Name: Parker-Hannifin Corp. (NYSE:PH) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Parker-Hannifin Corp., consolidated cash flow statement

US$ in thousands

12 months ended:	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
Net income	1,316,186)	1,746,861)	1,206,703)	1,512,931)	1,061,315)	983,844)
Depreciation	257,314)	269,943)	252,899)	225,675)	237,806)	202,868)
Amortization	314,450)	325,447)	284,632)	210,514)	228,279)	152,361)
Stock incentive plan compensation	137,093)	121,483)	111,375)	104,078)	118,831)	80,339)
Deferred income taxes	(351,201)	(51,500)	13,692)	32,537)	(41,412)	37,024)
Foreign currency transaction (gain) loss	(39,987)	(10,948)	(10,018)	5,888)	7,284)	8,060)
(Gain) loss on sale of property, plant and equipment	(5,727)	(109,332)	(1,850)	5,091)	(24,422)	1,494)
(Gain) loss on sale of businesses	(1,394)	—)	—)	5,854)	19,666)	(41,285)
(Gain) loss on investments	(3,972)	(12,616)	(2,084)	(16,749)	41,219)	—)
(Gain) loss on marketable securities	5,131)	(11,570)	(587)	7,563)	(2)	(1,032)
Other	70,443)	14,424)	17,984)	—)	—)	—)
Accounts receivable	(179,126)	(298,511)	578,853)	2,452)	(301,978)	(95,347)
Inventories	(212,134)	(85,597)	201,164)	(51,817)	(92,209)	(73,673)
Prepaid expenses and other	37,630)	(25,508)	(9,312)	(33,335)	(16,206)	2,410)
Other assets	(11,167)	(8,779)	(23,547)	2,677)	(13,293)	(3,887)
Accounts payable, trade	131,384)	526,781)	(370,765)	(12,397)	125,907)	174,761)
Accrued payrolls and other compensation	(15,524)	72,412)	(62,715)	2,088)	(4,614)	5,922)
Accrued domestic and foreign taxes	32,514)	36,552)	30,918)	(30,593)	44,019)	18,165)
Other accrued liabilities	999,831)	11,397)	(148,531)	16,698)	(5,567)	(59,738)
Pensions and other postretirement benefits	1,822)	17,875)	55,522)	(168,368)	31,239)	(103,866)
Other liabilities	(41,836)	46,187)	(53,384)	(90,647)	184,425)	14,051)
Changes in assets and liabilities, net of effects from acquisitions	743,394)	292,809)	198,203)	(363,242)	(48,277)	(121,202)
Adjustments to reconcile net income to net cash provided by operating activities	1,125,544)	828,140)	864,246)	217,209)	538,972)	318,627)
Net cash provided by operating activities	2,441,730)	2,575,001)	2,070,949)	1,730,140)	1,600,287)	1,302,471)
Acquisitions, net of cash acquired	—)	—)	(5,076,064)	(2,042)	—)	(4,069,197)
Capital expenditures	(230,044)	(209,957)	(232,591)	(195,089)	(247,667)	(203,748)
Proceeds from sale of property, plant and equipment	39,353)	140,590)	26,345)	46,592)	81,881)	14,648)
Proceeds from sale of businesses	3,366)	—)	—)	19,678)	177,741)	85,610)
Purchase of marketable securities and other investments	(27,895)	(34,809)	(194,742)	(181,780)	(80,607)	(465,666)
Maturities and sales of marketable securities and other investments	31,809)	79,419)	275,483)	74,908)	83,905)	1,279,318)
Other	(235,426)	24,744)	177,576)	19,223)	4,837)	(6,113)
Net cash (used in) provided by investing activities	(418,837)	(13)	(5,023,993)	(218,510)	20,090)	(3,365,148)
Proceeds from exercise of stock options	2,831)	4,684)	2,623)	2,475)	3,682)	2,202)
Payments for common shares	(460,056)	(218,818)	(216,049)	(860,052)	(381,041)	(338,078)
Acquisition of noncontrolling interests	—)	—)	(1,200)	—)	—)	—)
Proceeds from (payments of) notes payable, net	1,422,026)	(723,496)	136,744)	48,828)	4,115)	230,499)
Proceeds from long-term borrowings	3,598,056)	1,213)	1,721,211)	2,336,749)	1,189)	2,614,463)
Payments for long-term borrowings	(18,737)	(1,211,748)	(740,181)	(213,226)	(944,629)	(381,078)
Financing fees paid	(58,629)	—)	—)	—)	—)	—)
Dividends paid	(569,855)	(475,174)	(453,838)	(412,468)	(365,288)	(345,380)
Net cash provided by (used in) financing activities	3,915,636)	(2,623,339)	449,310)	902,306)	(1,681,972)	1,782,628)
Effect of exchange rate changes on cash	(23,770)	95,954)	(30,519)	(16,306)	(1,154)	(56,718)
Net increase (decrease) in cash and cash equivalents and restricted cash	5,914,759)	47,603)	(2,534,253)	2,397,630)	(62,749)	(336,767)
Cash, cash equivalents and restricted cash at beginning of year	733,117)	685,514)	3,219,767)	822,137)	884,886)	1,221,653)
Cash, cash equivalents and restricted cash at end of year	6,647,876)	733,117)	685,514)	3,219,767)	822,137)	884,886)

