SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[ X ]ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ......................to ......................
Commission file number 1-4982
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
PARKER RETIREMENT SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
PARKER-HANNIFIN CORPORATION
17325 EUCLID AVENUE
CLEVELAND, OHIO 44112
<PAGE>
PARKER RETIREMENT SAVINGS PLAN
INDEX OF FINANCIAL STATEMENTS
PAGE
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Plan Benefits
at December 31, 1996 and 1995 2
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended December 31, 1996 and 1995 2
Notes to Financial Statements 3 to 13
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes for the year ended December 31, 1996 14 to 15
Item 27d - Schedule of Reportable Transactions for
the year ended December 31, 1996 16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and
Board of Directors
Parker-Hannifin Corporation
We have audited the accompanying statements of Net Assets Available for Plan
Benefits of the Parker Retirement Savings Plan as of December 31, 1996 and
1995, and the related Statements of Changes in Net Assets Available for Plan
Benefits for each of the two years in the period ended December 31, 1996.
These financial statements are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of the
Parker Retirement Savings Plan as of December 31, 1996 and 1995, and the
changes in net assets available for plan benefits for each of the two years
in the period ended December 31, 1996 in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules
listed in the accompanying index are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Coopers & Lybrand L.L.P.
Cleveland, Ohio
June 27, 1997
1
<PAGE>
PARKER RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AT DECEMBER 31, 1996 AND 1995
(000's omitted)
1996 1995
_________ _________
[S] [C] [C]
ASSETS
Investments at fair value:
Cash and cash equivalents (Notes 1 & 4) $ 11,803 $ 20,666
Parker-Hannifin Corporation common
shares (Notes 1 & 4) 251,393 217,109
Investment contracts (Notes 1 & 5) 148,731 155,288
Other investments (Notes 1 & 4) 229,910 153,819
_________ _________
Total investments 641,837 546,882
_________ _________
Receivables:
Employer's contribution - 500
Participants' contributions 21 348
Participant loans 29,588 16,582
Accrued interest and dividends 1,031 906
Other 1,884 3
_________ _________
Total assets 674,361 565,221
_________ _________
LIABILITIES
Dividends payable to participants (Note 6) 3,338 2,885
Notes payable (Note 3) - 6,895
Other 1,427 447
_________ _________
Total liabilities 4,765 10,227
_________ _________
Net Assets Available for Plan Benefits $ 669,596 $ 554,994
========= =========
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
(000's omitted)
1996 1995
[S] [C] [C]
ADDITIONS
Contributions (Notes 1 & 2):
Participant payroll deductions $ 54,439 $ 39,121
Participant lump-sum - 62
Employer's contributions 19,703 18,201
_________ _________
Total contributions 74,142 57,384
Transfers from other plans (Note 2) 1,946 -
Interest income 13,849 13,498
Dividend income - net 1,271 1,588
Net appreciation in the fair
value of investments (Notes 1 & 4) 59,657 57,593
_________ _________
Total additions 150,865 130,063
_________ _________
DEDUCTIONS
Withdrawals and terminations 34,478 30,551
Interest expense (Note 3) 290 1,396
Trustee fees and expenses 1,495 682
_________ _________
Total deductions 36,263 32,629
_________ _________
Net increase in Assets Available for
Plan Benefits 114,602 97,434
Assets Available - Beginning of year 554,994 457,560
_________ _________
Assets Available - End of year $ 669,596 $ 554,994
========= =========
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION
The investments in Parker-Hannifin Corporation (the Company) common
shares, non-convertible corporate bonds, U.S. Government bonds, Key
Trust Employee Benefits Value Equity Fund, Key Trust Employee Benefits
Fixed Income Fund, AIM Constellation Fund, Capital Guardian
International Equity Fund and the Seven Seas S&P 500 Index Fund are
valued as of the last reported trade price on the last business day of
the period. The Parker Retirement Savings Plan (the Plan) presents in
the Statement of Changes in Net Assets Available for Plan Benefits the
net appreciation (depreciation) in the fair value of its investments
which consists of the realized gains or losses from the sale of
investments and the unrealized appreciation (depreciation) on
investments held by the Plan.
Investments in the Key Trust Employee Benefits Money Market Fund are
valued at market, which approximates cost. Refer to Note 5 for
information relating to the Contract Income Fund.
Management believes that the Plan's investments are well diversified
and do not create a significant concentration of credit risk.
Participants assume all risk in connection with any decrease in the
market price of any securities in all the Funds. Although the annual
rates of return with respect to the contracts held in the Contract
Income Fund are guaranteed by major insurance and bank companies, the
Company does not make any representations as to the financial
capability of such companies or their ability to make payments under
the contracts.
CONTRIBUTIONS
Contributions from employees and the Company are recorded in the
period that payroll deductions are made from Plan participants.
Company contributions are invested solely in the ESOP Fund, which
holds Company stock and some cash.
