Stock Analysis on Net

Parker-Hannifin Corp. (NYSE:PH)

$22.49

This company has been moved to the archive! The financial data has not been updated since February 7, 2023.

Analysis of Property, Plant and Equipment

Microsoft Excel

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Property, Plant and Equipment Disclosure

Parker-Hannifin Corp., balance sheet: property, plant and equipment

US$ in thousands

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Land and land improvements
Buildings and building equipment
Machinery and equipment
Construction in progress
Property, plant and equipment, gross
Accumulated depreciation
Property, plant and equipment, net

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).


The financial data reveal several key trends in property, plant, and equipment (PP&E) assets over the analyzed period from mid-2017 to mid-2022. Overall, the gross PP&E balance displayed moderate fluctuations, with a notable upward movement followed by a slight decline in the latest year.

Land and Land Improvements
There was a general decline in the value of land and land improvements from mid-2017 through mid-2019, dropping from approximately 321 million USD to 281 million USD. This was followed by an increase in 2020 and 2021, peaking around 343 million USD, before slightly decreasing again in 2022 to about 322 million USD. This pattern suggests some disposals or revaluations initially, followed by acquisitions or improvements, and then a modest reduction in the latest period.
Buildings and Building Equipment
This category remained relatively stable from 2017 through 2019, hovering close to 1.57 billion USD. A significant increase occurred in 2020, reaching over 1.77 billion USD, and further growth appeared in 2021 to about 1.85 billion USD. However, there was a minor decline in 2022 to approximately 1.78 billion USD. These changes indicate notable investments in buildings and related equipment, with a slight pullback in the most recent year.
Machinery and Equipment
The machinery and equipment line showed a steady increase from 3.17 billion USD in 2017 up to a peak of roughly 3.65 billion USD in 2021. In 2022, this figure slightly decreased to approximately 3.59 billion USD. The upward trend reflects ongoing capital expenditures and asset additions, while the slight decline in 2022 may point to disposals, impairments, or reclassification.
Construction in Progress
This item displayed variable movements, initially growing moderately from about 122 million USD in 2017 to 128 million USD in 2018, then declining to nearly 115 million USD in 2019. Thereafter, it rose sharply, reaching around 204 million USD by 2022. The substantial increase in construction in progress from 2020 indicates considerable ongoing projects or expansions, signaling continued investment efforts.
Property, Plant and Equipment, Gross
Gross PP&E remained nearly flat between 2017 and 2019, slightly above 5.18 billion USD. From 2020, a marked increase occurred, with the balance rising to over 6 billion USD in 2021, followed by a slight decrease to about 5.9 billion USD in 2022. This trend aligns with increases in the underlying asset categories and suggests robust capital investment activity, tempered by some asset retirements or transfers in the latest period.
Accumulated Depreciation
Accumulated depreciation steadily increased in absolute terms, moving from approximately -3.25 billion USD in 2017 to around -3.78 billion USD by 2022. This consistent increase is typical, reflecting ongoing asset aging and usage. The pace of depreciation growth aligns with the size and additions to the PP&E base, though it appears to stabilize towards the latest years.
Property, Plant and Equipment, Net
Net PP&E, calculated as gross PP&E less accumulated depreciation, showed a decreasing trend from about 1.94 billion USD in 2017 to roughly 1.77 billion USD in 2019. Subsequently, a sharp increase to over 2.29 billion USD occurred in 2020, with a slight decline thereafter to about 2.13 billion USD by 2022. This spike in 2020 suggests significant capital investments or revaluations that outpaced depreciation, while the recent decline may signal increased depreciation charges or disposals reducing net asset value.

In summary, the company maintained a substantial and relatively stable investment in PP&E assets throughout the examined timeframe. A pronounced expansion phase occurred around 2020 and 2021, reflected in elevated gross and net PP&E balances as well as increased construction in progress, illustrating intensified capital expenditure efforts. The slight declines in the most recent year could represent early signs of asset replacement cycles or strategic asset management adjustments. Accumulated depreciation rose steadily, consistent with asset aging and usage patterns.


Asset Age Ratios (Summary)

Parker-Hannifin Corp., asset age ratios

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Average age ratio
Estimated total useful life (years)
Estimated age, time elapsed since purchase (years)
Estimated remaining life (years)

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).


The analysis of the annual property, plant, and equipment data reveals several notable trends over the six-year period ending June 30, 2022.

