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, 1997
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
6035 PARKLAND BOULEVARD
CLEVELAND, OHIO 44124-4141
<PAGE>
PARKER RETIREMENT SAVINGS PLAN
INDEX OF FINANCIAL STATEMENTS
PAGE
Independent Auditors' Report 1 to 2
Financial Statements:
Statements of Net Assets Available for Benefits
at December 31, 1997 and 1996 3
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 1997 and 1996 3
Notes to Financial Statements 4 to 14
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes for the year ended December 31, 1997 15 to 17
Item 27d - Schedule of Reportable Transactions for
the year ended December 31, 1997 18
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
of Parker-Hannifin Corporation
We have audited the accompanying statements of net assets available for
benefits of the Parker Retirement Savings Plan as of December 31, 1997, and
the related statements of changes in net assets available for benefits for the
year ended December 31, 1997. 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 audit. The financial
statements of the Parker Retirement Savings Plan as of December 31, 1996, were
audited by other auditors whose report dated June 27, 1997, expressed an
unqualified opinion on those statements.
We conducted our audit 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 audit provides a reasonable basis
for our opinion.
In our opinion, the December 31, 1997 financial statements referred to above
present fairly, in all material respects the net assets available for benefits
of the Parker Retirement Savings Plan as of December 31, 1997, and the changes
in net assets available for benefits for the year ended December 31, 1997 in
conformity with generally accepted accounting principles.
Our audit was 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. These supplemental schedules are the responsibility of
the Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements
and, in our opinion, are fairly stated in all material aspects in relation to
the basic financial statements taken as a whole.
Ciuni & Panichi Inc.
Cleveland, Ohio
June 18, 1998
- 1 -
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and
Board of Directors
Parker-Hannifin Corporation
We have audited the accompanying statement of Net Assets Available for
Benefits of the Parker Retirement Savings Plan (the "Plan") as of December 31,
1996, and the related Statement of Changes in Net Assets Available for
Benefits for the year 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 audit.
We conducted our audit 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 audit provides 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 the changes in net
assets available for plan benefits for the year ended December 31, 1996 in
conformity with generally accepted accounting principles.
Our audit was 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 Fund information in the Statement of Changes in Net
Assets Available for Benefits and Note 11 to the financial statements is
presented for purposes of additional analysis rather than to present the
changes in net assets available for benefits of each fund. The supplemental
schedules and Fund Information 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
- 2 -
<PAGE>
PARKER RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1997 AND 1996
(000's omitted)
1997 1996
_________ _________
[S] [C] [C]
ASSETS
Investments at fair value:
Cash and cash equivalents (Notes 1 & 3) $ 10,351 $ 11,803
Parker-Hannifin Corporation common
shares (Notes 1 & 3) 475,169 251,393
Investment contracts (Notes 1 & 5) 140,116 148,731
Other investments (Notes 1 & 3) 312,301 229,910
Participant loans 37,306 29,588
_________ _________
Total investments 975,243 671,425
_________ _________
Receivables:
Participant contributions - 21
Accrued interest and dividends 1,187 1,031
Other 32 1,884
_________ _________
Total assets 976,462 674,361
_________ _________
LIABILITIES
Dividends payable to participants (Note 6) 4,220 3,338
Other 2,669 1,427
_________ _________
Total liabilities 6,889 4,765
_________ _________
Net Assets Available for Benefits $ 969,573 $ 669,596
========= =========
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
(000's omitted)
1997 1996
_________ _________
[S] [C] [C]
ADDITIONS
Contributions (Notes 1 & 2):
Participant payroll deductions $ 51,549 $ 54,439
Employer's contributions 22,313 19,703
_________ _________
Total contributions 73,862 74,142
Transfers from other plans (Note 2) - 1,946
Interest income 18,155 13,849
Dividend income - net 1,438 1,271
Net appreciation in the fair
value of investments (Notes 1 & 3) 248,406 59,657
_________ _________
Total additions 341,861 150,865
_________ _________
DEDUCTIONS
Withdrawals and terminations 40,356 34,478
Interest expense (Note 4) - 290
Trustee fees and expenses 1,528 1,495
_________ _________
Total deductions 41,884 36,263
_________ _________
Net increase in Assets Available
for Benefits 299,977 114,602
Net Assets Available - Beginning of year 669,596 554,994
_________ _________
Net Assets Available - End of year $ 969,573 $ 669,596
========= =========
The accompanying notes are an integral part of the financial statements.
