Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Parker-Hannifin Corp., balance sheet: goodwill and intangible assets

US$ in thousands

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
Goodwill	7,740,082)	8,059,687)	7,869,935)	5,453,805)	5,504,420)	5,586,878)
Patents and technology	990,775)	999,952)	991,596)	265,644)	265,423)	254,049)
Trademarks	727,820)	762,130)	748,326)	542,573)	546,905)	553,691)
Customer lists and other	3,735,042)	3,869,772)	3,791,505)	2,435,461)	2,482,079)	2,566,983)
Intangible assets, gross carrying amount	5,453,637)	5,631,854)	5,531,427)	3,243,678)	3,294,407)	3,374,723)
Accumulated amortization	(2,317,820)	(2,112,057)	(1,732,514)	(1,460,401)	(1,278,887)	(1,067,239)
Intangible assets, net	3,135,817)	3,519,797)	3,798,913)	1,783,277)	2,015,520)	2,307,484)
Goodwill and intangible assets	10,875,899)	11,579,484)	11,668,848)	7,237,082)	7,519,940)	7,894,362)

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
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Parker-Hannifin Corp. goodwill increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.
Intangible assets, net	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Parker-Hannifin Corp. intangible assets, net decreased from 2020 to 2021 and from 2021 to 2022.
Goodwill and intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Parker-Hannifin Corp. goodwill and intangible assets decreased from 2020 to 2021 and 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: Goodwill	7,740,082)	8,059,687)	7,869,935)	5,453,805)	5,504,420)	5,586,878)
Total assets (adjusted)	18,203,861)	12,281,513)	11,868,254)	12,122,885)	9,815,667)	9,903,026)
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: Goodwill	7,740,082)	8,059,687)	7,869,935)	5,453,805)	5,504,420)	5,586,878)
Shareholders’ equity (adjusted)	1,107,929)	338,620)	(1,755,952)	508,164)	355,446)	(325,229)

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
Total Asset Turnover
Reported total asset turnover	0.61	0.71	0.69	0.81	0.93	0.78
Adjusted total asset turnover	0.87	1.17	1.15	1.18	1.46	1.21
Financial Leverage
Reported financial leverage	2.93	2.42	3.23	2.95	2.61	2.94
Adjusted financial leverage	16.43	36.27	—	23.86	27.62	—
Return on Equity (ROE)
Reported ROE	14.87%	20.79%	19.73%	25.37%	18.10%	18.69%
Adjusted ROE	118.74%	515.65%	—	297.61%	298.44%	—
Return on Assets (ROA)
Reported ROA	5.07%	8.58%	6.11%	8.60%	6.92%	6.35%
Adjusted ROA	7.23%	14.22%	10.16%	12.48%	10.81%	9.93%

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 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 ROA	A profitability ratio calculated as 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 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 Goodwill
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	18,203,861)	12,281,513)	11,868,254)	12,122,885)	9,815,667)	9,903,026)
Activity Ratio
Adjusted total asset turnover²	0.87	1.17	1.15	1.18	1.46	1.21

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 ÷ 18,203,861 = 0.87

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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 Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets	18,203,861)	12,281,513)	11,868,254)	12,122,885)	9,815,667)	9,903,026)
Adjusted shareholders’ equity	1,107,929)	338,620)	(1,755,952)	508,164)	355,446)	(325,229)
Solvency Ratio
Adjusted financial leverage²	16.43	36.27	—	23.86	27.62	—

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
= 18,203,861 ÷ 1,107,929 = 16.43

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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)
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 Goodwill
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)
Adjusted shareholders’ equity	1,107,929)	338,620)	(1,755,952)	508,164)	355,446)	(325,229)
Profitability Ratio
Adjusted ROE²	118.74%	515.65%	—	297.61%	298.44%	—

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 × Net income attributable to common shareholders ÷ Adjusted shareholders’ equity
= 100 × 1,315,605 ÷ 1,107,929 = 118.74%

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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)
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 Goodwill
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)
Adjusted total assets	18,203,861)	12,281,513)	11,868,254)	12,122,885)	9,815,667)	9,903,026)
Profitability Ratio
Adjusted ROA²	7.23%	14.22%	10.16%	12.48%	10.81%	9.93%

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 × Net income attributable to common shareholders ÷ Adjusted total assets
= 100 × 1,315,605 ÷ 18,203,861 = 7.23%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as 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 Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

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

Adjusted Financial Ratios: Removal of Goodwill (Summary)

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

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)