PLAN CHANGES
Effective January 1, 1996, certain changes were made to the Plan.
Several of these changes are as follows:
* Plan is now valued daily
* Participants may change contribution percentages and future
investment elections upon request
* Funds may be reallocated upon request
* An interactive voice response system has been implemented
* Investment elections may be allocated in whole percentage
increments (limited to 50% in the Stock Fund)
* Three new funds have been added (Small Capitalization,
International, and S&P 500 Index Funds)
* The maximum before-tax contribution has been increased from 10% to 15%
* Eligibility begins 3 months after date of hire
* Diversification of ESOP shares is allowed anytime during the year
(subject to age and service requirements)
* After-tax withdrawal is available upon request
* Participant is allowed two loans at a time
* Lump sum contributions have been eliminated
* The after-tax match on the first 3% of after-tax contributions has
been eliminated and the Company now matches only the 4% and 5% at 25%
* Plan name has been changed to the Parker Retirement Savings Plan
For a more complete explanation of the Plan, participants should refer
to the summary plan description.
3
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued
OTHER
The prior year Statement of Net Assets Available for Plan Benefits has
been restated to reclassify certain items to conform to the current
year's presentation.
Purchases and sales of securities are reflected on a trade-date basis.
Dividend income is recorded on the ex-dividend date. Interest and
other income are recorded as earned on the accrual basis.
Costs incident to the purchase and sale of securities, such as
brokerage commissions and stock transfer taxes, as well as investment
advisory fees, are charged to the Funds to which they relate and
netted against interest income. All other costs and expenses incurred
in administering the Plan, including fees of the Trustee, are paid out
of the Plan's assets, unless the Company elects to pay such costs.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from
those estimates.
Participants should refer to the summary plan description or the plan
agreement for more complete information.
2. CONTRIBUTIONS AND TRANSFERS
A participant may elect to contribute, through payroll deductions, not
less than 1% nor more than 15% of his total compensation for a Plan
year and may change such percentage upon request. The amount which a
highly compensated employee may contribute may be limited in order to
comply with Internal Revenue Code sections 401(k) and 401(m). A
participant may suspend his contributions at any time. Upon
enrollment or re-enrollment, each participant stipulates his
contributions to be invested in accordance with the following
investment options:
(a) Company Stock Fund - Invested primarily in Common Shares of the
Company purchased on the open market. A participant's contribution is
limited to 50% invested in this fund.
(b) Fixed Income Fund - Invested primarily in securities which have a
fixed rate of return such as government and high-quality corporate
bills, notes, bonds, and other similar investments of issuers other
than the Company.
(c) Equity Fund - Invested primarily in common stock of high-quality
medium and large capitalization companies other than the Company.
(d) Contract Income Fund - Invested primarily in high-quality fixed
income investments such as contracts issued by insurance companies and
banks which provide a return guaranteed by the issuer, and debt
securities such as notes and bonds issued by Federal agencies or
mortgage backed securities, with each of these investments typically
providing a stable rate of return for a specific period of time.
Refer to Note 5 for a further description of assets.
(e) Balanced Fund - Invested primarily in bonds, convertible
securities, money market investments, and common stocks of high-
quality medium and large capitalization companies other than the
Company.
(f) Small Capitalization Fund - Invested primarily in equity
securities of small companies that have demonstrated or have the
potential for above-average capital growth.
(g) International Fund - Invested primarily in common stocks,
preferred stocks, warrants and rights to subscribe to common stocks on
non-U.S. issuers.
(h) S&P 500 Index Fund - Invested in stocks which comprise the S&P
500 Index, most of which are listed on the New York Stock Exchange.
4
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
2. CONTRIBUTIONS AND TRANSFERS, continued
PARTICIPANT LUMP-SUM CONTRIBUTIONS
Through December 31, 1995 a participant could elect to make an annual
voluntary lump-sum contribution, providing he was actively contributing
to the Plan. The amount of any lump-sum contribution, when added to a
participant's payroll deduction contributions during the plan year,
could not exceed an amount equal to 15% of his total compensation for
the year. The highly compensated employees may have been prohibited
from making such contributions. A participant's voluntary lump-sum
contribution could be invested in the same manner as payroll deduction
contributions except that up to 100% of such contribution could be
invested in the Company Stock Fund. The right to make a voluntary
lump sum contribution was eliminated beginning with the 1996 Plan
year.
TRANSFER OF PROFIT-SHARING ACCOUNT BALANCES
A participant who has an account attributable to the old Profit-
Sharing Plan (replaced by the Retirement Plan) may make an irrevocable
election to have his entire account balance transferred to the Plan.
The account balance may be transferred upon request.
TRANSFERS FROM OTHER PLANS
As a result of an acquisition in 1996, $1,945,530 was transferred into
the Plan from the account balances of the Symmetrics Savings Plan.
