: | |]

| Common Shares, $.50 par value | | [added: | | | |] PH | | [added: | | | |] New York Stock Exchange | [added: | |]

| Large Accelerated Filer | [added: | |] ☒ | [added: | |] Accelerated Filer | [added: | |] ☐ | [added: | |]

| Non-Accelerated Filer | [added: | |] ☐ | [added: | |] Smaller Reporting Company | [added: | |] ☐ | [added: | |]

| Emerging Growth Company | [added: | |] ☐ | | | [added: | | | | | |]

The aggregate market value of the outstanding common stock held by non-affiliates of the Registrant as of December 31, [removed: 2019: $26,292,325,769.][added: 2020: $34,984,991,426.]

The number of Common Shares outstanding on July 31, [removed: 2020] [added: 2021] was [removed: 128,561,616.][added: 129,101,437.]

Portions of the Definitive Proxy Statement for the Company’s [removed: 2020] [added: 2021] Annual Meeting of Shareholders, to be held on October [removed: 28, 2020,] [added: 27, 2021,] are incorporated by reference into Part III of this Annual Report on Form 10-K.

| PART I | | | [added: | | | | | |]

| Item 1. | [removed: [Business](#sB162EE18A30C564694DE9D845D091624)] | [removed: [2](#sB162EE18A30C564694DE9D845D091624)] | [added: [Business](#iafaf11c8b47c4292a2ffb731d906bd90_13) | | | [2](#iafaf11c8b47c4292a2ffb731d906bd90_13) | | |]

| Item 1A. | [added: | |] [Risk [removed: Factors](#sEF4658E74CEB5CC58F4688B241B1107B)] [added: Factors](#iafaf11c8b47c4292a2ffb731d906bd90_16)] | [removed: [8](#sEF4658E74CEB5CC58F4688B241B1107B)] | [added: | [10](#iafaf11c8b47c4292a2ffb731d906bd90_16) | | |]

| Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#s0D8D5E5DA1B25C8E837E96E1A0CBB441)] [added: Comments](#iafaf11c8b47c4292a2ffb731d906bd90_19)] | [removed: [14](#s0D8D5E5DA1B25C8E837E96E1A0CBB441)] | [added: | [17](#iafaf11c8b47c4292a2ffb731d906bd90_19) | | |]

| Item 1C. | [added: | |] [Information about our Executive [removed: Officers](#s0958F24A59C757B69870A9D72748D7D8)] [added: Officers](#iafaf11c8b47c4292a2ffb731d906bd90_22)] | [removed: [14](#s0958F24A59C757B69870A9D72748D7D8)] | [added: | [17](#iafaf11c8b47c4292a2ffb731d906bd90_22) | | |]

| Item 2. | [removed: [Properties](#s57F1A71E443D502E9320EB0654769EBC)] | [removed: [15](#s57F1A71E443D502E9320EB0654769EBC)] | [added: [Properties](#iafaf11c8b47c4292a2ffb731d906bd90_25) | | | [19](#iafaf11c8b47c4292a2ffb731d906bd90_25) | | |]

| Item 3. | [added: | |] [Legal [removed: Proceedings](#s6660AD97CC585B7080A84EEF9488F0BB)] [added: Proceedings](#iafaf11c8b47c4292a2ffb731d906bd90_28)] | [removed: [15](#s6660AD97CC585B7080A84EEF9488F0BB)] | [added: | [19](#iafaf11c8b47c4292a2ffb731d906bd90_28) | | |]

| Item 4. | [added: | |] [Mine Safety [removed: Disclosures](#s120016EEF5C152BE9DD26603F43C9EE2)] [added: Disclosures](#iafaf11c8b47c4292a2ffb731d906bd90_31)] | [removed: [16](#s120016EEF5C152BE9DD26603F43C9EE2)] | [added: | [19](#iafaf11c8b47c4292a2ffb731d906bd90_31) | | |]

| PART II | | | [added: | | | | | |]

| Item 5. | [added: | |] [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s83ECA4C8FAED505BB6E08B0A9CCC5415)] [added: Securities](#iafaf11c8b47c4292a2ffb731d906bd90_37)] | [removed: [16](#s83ECA4C8FAED505BB6E08B0A9CCC5415)] | [added: | [19](#iafaf11c8b47c4292a2ffb731d906bd90_37) | | |]

| Item 7. | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s33A9BCE5303A5F45A39391EC6BCA27D8)] [added: Operations](#iafaf11c8b47c4292a2ffb731d906bd90_43)] | [removed: [17](#s33A9BCE5303A5F45A39391EC6BCA27D8)] | [added: | [21](#iafaf11c8b47c4292a2ffb731d906bd90_43) | | |]

| Item 7A. | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sA72E592F5DED5CD58951BFD55D3E2483)] [added: Risk](#iafaf11c8b47c4292a2ffb731d906bd90_67)] | [removed: [28](#sA72E592F5DED5CD58951BFD55D3E2483)] | [added: | [32](#iafaf11c8b47c4292a2ffb731d906bd90_67) | | |]

| Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#s7C39BE43558055A2818FB4D9B2FA2BE6)] [added: Data](#iafaf11c8b47c4292a2ffb731d906bd90_70)] | [removed: [29](#s7C39BE43558055A2818FB4D9B2FA2BE6)] | [added: | [33](#iafaf11c8b47c4292a2ffb731d906bd90_70) | | |]

| Item 9. | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s5EFE0D1B560454EFAAFCBE600E565C28)] [added: Disclosure](#iafaf11c8b47c4292a2ffb731d906bd90_190)] | [removed: [66](#s5EFE0D1B560454EFAAFCBE600E565C28)] | [added: | [72](#iafaf11c8b47c4292a2ffb731d906bd90_190) | | |]

| Item 9A. | [added: | |] [Controls and [removed: Procedures](#s384E1A0CE42F5813876F5F9686A131FA)] [added: Procedures](#iafaf11c8b47c4292a2ffb731d906bd90_193)] | [removed: [66](#s384E1A0CE42F5813876F5F9686A131FA)] | [added: | [72](#iafaf11c8b47c4292a2ffb731d906bd90_193) | | |]

| Item 9B. | [added: | |] [Other [removed: Information](#s78387DC988455279950017A32E23A56D)] [added: Information](#iafaf11c8b47c4292a2ffb731d906bd90_196)] | [removed: [66](#s78387DC988455279950017A32E23A56D)] | [added: | [72](#iafaf11c8b47c4292a2ffb731d906bd90_196) | | |]

| PART III | | | [added: | | | | | |]

| Item 10. | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#s3A58F2FEBDA5564FA72E1790D991C4C7)] [added: Governance](#iafaf11c8b47c4292a2ffb731d906bd90_202)] | [removed: [66](#s3A58F2FEBDA5564FA72E1790D991C4C7)] | [added: | [72](#iafaf11c8b47c4292a2ffb731d906bd90_202) | | |]

| Item 11. | [added: | |] [Executive [removed: Compensation](#sFCF35D1BF61551DEB519CB02E0F96186)] [added: Compensation](#iafaf11c8b47c4292a2ffb731d906bd90_205)] | [removed: [67](#sFCF35D1BF61551DEB519CB02E0F96186)] | [added: | [72](#iafaf11c8b47c4292a2ffb731d906bd90_205) | | |]

| Item 12. | [added: | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s6CD2A5EDCA115F9BAAC82299FE081757)] [added: Matters](#iafaf11c8b47c4292a2ffb731d906bd90_208)] | [removed: [67](#s6CD2A5EDCA115F9BAAC82299FE081757)] | [added: | [73](#iafaf11c8b47c4292a2ffb731d906bd90_208) | | |]

| Item 13. | [added: | |] [Certain Relationships and Related Transactions, and Director [removed: Independence](#s5C3051678FA6559FB3BCE2F93FF169E3)] [added: Independence](#iafaf11c8b47c4292a2ffb731d906bd90_211)] | [removed: [67](#s5C3051678FA6559FB3BCE2F93FF169E3)] | [added: | [73](#iafaf11c8b47c4292a2ffb731d906bd90_211) | | |]

| Item 14. | [added: | |] [Principal Accountant Fees and [removed: Services](#sCC29B418E2E4544A83F71476C939B58C)] [added: Services](#iafaf11c8b47c4292a2ffb731d906bd90_214)] | [removed: [67](#sCC29B418E2E4544A83F71476C939B58C)] | [added: | [73](#iafaf11c8b47c4292a2ffb731d906bd90_214) | | |]

