<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to _______________________
Commission File No. 1-4982
PARKER-HANNIFIN CORPORATION
------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-0451060
-------------------------------- -------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
6035 Parkland Boulevard, Cleveland, Ohio 44124-4141
---------------------------------------- -------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (216) 896-3000
-------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on which Registered
------------------- ---------------------
Common Shares, $.50 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, during the preceding 12 months, and (2) has been subject to
such filing requirements for the past 90 days. Yes __X__. No _____.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive
<PAGE> 2
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K [X].
The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of August 31, 2000, excluding, for purposes of this
computation, only stock holdings of the Registrant's Directors and Officers:
$4,029,986,104.
The number of Common Shares outstanding on August 31, 2000 was
116,337,804.
Portions of the following documents are incorporated by reference:
(1) Annual Report to Shareholders of the Company for the fiscal year ended
June 30, 2000. Incorporated by reference into Parts I, II and IV hereof.
(2) Definitive Proxy Statement for the Company's 2000 Annual Meeting of
Shareholders. Incorporated by reference into Part III hereof.
<PAGE> 3
PARKER-HANNIFIN CORPORATION
FORM 10-K
---------
Fiscal Year Ended June 30, 2000
PART I
------
ITEM 1. BUSINESS. Parker-Hannifin Corporation is a leading worldwide
full-line manufacturer of motion control products, including fluid power
systems, electromechanical controls and related components. Fluid power involves
the transfer and control of power through the medium of liquid, gas or air, in
hydraulic, pneumatic and vacuum applications. Fluid power systems move and
position materials, control machines, vehicles and equipment and improve
industrial efficiency and productivity. Components of a simple fluid power
system include a pump or compressor which generates pressure, valves which
control the fluid's flow, an actuator which translates the pressure in the fluid
into mechanical energy, a filter to insure proper fluid condition and numerous
hoses, couplings, fittings and seals. Electromechanical control involves the use
of electronic components and systems to control motion and precisely locate or
vary speed in automation applications. In addition to motion control products,
the Company also is a leading worldwide producer of fluid purification, fluid
flow, process instrumentation, air conditioning, refrigeration, and
electromagnetic shielding and thermal management products.
The Company was incorporated in Ohio in 1938. Its principal executive
offices are located at 6035 Parkland Boulevard, Cleveland, Ohio 44124-4141,
telephone (216) 896-3000. As used in this Report, unless the context otherwise
requires, the term "Company" or "Parker" refers to Parker-Hannifin Corporation
and its subsidiaries.
The Company's manufacturing, service, distribution and administrative
facilities are located in 38 states, Puerto Rico and worldwide in 45 foreign
countries. Its motion control technology is used in the products of its two
business Segments: Industrial and Aerospace. The products are sold as original
and replacement equipment through product and distribution centers worldwide.
The Company markets its products through its direct-sales employees and more
than 7,500 independent distributors. Parker products are supplied to
approximately 400,000 customers in virtually every significant manufacturing,
transportation and processing industry. For the fiscal year ended June 30, 2000,
net sales were $5,355,337,000; Industrial Segment products accounted for 79% of
net sales and Aerospace Segment products for 21%.
MARKETS
-------
Motion control systems are used throughout industry in applications which
include moving of materials, controlling machines, vehicles and equipment and
positioning materials during the manufacturing process. Motion control systems
contribute to the efficient use of energy and improve industrial productivity.
1
<PAGE> 4
The approximately 400,000 customers who purchase the Company's products
are found throughout virtually every significant manufacturing, transportation
and processing industry. No customer accounted for more than 5% of the Company's
total net sales for the fiscal year.
The major markets for products of the Fluid Connectors, Hydraulics,
Automation and Seal Groups of the Industrial Segment are agricultural machinery,
automotive, construction equipment, electronic equipment, fabricated metals,
food production, industrial machinery, lumber and paper, machine tools, marine,
medical equipment, mining, mobile equipment, chemicals, robotics, semi-conductor
equipment, telecommunications, textiles, transportation and every other major
production and processing industry. Products manufactured by the Industrial
Segment's Climate and Industrial Controls Group are utilized principally in
mobile air conditioning systems, industrial refrigeration systems, home and
commercial air conditioning equipment and industrial process markets. The major
markets for products manufactured by the Instrumentation Group of the Industrial
Segment are power generation, oil and gas exploration, petrochemical and
chemical processing, pulp and paper, semi-conductor manufacturing, medical and
analytical applications. The major markets for products of the Filtration Group
of the Industrial Segment are industrial machinery, mobile equipment, process
equipment, marine, aviation, environmental and semi-conductor manufacturing.
Sales of Industrial Segment products are made to original equipment
manufacturers and their replacement markets.
Aerospace Segment sales are made primarily to the commercial, military and
general aviation markets and are made to original equipment manufacturers and to
end users for maintenance, repair and overhaul.