TRANSFERS AMONG SAVINGS PLAN FUNDS
A participant may elect to reallocate at any time his account balances
attributable to his contributions invested in any Fund (other than the
ESOP Fund) to one or more of the other Funds.
A participant age 55 or older, with 10 or more years of participation
in the Plan, may transfer a portion of the shares of stock in the ESOP
Fund to any of the investment funds within the Plan. Such transfer
may be made anytime during the year.
PARKER-HANNIFIN CORPORATION CONTRIBUTIONS
The Company makes matching contributions based on the first 5% of a
participant's deferred compensation (before-tax) contributions. The
Company contributes an amount equal to 100% of the first 3% of the
monthly before-tax contributions and an amount equal to 25% of the 4%
and 5% of the contribution. Effective in 1996, the Company eliminated
the match on the first 3% of after-tax contribution and will match only
the 4% and 5% at 25%. Company contributions will match the before-tax
contributions prior to the after-tax contributions. Company contributions
are invested solely in the ESOP Fund.
PARTICIPANT LOANS
The Plan has a loan provision which allows an active participant to
borrow a minimum of $500 and up to a maximum of a) 50% of his account
balance or b) $50,000 minus the largest outstanding loan balance he
had in the last 12 months, whichever is less. The loan must be
repaid, with interest equal to the prime rate at the time the loan is
entered into plus 1%, over a period from 1 year to 4 1/2 years for a
general purpose loan and up to ten years for a residential loan.
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
PLAN PARTICIPANTS
The number of active participants in each fund at December 31, 1996
and 1995 are as follows:
1996 1995
______ _______
ESOP Fund 17,170 16,844
Company Stock Fund 11,541 6,051
Fixed Income Fund 6,358 3,597
Equity Fund 11,189 8,139
Contract Income Fund 11,756 7,702
Balanced Fund 6,083 3,908
Small Capitalization Fund 2,839 --
International Fund 2,239 --
S&P 500 Index Fund 2,655 --
The total number of participants in the Plan is less than the sum of
the number of participants shown above because many were participating
in more than one fund.
PARTICIPANT ACCOUNTS
Effective March 1, 1996, the Plan converted to the unit value method
for allocating Plan earnings for all funds with the exception of the
Company Stock and ESOP Funds. The unit values are determined on a
daily basis and are presented excluding contributions receivable and
benefits payable. The total number of units and unit values as of
December 31, 1996 by fund are as follows:
Total Number Net Asset
Investment Options of Units Unit Value
_________________________ _____________ __________
Fixed Income Fund 2,629,706.83 $10.45
Equity Fund 10,160,947.99 $11.90
Contract Income Fund 14,801,663.07 $10.52
Balanced Fund 3,768,542.95 $11.37
Small Capitalization Fund 611,819.96 $25.26
International Fund 497,833.72 $18.06
S&P 500 Index Fund 1,000,933.38 $15.57
3. ESOP FUND NOTES PAYABLE
During May and June of 1989, the ESOP Fund borrowed $70 million to
purchase 3.75 million shares of the Company's common stock on the open
market. The loan was guaranteed by the Company. Commencing July 1, 1989
and continuing over the period of the loan, the shares purchased by the
ESOP Fund were allocated to participants making contributions to the Plan
(see Note 2). The ESOP Fund used Company contributions and cash dividends
received on unallocated shares to repay the loan plus interest (8.41% per
annum for 1996 and 1995). Graduated principal payments and related
interest were due semiannually, commencing December 31, 1989 and ending on
June 30, 1996.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
4. INVESTMENTS
<TABLE>
<CAPTION>
The Plan investments at December 31, were as follows:
(000's omitted except on number of shares or units)
Number of
Shares or
Units Fair Value Cost
___________ __________ _________
<S> <C> <C> <C>
1996
____
Cash and cash equivalents
Employee Benefits Money Market Fund 11,803,416 $ 11,803 $ 11,803
_________ _________
Common Shares
Parker Hannifin Corporation - Allocated 6,487,567 251,393 128,034
_________ _________
Other Investments
AIM Constellation Fund 611,820 15,455 15,216
Capital Guardian International Equity Fund 497,833 8,991 8,382
Seven Seas S&P 500 Index Fund 1,000,933 15,585 14,754
Employee Benefits Fixed Income Fund 169,171 13,956 12,275
Employee Benefits Value Equity Fund 470,963 150,176 82,635
U.S. Government Securities 17,692,244 18,154 18,040
Corporate Debt Instruments 7,600,000 7,593 7,590
Investment Contracts 148,730,778 148,731 148,731
_________ _________
378,641 307,623
_________ _________
Total Assets Held for Investment $ 641,837 $ 447,460
========= =========
1995
____
Cash and cash equivalents
Employee Benefits Money Market Fund 20,665,545 $ 20,666 $ 20,666
_________ _________
Common Shares
Parker Hannifin Corporation - Allocated 6,012,502 205,928 110,913
Parker Hannifin Corporation - Unallocated 326,455 11,181 7,511
_________ _________
217,109 118,424
_________ _________
Other Investments