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| Item 6. | | | [\[Reserved\]](#iafaf11c8b47c4292a2ffb731d906bd90_40) | | | [20](#iafaf11c8b47c4292a2ffb731d906bd90_40) | | |

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| [Signatures](#iafaf11c8b47c4292a2ffb731d906bd90_223) | | | | | | [79](#iafaf11c8b47c4292a2ffb731d906bd90_223) | | |

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| Item 6. | [Selected Financial Data](#s44412437658C5385B9E1266CF1D9B03F) | [16](#s44412437658C5385B9E1266CF1D9B03F) |

| [Signatures](#s2F239D1857765C58AD3D3D8135DD9246) | | [73](#s2F239D1857765C58AD3D3D8135DD9246) |

Employees

Our executive officers as of August 15, [removed: 2020,] [added: 2021,] were as follows:

| Name | | [added: | | | |] Position | | [added: | | | |] Officer Since(1) | | [added: | | | |] Age as [removed: of 8/15/2020] [added: of 8/15/2021] | | [added: |]

| Thomas L. Williams | | [added: | | | |] Chairman of the Board, Chief Executive Officer and Director | | [added: | | | |] 2005 | | [removed: 61] | | [added: | | 62 | | |]

| Lee C. Banks | | [removed: President, Chief Operating Officer] [added: | | | | Vice Chairman] and [added: President and] Director | | [added: | | | |] 2001 | | [removed: 57] | | [added: | | 58 | | |]

| [removed: Catherine A. Suever] [added: Todd M. Leombruno] | | [added: | | | |] Executive Vice President [removed: – Finance & Administration] and Chief Financial Officer | | [removed: 2010] | | [removed: 61] | | [added: 2017 | | | | | | 51 | | |]

| Mark J. Hart | | [added: | | | |] Executive Vice President – Human Resources & External Affairs | | [added: | | | |] 2016 | | [removed: 55] | | [added: | | 56 | | |]

| William R. "Skip" Bowman | | [added: | | | |] Vice President and President - Instrumentation Group | | [added: | | | |] 2016 | | [removed: 62] | | [added: | | 63 | | |]

| Thomas C. Gentile | | [added: | | | |] Vice President – Global Supply Chain | | [added: | | | |] 2017 | | [removed: 48] | | [added: | | 49 | | |]

[removed: | Todd M. Leombruno | |] [added: He was] Vice President and Controller [removed: | |] [added: from July] 2017 [removed: | | 50 | |][added: to January 2021.]

| Joseph R. Leonti | | [added: | | | |] Vice President, General Counsel and Secretary | | [added: | | | |] 2014 | | [removed: 48] | | [added: | | 49 | | |]

| Robert W. Malone | | [added: | | | |] Vice President and President – Filtration Group | | [added: | | | |] 2014 | | [removed: 56] | | [added: | | 57 | | |]

| [removed: M. Craig Maxwell] [added: Mark T. Czaja] | | [added: | | | |] Vice President [removed: –] [added: -] Chief Technology and Innovation Officer | | [removed: 2003] | | [removed: 62] | | [added: 2021 | | | | | | 59 | | |]

| Dinu J. Parel | | [added: | | | |] Vice President and Chief [added: Digital and] Information Officer | | [added: | | | |] 2018 | | [added: | | | |] 40 | | [added: |]

| [removed: Jennifer A. Parmentier] [added: Berend Bracht] | | [added: | | | |] Vice President and President – Motion Systems Group | | [removed: 2015] | | [removed: 53] | | [added: 2021 | | | | | | 55 | | |]

| Andrew D. Ross | | [added: | | | |] Vice President and President – Fluid Connectors Group | | [added: | | | |] 2012 | | [removed: 53] | | [added: | | 54 | | |]

| Roger S. Sherrard | | [added: | | | |] Vice President and President – Aerospace Group | | [added: | | | |] 2003 | | [removed: 54] | | [added: | | 55 | | |]

| Andrew M. Weeks | | [added: | | | |] Vice President and President – Engineered Materials Group | | [added: | | | |] 2015 | | [removed: 57] | | [added: | | 58 | | |]

Williams, Banks, [added: Hart,] Leonti, Malone, [removed: Maxwell] [added: Ross] and Sherrard have served in the executive capacities indicated above during each of the past five years.

Mr. Banks has been a Director since January 2015 and [removed: President] [added: Vice Chairman] and [removed: Chief Operating Officer] [added: President] since [removed: February 2015.][added: August 2021.]

[removed: He] [added: She] is also a Director of Nordson Corporation.

[removed: Ms. Suever] [added: Mr. Leombruno] has been Executive Vice President [removed: - Finance & Administration] and Chief Financial Officer since [removed: April 2017.][added: January 2021.]

[removed: She] [added: He] is also a [removed: director] [added: Director] of [removed: Hexcel] [added: Wabtec] Corporation.

He was General Manager of the Company's [removed: domnick hunter] Process Filtration Division from December 2013 to July [removed: 2017.][added: 2017 and was Vice President of Supply Chain - Filtration Group from July 2008 to November 2013.]

[removed: Mr. Leombruno] [added: Ms. Ives] has been Vice President and Controller since [removed: July 2017.][added: January 2021.]

Mr. [removed: Maxwell] [added: Czaja] has been Vice President - Chief Technology and Innovation Officer since [removed: July 2003.][added: January 2021.]

Mr. Parel has been Vice President and Chief [added: Digital and] Information Officer since October [removed: 2018.][added: 2020.]

[removed: Ms. Parmentier] [added: Mr. Bracht] has been Vice President and President of the Motion Systems Group since [removed: February 2019.][added: August 2021.]

Mr. Ross has been Vice President [removed: since July 2012] and President [removed: of the] [added: -] Fluid Connectors Group since September 2015.

He was [added: Vice] President [added: and President] of the Engineered Materials Group from July 2012 to September 2015.

Our corporate headquarters is located in Cleveland, Ohio, and, at June 30, [removed: 2020,] [added: 2021,] the Company maintained approximately [removed: 320] [added: 315] manufacturing plants.

The facilities are situated in 38 states within the United States and in [removed: 48] [added: 44] other countries.

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| Jennifer A. Parmentier | | | | | | Chief Operating Officer | | | | | | 2015 | | | | | | 54 | | |

| Angela R. Ives | | | | | | Vice President and Controller | | | | | | 2021 | | | | | | 48 | | |

He was President and Chief Operating Officer from February 2015 to August 2021.

Ms. Parmentier has been Chief Operating Officer since August 2021.

