Cover Page
Cover Page | 3 Months Ended |
Sep. 30, 2021shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Sep. 30, 2021 |
Document Transition Report | false |
Entity File Number | 1-4982 |
Entity Registrant Name | PARKER-HANNIFIN CORPORATION |
Entity Incorporation, State or Country Code | OH |
Entity Tax Identification Number | 34-0451060 |
Entity Address, Address Line One | 6035 Parkland Boulevard, |
Entity Address, City or Town | Cleveland, |
Entity Address, State or Province | OH |
Entity Address, Postal Zip Code | 44124-4141 |
City Area Code | 216 |
Local Phone Number | 896-3000 |
Title of 12(b) Security | Common Shares, $.50 par value |
Trading Symbol | PH |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 128,514,953 |
Entity Central Index Key | 0000076334 |
Current Fiscal Year End Date | --06-30 |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Consolidated Statement of Incom
Consolidated Statement of Income - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | ||
Income Statement [Abstract] | |||
Net sales | $ 3,762,809 | $ 3,230,540 | [1],[2],[3],[4],[5],[6] |
Cost of sales | 2,713,897 | 2,386,449 | [1],[2],[3],[4],[5],[6] |
Selling, general and administrative expenses | 407,765 | 369,851 | [1],[2],[3],[4],[5],[6] |
Interest expense | 59,350 | 65,958 | [1],[2],[3],[4],[5],[6] |
Other expense (income), net | 10,052 | (4,892) | [1],[2],[3],[4],[5],[6] |
Income before income taxes | 571,745 | 413,174 | [1],[2],[3],[4],[5],[6] |
Income taxes | 120,282 | 93,063 | [1],[2],[3],[4],[5],[6] |
Net income | 451,463 | 320,111 | [1],[2],[3],[4],[5],[6] |
Less: Noncontrolling interest in subsidiaries' earnings | 306 | 308 | [1],[2],[3],[4],[5],[6] |
Net income attributable to common shareholders | $ 451,157 | $ 319,803 | [6] |
Earnings per share attributable to common shareholders: | |||
Basic (in USD per share) | $ 3.50 | $ 2.48 | [4] |
Diluted (in USD per share) | $ 3.45 | $ 2.45 | [5] |
[1] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[2] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[3] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[4] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[5] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[6] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 451,463 | $ 320,111 | [1],[2],[3],[4],[5],[6] |
Less: Noncontrolling interests in subsidiaries' earnings | 306 | 308 | [1],[2],[3],[4],[5],[6] |
Net income attributable to common shareholders | 451,157 | 319,803 | [6] |
Other comprehensive (loss) income, net of tax | |||
Foreign currency translation adjustment | (68,324) | 130,682 | [1],[2],[3],[4],[5],[6] |
Retirement benefits plan activity | 29,022 | 40,152 | [1],[2],[3],[4],[5],[6] |
Other comprehensive (loss) income | (39,302) | 170,834 | [4] |
Less: Other comprehensive (loss) income for noncontrolling interests | (539) | 431 | [1],[2],[3],[4],[5],[6] |
Other comprehensive (loss) income attributable to common shareholders | (38,763) | 170,403 | [1],[2],[3],[4],[5],[6] |
Total comprehensive income attributable to common shareholders | $ 412,394 | $ 490,206 | [1],[2],[3],[4],[5],[6] |
[1] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[2] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[3] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[4] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[5] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[6] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 478,582 | $ 733,117 |
Marketable securities and other investments | 40,160 | 39,116 |
Trade accounts receivable, net | 2,109,648 | 2,183,594 |
Non-trade and notes receivable | 315,571 | 326,315 |
Inventories | 2,264,725 | 2,090,642 |
Prepaid expenses and other | 422,588 | 243,966 |
Total current assets | 5,631,274 | 5,616,750 |
Property, plant and equipment | 6,019,237 | 6,040,220 |
Less: Accumulated depreciation | 3,795,703 | 3,773,744 |
Property, plant and equipment, net | 2,223,534 | 2,266,476 |
Deferred income taxes | 145,972 | 104,251 |
Investments and other assets | 800,211 | 774,239 |
Intangible assets, net | 3,426,540 | 3,519,797 |
Goodwill | 8,009,340 | 8,059,687 |
Total assets | 20,236,871 | 20,341,200 |
Current liabilities: | ||
Notes payable and long-term debt payable within one year | 302,309 | 2,824 |
Accounts payable, trade | 1,636,272 | 1,667,878 |
Accrued payrolls and other compensation | 341,355 | 507,027 |
Accrued domestic and foreign taxes | 279,173 | 236,384 |
Other accrued liabilities | 724,134 | 682,390 |
Total current liabilities | 3,283,243 | 3,096,503 |
Long-term debt | 6,263,941 | 6,582,053 |
Pensions and other postretirement benefits | 997,392 | 1,055,638 |
Deferred income taxes | 568,369 | 553,981 |
Other liabilities | 618,081 | 639,355 |
Total liabilities | 11,731,026 | 11,927,530 |
Shareholders’ equity: | ||
Serial preferred stock, $.50 par value; authorized 3,000,000 shares; none issued | 0 | 0 |
Common stock, $.50 par value; authorized 600,000,000 shares; issued 181,046,128 shares at September 30 and June 30 | 90,523 | 90,523 |
Additional capital | 358,677 | 329,619 |
Retained earnings | 15,233,799 | 14,915,497 |
