<PAGE> 1
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, 1999
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> 2
PARKER RETIREMENT SAVINGS PLAN
INDEX OF FINANCIAL STATEMENTS
PAGE
----
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Benefits
at December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available for Benefits
for the years ended December 31, 1999 and 1998 2
Notes to Financial Statements 3
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment 9
Purposes for the year ended December 31, 1999
Item 27d - Schedule of Reportable Transactions for 14
the year ended December 31, 1999
<PAGE> 3
Independent Auditors' Report
----------------------------
To the Participants and Board of Directors
Parker-Hannifin Corporation
Parker Retirement Savings Plan
We have audited the accompanying statements of net assets available for
benefits of the Parker Retirement Savings Plan as of December 31, 1999 and 1998,
and the related statements of changes in net assets available for benefits for
the years then ended. 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 benefits of the
Parker Retirement Savings Plan as of December 31, 1999 and 1998, and the changes
in net assets available for benefits for the years then ended 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. These supplemental schedules are the responsibility of the
Plan's management. 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.
Hausser & Taylor LLP
Beachwood, Ohio
May 17, 2000
1
<PAGE> 4
PARKER RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1999 AND 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
1999 1998
--------------- -------------
<S> <C> <C>
ASSETS
------
Investments (Notes 1, 5 & 7) $ 1,415,746 $ 970,998
Accrued interest and dividends 1,318 1,152
Other 1,905 2,811
--------------- -------------
Total assets 1,418,969 974,961
--------------- -------------
LIABILITIES
-----------
Notes payable (Note 4) 105,295 -
Dividends payable to participants (Note 3) - 4,605
Other 5,639 4,319
--------------- -------------
Total liabilities 110,934 8,924
--------------- -------------
Net Assets Available for Benefits $ 1,308,035 $ 966,037
=============== =============
</TABLE>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(Dollars in Thousands)
<TABLE>
<CAPTION>
1999 1998
--------------- -------------
ADDITIONS
---------
<S> <C> <C>
Participant payroll deductions (Notes 1 & 2) $ 71,264 $ 62,408
Employer contributions (Notes 1 & 2) 25,414 24,597
Interest income 23,798 21,949
Dividend income 13,386 1,896
Net appreciation (depreciation) in the fair
value of investments (Notes 1 & 5) 310,661 (72,144)
--------------- -------------
Total additions 444,523 38,706
--------------- -------------
DEDUCTIONS
----------
Benefits paid to participants 95,194 40,635
Interest expense 5,489 -
Trustee fees and expenses 1,842 1,607
--------------- -------------
Total deductions 102,525 42,242
--------------- -------------
Net increase (decrease) in Assets
Available for Benefits 341,998 (3,536)
Net Assets Available - Beginning of year 966,037 969,573
--------------- -------------
Net Assets Available - End of year $ 1,308,035 $ 966,037
=============== =============
</TABLE>
2
<PAGE> 5
NOTES TO FINANCIAL STATEMENTS
(Dollars in Thousands)
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
SSgA S&P 500 Index Fund are valued at quoted market prices 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 7 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
-------------
Participants may make contributions on a before tax and/or after tax basis.
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 a non-participant directed
ESOP Fund, which holds primarily Company stock.
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 are netted against
interest income. Certain costs and expenses incurred in administering the
Plan are paid out of the Plan's assets and the Company pays the remainder.
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.
Reclassification
----------------
Certain prior year amounts have been reclassified to conform to the current
year presentation.
3
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS, continued
(Dollars in Thousands)
2. DESCRIPTION OF PLAN
--------------------
General
-------
The following description of the Plan provides only general information.
Participants should refer to the Plan document or summary plan description
for a more complete description of the Plan's provisions.
The Plan is a defined contribution plan which is available to all U. S.
domestic regular and part-time non-union employees. Employees are able to
enroll in the Plan the first day of the month following the date of hire.
The Plan is subject to Sections 401(a) and 401(k) of the Internal Revenue
Code and the provisions of the Employee Retirement Income Security Act
(ERISA) of 1974, as amended. The Plan was amended and restated effective
January 1, 1998 to reflect certain operational and administrative changes
and to comply with tax legislative changes.