- 3 -
<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 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.
OTHER
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.
Benefits are recorded when paid.
2. DESCRIPTION OF PLAN
GENERAL
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement or summary plan
description for a more complete description of the Plan's provisions.
The Plan is a defined contribution plan covering all regular and part-
time non-union employees who have 90 days of service. It is subject to
the provisions of the Employee Retirement Income Security Act (ERISA) of
1974, as amended.
- 4 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
2. DESCRIPTION OF PLAN, Continued
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 this fund.
(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 and medium-sized 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.
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.
- 5 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
2. DESCRIPTION OF PLAN, Continued
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 4th
percent and 5th percent of the contribution. Effective in 1996, the
Company eliminated the match on the first 3% of after-tax contributions
and matches only the 4th percent and 5th percent at 25%. Company
contributions 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. Participant loans are
valued at cost, which approximates fair value.
PLAN PARTICIPANTS
The number of active participants in each fund at December 31, 1997 and
1996 are as follows:
1997 1996
______ ______
ESOP Fund 17,663 17,170
Company Stock Fund 12,147 11,541
Fixed Income Fund 5,863 6,358
Equity Fund 12,009 11,189
Contract Income Fund 10,561 11,756
Balanced Fund 6,655 6,083
Small Capitalization Fund 3,923 2,839
International Fund 3,132 2,239
S&P 500 Index Fund 4,953 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 which were converted April 1, 1997. 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, 1997 and 1996 by fund are as follows:
<TABLE>
<CAPTION>
1997 1996
____________________________ ____________________________
Total Net Asset Total Net Asset
Investment Options Number of Units Unit Value Number of units Unit Value
_________________________ _______________ __________ _______________ __________
<S> <C> <C> <C> <C>
ESOP 21,639,556.79 $16.21 - -
Company Stock 7,778,762.78 $16.23 - -
Fixed Income Fund 2,629,499.16 $11.34 2,629,706.83 $10.45
Equity Fund 9,945,404.96 $15.34 10,160,947.99 $11.90
Contract Income Fund 13,091,421.82 $11.20 14,801,663.07 $10.52
Balanced Fund 4,126,273.55 $13.78 3,768,542.95 $11.37
Small Capitalization Fund 844,330.36 $26.38 611,819.96 $25.26
International Fund 676,171.69 $19.74 497,833.72 $18.06
S&P 500 Index Fund 1,926,160.05 $19.66 1,000,933.38 $15.57
</TABLE>
- 6 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
3. 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
1997 Units Fair Value Cost
____ ___________ _________ _________
<S> <C> <C> <C>
Cash and cash equivalents
Employee Benefits Money Market Fund 10,351,068 $ 10,351 $ 10,351
_________ _________
Common Shares
Parker Hannifin Corporation - Allocated 10,357,909 475,169 162,976
_________ _________
Investment Contracts - estimated 140,116,435 140,116 140,116
_________ _________
Other Investments
AIM Constellation Fund 844,330 22,273 22,281
Capital Guardian International Equity Fund 676,172 13,348 12,673
Seven Seas S&P 500 Index Fund 1,926,160 37,868 32,942
Employee Benefits Fixed Income Fund 257,380 23,235 20,083
Employee Benefits Value Equity Fund 451,757 186,358 92,875
U.S. Government Securities 13,376,799 13,778 13,640
Corporate Debt Instruments 14,901,498 15,441 15,257
_________ _________
312,301 209,751
_________ _________
Participant Loans - estimated 37,306,280 37,306 37,306
_________ _________
Total Assets Held for Investment $ 975,243 $ 560,500
========= =========
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
_________ _________
Investment Contracts - estimated 148,730,778 148,731 148,731
_________ _________
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
_________ _________
229,910 158,892
_________ _________
Participant Loans - estimated 29,588,434 29,588 29,588
_________ _________
Total Assets Held for Investment $ 671,425 $ 477,048
========= =========
</TABLE>
The net realized gain on disposition of investments included in the Plan
equity is as follows:
1997 1996
_________ ________
Selling price $ 209,435 $ 72,242
Cost* 181,395 59,321
_________ ________
Realized gain $ 28,040 $ 12,921
========= ========
The net unrealized appreciation of investments included in the Plan
equity is as follows:
Balance at December 31, 1995 $ 147,641
Change for the fiscal period 46,736
_________
Balance at December 31, 1996 194,377
Change for the fiscal period 220,366
_________
Balance at December 31, 1997 $ 414,743
=========
* Cost of securities sold is determined on an average historical
cost basis.