PRINCIPAL PRODUCTS, METHODS OF DISTRIBUTION AND COMPETITIVE CONDITIONS
----------------------------------------------------------------------
INDUSTRIAL SEGMENT. The product lines of the Company's Industrial Segment
cover most of the components of motion control systems. The Fluid Connectors
Group manufactures connectors, including tube fittings and hose fittings,
valves, hoses and couplers, which control, transmit and contain fluid. The
Hydraulics Group produces hydraulic components and systems for builders and
users of industrial and mobile machinery and equipment, such as cylinders,
accumulators, rotary actuators, valves, motors and pumps, hydrostatic steering
units, power units, integrated hydraulic circuits, electrohydraulic systems and
metering pumps. The Automation Group supplies pneumatic and electromechanical
components and systems, including pneumatic valves, air preparation units,
indexers, stepper and servo drives, multi-axis positioning tables, electric and
pneumatic cylinders, structural extrusions, vacuum products, pneumatic logic and
human/machine interface hardware and software. The Climate and Industrial
Controls Group manufactures components and systems for use in industrial,
residential, automotive and mobile air conditioning and refrigeration systems
and other applications, including pressure regulators, solenoid valves,
expansion valves, filter-dryers, gerotors and hose assemblies. The Seal Group
manufactures sealing devices, including o-rings and o-seals, gaskets and
packings, which insure leak-proof connections and electromagnetic interference
shielding and thermal management products. The Filtration Group manufactures
filters, systems and instruments to monitor and to remove contaminants from
fuel, air, oil, water and other fluids and gases, including hydraulic,
lubrication and coolant filters; process, chemical and microfiltration filters;
compressed air and gas purification filters; lube oil and fuel filters; fuel
conditioning filters; fuel filters/water separators; cabin
2
<PAGE> 5
air filters; nitrogen and hydrogen generators and condition monitoring devices.
The Instrumentation Group manufactures high quality critical flow components for
process instrumentation, ultra-high-purity, medical and analytical applications,
including instrumentation and ultra-high-purity tube fittings, ball, plug and
needle valves, packless ultra-high-purity valves, fluoropolymer fittings,
tubing, valves and spray guns, miniature solenoid valves, multi-solenoid
manifolds, regulators, transducers, quick connects, hose products and cylinder
connections.
Industrial Segment products include both standard items which are produced
in large quantities and custom units which are engineered and produced to
original equipment manufacturers' specifications for application to a particular
end product. Both standard and custom products are also used in the replacement
of original motion control system components. Industrial Segment products are
marketed primarily through field sales employees and more than 7,500 independent
distributors.
AEROSPACE SEGMENT. The principal products of the Company's Aerospace
Segment are hydraulic, fuel and pneumatic systems and components that are used
on commercial and military airframe and engine programs.
The Aerospace Segment offers complete hydraulic systems, as well as
primary flight control components that include hydraulic, electrohydraulic and
electromechanical systems used for precise control of aircraft rudders,
elevators, ailerons and other aerodynamic control surfaces and utility hydraulic
components such as reservoirs, accumulators, selector valves, electrohydraulic
servovalves, thrust-reverser actuators, engine-driven pumps, nosewheel steering
systems, electromechanical actuators, engine controls and electronic
controllers. The Aerospace Segment also designs and manufactures aircraft wheels
and brakes for the general aviation and military markets.
The Aerospace fuel product line includes complete fuel systems as well as
components such as fuel transfer and pressurization controls, in-flight
refueling systems, fuel pumps and valves, fuel measurement and management
systems and center of gravity controls, engine fuel injection atomization
nozzles and augmentor controls, and electronic monitoring computers.
Pneumatic components include bleed air control systems, pressure
regulators, low-pressure pneumatic controls, heat transfer systems, engine start
systems, engine bleed control and anti-ice systems, and electronic control and
monitoring computers.
Aerospace Segment products are marketed by the Company's regional sales
organization and are sold directly to manufacturers and end users.
COMPETITION. All aspects of the Company's business are highly competitive.
No single manufacturer competes with respect to all products manufactured and
sold by the Company and the degree of competition varies with different
products. In the Industrial Segment, the Company competes on the basis of
product quality and innovation, customer service, its manufacturing and
distribution capability, and competitive price. The Company believes that, in
most of the major markets for its products, it is one of the principal suppliers
of motion control systems and components.
3
<PAGE> 6
In the Aerospace Segment, the Company has developed alliances with key
customers based on Parker's advanced technological and engineering capabilities,
superior performance in quality, delivery, and service, and price
competitiveness, which has enabled Parker to obtain significant original
equipment business on new aircraft programs for its systems and components and,
thereby, obtain the follow-on repair and replacement business for these
programs. The Company believes that it is one of the primary suppliers in the
aerospace marketplace.
RESEARCH AND PRODUCT DEVELOPMENT
--------------------------------
The Company continually researches the feasibility of new products through
its development laboratories and testing facilities in many of its worldwide
manufacturing locations. Its research and product development staff includes
chemists, mechanical, electronic and electrical engineers and physicists.
Research and development costs relating to the development of new products
or services and the improvement of existing products or services amounted to
$89,059,000 in fiscal 2000, $86,953,000 in fiscal 1999 and $83,117,000 in fiscal
1998. Reimbursements of customer-sponsored research included in the total cost
for each of the respective years were $16,409,000, $15,239,000 and $15,753,000.
PATENTS, TRADEMARKS, LICENSES
-----------------------------
The Company owns a number of patents, trademarks and licenses related to
its products and has exclusive and non-exclusive rights under patents owned by
others. In addition, patent applications on certain products are now pending,
although there can be no assurance that patents will be issued. The Company is
not dependent to any material extent on any single patent or group of patents.
BACKLOG AND SEASONAL NATURE OF BUSINESS
---------------------------------------
The Company's backlog at June 30, 2000 was approximately $1,797,233,000
and at June 30, 1999 was approximately $1,625,637,000. Approximately 83% of the
Company's backlog at June 30, 2000 is scheduled for delivery in the succeeding
twelve months. The Company's business generally is not seasonal in nature.