Cash
----
The Plan maintains at a financial institution cash which exceeds federally
insured amounts at times and which may, at times, significantly differ from
balance sheet amounts due to outstanding checks.
Contributions and Transfers
---------------------------
Participants may elect to contribute, through payroll deductions, not less
than 1% nor more than 15% of their 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). Participants may suspend
their contributions at any time and may designate one or more of several
available funds in which their contributions are to be invested. Investment
elections may be changed at any time. Available funds are:
(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 7 for a
further description of this fund.
(e) BALANCED FUND - Invested primarily in securities which have a fixed
rate of return such as government and high-quality corporate bills,
notes, bonds, and/or invested in bonds, convertible securities, money
market investments, and common stocks of high-quality medium and large
capitalization companies other than the Company.
(f) MID 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 of 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> 7
NOTES TO FINANCIAL STATEMENTS, continued
(Dollars in Thousands)
2. DESCRIPTION OF PLAN (CONT'D)
-----------------------------
Parker-Hannifin Corporation 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. The Company may also match
after-tax contributions, but matches only 25% of the 4th percent and 5th
percent of after tax contributions. Company contributions match the
before-tax contributions prior to the after-tax contributions. Company
contributions are invested solely in the ESOP Fund. 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.
Participant Loans
-----------------
The Plan has a loan provision which allows an active participant to borrow
a minimum of $500 (actual dollars) and up to the lesser of a) 50% of their
account balance or b) $50,000 (actual dollars) less the largest outstanding
loan balance he/she had in the last 12 months. 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.
Participant Accounts
--------------------
The Plan utilizes the unit value method for allocating Plan earnings for
all funds. Unit values are determined on a daily basis and exclude
contributions receivable and benefits payable.
3. VESTING, WITHDRAWALS AND DISTRIBUTIONS
--------------------------------------
Participants are fully vested at all times. In general, a participant's
account is only paid out after termination of employment, but under certain
circumstances, a participant may withdraw in cash a portion of his/her
before and/or after tax contributions, subject to certain limitations and
restrictions.
After a participant terminates employment for any reason, all amounts are
distributable to the participant or if the participant is deceased, to the
participant's designated beneficiary. The distribution may be deferred
until the age of 70 1/2 if the participant's interest exceeds $5,000
(actual dollars). Distribution is in cash either in a single payment,
quarterly installments or, by purchase of an annuity, except that amounts
held in the Company Stock Fund and ESOP Fund may be distributed in the form
of common shares or cash, as the participant elects.
Dividends received by the ESOP Fund with respect to allocated Company
shares are paid to participants at the end of each Plan year.
4. ESOP FUND NOTES PAYABLE
-----------------------
In March 1999, the Trust issued and sold $112,000 aggregate principal
amount of its 6.34% Amortizing Notes due 2008, the proceeds of which were
used to purchase 3,055,413 million shares of the Company's stock from the
Company's treasury. The Notes were guaranteed by the Company and call for
payment of principal and interest semiannually from July 15, 1999 through
July 15, 2008. The ESOP Fund uses company contributions and cash dividends
received on unallocated shares to repay the loan plus interest. Commencing
July 1, 1999 and continuing over the period of the loan, the shares
purchased by the ESOP Fund will be allocated to participants making
contributions to the plan. The shares will be held in suspense in the ESOP
fund (referred to as unallocated shares), to be released and allocated to
participant's accounts periodically in full or partial satisfaction of the
Company's matching contribution obligations. Principal amounts of the notes
payable for the five years ending December 31, 2000 through 2004 are
$11,107, $11,187, $11,294, $11,430 and $11,596, respectively.