Employee Benefits Fixed Income Fund 149,992 11,972 10,507
Employee Benefits Value Equity Fund 455,323 117,029 70,298
U.S. Government Securities 17,441,076 18,600 17,947
Corporate Debt Instruments 6,100,000 6,218 6,111
Investment Contracts 155,287,642 155,288 155,288
_________ _________
309,107 260,151
_________ _________
Total Assets Held for Investment $ 546,882 $ 399,241
========= =========
</TABLE>
The net realized gain on disposition of investments included in the Plan
equity is as follows:
1996 1995
________ _________
Selling price $ 72,242 $ 132,344
Cost* 59,321 128,148
________ _________
Realized gain $ 12,921 $ 4,196
======== =========
The net unrealized appreciation of investments included in the Plan
equity is as follows:
Balance at December 31, 1994 $ 94,244
Change for the fiscal period 53,397
_________
Balance at December 31, 1995 147,641
Change for the fiscal period 46,736
_________
Balance at December 31, 1996 $ 194,377
=========
* Cost of securities sold is determined on an average historical
cost basis.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
5. CONTRACT INCOME FUND
Reported in the aggregate for the Contract Income Fund at December 31:
1996 1995
_____________ _____________
Contract Value of Assets $ 155,753,873 $ 169,961,276
Fair Value of Assets $ 155,405,312 $ 172,323,519
Average Yield of Assets 6.58% 6.35%
Return on assets for the 12 months
ended December 31 6.37% 6.44%
Duration 2.13 years 2.38 years
The above information is provided in compliance with the AICPA
Statement of Position 94-4 (SOP 94-4). SOP 94-4 requires that fair
value be based upon the standard discounted cash flow methodology as
referred to in the Statement of Financial Accounting Standards No.
107. To arrive at the above aggregate fair value, comparable duration
Wall Street Journal Guaranteed Investment Contract (GIC) Index rates
were used as the discount factor within the discounted cash flow
formula. A standard present value calculation has been employed to
arrive at a current value for each cash flow within a contract. The
sum of the present values for each contract's cash flows is the
estimated total fair value for that contract. All of the contract
fair values are then added together to arrive at the above aggregate
fair value for the portfolio.
The Contract Income Fund contains a managed synthetic GIC. This is a
portfolio of securities owned by the Fund with a benefit-responsive,
book-value "wrap" contract associated with the portfolio. The wrap
contract assures that book-value, benefit-responsive payments can be
made for participant withdrawals. The managed synthetic GIC included
in the above amounts at December 31, 1996 and 1995 had a contract
value of $45,207,576 and $44,176,639, while the fair value was
$44,960,145 and $44,678,558, respectively. The crediting rate on the
managed synthetic GIC resets at least quarterly and will have an
interest rate of no less than 0%.
At December 31, 1995 the Contract Income Fund contained non-benefit
responsive contracts. SOP 94-4 recommends that these contracts be
carried at a fair value. However, the Fund's non-benefit responsive
contracts were not a large enough representation of the portfolio
(1.6% at December 31, 1995) to result in a material impact on the
Contract Income Fund. Therefore, these contracts have been reported at
contract value in the financial statements.
It is important to note that, in the absence of an actively traded
market, discounted cash flows are only an estimate of the contract's
economic value. These values are not a useful value for participant
statement purposes nor are they representative of the value which may
be received from these contracts in either a participant disbursement
or an early termination of the contract.
6. VESTING, WITHDRAWALS AND DISTRIBUTIONS
A participant's interest in the Plan attributable to his own
contributions and Company contributions is fully vested at all times.
A participant may withdraw in cash a portion of his contributions,
subject to certain limitations and restrictions.
After a participant terminates employment for any reason, all amounts
are distributable to him or, if he is deceased, to his designated
beneficiary. If his interest exceeds $3,500, he may defer his
distribution up to his attainment of age 70 1/2. Distribution is
either in a single payment, quarterly installments or, by purchase of
an annuity. Amounts held in the Company Stock Fund and ESOP Fund are
distributed in the form of Common Shares or cash, as the participant
elects. All other amounts are distributed in the form of cash or
annuity.
Dividends received by the ESOP Fund with respect to allocated Company
shares are paid to participants subsequent to the end of each plan
year.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
7. TAX STATUS
The United States Treasury Department advised on July 24, 1995, that
the Plan, as restated as of January 1, 1992, constitutes a qualified
trust under Section 401(a) of the Internal Revenue Code and is
therefore exempt from federal income taxes under provisions of Section
501(a).