ENVIRONMENTAL REGULATION
------------------------
The Company is subject to federal, state and local laws and regulations
designed to protect the environment and to regulate the discharge of materials
into the environment. Among other environmental laws, the Company is subject to
the federal "Superfund" law, under which the Company has been designated as a
"potentially responsible party" and may be liable for cleanup costs associated
with various waste sites, some of which are on the U.S. Environmental Protection
Agency Superfund priority list.
As of August 31, 2000, the Company is involved in environmental
remediation at 22 manufacturing facilities presently or formerly operated by the
Company and has been named as a
4
<PAGE> 7
"potentially responsible party," along with other companies at ten off-site
waste disposal facilities and two regional Superfund sites.
The Company believes that its policies, practices and procedures are
properly designed to prevent unreasonable risk of environmental damage and the
consequent financial liability to the Company. Compliance with environmental
laws and regulations requires continuing management effort and expenditures by
the Company. Compliance with environmental laws and regulations has not had in
the past, and, the Company believes, will not have in the future, material
effects on the capital expenditures, earnings, or competitive position of the
Company.
As of August 31, 2000, the Company has a reserve of $17,077,000 for
environmental matters which are probable and reasonably estimable. This reserve
is recorded based upon the best estimate of net costs to be incurred in light of
the progress made in determining the magnitude of remediation costs, the timing
and extent of remedial actions required by governmental authorities, the amount
of the Company's liability in proportion to other responsible parties and any
recoveries receivable.
The Company's estimated total liability for the above mentioned sites
ranges from a minimum of $17,080,000 to a maximum of $36,465,000. The actual
costs to be incurred by the Company will be dependent on final delineation of
contamination, final determination of remedial action required, negotiations
with federal and state agencies with respect to cleanup levels, changes in
regulatory requirements, innovations in investigatory and remedial technology,
effectiveness of remedial technologies employed, the ultimate ability to pay of
the other responsible parties, and any insurance recoveries.
ENERGY MATTERS AND SOURCES AND AVAILABILITY OF RAW MATERIALS
------------------------------------------------------------
The Company's primary energy source for each of its business segments is
electric power. While the Company cannot predict future costs of such electric
power, the primary source for production of the required electric power will be
coal from substantial, proven coal reserves available to electric utilities. The
Company is subject to governmental regulations in regard to energy supplies both
in the United States and elsewhere. To date the Company has not experienced any
significant disruptions of its operations due to energy curtailments.
Steel, brass, aluminum and elastomeric materials are the principal raw
materials used by the Company. These materials are available from numerous
sources in quantities sufficient to meet the requirements of the Company.
EMPLOYEES
---------
The Company employed 43,895 persons as of June 30, 2000, of whom 16,680
were employed by foreign subsidiaries.
5
<PAGE> 8
BUSINESS SEGMENT INFORMATION
----------------------------
The net sales, segment operating income and identifiable assets by
business segment and net sales and long-lived assets by geographic area for the
past three fiscal years, as set forth on page 25 of the Annual Report and
specifically excerpted on pages 13-16 to 13-17 of Exhibit 13 hereto, are
incorporated herein by reference.
ACQUISITIONS
------------
During fiscal 2000 the Company completed several acquisitions. The
discussion of these acquisitions, as set forth on page 27 of the Annual Report
and specifically excerpted on page 13-20 of Exhibit 13 hereto, is incorporated
herein by reference. On July 21, 2000 the Company completed its purchase of
Wynn's International, Inc. ("Wynn's"). The discussion of this acquisition, as
set forth on page 35 of the Annual Report and specifically excerpted on page
13-33 of Exhibit 13 hereto, is incorporated herein by reference.
ITEM 1A. EXECUTIVE OFFICERS OF THE COMPANY
------------------------------------------
The Company's Executive Officers are as follows:
<TABLE>
<CAPTION>
Officer
Name Position Since(1) Age
---- -------- -------- ---
<S> <C> <C> <C>
Duane E. Collins Chief Executive Officer and 1983 64
Chairman of the Board of Directors
Donald E. Washkewicz President, Chief Operating Officer and Director 1997 50
Dennis W. Sullivan Executive Vice President and Director 1978 61
Lawrence M. Zeno Vice President 1993 58
Claus Beneker Vice President - Technical Director 1999 60
Robert W. Bond Vice President and President, Automation Group 2000 43
Paul L. Carson Vice President - Information Services 1993 64
Lynn M. Cortright Vice President and President, Climate & 1999 59
Industrial Controls Group
Dana A. Dennis Controller 1999 52
Daniel T. Garey Vice President - Human Resources 1995 57
</TABLE>
6
<PAGE> 9
<TABLE>
<S> <C> <C> <C>
Stephen L. Hayes Vice President and President, Aerospace Group 1993 59
Michael J. Hiemstra Vice President - Finance and Administration 1987 53
and Chief Financial Officer
Marwan M. Kashkoush Vice President and President, Hydraulics Group 2000 46
Thomas W. Mackie Vice President and President, 2000 53
Instrumentation Group
John D. Myslenski Vice President and President, 1997 49
Fluid Connectors Group
John K. Oelslager Vice President and President, Filtration Group 1997 57
Thomas A. Piraino, Jr. Vice President, General Counsel and Secretary 1998 51
Timothy K. Pistell Treasurer 1993 53
Nickolas W. Vande Steeg Vice President and President, Seal Group 1995 57
</TABLE>
(1) Officers of the Company serve for a term of office from the date of
election to the next organizational meeting of the Board of
Directors and until their respective successors are elected, except
in the case of death, resignation or removal. Messrs. Sullivan,
Carson, Garey, Hayes, Hiemstra and Pistell have served in the
executive capacities indicated above during the past five years.