5
<PAGE> 8
NOTES TO FINANCIAL STATEMENTS, continued
(Dollars in Thousands)
5. INVESTMENTS
-----------
The Plan investments at fair value (determined by quoted market price) at
December 31, :
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Cash and cash equivalents
Employee Benefits Money Market Fund $ 19,996 $ 18,592
Common Shares
Company Stock Fund 131,257 111,096
ESOP Fund - Allocated * 403,188 259,664
ESOP Fund - Unallocated * 147,033 -
Investment Contracts - estimated 157,633 131,277
Other Investments
AIM Constellation Fund 50,071 27,551
Capital Guardian International Equity Fund 37,600 14,765
SSgA S&P 500 Index Fund 107,298 64,735
Employee Benefits Fixed Income Fund 34,099 28,376
Employee Benefits Value Equity Fund 261,124 233,571
U.S. Government Securities 19,972 27,270
Corporate Debt Instruments 14,115 12,927
---------- ----------
524,279 409,195
Participant Loans - estimated 32,360 41,174
---------- ----------
Total Assets Held for Investment $1,415,746 $ 970,998
========== ==========
</TABLE>
* Non-participant directed investments
The plan's investments appreciated (depreciated) in value as follows:
<TABLE>
<CAPTION>
1999 1998
----------- ---------
<S> <C> <C>
Company Stock Fund $ 58,000 $ (38,542)
ESOP Fund - Allocated 147,587 (99,729)
ESOP Fund - Unallocated 41,998 -
Bank Common/ Collective Trusts 39,057 56,460
Mutual Funds 24,019 9,667
----------- ---------
$ 310,661 $ (72,144)
=========== =========
</TABLE>
6. NONPARTICIPANT-DIRECTED INVESTMENTS
-----------------------------------
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant directed investments
at December 31 is as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Net Assets:
ESOP Fund - Allocated $ 405,770 $ 259,312
ESOP Fund - Unallocated 39,684 -
--------- ---------
$ 445,454 $ 259,312
========= =========
</TABLE>
6
<PAGE> 9
NOTES TO FINANCIAL STATEMENTS, continued
(Dollars in Thousands)
6. NONPARTICIPANT-DIRECTED INVESTMENTS (CONT'D)
--------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999
----------------------------
ESOP FUND ESOP FUND
ALLOCATED UNALLOCATED
--------- -----------
<S> <C> <C>
Changes in Net Assets:
Contributions $ 16,804 $ 8,610
Transfers to other plan funds (1,454) (6,949)
Interest income 164 21
Dividend income 9,981 1,494
Net appreciation 147,589 41,997
Benefits paid to participants (26,626) -
Interest expense - (5,489)
--------- ---------
$ 146,458 $ 39,684
========= =========
</TABLE>
7. CONTRACT INCOME FUND
--------------------
Reported in aggregate for the Contract Income Fund (including cash and cash
equivalents) at December 31:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Contract Value of Assets $ 173,382 $ 144,471
Fair Value of Assets $ 170,329 $ 147,596
Average Yield of Assets 6.39% 6.18%
Return on assets for the 12 months ended December 31 6.26% 6.34%
Duration 2.88 years 2.32 years
</TABLE>
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 (which exceeded 5% of
the Plan's net assets) included in the above amounts at December 31, 1999
and 1998 had a book value of $54,483 and $51,179, while the fair value was
$53,119 and $53,296, respectively.
At December 31, 1999 and 1998 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 material to the Contract Income Fund. Therefore, this
contract has been reported at contract value in the financial statements.
7
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS, continued
(Dollars in Thousands)
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.
8. 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 generally are not
taxable until distributed to the participants.
9. 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 may permit assets held in trust by
the Trustee to 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
will continue to be fully vested.
10. 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:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C> <C>
Net assets per Form 5500 $1,308,032 $ 966,037
Distributions payable that are allocated
but unpaid to former participants 3
---------- ---------
Plan Equity per financial statements $1,308,035 $ 966,037
========== =========
Distributions to former participants per Form 5500 $ 95,194 $ 40,478
Prior year distributions payable that were paid
to former participants in the current year 157
---------- ---------
Distributions to former participants
per financial statements $ 95,194 $ 40,635
========== =========
</TABLE>
11. PARTY-IN-INTEREST
-----------------
Certain plan investments are units of common/collective trusts managed by
Key Bank. Key Bank is the trustee as defined by the Plan and, therefore,
these transactions qualify as party-in-interest.