Contributions matched by the Company and all earnings are not taxable
until distributed to the participants. Participants are allowed to
make deferred compensation contributions to the Plan in amounts up to
15% of their total compensation but not to exceed $9,500 and $9,240 in
1996 and 1995, respectively (may be adjusted annually for cost-of-
living increases). Such contributions are made in accordance with a
salary reduction arrangement under Section 401(k) of the Internal Revenue
Code of 1986, as amended, and are treated for federal income tax purposes
as Company contributions. Contributions by highly compensated employees
are limited in accordance with section 401(k).
8. PLAN TERMINATION
The Company, by action of its Board of Directors, without further
approval by the shareholders, has the right to amend, modify, suspend,
or terminate the Plan in its entirety, or as to any subsidiary or
operating location. No amendment, modification, suspension, or
termination shall provide that assets held in trust by the Trustee may
be used for or diverted to purposes other than for the exclusive
benefit of participants or their beneficiaries. If the Plan is
terminated, the Company contributions credited to each affected
participant shall continue to be fully vested.
9. RECONCILIATION WITH FORM 5500
The Department of Labor requires that amounts owed to withdrawing but
unpaid former participants be classified as a plan liability on Form
5500, while these amounts are not reported as a liability in the
Statements of Net Assets Available for Plan Benefits. As a result,
the following reconciliations were prepared:
1996 1995
_____________ _____________
Net assets per Form 5500 $ 669,509,061 $ 552,376,550
Distributions payable that are allocated
but unpaid to former participants 87,212 2,616,830
_____________ _____________
Plan Equity per financial statements $ 669,596,273 $ 554,993,380
============= =============
Distributions to former participants
per Form 5500 $ 31,947,842 $ 31,456,839
Distributions payable that are allocated
but unpaid to former participants (87,212) (2,616,830)
Prior year distributions payable that were
paid to former participants in the
current year 2,616,830 1,711,238
_____________ _____________
Distributions to former participants per
financial statements $ 34,477,460 $ 30,551,247
============= =============
10. ASSET ALLOCATION
As described in Note 2, the participants may elect to invest their
contributions in eight investment funds (five in 1995) and Company
contributions are invested in the ESOP Fund. The allocation of assets
and liabilities, and the additions and deductions among the investment
funds as well as the ESOP and Loan Funds follows on pages 10 through
13.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
10. ASSET ALLOCATION, continued
<TABLE>
<CAPTION>
PARKER RETIREMENT SAVINGS PLAN
ALLOCATION OF NET ASSETS AVAILABLE FOR PLAN BENEFITS INVESTMENT PROGRAMS
DECEMBER 31, 1996
(000'S omitted)
Company Fixed Contract
ESOP Stock Income Equity Income Balanced
Fund Fund Fund Fund Fund Fund
_________ ________ ________ _________ _________ ________
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Cash and cash equivalents $ 2,902 $ 653 $ 1,271 $ - $ 6,977 $ -
Parker-Hannifin Corporation
common shares 187,635 63,758
Investment contracts 148,731
Other investments 25,747 121,331 42,802
_________ ________ ________ _________ _________ ________
Total investments 190,537 64,411 27,018 121,331 155,708 42,802
Receivables:
Participants' contributions 21
Participant loans
Accrued interest and dividends 17 2 436 548
Other 1,318 28 263 136
_________ ________ ________ _________ _________ ________
Total assets 191,872 64,413 27,482 121,352 156,519 42,938
_________ ________ ________ _________ _________ ________
LIABILITIES
Dividends payable to participants 3,338
Other 35 17 415 627 40
_________ ________ ________ _________ _________ ________
Total liabilities 3,338 35 17 415 627 40
_________ ________ ________ _________ _________ ________
Net Assets Available for
Plan Benefits $ 188,534 $ 64,378 $ 27,465 $ 120,937 $ 155,892 $ 42,898
========= ======== ======== ========= ========= ========
(Table continued)
Small S & P
Capitali- Inter- 500
zation national Index Loan
Fund Fund Fund Fund Total
________ _______ ________ ________ _________
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Cash and cash equivalents $ - $ - $ - $ - $ 11,803
Parker-Hannifin Corporation
common shares 251,393
Investment contracts 148,731
Other investments 15,454 8,991 15,585 229,910