- 7 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
4. 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). Graduated principal payments and related
interest were due semiannually, commencing December 31, 1989 and ending
on June 30, 1996.
5. CONTRACT INCOME FUND
Reported in the aggregate for the Contract Income Fund at December 31:
1997 1996
_____________ _____________
Contract Value of Assets $ 146,626,466 $ 155,753,873
Fair Value of Assets $ 146,981,405 $ 155,405,312
Average Yield of Assets 6.39% 6.58%
Return on assets for the
12 months ended December 31 6.55% 6.37%
Duration 2.49 years 2.13 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, 1997 and 1996 had a contract value of
$48,093,253 and $45,207,576, while the fair value was $49,116,395 and
$44,960,145, 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, 1997 and 1996 the Contract Income Fund contained a non-
benefit responsive contract. SOP 94-4 recommends that this contract be
carried at a fair value. However, the Fund's non-benefit responsive
contract was not a large enough representation of the portfolio (1.8% and
1.6% at December 31, 1997 and 1996, respectively) to result in a material
impact on the Contract Income Fund. Therefore, this contract has 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.
Certain employer initiated events (e.g., layoffs, bankruptcy, plant
closings, plan termination, mergers, early retirement incentives) are not
eligible for book value disbursements even from fully benefit responsive
contracts. These events may cause liquidation of all or a portion of a
contract at a market value adjustment. If the likelihood of such a non-
book value withdrawal incident is imminent, it may be necessary to
consider a revaluation of those particular Contract Income Fund
contracts.
- 8 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
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 ($5,000 in 1998), 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.
7. TAX STATUS
The Internal Revenue Service has determined and informed the Company by
letter dated July 24, 1995, that the Plan, and related trust are designed
in accordance with applicable sections of the Internal Revenue Code
(IRC). Since receiving the determination letter the Plan has been amended
to provide for various administrative changes including adding additional
investment funds and furnishing daily valuations. The Plan administrator
and the Plan's tax counsel believe that the Plan continues to be designed
and operated in compliance with the applicable provisions of the IRC.
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 in 1997 and 1996 (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
Although it has not expressed any intent to do so, 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 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
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 Benefits. As a result, the
following reconciliations were prepared:
1997 1996
_____________ _____________
Net assets per Form 5500 $ 969,417,579 $ 669,509,061
Distributions payable that are allocated
but unpaid to former participants 156,485 87,212
_____________ _____________
Plan Equity per financial statements $ 969,574,064 $ 669,596,273
============= =============
Distributions to former participants
per Form 5500 $ 40,425,753 $ 31,947,842
Distributions payable that are allocated
but unpaid to former participants (156,485) (87,212)
Prior year distributions payable that
were paid to former participants in
the current year 87,212 2,616,830
_____________ _____________
Distributions to former participants
per financial statements $ 40,356,480 $ 34,477,460
============= =============
10. YEAR 2000 CONSIDERATIONS
The Company is taking actions to assure that its computer systems are
capable of processing periods for the year 2000 and beyond. The Company
is also determining whether third party service providers have reasonable
plans in place to become year 2000 compliant. This project is currently
expected to be substantially complete in early 1999 and the Company does
not expect this project to have a significant effect on plan operations.
11. ASSET ALLOCATION
As described in Note 2, the participants may elect to invest their
contributions in eight investment funds 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 11 through 14.