8
<PAGE> 11
PARKER RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
FOR THE YEAR ENDED DECEMBER 31, 1999
EIN 34-0451060
Plan 075
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
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> <C>
* Employee Benefits Money Market
Fund Cash and cash equivalents $ 19,995,398 $ 19,995,398
* Parker Hannifin Corporation 2,557,959 Common Shares 71,394,507 131,256,550
* ESOP - Allocated 7,857,427Common Shares 133,589,601 403,188,152
* ESOP - Unallocated 2,865,411 Common Shares 105,035,222 147,032,835
AIM 1,236,019 units of AIM Constellation Fund 36,848,041 50,071,140
Capital Guardian 994,450 units of Capital Guardian Intl Equity Fund 26,686,520 37,600,138
SSgA 4,202,817 units of SSgA S&P 500 Index Fund 87,101,195 107,297,926
* Key Bank 439,317 units of Employee Benefits Fixed Income Fund 30,646,688 34,099,385
* Key Bank 352,073 units of Employee Benefits Value Equity Fund 129,821,024 261,123,683
* Participant Loans Participant loans - 8.75% - 9.25% - 32,359,898
U.S. Government Securities:
---------------------------
Freddie Mac Gold 6.0% due 04-01-2026 129,578 127,547
Freddie Mac Gold 6.0% due 07-01-2028 358,391 351,214
Freddie Mac 8.5% due 07-01-2021 73,008 70,034
Freddie Mac Gold 7.0% due 07-01-2028 60,126 57,050
Freddie Mac Gold 7.0% due 11-01-2028 680,541 645,462
Freddie Mac Gold 6.5% due 01-01-2029 711,082 666,046
Freddie Mac Gold 6.5% due 02-01-2029 86,094 84,060
Freddie Mac Gold 6.5% due 04-01-2029 54,228 51,193
Freddie Mac Gold 6.0% due 04-01-2028 149,100 145,039
Freddie Mac Gold 7.0% due 10-01-2028 74,182 70,301
Freddie Mac Gold 7.0% due 10-01-2028 81,102 75,007
Freddie Mac Gold 8.0% due 01-01-2029 162,934 158,065
Freddie Mac Gold 8.0% due 10-01-2028 22,765 22,084
Freddie Mac Gold 7.5% due 03-01-2029 368,331 353,644
Freddie Mac Gold 7.5% due 10-01-2029 11,803 11,588
Freddie Mac Gold 7.5% due 11-01-2029 112,663 110,765
Freddie Mac 6.0% due 07-15-2026 604,665 565,380
Freddie Mac Gold 6.5% due 05-01-2026 336,368 330,491
Freddie Mac 6.625% due 09-15-2009 490,803 480,922
Freddie Mac 6.25% due 07-15-2004 179,487 175,979
Fannie Mae 6.875% due 04-23-2004 239,781 239,062
Fannie Mae 5.625% due 05-14-2004 239,294 238,905
Fannie Mae 6.25% due 05-15-2029 281,952 271,450
Fannie Mae 6.5% due 08-15-2004 468,460 464,125
Fannie Mae 6.5% due 04-25-2029 155,181 154,832
Fannie Mae 6.5% due 11-25-2029 93,402 89,968
Fannie Mae 7.5% due 07-03-2006 258,788 241,387
Fannie Mae 6.5% due 07-01-2028 183,806 180,806
Fannie Mae 6.5% due 09-01-2028 31,686 31,108
Fannie Mae 6.5% due 11-01-2028 196,760 193,548
Fannie Mae 6.5% due 11-01-2027 418,209 410,802
Fannie Mae 6.5% due 10-01-2026 310,354 302,416
Fannie Mae 8.5% due 11-01-2017 170,772 166,475
Fannie Mae 6.0% due 12-01-2028 127,955 125,847
Fannie Mae 6.5% due 04-01-2029 193,952 183,382
Fannie Mae 6.5% due 03-01-2029 236,811 222,441
Fannie Mae 7.5% due 04-01-2029 27,481 26,533
Fannie Mae 7.5% due 05-01-2029 81,916 79,091
</TABLE>
9
<PAGE> 12
PARKER RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
FOR THE YEAR ENDED DECEMBER 31, 1999
EIN 34-0451060
Plan 075
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
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> <C>
Fannie Mae 7.5% due 04-01-2029 37,301 35,802