She was Vice President and President of the Motion Systems Group from February 2019 to August 2021.

He was Vice President of Operations of the Engineered Materials Group since joining the Company in July 2018.

He was President and Chief Executive Officer of Bendix Commercial Vehicle Systems LLC from 2015 to 2018.

Bendix designs, develops and supplies products under the Bendix brand name for medium- and heavy-duty trucks, tractors, trailers, buses, and other commercial vehicles throughout North America.

Prior to Bendix, he held several executive leadership positions during his 24-year career at Bosch Rexroth, including President and Chief Executive Officer of Bosch Rexroth Americas.

He was Vice President of Technology and Innovation - Motion Systems Group from August 2019 to December 2020; Vice President of Technology and Innovation - Aerospace Group from August 2004 to July 2019; and Division Engineering Director from October 2000 to July 2004.

She was Vice President, Assistant Controller from September 2020 to December 2020; Group VP Controller for the Instrumentation Group from November 2019 to August 2020; and was Division Controller for the Electromechanical and Drives Division from August 2010 to October 2019.

He was Vice President and Chief Information Officer from October 2018 to October 2020.

ITEM 3. Legal Proceedings. None.

From time to time we are involved in matters that involve governmental authorities as a party under federal, state and local laws that have been enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment.

We will report such matters that exceed, or that we reasonably believe may exceed, $1.0 million or more in monetary sanctions.

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She was Vice President and Controller from December 2010 to April 2017.

[removed: | (a) | Market] [added: (a)Market] for the Registrant’s Common Equity. The Company’s common stock is listed for trading on the New York Stock Exchange ("NYSE") under the symbol "PH". [removed: As of July 31, 2020, the number of shareholders of record of the Company was 3,383. |]

[removed: | (b) | Use] [added: (b)Use] of Proceeds. Not Applicable. [removed: |]

[removed: |] (c) [removed: |] Purchases of Equity Securities by the Issuer and Affiliated Purchasers. [removed: |]

| ISSUER PURCHASES OF EQUITY SECURITIES | | | | | | | | | | | | | | [added: | | | | | | | | | | | | |]

| Period | | [added: | | | |] (a) [removed: Total Number of Shares Purchased] [added: Total Number of Shares Purchased] | | | [added: | | |] (b) [removed: Average Price Paid Per] [added: Average Price Paid Per] Share | | | | [added: | |] (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | | | [added: | | |] (d) Maximum [removed: Number (or Approximate Dollar] [added: Number (or Approximate Dollar] Value) [removed: of Shares] [added: of Shares] that May [removed: Yet Be Purchased Under] [added: Yet Be Purchased Under] the Plans [removed: or Programs] [added: or Programs] | | [added: |]

[removed: | (1) | On] [added: (1)On] October 22, 2014, the Company publicly announced that the Board of Directors increased the overall maximum number of shares authorized for repurchase under [removed: this program] [added: the Company's share repurchase program, first announced on August 16, 1990,] so that, beginning on [removed: such date,] [added: October 22, 2014,] the [added: maximum] aggregate number of shares authorized for repurchase was 35 million shares. [removed: There is no limitation on the amount of shares that can be repurchased in a year. There is no expiration date for this program. In March 2020, the Company suspended the share repurchase program in response to business uncertainty resulting from the COVID-19 pandemic. |]

As of July 31, 2021, the number of shareholders of record of the Company was 3,292.

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| April 1, 2021 through April 30, 2021 | | | | | | 52,600 | | | | | | $ | 317.78 | | | | | 52,600 | | | | | | 9,805,825 | | |

| May 1, 2021 through May 31, 2021 | | | | | | 50,500 | | | | | | $ | 311.38 | | | | | 50,500 | | | | | | 9,755,325 | | |

| June 1, 2021 through June 30, 2021 | | | | | | 58,345 | | | | | | $ | 300.92 | | | | | 58,345 | | | | | | 9,696,980 | | |

| Total | | | | | | 161,445 | | | | | | | | | | | | 161,445 | | | | | | | | |

There is no limitation on the amount of shares that can be repurchased in a fiscal year.

There is no expiration date for this program.

In March 2020, the Company suspended the share repurchase program in response to business uncertainty resulting from the COVID-19 pandemic.

During 2021, the Company reinitiated the share repurchase program and began repurchasing shares under the program in February 2021.

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| April 1, 2020 through April 30, 2020 | | — | | | $ | — | | | — | | | 10,028,239 | |

| May 1, 2020 through May 31, 2020 | | — | | | $ | — | | | — | | | 10,028,239 | |

| June 1, 2020 through June 30, 2020 | | — | | | $ | — | | | — | | | 10,028,239 | |

| Total | | — | | | | | | | — | | | | |

ITEM 6. Selected Financial Data. This selected financial data should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and our Consolidated Financial Statements and accompanying notes included in Part II, Item 7 and Part II, Item 8, respectively, of this Annual Report on Form 10-K.

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| (Amounts in thousands, except per share information) | | 2020 | | | | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | |

| Net sales | | $ | 13,695,520 | | | $ | 14,320,324 | | | $ | 14,302,392 | | | $ | 12,029,312 | | | $ | 11,360,753 | |

| Net income attributable to common shareholders | | 1,206,341 | | | | 1,512,364 | | | | 1,060,801 | | | | 983,412 | | | | 806,840 | | |

| Basic earnings per share | | 9.39 | | | | 11.63 | | | | 7.98 | | | | 7.37 | | | | 5.96 | | |

| Diluted earnings per share | | 9.29 | | | | 11.48 | | | | 7.83 | | | | 7.25 | | | | 5.89 | | |

| Cash dividends per share | | 3.52 | | | | 3.16 | | | | 2.74 | | | | 2.58 | | | | 2.52 | | |

| Total assets | | 19,738,189 | | | | 17,576,690 | | | | 15,320,087 | | | | 15,489,904 | | | | 12,034,142 | | |

| Long-term debt | | 7,652,256 | | | | 6,520,831 | | | | 4,318,559 | | | | 4,861,895 | | | | 2,652,457 | | |

| | | [added: | | | |] Page [removed: Number in] [added: Number in] Form 10-K | [added: | |]

| Financial Statements | | | [added: | | | | | |]

| | [added: | |] [Consolidated Statement of [removed: Income](#s503B9DC9FD965653B64001429BA4CA88)] [added: Income](#iafaf11c8b47c4292a2ffb731d906bd90_76)] | [removed: [32](#s503B9DC9FD965653B64001429BA4CA88)] | [added: | [36](#iafaf11c8b47c4292a2ffb731d906bd90_76) | | |]

| | [added: | |] [Consolidated Statement of Comprehensive [removed: Income](#sBDC5B3A138655B15A9CD61947DC6ED47)] [added: Income](#iafaf11c8b47c4292a2ffb731d906bd90_79)] | [removed: [33](#sBDC5B3A138655B15A9CD61947DC6ED47)] | [added: | [37](#iafaf11c8b47c4292a2ffb731d906bd90_79) | | |]

| | [added: | |] [Business Segment [removed: Information](#s7137B11F169554A5AF226C305A59C4BE)] [added: Information](#iafaf11c8b47c4292a2ffb731d906bd90_85)] | [removed: [34](#s7137B11F169554A5AF226C305A59C4BE)] | [added: | [38](#iafaf11c8b47c4292a2ffb731d906bd90_85) | | |]