Mr. Collins was named Chairman of the Board of Directors of the Company in
October 1999. He was elected Chief Executive Officer in July 1993. He was
President from July 1993 to February 2000.
Mr. Washkewicz was elected President and Chief Operating Officer in
February 2000. Mr. Washkewicz was a Vice President and President of the
Hydraulics Group from October 1997 to February 2000 and Vice
President-Operations of the Fluid Connectors Group from October 1994 to October
1997.
Mr. Zeno was elected as a Vice President in October 1993. Mr. Zeno was a
President of the Motion and Control Group from January 1994 to June 1997.
Mr. Beneker was elected as Vice President - Technical Director effective
in February 1999. He was Vice President of Business Development of the Aerospace
Group from July 1995 to February 1999.
7
<PAGE> 10
Mr. Bond was elected as a Vice President in July 2000 and named President
of the Automation Group effective in March 2000. He was Vice President -
Operations of the Fluid Connectors Group from July 1997 to March 2000 and
General Manager of the Quick Coupling Division from January 1992 to June 1997.
Mr. Cortright was elected as a Vice President in January 1999 and was
named President of the Climate & Industrial Controls Group in October 1998. He
was President of the Latin American Group from November 1987 to October 1998.
Mr. Dennis was elected Controller effective July 1999. He was Vice
President/Controller of the Automation Group from August 1997 to July 1999 and
Vice President/Controller of the Motion and Control Group from July 1994 to
August 1997.
Mr. Kashkoush was elected as a Vice President in July 2000 and named
President of the Hydraulics Group in February 2000. He was President of the
European Operations of the Hydraulics Group from February 1999 to February 2000;
Group Vice President - Sales and Marketing of the Hydraulics Group from July
1997 to February 1999; and Operations Manager of the Troy, Michigan Sales
Division from February 1994 to July 1997.
Mr. Mackie was elected as a Vice President in July 2000 and named
President of the Instrumentation Group in July 1997. He was Vice President -
Operations of the Fluid Connectors Group from July 1994 to July 1997.
Mr. Myslenski was elected as a Vice President in October 1997 and named
President of the Fluid Connectors Group in July 1997. He was Vice President-
Operations of the Fluid Connectors Group from March 1989 to June 1997.
Mr. Oelslager was elected as a Vice President in October 1997 and named
President of the Filtration Group effective in March 2000. He was President of
the Automation Group from July 1997 to March 2000 and Vice President -
Operations of the Motion and Control Group from July 1995 to June 1997.
Mr. Piraino was elected as Vice President, General Counsel and Secretary
effective in July 1998. He was Vice President-Law from July 1990 to June 1998.
Mr. Vande Steeg was elected as a Vice President effective in September
1995. He has been President of the Seal Group since 1987.
ITEM 2. PROPERTIES. The following table sets forth the principal plants
and other materially important properties of the Company and its subsidiaries.
The leased properties are indicated with an asterisk. A "(1)" indicates that the
property is occupied by the Company's Industrial Segment, a "(2)" indicates
properties occupied by the Aerospace Segment, and a "(3)" indicates that the
property is occupied by a business that the Company acquired in the Commercial
Intertech or Wynn's acquisition that the Company plans on divesting or is
exploring the possibility of divesting.
8
<PAGE> 11
UNITED STATES
-------------
State City
----- ----
Alabama Boaz(1)
Decatur(1)
Huntsville(1)
Jacksonville(1)
Arizona Glendale(2)
Tempe(1)
Tolleson(2)
Tucson(1)
Arkansas Benton(1)
Siloam Springs(1)
Trumann(1)
California Azusa(3)
Irvine(1)(2)
Modesto(1)
Newbury Park*(1)
Orange(3)
Richmond(1)
Rohnert Park(1)
San Diego(1)
Connecticut New Britain(1)
Florida Longwood(1)
Miami*(1)
Sarasota(1)
Georgia Dublin(2)
Idaho Boise*(1)
Illinois Broadview(1)
Des Plaines(1)
Hampshire(1)
Ladd(1)
Lincolnshire*(1)
Mount Prospect*(1)
Rockford(1)
Indiana Albion(1)
Ashley(1)
Goshen(1)
Lebanon(1)
Syracuse(1)
Tell City(1)
Iowa Red Oak(1)
Kansas Manhattan(1)
