Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Parker-Hannifin Corp., income tax expense (benefit), continuing operations

US$ in thousands

12 months ended:	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
Federal	297,672)	247,094)	105,796)	160,858)	453,821)	132,420)
Foreign	303,089)	269,607)	167,680)	206,167)	210,385)	157,518)
State and local	48,479)	34,895)	18,756)	20,932)	18,168)	17,835)
Current	649,240)	551,596)	292,232)	387,957)	682,374)	307,773)
Federal	(253,123)	(52,960)	26,067)	14,903)	(23,876)	37,316)
Foreign	(45,977)	8,851)	(14,247)	3,202)	(17,454)	(5,319)
State and local	(52,100)	(7,391)	1,872)	14,432)	(82)	5,027)
Deferred	(351,200)	(51,500)	13,692)	32,537)	(41,412)	37,024)
Income taxes	298,040)	500,096)	305,924)	420,494)	640,962)	344,797)

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

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Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Parker-Hannifin Corp. current increased from 2020 to 2021 and from 2021 to 2022.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Parker-Hannifin Corp. deferred decreased from 2020 to 2021 and from 2021 to 2022.
Income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Parker-Hannifin Corp. income taxes increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Parker-Hannifin Corp., effective income tax rate (EITR) reconciliation

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
Statutory federal income tax rate	21.00%	21.00%	21.00%	21.00%	28.10%	35.00%
State and local income taxes	-0.20%	1.00%	1.40%	1.70%	1.20%	1.70%
Tax related to international activities	2.70%	3.60%	1.80%	2.90%	-1.00%	-5.50%
Transition tax related to the TCJ Act	0.00%	0.00%	-0.70%	0.80%	17.50%	0.00%
Remeasurement of deferred tax assets and liabilities related to the TCJ Act	0.00%	0.00%	0.00%	-0.90%	-4.80%	0.00%
Cash surrender value of life insurance	0.50%	-0.60%	-0.30%	-0.10%	-0.40%	-0.90%
Federal manufacturing deduction	0.00%	0.00%	0.00%	0.10%	-1.00%	-0.90%
Foreign derived intangible income deduction	-3.70%	-1.00%	-1.50%	-1.00%	0.00%	0.00%
Research tax credit	-0.80%	-0.40%	-0.60%	-0.50%	-0.70%	-0.80%
Share-based compensation	-1.30%	-1.60%	-1.50%	-1.70%	-2.20%	-2.70%
Other	0.30%	0.30%	0.60%	-0.60%	1.00%	0.10%
Effective income tax rate	18.50%	22.30%	20.20%	21.70%	37.70%	26.00%

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

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Item	Description	The company
Effective income tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Parker-Hannifin Corp. effective income tax rate increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Parker-Hannifin Corp., components of deferred tax assets and liabilities

US$ in thousands

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
Retirement benefits	207,147)	322,931)	504,747)	368,269)	340,480)	571,022)
Other liabilities and reserves	180,624)	136,710)	139,872)	90,936)	112,935)	144,885)
Long-term contracts	8,739)	5,562)	7,392)	22,241)	17,496)	61,375)
Stock-based compensation	31,490)	30,165)	35,483)	38,730)	38,535)	59,725)
Loss carryforwards	888,552)	861,013)	754,655)	792,914)	679,880)	678,486)
Unrealized currency exchange gains and losses	254,334)	18,841)	39,256)	27,034)	27,228)	22,212)
Inventory	14,649)	(11,753)	5,242)	5,540)	6,696)	17,809)
Tax credit carryforwards	17,326)	19,709)	33,176)	15,640)	—)	23,050)
Undistributed foreign earnings	(21,822)	(21,722)	(15,196)	(16,762)	(16,308)	—)
Depreciation and amortization	(875,623)	(945,422)	(988,886)	(589,454)	(689,320)	(1,080,218)
Valuation allowance	(901,875)	(865,764)	(771,430)	(797,692)	(694,857)	(684,079)
Net deferred tax asset (liability)	(196,459)	(449,730)	(255,689)	(42,604)	(177,235)	(185,733)

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

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Item	Description	The company
Net deferred tax asset (liability)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Parker-Hannifin Corp. net deferred tax asset (liability) decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

Parker-Hannifin Corp., deferred tax assets and liabilities, classification

US$ in thousands

		Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
	Deferred tax assets	110,585)	104,251)	126,839)	150,462)	57,623)	36,057)
	Deferred tax liabilities	307,044)	553,981)	382,528)	193,066)	234,858)	221,790)

