An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)
Adjustments to Financial Statements for Operating Leases
Adjusted Financial Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)

Parker-Hannifin Corp., future operating lease payments (before adoption of FASB Topic 842)

US$ in thousands

	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018	Jun 30, 2017
Total undiscounted future operating lease payments	—	—	—	142,202)	226,691)	240,244)
Discount rate¹	—	—	—	4.30%	4.47%	4.50%

Total present value of future operating lease payments	—	—	—	125,951)	201,970)	213,295)

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).

¹ Weighted-average interest rate for Parker-Hannifin Corp. debt

2019 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 4.30%
2020	45,920)	2020	45,920)	44,027)
2021	31,115)	2021	31,115)	28,602)
2022	21,625)	2022	21,625)	19,059)
2023	13,228)	2023	13,228)	11,178)
2024	7,591)	2024	7,591)	6,150)
2025 and thereafter	22,723)	2025	7,591)	5,896)
		2026	7,591)	5,653)
		2027	7,541)	5,385)
Total:	142,202)		142,202)	125,951)

Based on: 10-K (reporting date: 2019-06-30).

2018 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 4.47%
2019	78,812)	2019	78,812)	75,440)
2020	56,889)	2020	56,889)	52,125)
2021	35,102)	2021	35,102)	30,786)
2022	18,326)	2022	18,326)	15,385)
2023	9,172)	2023	9,172)	7,371)
2024 and thereafter	28,390)	2024	9,172)	7,055)
		2025	9,172)	6,753)
		2026	9,172)	6,464)
		2027	874)	590)
Total:	226,691)		226,691)	201,970)

Based on: 10-K (reporting date: 2018-06-30).

2017 Calculations

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at 4.50%
2018	81,400)	2018	81,400)	77,895)
2019	56,974)	2019	56,974)	52,173)
2020	35,467)	2020	35,467)	31,080)
2021	21,189)	2021	21,189)	17,768)
2022	13,220)	2022	13,220)	10,608)
2023 and thereafter	31,994)	2023	13,220)	10,152)
		2024	13,220)	9,714)
		2025	5,554)	3,905)
Total:	240,244)		240,244)	213,295)

Based on: 10-K (reporting date: 2017-06-30).

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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)
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)¹	—)	—)	—)	125,951)	201,970)	213,295)
Total assets (adjusted)	25,943,943)	20,341,200)	19,738,189)	17,702,641)	15,522,057)	15,703,199)
Adjustment to Total Debt
Total debt (as reported)	11,480,135)	6,584,877)	8,461,785)	7,107,845)	4,957,025)	5,870,360)
Add: Operating lease liability (before adoption of FASB Topic 842)²	—)	—)	—)	125,951)	201,970)	213,295)
Add: Current operating lease liabilities (included within Other accrued liabilities)	36,023)	40,193)	43,327)	—)	—)	—)
Add: Long-term operating lease liabilities (included within Other liabilities)	100,337)	93,904)	96,446)	—)	—)	—)
Total debt (adjusted)	11,616,495)	6,718,974)	8,601,558)	7,233,796)	5,158,995)	6,083,655)

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).

^{1, 2} Equal to total present value of future operating lease payments.

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 Turnover¹
Reported total asset turnover	0.61	0.71	0.69	0.81	0.93	0.78
Adjusted total asset turnover	0.61	0.71	0.69	0.81	0.92	0.77
Debt to Equity²
Reported debt to equity	1.30	0.78	1.38	1.19	0.85	1.12
Adjusted debt to equity	1.31	0.80	1.41	1.21	0.88	1.16
Return on Assets³ (ROA)
Reported ROA	5.07%	8.58%	6.11%	8.60%	6.92%	6.35%
Adjusted ROA	5.07%	8.58%	6.11%	8.54%	6.83%	6.26%

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).

¹ See details »

² See details »

³ See details »

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 debt to equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Parker-Hannifin Corp. adjusted debt to equity ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.
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 Operating Leases
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	25,943,943)	20,341,200)	19,738,189)	17,702,641)	15,522,057)	15,703,199)
Activity Ratio
Adjusted total asset turnover²	0.61	0.71	0.69	0.81	0.92	0.77

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 ÷ 25,943,943 = 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 debt	11,480,135)	6,584,877)	8,461,785)	7,107,845)	4,957,025)	5,870,360)
Shareholders’ equity	8,848,011)	8,398,307)	6,113,983)	5,961,969)	5,859,866)	5,261,649)
Solvency Ratio
Debt to equity¹	1.30	0.78	1.38	1.19	0.85	1.12
Adjusted for Operating Leases
Selected Financial Data (US$ in thousands)
Adjusted total debt	11,616,495)	6,718,974)	8,601,558)	7,233,796)	5,158,995)	6,083,655)
Shareholders’ equity	8,848,011)	8,398,307)	6,113,983)	5,961,969)	5,859,866)	5,261,649)
Solvency Ratio
Adjusted debt to equity²	1.31	0.80	1.41	1.21	0.88	1.16

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 Debt to equity = Total debt ÷ Shareholders’ equity
= 11,480,135 ÷ 8,848,011 = 1.30

² Adjusted debt to equity = Adjusted total debt ÷ Shareholders’ equity
= 11,616,495 ÷ 8,848,011 = 1.31

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Solvency ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	Parker-Hannifin Corp. adjusted debt-to-equity ratio improved from 2020 to 2021 but then slightly deteriorated 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)
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 Operating Leases
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	25,943,943)	20,341,200)	19,738,189)	17,702,641)	15,522,057)	15,703,199)
Profitability Ratio
Adjusted ROA²	5.07%	8.58%	6.11%	8.54%	6.83%	6.26%

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 ÷ 25,943,943 = 5.07%

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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 Operating Leases

Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)

Adjustments to Financial Statements for Operating Leases

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

Adjusted Financial Ratios for Operating Leases (Summary)

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

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)