Kentucky Berea(1)
9
<PAGE> 12
State City
----- ----
Lexington(1)
Springfield(1)
Louisiana Harvey*(1)
Maine Portland(1)
Maryland Linthicum*(1)
Massachusetts Ayer(2)
Haverhill*(1)
Tewksbury*(1)
Woburn(1)
Michigan Kalamazoo(2)
Lakeview(1)
Otsego(1)
Oxford(1)
Richland(1)
Troy*(1)
Minnesota Chanhasen*(1)
Golden Valley(1)
Minneapolis(1)
Mississippi Batesville(1)
Booneville(1)
Madison(1)
Missouri Kennett(1)
Nebraska Gothenburg(1)
Lincoln(1)
Nevada Carson City(1)
New Hampshire Hollis*(1)
Hudson(1)
Portsmouth*(1)
New Jersey Belleville*(1)
Fairfield*(1)
New York Chestnut Ridge(1)
Clyde(2)
Lyons(1)
Smithtown(2)
North Carolina Forest City(1)
Hillsborough(1)
Kings Mountain(1)
Sanford(1)
Snow Hill(1)
Wake Forest*(1)
Wilson(1)
Ohio Akron(1)
Andover(2)
10
<PAGE> 13
State City
----- ----
Avon(2)
Brookville(1)
Columbus(1)
Cuyahoga Falls*(1)
Dayton*(1)
Eastlake(1)
Eaton(1)
Elyria(1)(2)
Englewood*(1)
Forest(2)
Green Camp(1)
Hicksville(1)
Kent(1)
Lewisburg(1)
Lewiston*(1)
Mayfield Heights(1)(2)
Mentor*(2)
Metamora(1)
Milford*(1)
Ravenna(1)
St. Marys(1)
Wadsworth(1)
Wickliffe(1)
Youngstown(1)(3)
Oklahoma Henryetta*(1)
Oregon Eugene(1)
Pennsylvania Canton(1)
Harrison City(1)
Reading(1)
South Carolina Beaufort(1)
Bishopville*(1)
Mount Holley(2)
Spartanburg(1)
Tennessee Greeneville(1)
Greenfield(1)
Lebanon(1)
Livingston(1)
Memphis*(1)
Texas Big Spring*(1)
Cleburne(1)
Ft. Worth(1)
Mansfield(1)
Saginaw(3)
11
<PAGE> 14
State City
----- ----
Utah Ogden(2)
Salt Lake City(1)
Virginia Lynchburg(1)
Washington Seattle*(1)
Wisconsin Chetek(1)
Grantsburg(1)
Mauston(1)
Waukesha(1)
Territory City
--------- ----
Puerto Rico Ponce*(2)
FOREIGN COUNTRIES
-----------------
Country City
------- ----
Argentina Buenos Aires(1)
Australia Castle Hill(1)
Port Melbourne(1)
Wodonga*(1)
Austria Wiener Neustadt(1)
Belgium Brussels*(1)
St. Niklaas(3)
Brazil Cachoerinha(1)
Jacarei(1)
Mairinque(1)
Sao Paulo(1)
Canada Grimsby(1)
Orillia(1)
Owen Sound(1)
Chile Santiago*(1)
Czech Republic Chomutov*(1)
Prague*(1)
Prerov*(3)
Sadska(1)
Denmark Espergarde(1)
Ishoj(1)
Egypt Cairo*(1)
England Barnstaple(1)
Buxton(1)
Cannock(1)
12
<PAGE> 15
FOREIGN COUNTRIES
-----------------
Country City
------- ----
Cheltenham*(1)
Derby(1)
Dewsbury(1)
Grantham(1)
Hemel Hempstead(1)
Marlow*(1)
Ossett(1)
Poole*(1)
Rotherham(1)
Thetford(1)
Warwick(1)
Watford(1)
Finland Hyrynsalmi*(1)
Urjala(1)
Vantaa(1)
France Annemasse(1)
Contamine(1)
Evreux(1)
Pontarlier(1)
Wissembourg(1)
Germany Bielefeld(1)
Bietigheim-Bissingen(1)
Chemnitz(1)
Cologne(1)
Erfurt(1)
Geringswalde(1)
Hochmossingen(1)
Kaarst(1)
Lampertheim(1)
Mucke(1)
Offenburg*(1)
Pleidelsheim(1)
Queckborn(1)
Scholss-Holte(1)
Weilheim(1)
Wiesbaden(2)
Greece Athens*(1)
Hong Kong Hong Kong*(1)
Hungary Budapest*(1)
India Mumbai*(1)
Ireland Dublin*(1)
13
<PAGE> 16
FOREIGN COUNTRIES
-----------------
Country City
------- ----
Italy Adro(1)
Arsago Seprio(1)
Corsico(1)
Gessate(1)
Japan Yokohama(1)(2)
Luxembourg Diekirch(3)
Malaysia Kuala Lumpur*(2)
Mexico Matamoros(1)
Montemorelos(1)
Monterrey(1)
Tijuana(1)
Toluca(1)
Netherlands Amelo*(1)
Etten-Leur*(1)
Hendrik-Ido-Ambacht(1)
Hoogezand(1)
Oldenzaal(1)
New Zealand Mt. Wellington(1)
Norway Langhus(1)
Peoples Republic of China Beijing*(1)(2)
Shanghai*(1)
Poland Warsaw*(1)
Wroclaw(1)
Portugal Porto*(1)
Romania Bucharest*(1)
Russia Moscow*(1)
Saudi Arabia Ryad*(1)
Singapore Singapore*(1)
Slovenia Novo Mesto*(1)
South Africa Kempton Park(1)
South Korea Chonan(1)
Seoul*(1)
Suwon(1)
Yangsan(1)
Spain Madrid*(1)
Sweden Boras(1)
Falkoping(1)
Flen(1)
Spanga(1)
Trollhatten(1)
Ulricehamn(1)
14
<PAGE> 17
FOREIGN COUNTRIES
-----------------
Country City
------- ----
Switzerland Geneva(1)
Taiwan Taipei*(1)
Thailand Bangkok*(1)
Ukraine Kiev*(1)
United Arab Emirates Abu Dhabi*(1)
Venezuela Caracas*(1)
The Company believes that its properties have been adequately maintained,
are in good condition generally and are suitable and adequate for its business
as presently conducted. The extent of utilization of the Company's properties
varies among its plants and from time to time. Additional capacity has been
added as the Company expands through business combinations. The Company's
material manufacturing facilities remain capable of handling additional volume
increases.