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).

Operating cash flow demonstrates a consistent upward trajectory over the analyzed period, growing from 1.30 billion US dollars in 2017 to a peak of 2.57 billion US dollars in 2021, before slightly moderating to 2.44 billion US dollars in 2022. This growth is supported by a generally positive trend in net income, although operating cash flow consistently exceeds net income, indicating high-quality earnings supported by significant non-cash adjustments. Depreciation and amortization expenses have remained relatively stable, collectively contributing between 350 million and 580 million US dollars annually to the reconciliation of net income to cash provided by operations.

Working Capital and Operational Adjustments: Fluctuations in working capital have had a variable impact on cash flows. A notable surge in cash from operations occurred in 2022, driven largely by a significant increase in other accrued liabilities totaling approximately 1 billion US dollars. Conversely, 2019 saw a substantial cash outflow of 363 million US dollars related to changes in assets and liabilities, reflecting a period of increased working capital absorption.
Investment Strategy and Capital Expenditures: Investing activities are characterized by sporadic, large-scale capital outlays primarily driven by strategic acquisitions. Major acquisition spending occurred in 2017 (4.07 billion US dollars) and 2020 (5.07 billion US dollars), which accounts for the significant net cash outflows in those years. In contrast, organic capital expenditures have remained remarkably stable, averaging approximately 220 million US dollars annually, suggesting a disciplined approach to maintaining existing infrastructure while utilizing acquisitions for growth.
Financing and Capital Structure: Financing activities exhibit high volatility, reflecting a cycle of borrowing to fund acquisitions and subsequent debt repayment. A substantial increase in liquidity is observed in 2022, with net cash provided by financing activities reaching 3.91 billion US dollars, primarily fueled by 3.59 billion US dollars in long-term borrowings and 1.42 billion US dollars in proceeds from notes payable. This follows a period of deleveraging in 2021, where 1.21 billion US dollars were used to pay down long-term borrowings.
Shareholder Returns: A consistent commitment to shareholder returns is evident through steady dividend payments and share repurchases. Dividends paid have increased annually, rising from 345 million US dollars in 2017 to 569 million US dollars in 2022. Payments for common shares have been a recurring feature, peaking at 860 million US dollars in 2019, indicating a programmatic approach to returning excess capital to shareholders.
Liquidity Position: The cash and cash equivalents position experienced significant volatility, coinciding with the timing of large acquisitions and financing events. The period concludes with a substantial increase in liquidity, as the cash balance rose from 733 million US dollars at the end of 2021 to 6.64 billion US dollars by June 30, 2022, primarily as a result of the aggressive borrowing activity in the final year of the data set.

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