________ _______ ________ ________ _________
Total investments 15,454 8,991 15,585 - 641,837
________ _______ ________ ________ _________
Receivables:
Participants' contributions 21
Participant loans 29,588 29,588
Accrued interest and dividends 28 1,031
Other 61 35 43 1,884
________ _______ ________ ________ _________
Total assets 15,515 9,026 15,656 29,588 674,361
________ _______ ________ ________ _________
LIABILITIES
Dividends payable to participants 3,338
Other 188 14 91 1,427
________ _______ ________ ________ _________
Total liabilities 188 14 91 - 4,765
________ _______ ________ ________ _________
Net Assets Available for
Plan Benefits $ 15,327 $ 9,012 $ 15,565 $ 29,588 $ 669,596
======== ======= ======== ======== =========
</TABLE>
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
10. ASSET ALLOCATION, continued
<TABLE>
<CAPTION>
PARKER RETIREMENT SAVINGS PLAN
ALLOCATION OF NET ASSETS AVAILABLE FOR PLAN BENEFITS INVESTMENT PROGRAMS
DECEMBER 31, 1995
(000'S omitted)
Company Fixed Contract
ESOP Stock Income Equity Income Balanced Loan
Fund Fund Fund Fund Fund Fund Fund Total
_________ ________ ________ ________ _________ ________ ________ _________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Cash and cash equivalents $ 4,988 $ 519 $ 549 $ - $ 14,610 $ - $ - $ 20,666
Parker-Hannifin Corporation
common shares 160,718 56,391 217,109
Investment contracts 155,288 155,288
Other investments 24,818 95,862 33,139 153,819
_________ ________ ________ ________ _________ ________ ________ _________
Total investments 165,706 56,910 25,367 95,862 169,898 33,139 - 546,882
_________ ________ ________ ________ _________ ________ ________ _________
Receivables:
Employer's contribution 500 500
Participants' contributions 121 38 133 56 348
Participant loans 16,582 16,582
Accrued interest and dividends 57 3 535 311 906
Other 3 3
_________ ________ ________ ________ _________ ________ ________ _________
Total assets 166,263 57,037 25,940 95,995 170,209 33,195 16,582 565,221
_________ ________ ________ ________ _________ ________ ________ _________
LIABILITIES
Dividends payable to participants 2,885 2,885
Notes payable 6,895 6,895
Other 200 247 447
_________ ________ ________ ________ _________ ________ ________ _________
Total liabilities 9,780 200 - - 247 - - 10,227
_________ ________ ________ ________ _________ ________ ________ _________
Net Assets Available for
Plan Benefits $ 156,483 $ 56,837 $ 25,940 $ 95,995 $ 169,962 $ 33,195 $ 16,582 $ 554,994
========= ======== ======== ======== ========= ======== ======== =========
</TABLE>
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
10. ASSET ALLOCATION, continued
<TABLE>
<CAPTION>
PARKER RETIREMENT SAVINGS PLAN
ALLOCATION OF NET ASSETS AVAILABLE FOR PLAN BENEFITS INVESTMENT PROGRAMS
DECEMBER 31, 1996
(000's omitted)
Company Fixed Contract
ESOP Stock Income Equity Income Balanced
Fund Fund Fund Fund Fund Fund
_________ ________ ________ _________ _________ ________
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Contributions:
Participant payroll deductions $ - $ 7,388 $ 4,293 $ 14,792 $ 10,534 $ 7,323
Employer 19,703
_________ ________ ________ _________ _________ ________
Total contributions 19,703 7,388 4,293 14,792 10,534 7,323
_________ ________ ________ _________ _________ ________
Transfers from other plans 205 65 554 274 442
Interfund transfers (1,378) (5,915) (2,330) (8,798) (17,673) (2,097)
Interest income 259 62 1,684 2 9,840 32
Dividend income - net 67 1,204
Net appreciation (depreciation) in
the fair value of investments 20,647 7,514 (652) 23,318 5,844
_________ ________ ________ _________ _________ ________
Total additions 39,298 10,458 3,060 29,868 2,975 11,544
_________ ________ ________ _________ _________ ________
DEDUCTIONS
Withdrawals and terminations 6,957 2,911 1,424 4,289 16,604 1,610
Interest expense 290
Trustee fees and expenses 6 111 637 441 231
_________ ________ ________ _________ _________ ________
Total deductions 7,247 2,917 1,535 4,926 17,045 1,841
_________ ________ ________ _________ _________ ________
Net increase (decrease) in Assets
Available for Plan Benefits 32,051 7,541 1,525 24,942 (14,070) 9,703
Assets Available - Beginning of year 156,483 56,837 25,940 95,995 169,962 33,195
_________ ________ ________ _________ _________ ________
Assets Available - End of year $ 188,534 $ 64,378 $ 27,465 $ 120,937 $ 155,892 $ 42,898
========= ======== ======== ========= ========= ========
(Table continued)
Small S & P
Capitali- Inter- 500
zation national Index Loan
Fund Fund Fund Fund Total
________ _______ ________ ________ _________
<C> <C> <C> <C> <C>
ADDITIONS