Average Age Ratio
The average age ratio shows a generally consistent pattern with slight fluctuations. It increased from 66.79% in 2017 to a peak of 69.68% in 2019, indicating that the assets were aging relatively more during this time. This was followed by a decrease to 64.37% in 2020, suggesting a relative renewal or replacement of assets. Subsequently, the ratio increased again to 67.71% by 2022, indicating a gradual aging of the asset base in recent years.
Estimated Total Useful Life
The estimated total useful life of the assets has varied between 21 and 24 years over the period. It started at 24 years in 2017, dropped to 21 years in 2018 and remained mostly stable around 21 or 22 years after that. This indicates a revision or reassessment of asset lifespans, potentially reflecting changes in technology, usage, or accounting policies.
Estimated Age (Time Elapsed Since Purchase)
The estimated age of the assets fluctuated, starting at 16 years in 2017, dropping to 14 years in 2018, then stabilizing around 14 to 15 years through 2022. Such variation suggests adjustments either due to asset acquisitions, disposals, or reevaluation of asset age profiles.
Estimated Remaining Life
The estimated remaining life remained relatively stable, fluctuating between 7 and 8 years. It was 8 years initially in 2017, dipped to 7 years in most years, with a slight increase to 8 years in 2020 before returning to 7 years. This stability indicates a consistent expectation of the future utility of the assets, despite minor changes.

Overall, the asset base demonstrates a moderately aging profile with some reassessment of useful life parameters. The company appears to maintain a balance between asset aging and renewal, reflected in the relatively stable estimated remaining life and moderate fluctuations in the average age ratio.


Average Age

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data (US$ in thousands)
Accumulated depreciation
Property, plant and equipment, gross
Land and land improvements
Asset Age Ratio
Average age1

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 Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, gross – Land and land improvements)
= 100 × ÷ () =


Accumulated Depreciation
The accumulated depreciation values displayed a consistent upward trend from June 30, 2017, to June 30, 2022. Beginning at approximately 3.25 billion US dollars in 2017, the figure gradually increased each year, reaching nearly 3.78 billion US dollars by 2022. The rate of increase was steady, with the largest year-over-year increase occurring between 2019 and 2021. However, from 2021 to 2022, the growth in accumulated depreciation appears to have plateaued slightly.
Property, Plant and Equipment, Gross
The gross value of property, plant, and equipment showed a mixed trend over the period analyzed. Starting at about 5.19 billion US dollars in 2017, the figure remained relatively stable through 2019 but then experienced a significant increase in 2020 and 2021, peaking at approximately 6.04 billion US dollars in 2021. In 2022, there was a slight decline to roughly 5.90 billion US dollars. This pattern suggests a period of expansion or major capital investments followed by a modest reduction in gross asset base.
Land and Land Improvements
The value of land and land improvements fluctuated over the years, beginning at around 321 million US dollars in 2017. It declined steadily in the following years, reaching a low of approximately 281 million US dollars in 2019. Subsequently, the value rose sharply in 2020 to about 346 million US dollars, only to decrease again in the last two years to approximately 322 million US dollars by 2022. This variability may reflect changes in land acquisitions or disposals, as well as possible revaluations.
Average Age Ratio
The average age ratio, expressed as a percentage, indicates a general fluctuation throughout the time frame. Starting at 66.79% in 2017, it steadily increased to a peak of 69.68% in 2019, suggesting an aging asset base. However, in 2020, there was a noticeable drop to 64.37%, which may signify asset renewal or disposal of older assets. The ratio then increased again moderately in the two subsequent years, ending at 67.71% in 2022. Overall, this ratio reflects some cycles of asset aging and rejuvenation.
Summary
The overall analysis points to a company actively managing its property, plant, and equipment portfolio. The steady increase in accumulated depreciation aligns with the aging of assets over time. The surge in gross asset value during 2020 and 2021 suggests substantial capital investment, while the subsequent decline in 2022 might indicate asset disposals or revaluations. The fluctuations in land and land improvements reflect dynamic management of real estate holdings. The average age ratio confirms periods of both aging and refreshment of the asset base, underscoring ongoing asset lifecycle management efforts.

Estimated Total Useful Life

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data (US$ in thousands)
Property, plant and equipment, gross
Land and land improvements
Depreciation expense
Asset Age Ratio (Years)
Estimated total useful life1

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 Estimated total useful life = (Property, plant and equipment, gross – Land and land improvements) ÷ Depreciation expense
= () ÷ =