Fannie Mae 7.5% due 05-01-2029 73,126 70,187
Fannie Mae 6.0% due 07-01-2029 166,080 163,344
Fannie Mae 7.5% due 11-01-2029 61,030 60,039
Fannie Mae 8.5% due 08-01-2019 315,621 314,376
Fannie Mae 7.0% due 12-01-2014 49,863 49,422
Fannie Mae 7.0% due 11-01-2029 45,281 44,440
Fannie Mae 8.0% due 11-01-2019 528,520 521,392
Fannie Mae 8.5% due 11-01-2019 261,576 258,779
Fannie Mae 10.0% due 11-01-2013 623,773 616,409
Fannie Mae 10.5% due 11-01-2013 318,519 315,496
Fannie Mae 11.0% due 11-01-2013 296,297 293,897
Fannie Mae 7.0% due 11-01-2014 46,263 45,853
Fannie Mae 7.0% due 01-01-2015 277,240 274,784
GNMA 7.0% due 09-15-2023 48,558 46,212
GNMA 7.0% due 06-15-2023 15,546 14,795
GNMA 7.0% due 07-15-2023 98,544 93,782
GNMA 7.0% due 07-15-2023 59,364 56,496
GNMA 7.0% due 07-15-2023 42,243 41,711
GNMA 7.0% due 07-15-2023 78,077 74,305
GNMA 7.0% due 11-15-2023 13,923 13,725
GNMA 7.0% due 10-15-2023 40,731 38,763
GNMA 7.0% due 10-15-2023 52,407 51,746
GNMA 7.0% due 08-15-2023 36,355 34,598
GNMA 7.0% due 07-15-2023 47,769 45,461
GNMA 7.0% due 09-15-2023 141,630 139,844
GNMA 7.0% due 08-15-2023 66,326 63,121
GNMA 7.0% due 05-15-2023 84,730 80,636
GNMA 7.0% due 08-15-2023 42,147 40,110
GNMA 7.0% due 12-15-2023 47,829 47,226
GNMA 7.0% due 08-15-2028 54,823 52,124
GNMA 7.0% due 04-15-2028 65,203 62,338
GNMA 7.0% due 04-15-2028 77,269 73,874
GNMA 7.0% due 04-15-2028 83,442 79,776
GNMA 7.0% due 09-15-2028 18,711 18,143
GNMA 7.0% due 07-15-2028 187,038 183,223
GNMA 7.0% due 11-15-2028 19,109 18,786
GNMA 7.5% due 04-15-2029 344,557 330,157
GNMA 7.0% due 12-15-2022 20,704 19,708
GNMA 7.0% due 12-15-2023 45,659 45,092
GNMA 7.0% due 12-15-2023 406,441 399,780
GNMA 7.0% due 12-15-2025 218,111 215,094
Government Ln Trs 8.5% due 04-01-2006 176,043 167,335
United States Treas Bonds 7.5% due 11-15-2016 344,438 331,650
United States Treas Bonds 8.75% due 08-15-2020 410,953 399,815
United States Treas Bonds 8.0% due 11-15-2021 479,719 476,633
United States Treas Bonds 5.25% due 02-15-2029 950,079 907,076
United States Treas Bonds 6.125% due 08-15-2029 72,523 69,589
United States Treas Nts 6.375% due 08-15-2002 694,322 690,509
United States Treas Nts 7.0% due 07-15-2006 309,155 307,266
United States Treas Nts 5.75% due 04-30-2003 218,490 215,978
United States Treas Nts 4.625% due 11-30-2000 872,914 871,406
</TABLE>
10
<PAGE> 13
PARKER RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
FOR THE YEAR ENDED DECEMBER 31, 1999
EIN 34-0451060
Plan 075
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
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> <C>
United States Treas Nts 6.0% due 08-15-2009 200,746 194,719
United States Treas Nts 5.875% due 11-15-2004 384,984 380,422
Fannie Mae 30 Yr MBS 7.5% 1,086,133 1,075,760
Freddie Mac Gold 7.0% TBA 266,559 265,237
-------- ---------
Total U.S. Government Securities 20,488,605 19,972,290
Corporate Debt Instruments:
---------------------------
AT&T Capital Corp Note 6.875% due 01-16-2001 117,218 114,978
Abbey National Note FL RT% due 06-29-2049 27,879 27,054
Abitibi-Consolidated Inc. Note 6.95% due 04-01-2008 113,566 104,958
Allstate Corp Senior Note 7.2% due 12-01-2009 104,757 102,080
Amerada Hess Corp Bond 7.875% due 10-01-2029 113,331 112,160