- 10 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
11). ASSET ALLOCATION, continued
<TABLE>
<CAPTION>
PARKER RETIREMENT SAVINGS PLAN
ALLOCATION OF NET ASSETS AVAILABLE FOR BENEFITS - INVESTMENT PROGRAMS
DECEMBER 31, 1997
(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 $ 3,416 $ 214 $ 202 $ 42 $ 6,477 $ -
Parker-Hannifin Corporation
common shares 347,955 127,214 - - - -
Investment contracts - - - - 140,116 -
Other investments - - 29,219 152,594 - 56,999
Participant loans - - - - -
_________ _________ ________ _________ _________ ________
Total investments 351,371 127,428 29,421 152,636 146,593 56,999
_________ _________ ________ _________ _________ ________
Receivables:
Accrued interest and dividends 20 7 385 - 775 -
Other - - 32 - - -
_________ _________ ________ _________ _________ ________
Total assets 351,391 127,435 29,838 152,636 147,368 56,999
_________ _________ ________ _________ _________ ________
LIABILITIES
Dividends payable to participants 4,220 - - - - -
Other 600 1,266 14 - 789 -
_________ _________ ________ _________ _________ ________
Total liabilities 4,820 1,266 14 - 789 -
_________ _________ ________ _________ _________ ________
Net Assets Available for
Benefits $ 346,571 $ 126,169 $ 29,824 $ 152,636 $ 146,579 $ 56,999
========= ========= ======== ========= ========= ========
(Table continued)
Small
Capitali- Inter- S&P 500
zation national Index Loan
Fund Fund Fund Fund Total
________ ________ ________ _______ _________
<C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Cash and cash equivalents $ - $ - $ - $ - $ 10,351
Parker-Hannifin Corporation
common shares - - - - 475,169
Investment contracts - - - - 140,116
Other investments 22,273 13,348 37,868 - 312,301
Participant loans - - - 37,306 37,306
________ ________ ________ _______ _________
Total investments 22,273 13,348 37,868 37,306 975,243
________ ________ ________ _______ _________
Receivables:
Accrued interest and dividends - - - - 1,187
Other - - - - 32
________ ________ ________ _______ _________
Total assets 22,273 13,348 37,868 37,306 976,462
________ ________ ________ _______ _________
LIABILITIES
Dividends payable to participants - - - - 4,220
Other - - - - 2,669
________ ________ ________ _______ _________
Total liabilities - - - - 6,889
________ ________ ________ _______ _________
Net Assets Available for
Benefits $ 22,273 $ 13,348 $ 37,868 $ 37,306 $ 969,573
======== ======== ======== ======== =========
</TABLE>
- 11 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
11). ASSET ALLOCATION, continued
<TABLE>
<CAPTION>
PARKER RETIREMENT SAVINGS PLAN
ALLOCATION OF NET ASSETS AVAILABLE FOR 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
Participant loans - - - - - -
_________ ________ ________ _________ _________ ________
Total investments 190,537 64,411 27,018 121,331 155,708 42,802
_________ ________ ________ _________ _________ ________
Receivables:
Participants' contributions - - - 21 - -
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
Benefits $ 188,534 $ 64,378 $ 27,465 $ 120,937 $ 155,892 $ 42,898
========= ======== ======== ========= ========= ========
(Table continued)
Small
Capitali- Inter- S&P 500
zation national Index Loan
Fund Fund Fund Fund Total
________ _______ ________ ________ _________
<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
Participant loans - - - 29,588 29,588
________ _______ ________ ________ _________
Total investments 15,454 8,991 15,585 29,588 671,425
________ _______ ________ ________ _________
Receivables:
Participants' contributions - - - - 21
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
Benefits $ 15,327 $ 9,012 $ 15,565 $ 29,588 $ 669,596
======== ======= ======== ======== =========
</TABLE>
- 12 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
11) ASSET ALLOCATION, continued
<TABLE>
<CAPTION>
PARKER RETIREMENT SAVINGS PLAN