| | [added: | |] [Consolidated Balance [removed: Sheet](#sCB857DDC4D985DA182101E27F154F616)] [added: Sheet](#iafaf11c8b47c4292a2ffb731d906bd90_88)] | [removed: [36](#sCB857DDC4D985DA182101E27F154F616)] | [added: | [40](#iafaf11c8b47c4292a2ffb731d906bd90_88) | | |]

| | [added: | |] [Consolidated Statement of Cash [removed: Flows](#s90C779AF42D65AEC88010CE931301AE9)] [added: Flows](#iafaf11c8b47c4292a2ffb731d906bd90_94)] | [removed: [37](#s90C779AF42D65AEC88010CE931301AE9)] | [added: | [41](#iafaf11c8b47c4292a2ffb731d906bd90_94) | | |]

| | [added: | |] [Consolidated Statement of [removed: Equity](#s752CC16CFFB95C11AB673FAE2903705F)] [added: Equity](#iafaf11c8b47c4292a2ffb731d906bd90_100)] | [removed: [38](#s752CC16CFFB95C11AB673FAE2903705F)] | [added: | [42](#iafaf11c8b47c4292a2ffb731d906bd90_100) | | |]

| | [added: | |] [Notes to Consolidated Financial [removed: Statements](#s354457172FA15D5D8F13F8CC334C4970)] [added: Statements](#iafaf11c8b47c4292a2ffb731d906bd90_106)] | [removed: [39](#s354457172FA15D5D8F13F8CC334C4970)] | [added: | [43](#iafaf11c8b47c4292a2ffb731d906bd90_106) | | |]

We have audited the accompanying consolidated balance sheets of Parker-Hannifin Corporation and subsidiaries (the "Company") as of June 30, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] the related consolidated statements of income, comprehensive income, equity, and cash flows, for each of the three years in the period ended June 30, [removed: 2020,] [added: 2021,] and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

We also have audited the Company’s internal control over financial reporting as of June 30, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended June 30, [removed: 2020,] [added: 2021,] in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

Our audit procedures related to the [added: Company’s] revenue [removed: growth rates and the selection of the assumptions for the intangible assets acquired] [added: transactions] included the following, among others:

| | | [added: | | | |] For the years ended June 30, | | | | | | | | | | | [added: | | | |]

| (Dollars in thousands, except per share amounts) | | [removed: 2020] | | | | [removed: 2019] [added: 2021] | | | | [removed: 2018] | | [added: 2020*] | [added: | | | | | 2019* | | |]

| Net Sales | | [added: | | | |] $ | [removed: 13,695,520] [added: 14,347,640] | | | [added: | |] $ | [removed: 14,320,324] [added: 13,695,520] | | | [added: | |] $ | [removed: 14,302,392] [added: 14,320,324] | |

| Selling, general and administrative expenses | | [removed: 1,656,553] | | | | [removed: 1,543,939] [added: 1,527,302] | | | | [removed: 1,639,989] | | [added: 1,656,553] | [added: | | | | | 1,543,939 | | |]

| Interest expense | | [removed: 308,161] | | | | [removed: 190,138] [added: 250,036] | | | | [removed: 213,873] | | [added: 308,161] | [added: | | | | | 190,138 | | |]

| Other [removed: (income) expense,] [added: income,] net | | [removed: (67,112] | | [removed: )] | | [removed: (61,247] [added: (17,003)] | | [removed: )] | | [removed: 12,991] | | [added: (67,112)] | [added: | | | | | (61,247) | | |]

| (Gain) loss on disposal of assets [removed: (Note 3)] | | [removed: (1,227] | | [removed: )] | | [removed: 10,585] [added: (109,332)] | | | | [removed: (4,483] | | [removed: )] [added: (1,227)] | [added: | | | | | 9,049 | | |]

| Less: Noncontrolling interest in subsidiaries' earnings | | [removed: 362] | | | | [removed: 567] [added: 761] | | | | [removed: 514] | | [added: 362] | [added: | | | | | 567 | | |]

| [removed: Net Income Attributable] [added: Net income attributable] to [removed: Common Shareholders] [added: common shareholders] | | [removed: $] | [removed: 1,206,341] [added: 1,732,112] | | | [removed: $] | [added: | | 1,746,100 | | | | | | 13,988 | | | | | | 1,206,341 | | | | | | 1,201,970 | | | | | | (4,371) | | | | | |] 1,512,364 | | | [removed: $] | [removed: 1,060,801] | | [added: 1,524,516 | | | | | | 12,152 | | |]

| Earnings per Share Attributable to Common [removed: Shareholders (Note 6)] [added: Shareholders] | | | | | | | | | | | | | [added: | | | | | | | |]

[removed: | Basic earnings per share | | $ | 9.39 | | | $ | 11.63 | | | $ | 7.98 | |][added: Earnings Per Share]

| Diluted earnings per share | | [added: | | | |] $ | [removed: 9.29] [added: 13.35] | | | [added: | |] $ | [removed: 11.48] [added: 9.26] | | | [added: | |] $ | [removed: 7.83] [added: 11.57] | |

| (Dollars in thousands) | | [removed: 2020] | | | | [removed: 2019] [added: 2021] | | | | [removed: 2018] | | [added: 2020*] | [added: | | | | | 2019* | | |]

| Less: Noncontrolling interests in subsidiaries' earnings | | [removed: 362] | | | | [removed: 567] [added: 761] | | | | [removed: 514] | | [added: 362] | [added: | | | | | 567 | | |]

| Net income attributable to common shareholders | | [removed: 1,206,341] | [added: 1,732,112] | | | [added: | | | 1,746,100 | | | | | | 13,988 | | | | | | 1,206,341 | | | | | | 1,201,970 | | | | | | (4,371) | | | | | |] 1,512,364 | | | | [removed: 1,060,801] | | [added: 1,524,516] | [added: | | | | | 12,152 | | |]

| Other comprehensive [removed: (loss) income,] [added: income (loss),] net of tax | | | | | | | | | | | | | [added: | | | | | | | |]

| Foreign currency translation adjustment and other (net of tax of [removed: $4,820, $709] [added: $(3,664), $4,820] and [removed: $16,964] [added: $709] in [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018)] [added: 2019)] | | [removed: (182,957] | | [removed: )] | | [removed: (66,392] [added: 328,792] | | [removed: )] | | [removed: (18,575] | | [removed: )] [added: (182,957)] | [added: | | | | | (66,392) | | |]

| Retirement benefits plan activity (net of tax of [removed: $97,477, $71,821] [added: $(205,845), $97,477] and [removed: $(82,506)] [added: $71,821] in [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018)] [added: 2019)] | | [removed: (317,546] | | [removed: )] | | [removed: (227,783] [added: 664,076] | | [removed: )] | | [removed: 179,253] | | [added: (317,546)] | [added: | | | | | (227,783) | | |]

| Other comprehensive [removed: (loss)] income [added: (loss)] | | [removed: (500,503] | | [removed: )] | | [removed: (294,175] [added: 992,868] | | [removed: )] | | [removed: 160,678] | | [added: (500,503)] | [added: | | | | | (294,175) | | |]

| Less: Other comprehensive [removed: (loss)] income [added: (loss)] for noncontrolling interests | | [removed: (676] | | [removed: )] | | [removed: 53] [added: 720] | | | | [removed: (440] | | [removed: )] [added: (676)] | [added: | | | | | 53 | | |]

| Other comprehensive [removed: (loss)] income [added: (loss)] attributable to common shareholders | | [removed: (499,827] | | [removed: )] | | [removed: (294,228] [added: 992,148] | | [removed: )] | | [removed: 161,118] | | [added: (499,827)] | [added: | | | | | (294,228) | | |]