American General Finance Senior Note 5.8% due 03-15-2002 85,310 82,624
American Gen Instl Cap A Bond 7.57% due 12-01-2045 116,315 114,349
AON Cap A Bond 8.205% due 01-01-2027 131,638 120,140
Avon Products Note 7.15% due 11-15-2009 74,750 71,977
Baker Hughes Inc Senior Note 6.875% due 12-15-2009 148,737 131,156
Barclays Bank PLC Note 7.4% due 12-15-2009 109,944 107,922
Boeing Co Deb 8.75% due 09-15-2031 157,277 154,378
Cabot Industrial Note 7.125% due 05-01-2004 74,767 72,247
Capital Auto Rec Asset Trust ABS 6.06% due 06-15-2002 169,973 169,522
Cendant Corp Senior Note 7.75% due 12-01-2003 164,894 159,616
CIT RV Trust ABS 5.78% due 07-15-2008 279,949 274,269
Citigroup Inc. Senior Note 5.8% due 03-15-2004 74,807 71,390
Comdisco Inc. Senior Note 6.0% due 01-30-2002 117,068 116,310
Conseco Inc. Note 8.5% due 10-15-2002 119,972 121,396
Conseco Inc. Note 9.0% due 10-15-2006 199,686 200,948
Copelco Capital FDG Corp ABS 6.47% due 04-20-2005 349,921 348,359
Cyprus Materials Note 6.625% due 10-15-2005 145,697 143,976
Dr Invts Note 7.1% due 05-15-2002 274,843 273,149
Dayton Hudson Corp Bond 5.875% due 11-01-2008 117,123 103,507
Deere & Co Senior Deb 6.55% due 10-01-2028 99,262 96,392
Delta Air Lines Deb 8.3% due 12-15-2029 128,948 125,103
Dow Chemical Co. Bond 7.375% due 11-01-2029 99,618 95,612
EI Dupont Nemours Co Note 6.875% due 10-15-2009 113,423 111,386
Duke Capital Corp Note 8.0% due 10-01-2019 230,927 231,226
Duke Realty LP 7.3% due 06-30-2003 144,875 142,847
EOP Operating LP Note 6.75% due 02-15-2008 75,434 68,977
Edison International Inc Note 6.875% due 09-15-2004 138,930 137,087
Empresa Nacional De Electricdad Note 7.75% due 07-15-2008 157,689 146,455
Enron Corp Bond 7.375% due 05-15-2019 113,800 107,449
Finova Capital Corp Note 7.25% due 11-08-2004 119,530 118,309
First Un Corp Note 6.875% due 09-15-2005 170,688 155,538
First USA Credit Card Master Tr ABS FL RT% due 10-19-2006 359,000 359,000
Ford Credit Auto Owner Trust ABS 6.08% due 09-16-2002 249,986 247,420
Ford Motor Credit Corp Bond 6.7% due 07-16-2004 19,745 19,575
Ford Motor Credit Corp Note 7.375% due 10-28-2009 99,812 98,725
GE Capital Mtg Services Inc. CMO 7.5% due 05-25-2027 281,783 268,537
GTE Corp Deb 6.94% due 04-15-2028 107,384 104,192
General Elect Cap Corp Note 6.33% due 09-17-2001 95,000 94,383
General Elect Cap Corp Note 6.52% due 10-08-2002 75,000 74,229
</TABLE>
11
<PAGE> 14
PARKER RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
FOR THE YEAR ENDED DECEMBER 31, 1999
EIN 34-0451060
Plan 075
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
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> <C>
Heller Financial Inc Note 7.375% due 11-01-2009 134,449 131,148
Household Finance Corp Note 5.875% due 02-01-2009 178,623 168,076
Intl Paper Co Note 7.625% due 01-15-2007 81,230 74,582
Johnson & Johnson Bond 6.95% due 09-01-2029 136,696 132,072
KN Energy Inc Senior Note 6.45% due 03-01-2003 59,916 58,324
KN Energy Inc Note 6.65% due 03-01-2005 45,723 43,067
Knight Riddder Inc. Deb 6.875% due 03-15-2029 188,867 166,589
Republic of Korea Note 8.875% due 04-15-2008 127,314 125,858
LB Commercial Conduit Mtg TR CMO 6.41% due 08-15-2007 158,174 155,736
Lehman Bros Holdings Inc. Note 6.625% due 04-01-2004 39,961 38,722