ALLOCATION OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - INVESTMENT PROGRAMS
DECEMBER 31, 1997
(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 $ - $ 8,413 $ 3,699 $ 14,512 $ 9,632 $ 6,050
Employer 22,313 - - - - -
_________ _________ ________ _________ _________ ________
Total contributions 22,313 8,413 3,699 14,512 9,632 6,050
_________ _________ ________ _________ _________ ________
Interfund transfers (2,092) 6,311 (1,277) (11,617) (14,834) 1,266
Interest income 205 137 1,824 62 9,877 -
Dividend income - net - 1,438 - - - -
Net appreciation in the fair
value of investments 147,306 49,467 485 35,310 - 9,590
_________ _________ ________ _________ _________ ________
Total additions 167,732 65,766 4,731 38,267 4,675 16,906
_________ _________ ________ _________ _________ ________
DEDUCTIONS
Withdrawals and terminations 9,695 3,975 2,263 5,890 13,613 2,500
Trustee fees and expenses - - 109 678 375 305
_________ _________ ________ _________ _________ ________
Total deductions 9,695 3,975 2,372 6,568 13,988 2,805
_________ _________ ________ _________ _________ ________
Net increase (decrease) in Assets
Available for Benefits 158,037 61,791 2,359 31,699 (9,313) 14,101
Net Assets Available - Beginning of year 188,534 64,378 27,465 120,937 155,892 42,898
_________ _________ ________ _________ _________ ________
Net Assets Available - End of year $ 346,571 $ 126,169 $ 29,824 $ 152,636 $ 146,579 $ 56,999
========= ========= ======== ========= ========= ========
(Table continued)
Small
Capitali- Inter- S&P 500
zation national Index Loan
Fund Fund Fund Fund Total
________ ________ ________ ________ _________
<C> <C> <C> <C> <C>
ADDITIONS
Contributions:
Participant payroll deductions $ 3,376 $ 2,037 $ 3,830 $ - $ 51,549
Employer - - - - 22,313
________ ________ ________ ________ _________
Total contributions 3,376 2,037 3,830 - 73,862
________ ________ ________ ________ _________
Interfund transfers 2,158 1,939 12,300 5,846 -
Interest income 1,653 1 1,648 2,748 18,155
Dividend income - net - - - - 1,438
Net appreciation in the fair
value of investments 389 811 5,048 - 248,406
________ ________ ________ ________ _________
Total additions 7,576 4,788 22,826 8,594 341,861
________ ________ ________ ________ _________
DEDUCTIONS
Withdrawals and terminations 608 440 496 876 40,356
Trustee fees and expenses 22 12 27 - 1,528
________ ________ ________ ________ _________
Total deductions 630 452 523 876 41,884
________ ________ ________ ________ _________
Net increase (decrease) in Assets
Available for Plan Benefits 6,946 4,336 22,303 7,718 299,977
Net Assets Available - Beginning of year 15,327 9,012 15,565 29,588 669,596
________ ________ ________ ________ _________
Net Assets Available - End of year $ 22,273 $ 13,348 $ 37,868 $ 37,306 $ 969,573
======== ======== ======== ======== =========
</TABLE>
- 13 -
<PAGE>
NOTES TO FINANCIAL STATEMENTS, continued
11). ASSET ALLOCATION, continued
<TABLE>
<CAPTION>
PARKER RETIREMENT SAVINGS PLAN
ALLOCATION OF CHANGES IN NET ASSETS AVAILABLE FOR 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 Benefits 32,051 7,541 1,525 24,942 (14,070) 9,703
Net Assets Available - Beginning of year 156,483 56,837 25,940 95,995 169,962 33,195
_________ ________ ________ _________ _________ ________
Net Assets Available - End of year $ 188,534 $ 64,378 $ 27,465 $ 120,937 $ 155,892 $ 42,898
========= ======== ======== ========= ========= ========
(Table continued)
Small
Capitali- Inter- S&P 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 Benefits 15,327 9,012 15,565 13,006 114,602
Net Assets Available - Beginning of year - - - 16,582 554,994
________ _______ ________ ________ _________
Net Assets Available - End of year $ 15,327 $ 9,012 $ 15,565 $ 29,588 $ 669,596
======== ======= ======== ======== =========
</TABLE>
- 14 -
<PAGE>
<TABLE>
<CAPTION>
PARKER RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