| [removed: Total Comprehensive Income Attributable] [added: Total comprehensive income attributable] to [removed: Common Shareholders] [added: common shareholders] | | [removed: $] | [removed: 706,514] [added: 2,724,260] | | | [removed: $] | [added: | | 2,738,248 | | | | | | 13,988 | | | | | | 706,514 | | | | | | 702,143 | | | | | | (4,371) | | | | | |] 1,218,136 | | | [removed: $] | [removed: 1,221,919] | | [added: 1,230,288 | | | | | | 12,152 | | |]

| Net Sales: | | | | | | | | | | | | | [added: | | | | | | | |]

| Diversified Industrial: | | | | | | | | | | | | | [added: | | | | | | | |]

| North America | | [added: | | | |] $ | [removed: 6,456,298] [added: 6,676,449] | | | [added: | |] $ | [removed: 6,808,948] [added: 6,456,298] | | | [added: | |] $ | [removed: 6,726,900] [added: 6,808,948] | |

| International | | [removed: 4,504,587] | | | | [removed: 5,000,599] [added: 5,283,710] | | | | [removed: 5,259,793] | | [added: 4,504,587] | [added: | | | | | 5,000,599 | | |]

Change in Accounting Principle

As discussed in Notes 1 and 7 to the consolidated financial statements, the Company elected to change its method of accounting for certain inventories from the last-in, first-out (“LIFO”) cost method to the first-in, first-out (“FIFO”) cost method which has been retrospectively applied to the consolidated financial statements as of June 30, 2020 and 2019.

Revenue — Refer to Notes 1 and 2 to the financial statements

The Company is a highly diversified business with revenue derived from the sales of products in a variety of industrial and aerospace markets.

The Company’s business activities are carried out by numerous individual business units, which offer unique technology and product platforms within specific geographic areas.

We identified revenue as a critical audit matter given the geographical dispersion of the Company’s operations and business units generating revenue.

This required extensive audit effort due to the volume of the underlying transactions and distinctiveness of each individual business unit.

High levels of auditor judgement were necessary to determine the nature, timing, and extent of audit procedures performed within the Company.

- We tested the design and effectiveness of internal controls within the revenue business processes, including controls over revenue recognition and controls over the review of operating results.

- For a sample of revenue transactions, we performed detail transaction testing by agreeing the amounts recorded as revenue to source documents and determined that revenue was recognized appropriately.

- For the revenue populations subject to detail testing, we tested the completeness of revenue by making selections from a reciprocal population (e.g. sales order listing) and determined whether the sales order was recorded as a sale in the general ledger.

- For revenue transactions not subject to detail transaction testing, we performed substantive analytical procedures.

We developed independent expectations of revenue based on data derived from published industry indices, market and customer trends, and the results of our detail revenue testing and compared these expectations to the revenue recorded by management.

August 25, 2021

| Cost of sales | | | | | | 10,449,680 | | | | | | 10,292,291 | | | | | | 10,688,970 | | |

| Income before income taxes | | | | | | 2,246,957 | | | | | | 1,506,854 | | | | | | 1,949,475 | | |

| Income taxes | | | | | | 500,096 | | | | | | 304,522 | | | | | | 424,392 | | |

| Net Income | | | | | | 1,746,861 | | | | | | 1,202,332 | | | | | | 1,525,083 | | |

| Net Income Attributable to Common Shareholders | | | | | | $ | 1,746,100 | | | | | $ | 1,201,970 | | | | | $ | 1,524,516 | |

*Years ended June 30, 2020 and 2019 amounts have been adjusted to reflect the change in inventory accounting method, as described in Notes 1 and 7 to the Consolidated Financial Statements.

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | For the years ended June 30, | | | | | | | | | | | | | | |

| Net Income | | | | | | $ | 1,746,861 | | | | | $ | 1,202,332 | | | | | $ | 1,525,083 | |

| Net income attributable to common shareholders | | | | | | 1,746,100 | | | | | | 1,201,970 | | | | | | 1,524,516 | | |

| | | | | | | | | | | | | | | | | | | | | |

| Total Comprehensive Income Attributable to Common Shareholders | | | | | | $ | 2,738,248 | | | | | $ | 702,143 | | | | | $ | 1,230,288 | |

*Years ended June 30, 2020 and 2019 amounts have been adjusted to reflect the change in inventory accounting method, as described in Notes 1 and 7 to the Consolidated Financial Statements.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (Dollars in thousands) | | | | | | 2021 | | | | | | 2020* | | | | | | 2019* | | |

| Diversified Industrial: | | | | | | | | | | | | | | | | | | | | |

| Interest expense | | | | | | 250,036 | | | | | | 308,161 | | | | | | 190,138 | | |

| Other (income) expense | | | | | | (37,052) | | | | | | 151,689 | | | | | | 96,626 | | |

| Income before income taxes | | | | | | $ | 2,246,957 | | | | | $ | 1,506,854 | | | | | $ | 1,949,475 | |

| | | | | | | | | | | | | | | | | | | | | |

| Corporate | | | | | | 745,117 | | | | | | 662,655 | | | | | | 2,996,771 | | |

| | | | | | | $ | 20,341,200 | | | | | $ | 19,887,753 | | | | | $ | 17,732,028 | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | |

| | | |

| --- | --- | --- |

As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at two entities which were acquired within the fiscal year, and whose financial statements constitute approximately 28% of total assets and 7% of net sales for the year ended June 30, 2020.

Accordingly, our audit did not include the internal control over financial reporting over these acquired entities.

Acquisitions - Valuation of intangible assets acquired via the acquisition of Exotic Metals Forming Co. & LORD Corporation - Refer to Note 3 to the financial statements

The Company completed the acquisitions of Exotic Metals Forming Company for $1.706 billion on September 16, 2019 and LORD Corporation for $3.455 billion on October 29, 2019.

The Company accounted for the acquisitions under the acquisition method of accounting for business combinations.

Accordingly, the purchase price was primarily allocated to the assets acquired and liabilities assumed based on their respective fair values, including customer-related and technology intangible assets.

Management estimated the fair value of these intangible assets utilizing an income approach.

The fair value determination of the customer-related and technology intangible assets required management to make significant assumptions related to the forecasted revenue growth rates and the selection of the discount rates.

We identified the customer-related and technology intangible assets for the Exotic and LORD acquisitions as a critical audit matter because of the significant assumptions management makes to fair value these assets.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s assumptions related to the revenue growth rates and the selection of the discount rates utilized to value these intangible assets.

| | |

| --- | --- |

| • | We tested the effectiveness of controls over the valuation of the intangible assets acquired, including management’s controls over the revenue growth rates and selection of the discount rates. |

| • | We assessed the reasonableness of the revenue growth rates by comparing the assumptions used in the projections to external market sources, historical data, and results from other areas of the audit. |

| • | We performed qualitative and quantitative analyses to identify the assumptions that would significantly impact the overall valuation of the intangible assets acquired. The assumptions identified included (1) revenue growth rate and (2) discount rate. |

| • | With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rates by: |

| – | Testing the source information underlying the determination of the discount rates and testing the mathematical accuracy of the calculation. |

| – | Developing a range of independent estimates and comparing those to the discount rates selected by management. |