Liberty Mutual Ins Co Note 8.2% due 05-04-2007 103,754 94,755
Lockheed Martin Corp Bond 8.5% due 12-01-2029 119,531 119,994
Lowes Companies Inc. Note 6.5% due 03-15-2029 81,722 79,987
MBNA Master Credit Card Trust ABS 5.8% due 12-15-2005 249,448 240,703
Morgan Stanley Dean Witter Notes 7.125% due 01-15-2003 359,921 359,716
Motorola Inc Deb 6.5% due 11-15-2028 61,857 60,317
Nabisco Inc Notes 6.0% due 02-15-2011 199,950 197,012
Norwest Asset Securities Corp CMO 6.75% due 05-25-2028 581,150 537,637
Oakwood Homes Corp Senior Note 7.875% due 03-01-2004 153,233 92,400
Owens Corning Note 7.5% due 05-01-2005 153,200 142,183
Philip Morris Cos Inc Note 7.0% due 07-15-2005 200,936 180,137
Premier Auto Tr ABS 6.35% due 04-06-2002 349,560 349,671
Premier Auto Tr ABS 5.07% due 07-08-2002 189,999 187,446
Raytheon Co Note 6.75% due 08-15-2007 155,547 153,933
Residential Accredit Loans Inc Remic 6.75% due 07-25-2028 368,902 346,875
Residential Asset Secs Corp ABS 7.18% due 01-25-2025 195,000 193,842
RJ Reynolds Tobacco Hldg Note 7.375% due 05-15-2003 114,806 107,979
Rohm & Haas Co. Deb 7.85% due 07-15-2029 186,996 185,542
Royal & Sun Alliance Ins Note 8.95% due 10-15-2029 127,326 127,650
Saks Incorporated Note 8.25% due 11-15-2008 131,358 116,748
Saks Inc. Note 7.0% due 07-15-2004 169,182 159,759
J Seagram & Sons Bond 6.25% due 12-15-2001 75,660 73,617
J Seagram & Sons Note 6.8% due 12-15-2008 158,535 159,302
Sun Microsystems Inc. Senior Note 7.35% due 08-15-2004 121,978 119,688
Sun Microsystems Inc. Senior Note 7.65% due 08-15-2009 464,093 460,834
TRW Inc. Senior Note 6.45% due 06-15-2001 159,986 158,450
Tele Communications Inc Note 8.25% due 01-15-2003 68,740 67,261
Texas Instruments Inc. Senior Note 7.0% due 08-15-2004 124,737 122,791
Time Warner Inc Note 7.75% due 06-15-2005 93,471 85,938
Toyota Auto Rec GR TR ABS 6.45% due 04-15-2002 30,010 29,973
Tyco Intl Group S A Note 6.375% due 06-15-2005 113,644 112,414
Tyco Intl Group S A Note 6.875% due 09-05-2002 123,349 123,264
USX Marathon Group Note 7.2% due 02-15-2004 180,873 177,678
Union Oil Co Of California Bond 7.5% due 02-15-2029 116,371 107,504
Union Pac Corp Note 7.375% due 05-15-2001 70,367 70,262
Valero Energy Corp Note 7.375% due 03-15-2006 154,763 147,842
Viacom Inc. Senior Note 7.75% due 06-01-2005 181,347 166,077
Wal Mart Stores Inc Note 6.875% due 08-10-2009 84,882 82,764
Williams Holdings of Del Note 6.125% due 12-01-2003 109,418 104,350
Williams Cos Inc Bond 6.2% due 08-01-2002 189,700 184,748
Worldcom Inc Senior Note 6.125% due 08-15-2001 24,780 24,730
Korea Development Bank Senior Unsub 6.50% due 11-15-2002 117,415 116,635
</TABLE>
12
<PAGE> 15
PARKER RETIREMENT SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
FOR THE YEAR ENDED DECEMBER 31, 1999
EIN 34-0451060
Plan 075
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
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> <C>
Korea Electric Pwr DEB 6.375% due 12-01-2003 187,497 189,678
---------- ----------
Total Corporate Debt Instruments 14,626,203 14,115,167
Investment Contracts:
---------------------
Metropolitan Life 6.75% due 11-14-2000 2,901,907 2,901,907
UBS AG 5.9271% due 03-25-2000 994,440 994,440
Capital Holding Corp 5.91% due 07-15-2000 558,391 558,391