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

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Item	Description	The company
Deferred tax assets	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Parker-Hannifin Corp. deferred tax assets decreased from 2020 to 2021 but then slightly increased from 2021 to 2022.
Deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Parker-Hannifin Corp. deferred tax liabilities increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Parker-Hannifin Corp., adjustments to financial statements

US$ in thousands

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
Adjustment to Total Assets
Total assets (as reported)	25,943,943)	20,341,200)	19,738,189)	17,576,690)	15,320,087)	15,489,904)
Less: Noncurrent deferred tax assets, net	110,585)	104,251)	126,839)	150,462)	57,623)	36,057)
Total assets (adjusted)	25,833,358)	20,236,949)	19,611,350)	17,426,228)	15,262,464)	15,453,847)
Adjustment to Total Liabilities
Total liabilities (as reported)	17,084,023)	11,927,530)	13,609,660)	11,608,538)	9,454,594)	10,222,558)
Less: Noncurrent deferred tax liabilities, net	307,044)	553,981)	382,528)	193,066)	234,858)	221,790)
Total liabilities (adjusted)	16,776,979)	11,373,549)	13,227,132)	11,415,472)	9,219,736)	10,000,768)
Adjustment to Shareholders’ Equity
Shareholders’ equity (as reported)	8,848,011)	8,398,307)	6,113,983)	5,961,969)	5,859,866)	5,261,649)
Less: Net deferred tax assets (liabilities)	(196,459)	(449,730)	(255,689)	(42,604)	(177,235)	(185,733)
Shareholders’ equity (adjusted)	9,044,470)	8,848,037)	6,369,672)	6,004,573)	6,037,101)	5,447,382)
Adjustment to Net Income Attributable To Common Shareholders
Net income attributable to common shareholders (as reported)	1,315,605)	1,746,100)	1,206,341)	1,512,364)	1,060,801)	983,412)
Add: Deferred income tax expense (benefit)	(351,200)	(51,500)	13,692)	32,537)	(41,412)	37,024)
Net income attributable to common shareholders (adjusted)	964,405)	1,694,600)	1,220,033)	1,544,901)	1,019,389)	1,020,436)

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

Parker-Hannifin Corp., Financial Data: Reported vs. Adjusted

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Parker-Hannifin Corp., adjusted financial ratios

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
Net Profit Margin
Reported net profit margin	8.29%	12.17%	8.81%	10.56%	7.42%	8.18%
Adjusted net profit margin	6.08%	11.81%	8.91%	10.79%	7.13%	8.48%
Total Asset Turnover
Reported total asset turnover	0.61	0.71	0.69	0.81	0.93	0.78
Adjusted total asset turnover	0.61	0.71	0.70	0.82	0.94	0.78
Financial Leverage
Reported financial leverage	2.93	2.42	3.23	2.95	2.61	2.94
Adjusted financial leverage	2.86	2.29	3.08	2.90	2.53	2.84
Return on Equity (ROE)
Reported ROE	14.87%	20.79%	19.73%	25.37%	18.10%	18.69%
Adjusted ROE	10.66%	19.15%	19.15%	25.73%	16.89%	18.73%
Return on Assets (ROA)
Reported ROA	5.07%	8.58%	6.11%	8.60%	6.92%	6.35%
Adjusted ROA	3.73%	8.37%	6.22%	8.87%	6.68%	6.60%

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Parker-Hannifin Corp. adjusted net profit margin ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Parker-Hannifin Corp. adjusted total asset turnover ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Parker-Hannifin Corp. adjusted financial leverage ratio decreased from 2020 to 2021 but then increased from 2021 to 2022 not reaching 2020 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Parker-Hannifin Corp. adjusted ROE deteriorated from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Parker-Hannifin Corp. adjusted ROA improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

Parker-Hannifin Corp., Financial Ratios: Reported vs. Adjusted

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	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to common shareholders	1,315,605)	1,746,100)	1,206,341)	1,512,364)	1,060,801)	983,412)
Net sales	15,861,608)	14,347,640)	13,695,520)	14,320,324)	14,302,392)	12,029,312)
Profitability Ratio
Net profit margin¹	8.29%	12.17%	8.81%	10.56%	7.42%	8.18%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to common shareholders	964,405)	1,694,600)	1,220,033)	1,544,901)	1,019,389)	1,020,436)
Net sales	15,861,608)	14,347,640)	13,695,520)	14,320,324)	14,302,392)	12,029,312)
Profitability Ratio
Adjusted net profit margin²	6.08%	11.81%	8.91%	10.79%	7.13%	8.48%

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

¹ Net profit margin = 100 × Net income attributable to common shareholders ÷ Net sales
= 100 × 1,315,605 ÷ 15,861,608 = 8.29%