Accumulated other comprehensive (loss) | (1,605,490) | (1,566,727) |
Treasury shares, at cost; 52,531,175 shares at September 30 and 51,900,460 shares at June 30 | (5,586,728) | (5,370,605) |
Total shareholders’ equity | 8,490,781 | 8,398,307 |
Noncontrolling interests | 15,064 | 15,363 |
Total equity | 8,505,845 | 8,413,670 |
Total liabilities and equity | $ 20,236,871 | $ 20,341,200 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - $ / shares | Sep. 30, 2021 | Jun. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Serial preferred stock, par value (in USD per share) | $ 0.50 | $ 0.50 |
Serial preferred stock, authorized (in shares) | 3,000,000 | 3,000,000 |
Serial preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.50 | $ 0.50 |
Common stock, authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, issued (in shares) | 181,046,128 | 181,046,128 |
Treasury shares (in shares) | 52,531,175 | 51,900,460 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | [1],[2],[3],[4],[5],[6] | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 451,463 | $ 320,111 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 65,751 | 66,739 | |
Amortization | 79,771 | 81,703 | |
Share incentive plan compensation | 57,666 | 58,461 | |
Deferred income taxes | (40,027) | 11,043 | |
Foreign currency transaction gain | (9,470) | (4,855) | |
Gain on disposal of property, plant and equipment | (30) | (498) | |
Loss (gain) on marketable securities | 804 | (340) | |
Gain on investments | (200) | (970) | |
Other | 42,823 | 5,302 | |
Changes in assets and liabilities, net of effects from acquisitions: | |||
Accounts receivable, net | 74,070 | 15,532 | |
Inventories | (190,779) | 42,039 | |
Prepaid expenses and other | 37,763 | 53,129 | |
Other assets | (27,553) | (9,693) | |
Accounts payable, trade | (20,365) | 138,900 | |
Accrued payrolls and other compensation | (161,560) | (98,186) | |
Accrued domestic and foreign taxes | 46,592 | (2,209) | |
Other accrued liabilities | 36,288 | 34,457 | |
Pensions and other postretirement benefits | (15,651) | 17,652 | |
Other liabilities | (2,997) | 9,057 | |
Net cash provided by operating activities | 424,359 | 737,374 | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Capital expenditures | (48,203) | (42,117) | |
Proceeds from sale of property, plant and equipment | 7,751 | 6,590 | |
Purchases of marketable securities and other investments | (7,456) | (10,726) | |
Maturities and sales of marketable securities and other investments | 5,312 | 49,107 | |
Other | 649 | 1,054 | |
Net cash (used in) provided by investing activities | (41,947) | 3,908 | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from exercise of stock options | 1,089 | 989 | |
Payments for common shares | (245,820) | (22,739) | |
(Payments for) proceeds from notes payable, net | (4) | 114,400 | |
Proceeds from long-term borrowings | 1 | 0 | |
Payments for long-term borrowings | (592) | (671,842) | |
Financing fees paid | (42,703) | 0 | |
Dividends paid | (132,921) | (113,542) | |
Net cash (used in) financing activities | (420,950) | (692,734) | |
Effect of exchange rate changes on cash | (997) | 8,332 | |
Net (decrease) increase in cash, cash equivalents and restricted cash | (39,535) | 56,880 | |
Cash, cash equivalents and restricted cash at beginning of year | 733,117 | 685,514 | |
Cash, cash equivalents and restricted cash at end of period | $ 693,582 | $ 742,394 | |
[1] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[2] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[3] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[4] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[5] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[6] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Business Segment Information
Business Segment Information | 3 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Business Segment Information | The Company operates in two reportable business segments: Diversified Industrial and Aerospace Systems. Both segments utilize eight core technologies, including hydraulics, pneumatics, electromechanical, filtration, fluid and gas handling, process control, engineered materials and climate control, to drive superior customer problem solving and value creation. Diversified Industrial - This segment produces a broad range of motion-control and fluid systems and components used in all kinds of manufacturing, packaging, processing, transportation, mobile construction, refrigeration and air conditioning, agricultural, and military machinery and equipment and has significant international operations. Sales are made directly to major original equipment manufacturers ("OEMs") and through a broad distribution network to smaller OEMs and the aftermarket. Aerospace Systems - This segment designs and manufactures products and provides aftermarket support for commercial, business jet, military and general aviation aircraft, missile and spacecraft markets. The Aerospace Systems Segment provides a full range of systems and components for hydraulic, pneumatic and fuel applications. Three Months Ended September 30, 2021 2020* Net sales Diversified Industrial: North America $ 1,793,715 $ 1,528,111 International 1,376,436 1,129,251 Aerospace Systems 592,658 573,178 Total net sales $ 3,762,809 $ 3,230,540 Segment operating income Diversified Industrial: North America $ 333,702 $ 268,833 International 291,176 186,901 Aerospace Systems 118,251 86,766 Total segment operating income 743,129 542,500 Corporate general and administrative expenses 49,072 36,735 Income before interest expense and other expense 694,057 505,765 Interest expense 59,350 65,958 Other expense 62,962 26,633 Income before income taxes $ 571,745 $ 413,174 *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Management representation