FOR THE YEAR ENDED DECEMBER 31, 1997
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 $ 10,351,068 $ 10,351,068
Parker Hannifin Corporation 10,357,909 Common Shares 162,976,655 475,169,075
AIM 844,330 units of AIM Constellation Fund 22,280,588 22,273,435
Capital Guardian 676,172 units of Capital Guardian Intl Equity Fund 12,672,747 13,347,629
Seven Seas 1,926,160 units of Seven Seas S&P 500 Index Fund 32,941,896 37,868,307
Key Bank 257,380 units of Employee Benefits Fixed Income Fund 20,082,844 23,235,321
Key Bank 451,757 units of Employee Benefits Value Equity Fund 92,875,012 186,357,572
Participant Loans Participant loans - variable interest rates 37,306,280 37,306,280
U.S. Government Securities:
___________________________
Federal Home Loan Mortgage Corp. 6% due 06-01-2009 260,677 268,258
Federal Home Loan Mortgage Corp. 7% due 12-01-2026 683,611 688,286
Federal Home Loan Mortgage Corp. 7% due 12-01-2027 710,977 713,186
Federal Home Loan Mortgage Corp. 6.5% due 12-01-2010 286,496 294,781
Federal Home Loan Mortgage Corp. 8% due 09-01-2017 430,573 435,588
Federal Home Loan Mortgage Corp. 6.5% due 07-01-2010 92,233 94,901
Federal Home Loan Mortgage Corp. 6.24% due 10-06-2004 362,452 369,676
Federal Home Loan Mortgage Corp. 5.9% due 10-10-2002 556,786 559,126
Federal Home Loan Mortgage Corp. 6.56% due 12-10-2007 300,000 301,593
Federal Home Loan Mortgage Corp. 7% due 11-01-2027 167,890 169,016
GNMA 7.5% due 9-15-2021 1,014,584 1,018,663
GNMA 7% due 01-15-2024 70,520 72,537
GNMA 7.5% due 01-15-2027 151,437 151,483
GNMA 7.5% due 02-15-2027 185,998 186,623
GNMA 8% due 08-15-2027 162,734 163,056
GNMA 8% due 06-15-2027 145,808 146,060
GNMA 7.5% due 07-15-2027 135,244 135,699
GNMA 7.5% due 07-15-2027 106,083 106,115
GNMA 8% due 10-15-2027 285,047 285,646
GNMA 7.5% due 08-15-2027 140,899 140,941
GNMA 7.5% due 10-15-2027 184,498 185,119
GNMA 7.5% due 8-15-2027 98,454 98,785
GNMA 7.5% due 8-15-2027 107,145 107,177
GNMA 7.5% due 12-15-2027 508,894 510,136
GNMA 9% due 6-15-2022 337,790 341,542
GNMA 8% due 7-15-2017 439,990 440,575
GNMA 7.5% due 12-15-2025 661,654 662,558
United States Treasury Bonds 6.5% due 11-15-2026 2,855,519 2,919,613
United States Treasury Bonds 6.375% due 8-15-2027 282,348 289,955
United States Treasury Notes 5% due 1-31-1999 846,930 848,398
United States Treasury Notes 6.375% due 3-31-2001 431,531 435,006
United States Treasury Notes 6.625% due 3-31-2002 15,434 15,488
United States Treasury Notes 6% due 8-15-2000 467,979 468,343
United States Treasury Notes 6.125% due 8-15-2007 151,875 154,172
_____________ _____________
Total U.S. Govt. Securities 13,640,090 13,778,101
Continued on next page
- 15 -
<PAGE>
PARKER RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES, continued
FOR THE YEAR ENDED DECEMBER 31, 1997
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>
Corporate Debt Instruments:
___________________________
Applied Materials Inc Senior NT 6.75% due 10-15-2007 100,179 100,386
Archer Daniels Midland Bond 6.75% due 12-15-2027 197,744 200,346
Bankers Trust NY Corp Med Term Note due 6.7% 10-1-2007 274,299 274,508
Chase Manhattan Auto Owner ABS 5.95% due 11-15-2000 348,359 349,563
Chase Manhattan Auto Owner ABS 6.25% due 11-15-2000 349,836 350,875
Chesapeake & Potomac Telephone Deb 8.375% due 10-01-2029 1,574,833 1,609,777
Citicorp Note 5.625% due 02-15-2001 979,100 984,080
Commercial Credit Note 6.75% due 05-15-2000 504,760 505,845
Copelco Capital FDG Corp ABS 6.74% due 4-20-2005 349,921 352,844
Dr Invts Note 7.1% due 5-15-2002 274,843 281,828
EQCC Home Equity Loan Tr ABS 6.41% due 12-15-2004 179,972 180,338
First Union - Lehman Bros Coml Note 7.38% due 4-18-2007 252,463 264,453
Ford Motor Credit Corporation Note 6.25% due 02-26-1998 1,000,640 1,000,260
Gannett Incorporated Notes 5.85% due 05-01-2000 466,500 497,830