ITEM 3. LEGAL PROCEEDINGS. None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not
applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS. As of August 31, 2000, the number of shareholders of record of the
Company was 6,427 and the number of beneficial owners was approximately 48,650.
Information regarding stock price and dividend information with respect to the
Company's common stock, as set forth on page 35 of the Annual Report and
specifically excerpted on page 13-34 of Exhibit 13 hereto, is incorporated
herein by reference.
ITEM 6. SELECTED FINANCIAL DATA. The information set forth on pages 36 and
37 of the Annual Report, as specifically excerpted on page 13-37 of Exhibit 13
hereto, is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. The information set forth on pages 18, 20, 22, 24 and 38
of the Annual Report, as specifically excerpted on pages 13-1 to 13-9 of Exhibit
13 hereto, is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The
Company enters into forward exchange contracts, costless collar contracts and
cross-currency swap agreements to reduce its exposure to fluctuations in related
foreign currencies. The total value of open contracts and any risk to the
Company as a result of these arrangements is not material to the Company's
financial position, liquidity or results of operations. For further discussion
see the Significant Accounting Policies Footnote on page 27 of the Annual
Report, as specifically excerpted on page 13-19 of Exhibit 13 hereto and
incorporated herein by reference.
15
<PAGE> 18
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The information set
forth on pages 17, 19, 21, 23, 25 to 35 and 38 of the Annual Report, as
specifically excerpted on pages 13-10 to 13-36 of Exhibit 13 hereto, is
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE. Not applicable.
PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. Information
required as to the Directors of the Company is contained on pages 1 to 3 of the
Company's definitive Proxy Statement dated September 25, 2000 (the "Proxy
Statement") under the caption "Election of Directors." The foregoing information
is incorporated herein by reference. Information as to the executive officers of
the Company is included in Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION. The information set forth under the
caption "Compensation of Directors" on page 3 of the Proxy Statement and under
the caption "Executive Compensation" on pages 7 to 10 of the Proxy Statement is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information set forth under the caption ""Change in Control" Severance
Agreements with Officers" on page 10 of the Proxy Statement and under the
caption "Principal Shareholders of the Corporation" on page 12 of the Proxy
Statement is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Not applicable.
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
a. The following are filed as part of this report:
1. FINANCIAL STATEMENTS AND SCHEDULE
The financial statements and schedule listed in the
accompanying Index to Consolidated Financial Statements
and Schedules are filed or incorporated by reference as
part of this Report.
2. EXHIBITS
The exhibits listed in the accompanying Exhibit Index
and required by Item 601 of Regulation S-K (numbered in
accordance with Item 601 of Regulation S-K) are filed or
incorporated by reference as part of this Report.
16
<PAGE> 19
b. During the quarter ended June 30, 2000, the Registrant
filed the following reports on Form 8-K:
1. On April 12, 2000 to file the press release issued
jointly by the Registrant and Commercial Intertech
Corp. announcing the completion of the merger of
Commercial Intertech Corp. with and into the
Registrant with Registrant as the surviving
corporation effective April 11, 2000.
2. On June 23, 2000 (a) to file the press release
issued jointly by the Registrant and Wynn's
International, Inc. announcing that the Registrant
entered into an Agreement and Plan of Merger with
WI Holding Inc. and Wynn's International, Inc.
whereby WI Holding Inc. will commence a tender
offer to purchase all of the outstanding common
stock of Wynn's International, Inc. and following
the purchase of such shares WI Holding Inc. will
be merged with Wynn's International, Inc.; and (b)
to file the Agreement and Plan of Merger,
Stockholder Tender Agreement and Consulting
Agreement relating thereto.
17
<PAGE> 20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PARKER-HANNIFIN CORPORATION
By: /s/ Michael J. Hiemstra
Michael J. Hiemstra
Vice President - Finance and
Administration and Chief
Financial Officer
September 28, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report on Form 10-K has been signed below by the following persons in the
capacities and on the date indicated.
SIGNATURE AND TITLE
DUANE E. COLLINS, Chairman of the Board of Directors and
Chief Executive Officer; DANA A. DENNIS, Controller and
Principal Accounting Officer; JOHN G. BREEN, Director;
PAUL C. ELY, JR., Director; PETER W. LIKINS, Director;
GIULIO MAZZALUPI, Director; KLAUS-PETER MUELLER, Director;
HECTOR R. ORTINO, Director; ALLAN L. RAYFIELD, Director;
WOLFGANG R. SCHMITT, Director; DEBRA L. STARNES, Director;
DENNIS W. SULLIVAN, Director; and DONALD E. WASHKEWICZ, Director.
Date: September 28, 2000
/s/ Michael J. Hiemstra
Michael J. Hiemstra, Vice President - Finance and
Administration, Principal Financial Officer and
Attorney-in-Fact
18
<PAGE> 21
PARKER-HANNIFIN CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<CAPTION>
Reference
--------------------------------------------
Excerpt from Annual
Form 10-K Report as set forth
Annual Report in Exhibit 13
(Page) (Page)
------------- --------------------
DATA INCORPORATED BY REFERENCE FROM THE
ANNUAL REPORT AS SPECIFICALLY EXCERPTED
IN EXHIBIT 13 HERETO:
<S> <C> <C>
Report of Independent Accountants --- 13-36
Consolidated Statement of Income for the
years ended June 30, 2000, 1999 and 1998 --- 13-10
Consolidated Statement of Comprehensive Income
for the years ended June 30, 2000, 1999 and
1998 --- 13-11
Consolidated Balance Sheet at June 30, 2000
and 1999 --- 13-12 and 13-13
Consolidated Statement of Cash Flows for
the years ended June 30, 2000, 1999 and 1998 --- 13-14 and 13-15
Notes to Consolidated Financial Statements --- 13-18 to 13-34
Report of Independent Accountants on the
Financial Statement Schedule F-2
SCHEDULE:
II - Valuation and Qualifying Accounts F-3 ---
</TABLE>
Individual financial statements and related applicable schedules for the
Registrant (separately) have been omitted because the Registrant is primarily an
operating company and its subsidiaries are considered to be totally-held.