Management representation | 3 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Management representation | As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms "Company", "Parker", "we" or "us" refer to Parker-Hannifin Corporation and its subsidiaries.Management representation In the opinion of the management of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company's financial position as of September 30, 2021, the results of operations for the three months ended September 30, 2021 and 2020 and cash flows for the three months then ended. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s 2021 Annual Report on Form 10-K. The future impacts of the novel coronavirus ("COVID-19") pandemic and its residual effects, including economic uncertainty and disruption within the global supply chain, labor markets and aerospace industry, on our business remain uncertain. Therefore, accounting estimates and assumptions may change over time in response to the impacts of COVID-19. Interim period results are not necessarily indicative of the results to be expected for the full fiscal year. Subsequent Events The Company has evaluated subsequent events that occurred through the date these financial statements were issued. In connection with the proposed acquisition of Meggitt plc ("Meggitt"), the Company entered into deal-contingent forward contracts during October 2021 to mitigate the risk of appreciation in the GBP-denominated purchase price. The deal-contingent forward contracts have an aggregate notional amount of £6,415 million, and settlement is contingent upon closing the proposed acquisition. During October 2021, we issued $2,126 million of commercial paper. We used the net proceeds and cash on hand to deposit a total of $2,272 million into the escrow account designated for the proposed acquisition. As of October 31, 2021, the balance of the escrow account is $2,487 million. After consideration of the increase in funds designated for the proposed acquisition and the deal-contingent forward contracts, the aggregate principal amount of the bridge credit agreement, dated August 2, 2021 (the "Bridge Credit Agreement") was decreased to £3,200 million. |
Revenue recognition
Revenue recognition | 3 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognition | Revenue recognition Revenue is derived primarily from the sale of products in a variety of mobile, industrial and aerospace markets. A majority of the Company’s revenues are recognized at a point in time. However, a portion of the Company’s revenues are recognized over time. Diversified Industrial Segment revenues by technology platform: Three Months Ended September 30, 2021 2020 Motion Systems $ 828,672 $ 657,141 Flow and Process Control 1,085,423 924,125 Filtration and Engineered Materials 1,256,056 1,076,096 Total $ 3,170,151 $ 2,657,362 Aerospace Systems Segment revenues by product platform: Three Months Ended September 30, 2021 2020 Flight Control Actuation $ 177,353 $ 158,102 Fuel, Inerting and Engine Motion Control 122,319 118,963 Hydraulics 73,341 75,918 Engine Components 141,608 149,037 Airframe and Engine Fluid Conveyance 54,033 47,362 Other 24,004 23,796 Total $ 592,658 $ 573,178 Total Company revenues by geographic region based on the Company's selling operation's location: Three Months Ended September 30, 2021 2020 North America $ 2,384,974 $ 2,096,165 Europe 761,970 615,572 Asia Pacific 568,134 485,148 Latin America 47,731 33,655 Total $ 3,762,809 $ 3,230,540 The majority of revenues from the Aerospace Systems Segment are generated from sales to customers within North America. Contract balances Contract assets and contract liabilities are reported on a contract-by-contract basis. Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. Payments from customers are received based on the terms established in the contract with the customer. Total contract assets and contract liabilities are as follows: September 30, June 30, Contract assets, current (included within Prepaid expenses and other) $ 25,936 $ 34,190 Contract assets, noncurrent (included within Investments and other assets) 2,471 1,884 Total contract assets 28,407 36,074 Contract liabilities, current (included within Other accrued liabilities) (45,439) (51,211) Contract liabilities, noncurrent (included within Other liabilities) (2,250) (3,080) Total contract liabilities (47,689) (54,291) Net contract liabilities $ (19,282) $ (18,217) At September 30, 2021, the change in net contract liabilities was primarily due to timing differences between when revenue was recognized and the receipt of advance payments. During the three months ended September 30, 2021, approximately $21 million of revenue was recognized that was included in the contract liabilities at June 30, 2021. Remaining performance obligations Our backlog represents written firm orders from a customer to deliver products and, in the case of blanket purchase orders, only includes the portion of the order for which a schedule or release has been agreed to with the customer. We believe our backlog represents our unsatisfied or partially unsatisfied performance obligations. Backlog at September 30, 2021 was $6,783 million, of which approximately 85 percent is expected to be recognized as revenue within the next 12 months and the balance thereafter. |
Proposed Acquisition
Proposed Acquisition | 3 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Proposed Acquisition | Proposed Acquisition On August 2, 2021, the Company announced that it reached an agreement on the terms of a recommended cash acquisition of the entire issued and to be issued ordinary share capital of Meggitt for 800 pence per share (the "Acquisition"), which is approximately £6,255 million based on issued share capital at September 30, 2021. Meggitt is a leader in design, manufacturing and aftermarket support of technologically differentiated systems and equipment in aerospace, defense and selected energy markets with annual sales of approximately $2.3 billion for the year ended December 31, 2020. We intend to fund the proposed Acquisition with cash and new debt. Refer to Note 13 for further discussion. The proposed Acquisition remains subject to customary closing conditions, including regulatory clearances. Acquisition-related transaction costs totaled $13 million for the current-year quarter. These costs are included in selling, general and administrative expenses in the Consolidated Statement of Income. Restricted Cash |
Earnings per share
Earnings per share | 3 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share The following table presents a reconciliation of the numerator and denominator of basic and diluted earnings per share for the three months ended September 30, 2021 and 2020. Three Months Ended September 30, 2021 2020* Numerator: Net income attributable to common shareholders $ 451,157 $ 319,803 Denominator: Basic - weighted average common shares 128,726,721 128,707,745 Increase in weighted average common shares from dilutive effect of equity-based awards 2,101,250 1,586,478 Diluted - weighted average common shares, assuming exercise of equity-based awards 130,827,971 130,294,223 Basic earnings per share $ 3.50 $ 2.48 Diluted earnings per share $ 3.45 $ 2.45 *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. For the three months ended September 30, 2021 and 2020, 165,732 and 530,438 common shares subject to equity-based awards, respectively, were excluded from the computation of diluted earnings per share because the effect of their exercise would be anti-dilutive. |
Share repurchase program
Share repurchase program | 3 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Share repurchase program | Share repurchase programThe Company has a program to repurchase its common shares. On October 22, 2014, the Board of Directors of the Company approved an increase in the overall number of shares authorized for repurchase under the program so that, beginning on such date, the aggregate number of shares authorized for repurchase was 35 million. There is no limitation on the number of shares that can be repurchased in a fiscal year. There is no expiration date for this program. Repurchases may be funded primarily from operating cash flows and commercial paper borrowings and the shares are initially held as treasury shares. During the three months ended September 30, 2021, we repurchased 767,600 shares at an average price, including commissions, of $300.07 per share. |
Trade accounts receivable, net
Trade accounts receivable, net | 3 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Trade accounts receivable, net | Trade accounts receivable, netTrade accounts receivable are initially recorded at their net collectible amount and are generally recorded at the time the revenue from the sales transaction is recorded. We evaluate the collectibility of our receivables based on historical experience and current and forecasted economic conditions based on management's judgment. Additionally, receivables are written off to bad debt when management makes a final determination of uncollectibility. Allowance for credit losses was $12 million at September 30, 2021 and June 30, 2021.Non-trade and notes receivable The non-trade and notes receivable caption in the Consolidated Balance Sheet is comprised of the following components: September 30, June 30, Notes receivable $ 128,414 $ 144,441 Accounts receivable, other 187,157 181,874 Total $ 315,571 $ 326,315 |
Non-trade and notes receivable