Property, Plant and Equipment, Gross
The gross value of property, plant, and equipment showed a relatively stable pattern from 2017 through 2019, hovering around 5.18 to 5.22 billion US dollars. A notable increase occurred in 2020, with the value rising significantly to approximately 5.81 billion US dollars, followed by a continued increase in 2021 to about 6.04 billion US dollars. However, in 2022, there was a slight decline to roughly 5.90 billion US dollars. This trend suggests a period of substantial capital investment or asset acquisition in 2020 and 2021, with a minor reduction or asset disposal in the subsequent year.
Land and Land Improvements
The value of land and land improvements exhibited a decreasing trend overall from 2017 through 2022. The value started at approximately 321 million US dollars in 2017 and declined to 290 million in 2018, further dropping to around 281 million in 2019. An exception to this decline is seen in 2020 and 2021, where values temporarily increased to about 346 million and 343 million US dollars respectively. By 2022, the amount decreased again to roughly 322 million US dollars. This pattern may indicate occasional strategic acquisitions or improvements, with the general trend pointing toward reduction or revaluation over the period.
Depreciation Expense
Depreciation expense has generally increased over the years, beginning at approximately 203 million US dollars in 2017 and peaking at nearly 270 million US dollars in 2021. In 2018, the expense rose to around 238 million and slightly dropped in 2019 to about 226 million before increasing again in 2020 and 2021. The expense decreased slightly in 2022 to approximately 257 million US dollars. This upward trajectory in depreciation expense likely reflects the growth in asset base as well as possible adjustments in asset lifespan or depreciation policies.
Estimated Total Useful Life
The estimated total useful life of the property, plant, and equipment showed some variability but remained within a close range. The life span was valued at 24 years in 2017, decreased to 21 years in 2018, then rose to 22 years in 2019 and 2020, slightly dropped back to 21 years in 2021, and returned to 22 years in 2022. This modest fluctuation could reflect changes in assumptions related to the useful life of assets, possibly due to technological advancements, changes in asset composition, or updated operational considerations.

Estimated Age, Time Elapsed since Purchase

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data (US$ in thousands)
Accumulated depreciation
Depreciation expense
Asset Age Ratio (Years)
Time elapsed since purchase1

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 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation expense
= ÷ =


Accumulated Depreciation
The accumulated depreciation shows a consistent upward trend over the six-year period. Starting at approximately 3,249 million US dollars in mid-2017, it increased gradually each year, reaching about 3,775 million US dollars by mid-2022. The increase from 2021 to 2022 is minimal, suggesting a plateau in accumulated depreciation growth in the latest year.
Depreciation Expense
The depreciation expense fluctuated over the period. It rose from around 203 million US dollars in 2017 to a peak of nearly 270 million US dollars in 2021. However, in 2022, it slightly declined to approximately 257 million US dollars. This pattern indicates some variability in recorded depreciation costs, with a noticeable peak in 2021 before a moderate decrease.
Time Elapsed Since Purchase
The average age of the property, plant, and equipment as indicated by time elapsed since purchase remained relatively stable, fluctuating between 14 and 16 years. This suggests a consistent age profile of the asset base without significant renewal or replacement trends during the timeframe.

Estimated Remaining Life

Microsoft Excel
Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Selected Financial Data (US$ in thousands)
Property, plant and equipment, net
Land and land improvements
Depreciation expense
Asset Age Ratio (Years)
Estimated remaining life1

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 Estimated remaining life = (Property, plant and equipment, net – Land and land improvements) ÷ Depreciation expense
= () ÷ =


The analysis of the property, plant, and equipment financial data over the given periods reveals several notable trends and changes.

Net Property, Plant, and Equipment
The net value of property, plant, and equipment experienced a decreasing trend from 2017 through 2019, dropping from approximately 1,937,292 thousand USD to 1,768,287 thousand USD. However, a significant increase occurred in 2020, reaching 2,292,735 thousand USD, followed by a slight decline in the subsequent years 2021 and 2022 to 2,266,476 thousand USD and 2,122,758 thousand USD, respectively. This pattern suggests a period of asset reduction followed by substantial acquisitions or revaluations in 2020, with a stabilization but slight downward adjustment afterwards.
Land and Land Improvements
The value of land and land improvements similarly declined from 321,331 thousand USD in 2017 to 281,040 thousand USD in 2019. Thereafter, it increased considerably in 2020 to 345,746 thousand USD, then slightly decreased in 2021 and 2022 to 342,950 thousand USD and 322,024 thousand USD respectively. This aligns with the broader net property, plant, and equipment trends, indicating possible new land acquisitions or improvements around 2020 followed by minor disposals or revaluation decreases.
Depreciation Expense
Depreciation expense rose from 202,868 thousand USD in 2017 to a peak of 269,943 thousand USD in 2021, with minor fluctuations. After increasing steadily through 2018 and 2020, it slightly decreased in 2022 to 257,314 thousand USD. This increase in depreciation expense may correlate with the additions to property, plant, and equipment around 2020, reflecting higher asset bases and ongoing usage.
Estimated Remaining Life
The estimated remaining life of the assets mostly fluctuated between 7 and 8 years across the period, starting at 8 years in 2017, shifting down to 7 years in 2018 and 2019, briefly returning to 8 years in 2020, and back to 7 years in 2021 and 2022. This relatively stable estimated remaining life implies consistent asset aging and renewal patterns without significant shifts in overall asset longevity assumptions.

In summary, the company experienced a contraction in net property assets from 2017 to 2019, followed by a marked increase in 2020, which could indicate capital reinvestment or asset revaluation activities. Depreciation expense trends are consistent with asset base changes. The estimated remaining life remained relatively stable, suggesting steady asset replacement or maintenance strategies over the period analyzed.