F-1
<PAGE> 22
Report of Independent Accountants on
Financial Statement Schedule
To the Board of Directors
of Parker-Hannifin Corporation:
Our audits of the consolidated financial statements referred to in our report
dated July 28, 2000 appearing in the 2000 Annual Report to Shareholders of
Parker-Hannifin Corporation (which report and consolidated financial statements
are incorporated by reference in this Annual Report on Form 10-K) also included
an audit of the financial statement schedule listed in Item 14(a)(1) of this
Form 10-K. In our opinion, this financial statement schedule presents fairly, in
all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
/s/ PricewaterhouseCoopers LLP
Cleveland, Ohio
July 28, 2000
F-2
<PAGE> 23
PARKER-HANNIFIN CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JUNE 30, 1998, 1999 and 2000
(Dollars in Thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
------------------------------- --------------- -------------- --------------- --------------
Additions
Balance at Charged to Other Balance
Beginning Costs and (Deductions)/ At End
Description Of Period Expenses Additions (A) Of Period
------------------------------- --------------- -------------- --------------- --------------
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
<S> <C> <C> <C> <C>
Year ended June 30, 1998 5,904 2,267 833 9,004
Year ended June 30, 1999 9,004 2,318 (1,925) 9,397
Year ended June 30, 2000 9,397 2,996 (1,973) 10,420
</TABLE>
(A) Net balance of deductions due to uncollectible accounts charged off and
additions due to acquisitions or recoveries.
F-3
<PAGE> 24
Exhibit Index
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
(3) ARTICLES OF INCORPORATION AND BY-LAWS
(3)(a) Amended Articles of Incorporation(A).
(3)(b) Code of Regulations, as amended(B).
(4) INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS:
(4)(a) Rights Agreement, dated January 31, 1997, between the
Registrant and KeyBank National Association
("KeyBank")(C), as amended by the First Addendum to
Shareholder Protection Rights Agreement, dated April 21,
1997, between the Registrant and Wachovia Bank of North
Carolina N.A. ("Wachovia"), as successor to KeyBank(D),
and the Second Addendum to Shareholder Protection Rights
Agreement, dated June 15, 1999, between the Registrant
and National City Bank, as successor to Wachovia(D).
The Registrant is a party to other instruments, copies
of which will be furnished to the Commission upon
request, defining the rights of holders of its long-term
debt identified in Note 8 of the Notes to Consolidated
Financial Statements appearing on pages 29 and 30 of the
Annual Report as specifically excerpted on page 13-24 of
Exhibit 13 hereto, which Note is incorporated herein by
reference.
(10) MATERIAL CONTRACTS:
(10)(a) Form of Change in Control Severance Agreement entered
into by the Registrant and executive officers(E).(*)
(10)(b) Parker-Hannifin Corporation Change in Control Severance
Plan, as amended(F).(*)
(10)(c) Form of Indemnification Agreement entered into by the
Registrant and its directors and executive officers.
(10)(d) Exchange Agreement entered into as of May 11, 1999
between the Registrant and Duane E. Collins including an
Executive Estate Protection Plan comprised of the
Executive Estate Protection Agreement entered into by
the Registrant, Duane E. Collins and The Duane E.
Collins Irrevocable Trust dated 5/10/99 (the "Trust"),
the Collateral Assignment between the Registrant and the
Trust and the "as sold" illustration of an Executive
Estate Protection Plan Insurance Policy(G).(*)
<PAGE> 25
Exhibit Index
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
(10)(e) Exchange Agreement entered into as of October 29, 1999
between the Registrant and Michael J. Hiemstra including
an Executive Estate Protection Plan comprised of the
Executive Estate Protection Agreement among the
Registrant, Michael J. Hiemstra, and the Irrevocable
Trust Creating Vested Trusts for Children of Michael J.