General Electric Company Deb 7.875% due 09-15-1998 509,050 506,495
Lehman Bros Holdings Inc Note 7.625% due 7-15-1999 1,022,090 1,019,350
Liberty Mutual Ins Co Note 8.2% due 5-4-2007 327,644 332,475
Lockheed Martin Note 7.25% due 05-15-2006 499,530 524,045
Lockheed Martin Deb 7.2% due 5-1-2036 149,702 162,558
Loews Corp Note 6.75% due 12-15-2006 176,624 176,230
Merrill Lynch Mtg Invs Inc CMO 7.12% due 6-18-2029 201,938 208,500
Nationsbank Credit Card CMO 6% due 12-15-2005 173,995 173,413
Phillip Morris Company Inc Note 6.375% due 01-15-1998 868,904 850,017
Premier Auto ABS 6.35% due 4-6-2002 349,560 351,859
Railcar ABS 7.75% due 6-1-2004 341,028 348,153
Service Corp International Note 6.375% due 10-01-2000 998,540 1,001,820
Lehman Large Loan CMO 6.79% due 6-12-2004 454,629 458,248
Money Store Home Equity ABS 7.5% due 1-15-2026 412,080 415,804
Tele Communications Inc Note 8.25% due 1-15-2003 105,844 106,789
Time Warner Inc Deb 8.11% due 8-15-2006 420,531 433,040
Toyota Auto Rec ABS 6.45% due 4-15-2002 288,043 289,305
USX Marathon Group Note 7.2% due 2-15-2004 803,880 825,304
Western Resources Inc Note 6.875% due 8-01-2004 299,679 304,482
_____________ _____________
Total Corporate Debt Instruments 15,256,740 15,440,820
Continued on next page
- 16 -
<PAGE>
PARKER RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES, continued
FOR THE YEAR ENDED DECEMBER 31, 1997
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 3,051,438 3,051,438
Caisse Des Depots ET Consignations 5.44% due 12-26-2000 3,340,236 3,340,236
Caisse Des Depots ET Consignations 6.51% due 1-15-2002 4,053,575 4,053,575
Capital Holding Corp 5.91% due 07-15-2000 2,997,684 2,997,684
Commonwealth Life Insurance 5.47% due 10-25-2004 10,004,734 10,004,734
Commonwealth Life Insurance 6.648% due 08-08-1999 9,993,080 9,993,080
Confederation Life 9.29% due 02-23-1995 69,977 69,977
Metropolitan Life 6.75% due 11-14-2000 2,546,523 2,546,523
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 6,239,740 6,239,740
Ohio National Life 7.12% due 6-15-2002 3,205,737 3,205,737
Principal Mutual Life Insurance Co 5.45% due 06-15-1999 4,946,631 4,946,631
Protective Life Insurance Co 6.89% due 9-15-2002 4,222,854 4,222,854
Safeco Life Insurance Co 7.04% due 12-15-2002 3,647,165 3,647,165
Safeco Life Insurance Co 6.49% due 11-15-2002 2,540,007 2,540,007
Union Bank Switzerland 6.64% due 08-15-1999 10,017,762 10,017,762
Union Bank Switzerland 5.9271% due 03-25-2000 10,304,524 10,304,524
Bankers Trust Basic Contract # 94-773 7.74% due 04-07-1999 2,013,100 2,013,100
Bankers Trust Synthetic GIC No maturity Floating rate 48,093,253 48,093,253
Bankers Trust FL RT% due 03-25-1999 507,215 507,215
Bankers Trust Contract # 92-286 7.204998% due 11-15-1998 249,407 249,407
Transamerica Occidental Life # 76524 8.12% due 11-07-1998 2,521,452 2,521,452
Transamerica Synthetic GIC # 76554 FL RT% due 6-15-2000 2,997,940 2,997,940
_____________ _____________
Total Investment Contracts 140,116,434 140,116,434
_____________ _____________
Total Assets Held for Investment $ 560,500,354 $ 975,244,042
============= =============
</TABLE>
- 17 -
<PAGE>
<TABLE>
<CAPTION>
THE PARKER RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
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, 1997.
# of Purchase Cost of
Description Transactions Price Proceeds Asset Gain or loss
<S> <C> <C> <C> <C> <C>
Key Trust Employee
Benefits Money Market 557 $ 155,369,893
Key Trust Employee
Benefits Money Market 520 $ 156,822,239 $ 156,822,239 $ -
Parker Hannifin Corp Common 61 40,757,938
Parker Hannifin Corp Common 36 13,143,540 5,203,082 7,940,458
Employee Benefit Value
Equity Fund 253 29,110,737
Employee Benefit Value
Equity Fund 268 36,003,710 18,870,538 17,133,172
</TABLE>
NOTE: There is no separate determination of expenses related to the above
transactions.
- 18 -
<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 26, 1998