Caisse Des Depots Et Consignatio 5.44% due 12-26-2000 1,820,254 1,820,254
Business Mens Assurance Co Amer 6.9% due 10-01-2001 3,051,438 3,051,438
Ohio National Life 7.12% due 06-15-2002 3,678,486 3,678,486
Caisse Des Depots Et Consignatio 6.51% due 01-15-2002 4,053,575 4,053,575
Protective Life Insur Co 6.89% due 09-15-2002 4,079,424 4,079,424
Safeco Life Insurance Co 7.04% due 12-15-2002 3,647,840 3,647,840
Safeco Life Insurance Co 6.49% due 11-15-2002 2,540,394 2,540,394
Jackson National Life Ins Co 5.54% due 03-31-2003 3,014,846 3,014,846
Jackson National Life Ins Co 5.96% due 08-15-2001 6,131,802 6,131,802
Transamerica 5.13% due 12-06-2001 5,053,324 5,053,324
GE Life and Annuity Assurance Co 5.63% due 08-15-2002 3,184,153 3,184,153
Bank of America SS GIC 5.45% due 10-15-2003 3,007,655 3,007,655
Bank of America SS GIC 5.88% due 11-15-2005 2,965,674 2,965,674
Monumental Life Insurance Co GIC 5.78% due 03-01-2005 3,563,395 3,563,395
Bank of America SS 5.81% due 03-25-2005 2,958,769 2,958,769
Bank of America SS 5.80% due 01-15-2005 4,045,336 4,045,336
Monumental Life Insurance Co 6.01% due 03-15-2006 2,482,218 2,482,218
Hartford Life Insurance Co 6.20% due 11-17-2003 4,153,162 4,153,162
Security Life of Denver Ins Co 6.36% due 11-17-2003 5,182,311 5,182,311
Caisse Des Depots Et Consignatio 6.77% due 07-15-2004 5,167,870 5,167,870
Bank of America 6.93% due 03-25-2005 3,002,528 3,002,528
UBS AG 6.82% due 07/15/2006 4,852,513 4,852,513
Canada Life Assurance Co 7.25% due 04-15-2005 4,029,254 4,029,254
Security Life of Denver Ins Co 6.39% due 03-01-2000 6,015,293 6,015,293
Hartford Life Insurance Co 7.32% due 06-15-2005 4,008,525 4,008,525
Bankers Trust Synthetic GIC FL RT% - No maturity 54,482,530 54,482,530
Transamerica Synthetic GIC FL RT% due 06-15-2000 3,006,094 3,006,094
----------- -----------
Total Investment Contracts 157,633,401 157,633,401
Total Assets Held for Investment $ 833,866,405 $1,415,745,963
=================================
</TABLE>
* Denotes Party-in-Interest
13
<PAGE> 16
THE PARKER RETIREMENT SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
EIN 34-0451060
Plan 075
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,
1999.
<TABLE>
<CAPTION>
(b) (c) (h) (g) (i)
# of Purchase Cost of
Description Transactions Price Proceeds Asset Gain
--------------------------------- ---------------- ------------------- ----------------- ------------------ --------------
<S> <C> <C> <C> <C> <C>
Key Trust Employee
Benefits Money Market 518 205,288,207
Key Trust Employee
Benefits Money Market 505 203,885,022 203,885,022
Parker Hannifin Corp Common 45 31,079,076
Parker Hannifin Corp Common 78 77,738,637 40,552,508 37,186,129
Employee Benefit Value
Equity Fund 243 39,726,195
Employee Benefit Value
Equity Fund 262 41,318,031 22,541,459 18,776,572
SSgA S & P 500 Index
Open End Fund 170 41,957,128
SSgA S & P 500 Index
Open End Fund 88 12,327,848 10,456,346 1,871,502
</TABLE>
NOTE: There is no separate determination of expenses related to the above
transactions.
14
<PAGE> 17
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: /s/ Michael J. Hiemstra
-----------------------------
Michael J. Hiemstra
Vice President-Finance & Administration
& Chief Financial Officer
Parker-Hannifin Corporation
June 20, 2000