Hiemstra dated August 16, 1999 (the "Trust") and the
Collateral Assignment between the Trust and the
Registrant(H).(*)
(10)(f) Exchange Agreement entered into as of February 22, 2000
between the Registrant and Daniel T.Garey including the
Executive Estate Protection Agreement among the
Registrant, Daniel T. Garey, and the Daniel T. Garey and
Diane-Worthington Garey Irrevocable Trust dated December
22, 1999 (the "Trust") and the Collateral Assignment
between the Trust and the Registrant(I).(*)
(10)(g) Form of Executive Life Insurance Agreement entered into
by the Registrant and executive officers (J).(*)
(10)(h) Parker-Hannifin Corporation Supplemental Executive
Retirement Benefits Program (August 15, 1996
Restatement)(K).(*)
(10)(i) Parker-Hannifin Corporation 1990 Employees Stock Option
Plan, as amended(L).(*)
(10)(j) Parker-Hannifin Corporation 1993 Stock Incentive
Program, as amended(M).(*)
(10)(k) Parker-Hannifin Corporation 2000 Target Incentive Bonus
Plan Description (N).(*)
(10)(l) Parker-Hannifin Corporation 2001 Target Incentive Bonus
Plan Description.(*)
(10)(m) Parker-Hannifin Corporation 1998-99-00 Long Term
Incentive Plan Description, as amended(O).(*)
(10)(n) Parker-Hannifin Corporation 1999-00-01 Long Term
Incentive Plan Description(P).(*)
(10)(o) Parker-Hannifin Corporation 2000-01-02 Long Term
Incentive Plan Description(Q).(*)
(10)(p) Parker-Hannifin Corporation 2001-02-03 Long Term
Incentive Plan Description.(*)
(10)(q) Parker-Hannifin Corporation Savings Restoration Plan, as
restated.(*)
<PAGE> 26
Exhibit Index
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
(10)(r) Parker-Hannifin Corporation Pension Restoration Plan, as
amended and restated(R).(*)
(10)(s) Parker-Hannifin Corporation Executive Deferral Plan, as
restated.(*)
(10)(t) Parker-Hannifin Corporation Volume Incentive Plan, as
amended.(*)
(10)(u) Parker-Hannifin Corporation Non-Employee Directors'
Stock Plan, as amended(S).(*)
(10)(v) Parker-Hannifin Corporation Non-Employee Directors Stock
Option Plan(T).(*)
(10)(w) Parker-Hannifin Corporation Deferred Compensation Plan
for Directors, as amended and restated(U).(*)
(10)(x) Parker-Hannifin Corporation Stock Option Deferral
Plan(V).(*)
(10)(y) Agreement and Plan of Merger, dated as of January 14,
2000, by and between Commercial Intertech Corp. and the
Registrant(W).
(10)(z) Agreement and Plan of Merger, dated as of June 13, 2000,
by and among Wynn's International, Inc., the Registrant
and WI Holding Inc.(X).
(11) Computation of Common Shares Outstanding and Earnings
Per Share is incorporated by reference to Note 5 of the
Notes to Consolidated Financial Statements appearing on
page 29 of the Annual Report as specifically excerpted
on pages 13-22 and 13-23 of Exhibit 13 hereto.
(12) Computation of Ratio of Earnings to Fixed Charges as of
June 30, 2000.
(13) Excerpts from Annual Report to Shareholders for the
fiscal year ended June 30, 2000 which are incorporated
herein by reference thereto.
(21) List of subsidiaries of the Registrant.
(23) Consent of Independent Accountants.
(24) Power of Attorney.
(27) Financial Data Schedule.
(*)Management contracts or compensatory plans or arrangements.
<PAGE> 27
-----------
(A) Incorporated by reference to Exhibit 3 to the
Registrant's Report on Form 10-Q for the quarterly
period ended September 30, 1997.
(B) Incorporated by reference to Exhibits to the
Registrant's Registration Statement on Form S-8 (No.
33-53193) filed with the Commission on April 20, 1994.
(C) Incorporated by reference to Exhibit 4.1 to the
Registrant's Report on Form 8-K filed with the
Commission on February 4, 1997.
(D) Incorporated by reference to Exhibit 4(a) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1999.
(E) Incorporated by reference to Exhibit 10(a) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1996.
(F) Incorporated by reference to Exhibit 10(b) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1996.
(G) Incorporated by reference to Exhibit 10(d) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1999.
(H) Incorporated by reference to Exhibit 10(a) to the
Registrant's Report on Form 10-Q for the quarterly
period ended December 31, 1999.
(I) Incorporated by reference to Exhibit 10(a) to the
Registrant's Report on Form 10-Q for the quarterly
period ended March 31, 2000.
(J) Incorporated by reference to Exhibit (10)(e) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1999.
(K) Incorporated by reference to Exhibit 10(e) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1996.
(L) Incorporated by reference to Exhibit 10(g) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1996.
(M) Incorporated by reference to Exhibit 10 to the
Registrant's Report on Form 10-Q for the quarterly
period ended September 30, 1997.
(N) Incorporated by reference to Exhibit 10(k) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1999.
<PAGE> 28
(O) Incorporated by reference to Exhibit 10(m) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1997.
(P) Incorporated by reference to Exhibit 10(m) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1998.
(Q) Incorporated by reference to Exhibit 10(a) to the
Registrant's Report on Form 10-Q for the quarterly
period ended September 30, 1999.
(R) Incorporated by reference to Exhibit 10(p) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1998.
(S) Incorporated by reference to Exhibit 10(s) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1996.
(T) Incorporated by reference to Exhibit 10(t) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1996.
(U) Incorporated by reference to Exhibit 10(b) to the
Registrant's Report on Form 10-Q for the quarterly
period ended September 30, 1999.
(V) Incorporated by reference to Exhibit 10(u) to the
Registrant's Report on Form 10-K for the fiscal year
ended June 30, 1998.
(W) Incorporated by reference to Exhibit 2.1 to the
Registrant's Current Report on Form 8-K dated January
17, 2000.
(X) Incorporated by reference to Exhibit (d)(2) to the
Schedule TO filed by the Registrant and WI Holding Inc.
on June 22, 2000.
Shareholders may request a copy of any of the exhibits to this Annual Report on
Form 10-K by writing to the Secretary, Parker-Hannifin Corporation, 6035
Parkland Boulevard, Cleveland, Ohio 44124-4141.