August 26, 2020

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Cost of sales | | 10,286,518 | | | | 10,703,484 | | | | 10,737,745 | | |

| Income before income taxes | | 1,512,627 | | | | 1,933,425 | | | | 1,702,277 | | |

| Income taxes (Note 5) | | 305,924 | | | | 420,494 | | | | 640,962 | | |

| Net Income | | 1,206,703 | | | | 1,512,931 | | | | 1,061,315 | | |

| Net Income | | $ | 1,206,703 | | | $ | 1,512,931 | | | $ | 1,061,315 | |

| Other expense | | 145,916 | | | | 112,676 | | | | 122,128 | | |

| Income before income taxes | | $ | 1,512,627 | | | $ | 1,933,425 | | | $ | 1,702,277 | |

| Corporate | | 513,091 | | | | 2,841,433 | | | | 504,723 | | |

| | | $ | 19,738,189 | | | $ | 17,576,690 | | | $ | 15,320,087 | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Inventories (Note 7) | | 1,814,631 | | | | 1,678,132 | | |

| Total Current Assets | | 4,885,204 | | | | 7,673,086 | | |

| Goodwill (Notes 1 and 8) | | 7,869,935 | | | | 5,453,805 | | |

| Total Assets | | $ | 19,738,189 | | | $ | 17,576,690 | |

| Deferred income taxes (Notes 1 and 5) | | 382,528 | | | | 193,066 | | |

| Total Liabilities | | 13,609,660 | | | | 11,608,538 | | |

ITEM 9A. Controls and Procedures. The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, of the effectiveness of the Company’s disclosure controls and procedures as of June 30, [removed: 2020.][added: 2021.]

Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that, as of June 30, [removed: 2020,] [added: 2021,] the Company’s disclosure controls and procedures were effective.

In response to the COVID-19 pandemic, many of our team members [removed: began] [added: have been] working [removed: from home during the second half of 2020.][added: remotely.]

[removed: Except for the Lord and Exotic acquisitions, there] [added: There] were no changes in the Company’s internal controls over financial reporting during the quarter ended June 30, [removed: 2020] [added: 2021] that materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

We assessed the effectiveness of our internal control over financial reporting as of June 30, [removed: 2020.][added: 2021.]

In making this assessment, we used the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission in “Internal Control-Integrated Framework (2013).” We concluded that based on our assessment, the Company's internal control over financial reporting was effective as of June 30, [removed: 2020.][added: 2021.]

Deloitte & Touche LLP, the independent registered public accounting firm that audited the Company's consolidated financial statements, has issued an attestation report on the Company's internal control over financial reporting as of June 30, [removed: 2020,] [added: 2021,] which is included in Part II, Item 8 of this Annual Report on Form 10-K.

The Company acquired Lord and Exotic during October 2019 and September 2019, respectively, and is currently integrating their processes and internal controls.

We have excluded Lord and Exotic from our evaluation of internal control over financial reporting as of June 30, 2020 because these entities were acquired in business combinations during the year.

On a combined basis, these entities represented approximately 28 percent of total assets at June 30, 2020 and approximately seven percent of net sales for the year then ended.

ITEM 10. Directors, Executive Officers and Corporate Governance. Information required with respect to the Directors of the Company is set forth under the caption "Item I – Election of Directors" in the definitive Proxy Statement for the Company’s [removed: 2020] [added: 2021] Annual Meeting of Shareholders, to be held October [removed: 28, 2020] [added: 27, 2021] (the [removed: "2020] [added: "2021] Proxy Statement"), and is incorporated herein by reference.

The information set forth under the caption "Delinquent Section 16(a) Reports" in the [removed: 2020] [added: 2021] Proxy Statement is incorporated herein by reference.

The information set forth under the captions "Committees of our Board of Directors - The Audit Committee" and "Committees of Our Board of Directors - Board Committees; Committee Charters" in the [removed: 2020] [added: 2021] Proxy Statement is incorporated herein by reference.

ITEM 11. Executive Compensation. The information set forth under the captions "Compensation Discussion and Analysis," "Compensation Committee Report," and "Compensation Tables" in the [removed: 2020] [added: 2021] Proxy Statement is incorporated herein by reference.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information set forth under the captions "Principal Shareholders" in the [removed: 2020] [added: 2021] Proxy Statement is incorporated herein by reference.

The following table sets forth certain information regarding the Company's equity compensation plans as of June 30, [removed: 2020,] [added: 2021,] unless otherwise indicated.

| Plan Category | [added: | |] Number of securities to be issued upon exercise of outstanding options, warrants and rights | [added: | |] Weighted-average exercise price of outstanding options, warrants and rights | [added: | |] Number of securities remaining available for future issuance under Equity compensation plans | [added: | |]

| Equity compensation plans [added: not] approved by security holders | [removed: 6,635,723(1)] | [removed: $134.29] | [removed: 23,486,752(2)] [added: —] | [added: | | — | | | — | | |]

| Equity compensation plans [removed: not] approved by security holders | [removed: —] | [removed: —] | [removed: —] [added: 5,498,710(1)] | [added: | | $154.85 | | | 21,200,533(2) | | |]

(1)Includes the maximum future payouts of common stock that may be issued under the calendar year [removed: 2018-19-20, 2019-20-21 and] [added: 2019-20-21,] 2020-21-22 [added: and 2021-22-23] long term incentive performance awards ("LTIP awards").

(2)The maximum number of shares of our common stock that may be issued under the Amended and Restated 2016 Omnibus Stock Incentive Plan is 23.8 million shares, of which approximately [removed: 13.5] [added: 11.3] million shares are available for future issuance.

ITEM 13. Certain Relationships and Related Transactions, and Director Independence. The information set forth under the captions "Other Governance Matters - Review and Approval of Transactions with Related Persons" and "Corporate Governance: Board of Directors - Director Independence" in the [removed: 2020] [added: 2021] Proxy Statement is incorporated herein by reference.

ITEM 14. Principal Accountant Fees and Services. The information set forth under the captions "Audit Fees and All Other Fees" and "Audit Committee Pre-Approval Policies and Procedures" in the [removed: 2020] [added: 2021] Proxy Statement is incorporated herein by reference.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Total | | | 5,498,710 | | | $154.85 | | | 21,200,533 | | |

| | | | |

| --- | --- | --- | --- |

| Total | 6,635,723 | $134.29 | 23,486,752 |

| | | [added: | | | |] Page [removed: Number in] [added: Number in] Form 10-K | | [added: | | | |]

| 1. Financial Statements | | | | [added: | | | | | | | |]

| | [added: | |] Consolidated Statement of Income | [removed: [32](#s503B9DC9FD965653B64001429BA4CA88)] | | [added: [36](#iafaf11c8b47c4292a2ffb731d906bd90_76) | | | | | |]

| | [added: | |] Consolidated Statement of Comprehensive Income | [removed: [33](#sBDC5B3A138655B15A9CD61947DC6ED47)] | | [added: [37](#iafaf11c8b47c4292a2ffb731d906bd90_79) | | | | | |]

| | [added: | |] Business Segment Information | [removed: [34](#s7137B11F169554A5AF226C305A59C4BE)] | | [added: [38](#iafaf11c8b47c4292a2ffb731d906bd90_85) | | | | | |]

| | [added: | |] Consolidated Balance Sheet | [removed: [36](#sCB857DDC4D985DA182101E27F154F616)] | | [added: [40](#iafaf11c8b47c4292a2ffb731d906bd90_88) | | | | | |]

| | [added: | |] Consolidated Statement of Cash Flows | [removed: [37](#s90C779AF42D65AEC88010CE931301AE9)] | | [added: [41](#iafaf11c8b47c4292a2ffb731d906bd90_94) | | | | | |]