Contributions:
Participant payroll deductions $ 3,988 $ 2,448 $ 3,673 $ - $ 54,439
Employer 19,703
________ _______ ________ ________ _________
Total contributions 3,988 2,448 3,673 - 74,142
________ _______ ________ ________ _________
Transfers from other plans 127 93 186 1,946
Interfund transfers 10,432 5,871 10,256 11,632 -
Interest income 1 160 1,809 13,849
Dividend income - net 1,271
Net appreciation (depreciation) in
the fair value of investments 881 665 1,440 59,657
________ _______ ________ ________ _________
Total additions 15,428 9,078 15,715 13,441 150,865
________ _______ ________ ________ _________
DEDUCTIONS
Withdrawals and terminations 88 60 100 435 34,478
Interest expense 290
Trustee fees and expenses 13 6 50 1,495
________ _______ ________ ________ _________
Total deductions 101 66 150 435 36,263
________ _______ ________ ________ _________
Net increase (decrease) in Assets
Available for Plan Benefits 15,327 9,012 15,565 13,006 114,602
Assets Available - Beginning of year - - - 16,582 554,994
________ _______ ________ ________ _________
Assets Available - End of year $ 15,327 $ 9,012 $ 15,565 $ 29,588 $ 669,596
======== ======= ======== ======== =========
</TABLE>
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
10. ASSET ALLOCATION, continued
<TABLE>
<CAPTION>
PARKER RETIREMENT SAVINGS PLAN
ALLOCATION OF NET ASSETS AVAILABLE FOR PLAN BENEFITS INVESTMENT PROGRAMS
DECEMBER 31, 1995
(000's omitted)
Company Fixed Contract
ESOP Stock Income Equity Income Balanced Loan
Fund Fund Fund Fund Fund Fund Fund Total
_________ ________ ________ _________ _________ ________ ________ _________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Contributions:
Participant payroll deductions $ - $ 5,904 $ 3,799 $ 12,442 $ 11,626 $ 5,350 $ - $ 39,121
Participant lump sum 18 5 24 8 7 62
Employer 18,201 18,201
_________ ________ ________ _________ _________ ________ ________ _________
Total contributions 18,201 5,922 3,804 12,466 11,634 5,357 - 57,384
_________ ________ ________ _________ _________ ________ ________ _________
Interfund transfers (694) (271) (287) 2,175 (2,163) (44) 1,284 -
Interest income 346 30 1,477 22 10,437 4 1,182 13,498
Dividend income - net 469 1,119 1,588
Net appreciation in the
fair value of investments 19,135 6,525 1,639 23,524 6,770 57,593
_________ ________ ________ _________ _________ ________ ________ _________
Total additions 37,457 13,325 6,633 38,187 19,908 12,087 2,466 130,063
_________ ________ ________ _________ _________ ________ ________ _________
DEDUCTIONS
Withdrawals and terminations 6,519 3,071 1,240 3,445 14,865 867 544 30,551
Interest Expense 1,396 1,396
Trustee fees and expenses 40 54 266 217 105 682
_________ ________ ________ _________ _________ ________ ________ _________
Total deductions 7,915 3,111 1,294 3,711 15,082 972 544 32,629
_________ ________ ________ _________ _________ ________ ________ _________
Net increase in Assets Available
for Plan Benefits 29,542 10,214 5,339 34,476 4,826 11,115 1,922 97,434
Assets Available - Beginning of year 126,941 46,623 20,601 61,519 165,136 22,080 14,660 457,560
_________ ________ ________ _________ _________ ________ ________ _________
Assets Available - End of year $ 156,483 $ 56,837 $ 25,940 $ 95,995 $ 169,962 $ 33,195 $ 16,582 $ 554,994
========= ======== ======== ========= ========= ======== ======== =========
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
PARKER RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
FOR THE YEAR ENDED DECEMBER 31, 1996
Identity of issue, borrower, lessor, Description of investment including maturity date, Current
or similar party rate of interest, collateral, par, or maturity value Cost value
______________________________________ _______________________________________________________ _____________ _____________
<S> <C> <C> <C>
Employee Benefits Money Market Fund Cash and cash equivalents $ 11,803,414 $ 11,803,414
Parker Hannifin Corporation 6,487,567 Common Shares 128,033,604 251,393,220
AIM 611,820 units of AIM Constellation Fund 15,216,562 15,454,572
Capital Guardian 497,833 units of Capital Guardian Intl Equity Fund 8,381,698 8,990,876
Seven Seas 1,000,933 units of Seven Seas S&P 500 Index Fund 14,754,299 15,584,532
Key Bank 169,171 units of Employee Benefits Fixed Income Fund 12,274,859 13,956,417
Key Bank 470,963 units of Employee Benefits Value Equity Fund 82,634,818 150,175,845
U.S. Government Securities:
GNMA 6.5% due 07-15-2009 1,304,746 1,309,900
GNMA 9% due 09-15-2016 325,695 324,275
GNMA 9% due 12-15-20 421,513 416,987
GNMA 8.5% due 06-15-2021 944,534 921,014