² Adjusted net profit margin = 100 × Adjusted net income attributable to common shareholders ÷ Net sales
= 100 × 964,405 ÷ 15,861,608 = 6.08%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Parker-Hannifin Corp. adjusted net profit margin ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net sales	15,861,608)	14,347,640)	13,695,520)	14,320,324)	14,302,392)	12,029,312)
Total assets	25,943,943)	20,341,200)	19,738,189)	17,576,690)	15,320,087)	15,489,904)
Activity Ratio
Total asset turnover¹	0.61	0.71	0.69	0.81	0.93	0.78
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Net sales	15,861,608)	14,347,640)	13,695,520)	14,320,324)	14,302,392)	12,029,312)
Adjusted total assets	25,833,358)	20,236,949)	19,611,350)	17,426,228)	15,262,464)	15,453,847)
Activity Ratio
Adjusted total asset turnover²	0.61	0.71	0.70	0.82	0.94	0.78

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 15,861,608 ÷ 25,943,943 = 0.61

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 15,861,608 ÷ 25,833,358 = 0.61

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Parker-Hannifin Corp. adjusted total asset turnover ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
As Reported
Selected Financial Data (US$ in thousands)
Total assets	25,943,943)	20,341,200)	19,738,189)	17,576,690)	15,320,087)	15,489,904)
Shareholders’ equity	8,848,011)	8,398,307)	6,113,983)	5,961,969)	5,859,866)	5,261,649)
Solvency Ratio
Financial leverage¹	2.93	2.42	3.23	2.95	2.61	2.94
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	25,833,358)	20,236,949)	19,611,350)	17,426,228)	15,262,464)	15,453,847)
Adjusted shareholders’ equity	9,044,470)	8,848,037)	6,369,672)	6,004,573)	6,037,101)	5,447,382)
Solvency Ratio
Adjusted financial leverage²	2.86	2.29	3.08	2.90	2.53	2.84

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

¹ Financial leverage = Total assets ÷ Shareholders’ equity
= 25,943,943 ÷ 8,848,011 = 2.93

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 25,833,358 ÷ 9,044,470 = 2.86

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Parker-Hannifin Corp. adjusted financial leverage ratio decreased from 2020 to 2021 but then increased from 2021 to 2022 not reaching 2020 level.

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to common shareholders	1,315,605)	1,746,100)	1,206,341)	1,512,364)	1,060,801)	983,412)
Shareholders’ equity	8,848,011)	8,398,307)	6,113,983)	5,961,969)	5,859,866)	5,261,649)
Profitability Ratio
ROE¹	14.87%	20.79%	19.73%	25.37%	18.10%	18.69%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to common shareholders	964,405)	1,694,600)	1,220,033)	1,544,901)	1,019,389)	1,020,436)
Adjusted shareholders’ equity	9,044,470)	8,848,037)	6,369,672)	6,004,573)	6,037,101)	5,447,382)
Profitability Ratio
Adjusted ROE²	10.66%	19.15%	19.15%	25.73%	16.89%	18.73%

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

¹ ROE = 100 × Net income attributable to common shareholders ÷ Shareholders’ equity
= 100 × 1,315,605 ÷ 8,848,011 = 14.87%

² Adjusted ROE = 100 × Adjusted net income attributable to common shareholders ÷ Adjusted shareholders’ equity
= 100 × 964,405 ÷ 9,044,470 = 10.66%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Parker-Hannifin Corp. adjusted ROE deteriorated from 2020 to 2021 and from 2021 to 2022.

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to common shareholders	1,315,605)	1,746,100)	1,206,341)	1,512,364)	1,060,801)	983,412)
Total assets	25,943,943)	20,341,200)	19,738,189)	17,576,690)	15,320,087)	15,489,904)
Profitability Ratio
ROA¹	5.07%	8.58%	6.11%	8.60%	6.92%	6.35%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to common shareholders	964,405)	1,694,600)	1,220,033)	1,544,901)	1,019,389)	1,020,436)
Adjusted total assets	25,833,358)	20,236,949)	19,611,350)	17,426,228)	15,262,464)	15,453,847)
Profitability Ratio
Adjusted ROA²	3.73%	8.37%	6.22%	8.87%	6.68%	6.60%

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

2022 Calculations

¹ ROA = 100 × Net income attributable to common shareholders ÷ Total assets
= 100 × 1,315,605 ÷ 25,943,943 = 5.07%

² Adjusted ROA = 100 × Adjusted net income attributable to common shareholders ÷ Adjusted total assets
= 100 × 964,405 ÷ 25,833,358 = 3.73%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Parker-Hannifin Corp. adjusted ROA improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

Parker-Hannifin Corp. (NYSE:PH)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Parker-Hannifin Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Parker-Hannifin Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)