| | [added: | |] Consolidated Statement of Equity | [removed: [38](#s752CC16CFFB95C11AB673FAE2903705F)] | | [added: [42](#iafaf11c8b47c4292a2ffb731d906bd90_100) | | | | | |]

| | [added: | |] Notes to Consolidated Financial Statements | [removed: [39](#s354457172FA15D5D8F13F8CC334C4970)] | | [added: [43](#iafaf11c8b47c4292a2ffb731d906bd90_106) | | | | | |]

| 2. Schedule | | | | [added: | | | | | | | |]

| | [added: | |] II - Valuation and Qualifying Accounts | [removed: [74](#sDFEE76C8E5C85964B7D8F27D62A30E9B)] | | [added: [80](#iafaf11c8b47c4292a2ffb731d906bd90_226) | | | | | |]

| 3. Exhibits | | | | [added: | | | | | | | |]

| Exhibit No. | | [added: | | | |] Description of Exhibit | [added: | |]

| (2)(a) | | [added: | | | |] [Agreement and Plan of Merger among Parker-Hannifin Corporation, CLARCOR, Inc. and Parker Eagle Corporation](http://www.sec.gov/Archives/edgar/data/76334/000119312516782477/d295621dex21.htm) [removed: dated] [added: [dated] as of December 1, 2016, incorporated by reference to Exhibit 2.1 of [removed: Registrant's Form] [added: Registrant's](http://www.sec.gov/Archives/edgar/data/76334/000119312516782477/d295621dex21.htm) [Report on](http://www.sec.gov/Archives/edgar/data/76334/000119312516782477/d295621dex21.htm) [Form] 8-K filed with the SEC on December 1, [removed: 2016] [added: 2016](http://www.sec.gov/Archives/edgar/data/76334/000119312516782477/d295621dex21.htm)] (Commission File No. 1-4982). | [added: | |]

| (2)(b) | | [added: | | | |] [Agreement and Plan of Merger among Parker-Hannifin Corporation, Erie Merger Sub, Inc., LORD Corporation and Shareholder Representative Services LLC as the shareholders' representative, dated as of April 26, 2019,](http://www.sec.gov/Archives/edgar/data/76334/000095015719000495/ex2-1.htm) [removed: incorporated] [added: [incorporated] by reference to Exhibit 2.1 of [removed: Registrant's Form] [added: Registrant's](http://www.sec.gov/Archives/edgar/data/76334/000095015719000495/ex2-1.htm) [Report on](http://www.sec.gov/Archives/edgar/data/76334/000095015719000495/ex2-1.htm) [Form] 8-K filed with the SEC on April 29, [removed: 2019] [added: 2019](http://www.sec.gov/Archives/edgar/data/76334/000095015719000495/ex2-1.htm)] (Commission File No. 1-4982). | [added: | |]

| (2)(c) | | [added: | | | |] [Share Purchase Agreement, among Parker-Hannifin Corporation, EMFCO Holdings Incorporated, the shareholders of the Company, and Fortis Advisors LLC, as the Sellers' representative, dated as of July 26, [removed: 2019](http://www.sec.gov/Archives/edgar/data/76334/000119312519204846/d783419dex21.htm),] [added: 2019](http://www.sec.gov/Archives/edgar/data/76334/000119312519204846/d783419dex21.htm)[,] incorporated by reference to Exhibit 2.1 of [removed: Registrant's Form] [added: Registrant's](http://www.sec.gov/Archives/edgar/data/76334/000119312519204846/d783419dex21.htm) [Report on](http://www.sec.gov/Archives/edgar/data/76334/000119312519204846/d783419dex21.htm) [Form] 8-K filed with the SEC on July 29, [removed: 2019] [added: 2019](http://www.sec.gov/Archives/edgar/data/76334/000119312519204846/d783419dex21.htm)] (Commission File No. 1-4982). | [added: | |]

| | | [added: | | | |] Articles of Incorporation and By-Laws: | [added: | |]

| (3)(a) | | [added: | | | |] [Amended Articles of Incorporation,](http://www.sec.gov/Archives/edgar/data/76334/000007633416000196/ph6302016ex3a.htm) [removed: incorporated] [added: [incorporated] by reference to Exhibit 3(a) to Registrant's Report on Form 10-K for the fiscal year ended June 30, [removed: 2016] [added: 2016](http://www.sec.gov/Archives/edgar/data/76334/000007633416000196/ph6302016ex3a.htm)] (Commission File No. 1-4982). | [added: | |]

| (3)(b) | | [added: | | | |] [Regulations, Amended and Restated as [removed: of January 24, 2019,] [added: of](http://www.sec.gov/Archives/edgar/data/76334/000007633421000111/phcregsamendedandrestated0.htm) [April 22, 2021](http://www.sec.gov/Archives/edgar/data/76334/000007633421000111/phcregsamendedandrestated0.htm)[,] incorporated by reference to Exhibit 3(a) to Registrant’s Report on Form 10-Q for the quarterly period [removed: ended December 31, 2018](http://www.sec.gov/Archives/edgar/data/76334/000007633419000018/ph10q12312018ex3a2.htm)] [added: ended](http://www.sec.gov/Archives/edgar/data/76334/000007633421000111/phcregsamendedandrestated0.htm) [March 31,](http://www.sec.gov/Archives/edgar/data/76334/000007633421000111/phcregsamendedandrestated0.htm) [20](http://www.sec.gov/Archives/edgar/data/76334/000007633421000111/phcregsamendedandrestated0.htm)[21](http://www.sec.gov/Archives/edgar/data/76334/000007633421000111/phcregsamendedandrestated0.htm) [](http://www.sec.gov/Archives/edgar/data/76334/000007633421000111/phcregsamendedandrestated0.htm)] (Commission File No. 1-4982). | [added: | |]

| | | [added: | | | |] Instruments Defining Rights of Security Holders: | [added: | |]

| (4)(a) | | [added: | | | |] [Description of Parker-Hannifin's [removed: Securities](http://www.sec.gov/Archives/edgar/data/76334/000007633419000096/phc201910kex4a.htm),] [added: Securities](http://www.sec.gov/Archives/edgar/data/76334/000007633419000096/phc201910kex4a.htm)[,] incorporated by reference to Exhibit 4(a) to Registrant's Report on Form 10-K for the year ended June 30, [removed: 2019] [added: 2019](http://www.sec.gov/Archives/edgar/data/76334/000007633419000096/phc201910kex4a.htm)] (Commission File No. 1-4982). | [added: | |]

| | | [added: | | | |] Material Contracts: | [added: | |]

| (10)(a) | | [added: | | | |] [Form of Parker-Hannifin Corporation Amended and Restated Change in Control Severance Agreement](http://www.sec.gov/Archives/edgar/data/76334/000119312508227100/dex10a.htm) entered into by Registrant and its executive officers, incorporated by reference to Exhibit 10(a) to Registrant’s Report on Form 10-Q for the quarterly period ended September 30, 2008 (Commission File No. 1-4982). | [added: | |]

| (10)(b) | | [added: | | | |] [Form of Parker-Hannifin Corporation Change in Control Severance Agreement for Executive Officers elected after September 1, 2015 at or above Grade 29](http://www.sec.gov/Archives/edgar/data/76334/000007633416000196/ph6302016ex10c.htm), incorporated by reference to Exhibit 10(c) to Registrant's Report on Form 10-K for the fiscal year ended June 30, 2016 (Commission File No. 1-4982). | [added: | |]