GNMA 9% due 06-15-2022 372,178 371,411
United States Treasury Notes 5.375% due 05-31-1998 3,458,437 3,473,750
United States Treasury Notes 6.375% due 07-15-1999 2,008,437 2,018,740
United States Treasury Notes 6.625% due 06-30-2001 996,250 1,015,940
United States Treasury Notes 6.375% due 08-15-2002 3,279,611 3,220,992
United States Treasury Notes 7.5% due 02-15-2005 4,928,964 5,081,027
_____________ _____________
Total U.S. Govt. Securities 18,040,365 18,154,036
Corporate Debt Instruments:
Citicorp Senior NT 5.625% due 02-15-2001 979,100 965,650
Commercial Credit Notes 6.75% due 05-15-2000 504,760 504,360
Ford Motor Credit Corporation Notes 6.25% due 02-26-1998 1,000,640 1,002,490
Gannett Incorporated Notes 5.85% due 05-01-2000 466,500 490,915
General Electric Company Deb 7.875% due 09-15-1998 509,050 514,515
IBM Note 6.375% due 11-01-1997 493,339 501,805
J C Penny Note 10% due 10-15-1997 265,802 257,587
Lockheed Martin Bond 7.25% due 05-15-2006 499,530 508,685
Phillip Morris Company Inc NT 6.375% due 01-15-1998 868,904 852,184
Salomon Inc Notes 6.7% due 12-01-1998 1,003,350 1,003,780
Service Corp International SR Note 6.375% due 10-01-2000 998,540 991,010
_____________ _____________
Total Corporate Debt Instruments 7,589,515 7,592,981
Continued on next page
14
<PAGE>
PARKER RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES, continued
FOR THE YEAR ENDED DECEMBER 31, 1996
Identity of issue, borrower, lessor, Description of investment including maturity date, Current
or similar party rate of interest, collateral, par, or maturity value Cost value
______________________________________ _______________________________________________________ _____________ _____________
<S> <C> <C> <C>
Investment Contracts:
Business Mens Assurance Co 6.9% due 10-01-2001 $ 3,039,746 $ 3,039,746
Caisse Des Depots ET Consignations 5.44% due 12-26-2000 3,138,139 3,138,139
Capital Holding Corp 5.91% due 07-15-2000 2,990,419 2,990,419
C.N.A. Insurance Co 8.7% due 03-17-1997 4,873,580 4,873,580
Commonwealth Life Insurance 5.47% due 10-25-2004 9,996,041 9,996,041
Commonwealth Life Insurance 6.648% due 08-08-1999 9,977,664 9,977,664
Confederation Life 9.29% due 02-23-1995 2,094,657 2,094,657
Hartford Insurance Co 8.40% due 01-15-1997 3,097,104 3,097,104
Hartford Life Insurance 7.83% due 10-15-1997 3,642,243 3,642,243
Metropolitan Life 6.75% due 11-14-2000 2,385,501 2,385,501
New York Life Insurance Co 7.15% due 09-15-1998 2,552,400 2,552,400
New York Life Insurance Co 5.8% due 11-15-1999 11,770,122 11,770,122
Principal Mutual Life Insurance Co 5.45% due 06-15-1999 4,690,972 4,690,972
Security Life Of Denver 5.85% due 01-06-1997 3,000,000 3,000,000
Union Bank Switzerland 6.64% due 08-15-1999 10,435,614 10,435,614
Union Bank Switzerland 5.9271% due 03-25-2000 10,301,718 10,301,718
Bankers Trust Basic Contract # 94-773 7.74% due 04-07-1999 1,999,408 1,999,408
Bankers Trust Synthetic GIC No maturity 45,207,576 45,207,576
Bankers Trust 6.75% due 03-25-1999 1,462,286 1,462,286
Bankers Trust Contract # 92-286 7.204998% due 11-15-1998 1,119,443 1,119,443
Bankers Trust Contract # 92-377 RT % due 9-25-1997 2,742,592 2,742,592
Bankers Trust RT% due 10-15-1997 2,704,520 2,704,520
Transamerica Occidental Life # 76524 8.12% due 11-07-1998 2,514,869 2,514,869
Transamerica Synthetic GIC # 76554 RT% due 6-15-2000 2,994,153 2,994,153
_____________ _____________
Total Investment Contracts 148,730,767 148,730,767
_____________ _____________
Total Assets Held for Investment $ 447,459,901 $ 641,836,660
============= =============
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
PARKER RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
The following schedule represents Plan transactions or series of transactions
in excess of 5% of current value of Plan assets for the year ended
December 31, 1996.
# of Purchase Cost of Gain or
Description Transactions Price Proceeds Asset loss
_________________________ ____________ ____________ ____________ ____________ _____________
<S> <C> <C> <C> <C> <C>
Key Trust Employee
Benefits Money Market 417 $ 55,481,840
Key Trust Employee
Benefits Money Market 300 $ 53,117,086 $ 53,117,086 $ -
<FN>
NOTE: There is no separate determination of expenses related to the above transactions.
16
</FN>
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrator of the Plan has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
PARKER RETIREMENT SAVINGS PLAN
BY: Michael J. Hiemstra
Michael J. Hiemstra
Vice President-Finance & Administration
& Chief Financial Officer
Parker-Hannifin Corporation
June 27, 1997