| (10)(c) | | [added: | | | |] [Form of Parker-Hannifin Corporation Change in Control Severance Agreement for Executive Officers dated after September 1, 2015 below Grade 29](http://www.sec.gov/Archives/edgar/data/76334/000007633416000196/ph6302016ex10d.htm), incorporated by reference to Exhibit 10(d) to Registrant's Report on Form 10-K for the fiscal year ended June 30, 2016 (Commission File No. 1-4982). | [added: | |]

| (10)(d) | | [added: | | | |] [Parker-Hannifin Corporation Amended and Restated Change in Control Severance Plan](http://www.sec.gov/Archives/edgar/data/76334/000119312508227100/dex10b.htm), incorporated by reference to Exhibit 10(b) to Registrant’s Report on Form 10-Q for the quarterly period ended September 30, 2008 (Commission File No. 1-4982). | [added: | |]

| (10)(e) | | [added: | | | |] [Form of Indemnification Agreement entered into by the Registrant and its directors and executive officers](http://www.sec.gov/Archives/edgar/data/76334/000119312503043642/dex10c.htm), incorporated by reference to Exhibit 10(c) to Registrant’s Report on Form 10-K for the fiscal year ended June 30, 2003 (Commission File No. 1-4982). | [added: | |]

| (10)(f) | | [added: | | | |] [Description of the Parker-Hannifin Corporation Officer Life Insurance Plan](http://www.sec.gov/Archives/edgar/data/76334/000119312505179715/dex10h.htm), incorporated by reference to Exhibit 10(h) to Registrant’s Report on Form 10-K for the fiscal year ended June 30, 2005 (Commission File No. 1-4982). | [added: | |]

| (10)(g) | | [added: | | | |] [Parker-Hannifin Corporation Amended and Restated Supplemental Executive Retirement Benefits Program](http://www.sec.gov/Archives/edgar/data/76334/000007633416000153/ph3312016ex10a.htm), effective July 1, 2014, incorporated by reference to Exhibit 10(a) to Registrant’s Report on Form 10-Q for the quarterly period ended March 31, 2016 (Commission File No. 1-4982). | [added: | |]

| (10)(h) | | [added: | | | |] [Parker-Hannifin Corporation Amended and Restated Defined Contribution Supplemental Executive Retirement Program](http://www.sec.gov/Archives/edgar/data/76334/000007633416000116/ph12312015ex10c.htm), effective January 22, 2015, incorporated by reference to Exhibit 10(c) to Registrant’s Report on Form 10-Q for the quarterly period ended December 31, 2015 (Commission File No. 1-4982). | [added: | |]

| (10)(i) | | [added: | | | |] [Summary of the Parker-Hannifin Corporation Executive Disability Insurance Plan](http://www.sec.gov/Archives/edgar/data/76334/000007633416000196/ph6302016ex10j.htm), incorporated by reference to Exhibit 10(j) to Registrant's Report on Form 10-K for the fiscal year ended June 30, 2016 (Commission File No. 1-4982). | [added: | |]

| (10)(j) | | [added: | | | |] [Parker-Hannifin Corporation Amended and Restated 2003 Stock Incentive Plan,](http://www.sec.gov/Archives/edgar/data/76334/000119312510251281/dex10b.htm) incorporated by reference to Exhibit 10(b) to Registrant’s Report on Form 10-Q for the quarterly period ended September 30, 2010 (Commission File No. 1-4982). | [added: | |]

| (10)(k) | | [added: | | | |] [Parker-Hannifin Corporation Amended and Restated 2009 Omnibus Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/76334/000119312512401634/d394759ddef14a.htm), incorporated by reference to Appendix A to Registrant’s Definitive Proxy Statement filed with the Commission on September 24, 2012 (Commission File No. 1-4982). | [added: | |]

| (10)(l) | | [added: | | | |] [Parker-Hannifin Corporation 2016 Omnibus Stock Incentive Plan,](http://www.sec.gov/Archives/edgar/data/76334/000119312516719682/d233270ddef14a.htm) incorporated by reference to Annex B to Registrant's Definitive Proxy Statement on Schedule 14A, filed with the SEC on September 26, 2016 (Commission File No. 1-4982). | [added: | |]

| (10)(m) | | [added: | | | |] [Parker-Hannifin Corporation First Amendment to 2016 Omnibus Stock Incentive Plan,](http://www.sec.gov/Archives/edgar/data/76334/000007633417000053/ph3312017ex10a.htm) effective April 1, 2017, incorporated by reference to Exhibit 10(a) to Registrant's Report on Form 10-Q for the quarterly period ended March 31, 2017 (Commission File No. 1-4982). | [added: | |]

| (10)(n) | | [added: | | | |] [Parker-Hannifin Corporation Amended and Restated 2016 Omnibus Stock Incentive Plan, effective as of October 23, [removed: 2019,](http://www.sec.gov/Archives/edgar/data/0000076334/000095015719001228/form8k.htm)] [added: 2019](http://www.sec.gov/Archives/edgar/data/76334/000007633419000122/phcamendedandrestated2.htm),] incorporated by reference to Exhibit 10.1 to Registrant's Report on Form 8-K filed with the SEC on October 28, 2019 (Commission File No. 1-4982). | [added: | |]

| (10)(o) | | [added: | | | |] [Parker-Hannifin Corporation 2015 Performance Bonus Plan](http://www.sec.gov/Archives/edgar/data/76334/000119312510216901/ddef14a.htm) incorporated by reference to Appendix B to Registrant’s Definitive Proxy Statement filed with the Commission on September 28, 2015 (Commission File No. 1-4982). | [added: | |]

| (10)(p) | | [added: | | | |] [Form of 2010 Notice of Stock Options with Tandem Stock Appreciation Rights for Executive Officers](http://www.sec.gov/Archives/edgar/data/76334/000119312509221583/dex10d.htm), incorporated by reference to Exhibit 10(d) to Registrant’s Report on Form 10-Q for the quarterly period ended September 30, 2009 (Commission File No. 1-4982). | [added: | |]

| (10)(q) | | [added: | | | |] [Form of 2011 Parker-Hannifin Corporation Stock Appreciation Rights Award Agreement for executive officers](http://www.sec.gov/Archives/edgar/data/76334/000119312510191101/dex102.htm), incorporated by reference to Exhibit 10.2 to Registrant’s Report on Form 8-K filed with the SEC on August 17, 2010 (Commission File No. 1-4982). | [added: | |]

| (10)(r) | | [added: | | | |] [2011 Parker-Hannifin Corporation Stock Appreciation Rights Terms and Conditions for executive officers](http://www.sec.gov/Archives/edgar/data/76334/000119312510191101/dex101.htm), incorporated by reference to Exhibit 10.1 to Registrant’s Report on Form 8-K filed with the SEC on August 17, 2010 (Commission File No. 1-4982). | [added: | |]

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| | PARKER-HANNIFIN CORPORATION | | |

| | By: | | /s/ Catherine A. Suever |

| | | | Catherine A. Suever |

| | | | Executive Vice President - Finance & |

August 26, 2020

| /s/ Catherine A. Suever | |

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| Allowance for doubtful accounts: | | | | | | | | | | | | | | | | |

| Year ended June 30, 2018 | | $ | 14,336 | | | $ | 2,861 | | | $ | (7,525 | ) | | $ | 9,672 | |

| Year ended June 30, 2018 | | $ | 684,079 | | | $ | 10,778 | | | $ | — | | | $ | 694,857 | |