Non-trade and notes receivable | 3 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Non-trade and notes receivable | Trade accounts receivable, netTrade accounts receivable are initially recorded at their net collectible amount and are generally recorded at the time the revenue from the sales transaction is recorded. We evaluate the collectibility of our receivables based on historical experience and current and forecasted economic conditions based on management's judgment. Additionally, receivables are written off to bad debt when management makes a final determination of uncollectibility. Allowance for credit losses was $12 million at September 30, 2021 and June 30, 2021.Non-trade and notes receivable The non-trade and notes receivable caption in the Consolidated Balance Sheet is comprised of the following components: September 30, June 30, Notes receivable $ 128,414 $ 144,441 Accounts receivable, other 187,157 181,874 Total $ 315,571 $ 326,315 |
Inventories
Inventories | 3 Months Ended |
Sep. 30, 2021 | |
Inventory, Net [Abstract] | |
Inventories | Inventories The inventories caption in the Consolidated Balance Sheet is comprised of the following components: September 30, June 30, Finished products $ 774,749 $ 733,744 Work in process 1,189,194 1,089,976 Raw materials 300,782 266,922 Total $ 2,264,725 $ 2,090,642 |
Business realignment and acquis
Business realignment and acquisition integration charges | 3 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Business realignment and acquisition integration charges | Business realignment and acquisition integration charges We incurred business realignment and acquisition integration charges in the first three months of fiscal 2022 and 2021. In both the first three months of fiscal 2022 and 2021, business realignment charges included severance costs related to actions taken under the Company's simplification initiative aimed at reducing organizational and process complexity, as well as plant closures. During fiscal 2021, business realignment charges primarily consisted of actions taken to address the impact of COVID-19 on our business. A majority of the business realignment charges were incurred in North America and Europe. We believe the realignment actions will positively impact future results of operations, but will not have a material effect on liquidity and sources and uses of capital. Business realignment charges presented in the Business Segment Information are as follows: Three Months Ended September 30, 2021 2020 Diversified Industrial $ 3,017 $ 10,572 Aerospace Systems (3) 3,951 Corporate general and administrative expenses — 614 Other expense — 564 Workforce reductions in connection with business realignment charges in the Business Segment Information are as follows: Three Months Ended September 30, 2021 2020 Diversified Industrial 35 384 Aerospace Systems — 240 Corporate general and administrative expenses — 13 The business realignment charges are presented in the Consolidated Statement of Income as follows: Three Months Ended September 30, 2021 2020 Cost of sales $ 1,001 $ 12,150 Selling, general and administrative expenses 2,013 2,987 Other expense (income), net — 564 During the first three months of fiscal 2022, approximately $9 million in payments were made relating to business realignment charges. Remaining payments related to business realignment actions of approximately $9 million, a majority of which are expected to be paid by June 30, 2022, are primarily reflected within the other accrued liabilities caption in the Consolidated Balance Sheet. Additional charges may be recognized in future periods related to the business realignment actions described above, the timing and amount of which are not known at this time. We also incurred the following acquisition integration charges related to the fiscal 2020 acquisitions of LORD Corporation ("Lord") and Exotic Metals Forming Company ("Exotic"): Three Months Ended September 30, 2021 2020 Diversified Industrial $ 1,202 $ 3,615 Aerospace Systems — 332 In the first three months of fiscal 2022, these charges are evenly split between cost of sales and selling, general and administrative expenses within the Consolidated Statement of Income. In fiscal 2021, these charges were primarily included in selling, general and administrative expenses within the Consolidated Statement of Income. |
Equity
Equity | 3 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Equity | Equity Changes in equity for the three months ended September 30, 2021 and 2020 are as follows: Common Stock Additional Capital Retained Earnings Accumulated Other Comprehensive (Loss) Treasury Shares Noncontrolling Total Equity Balance at June 30, 2021 $ 90,523 $ 329,619 $ 14,915,497 $ (1,566,727) $ (5,370,605) $ 15,363 $ 8,413,670 Net income 451,157 306 451,463 Other comprehensive (loss) (38,763) (539) (39,302) Dividends paid ($1.03 per share) (132,855) (66) (132,921) Stock incentive plan activity 29,058 14,211 43,269 Shares purchased at cost (230,334) (230,334) Balance at September 30, 2021 $ 90,523 $ 358,677 $ 15,233,799 $ (1,605,490) $ (5,586,728) $ 15,064 $ 8,505,845 Common Stock Additional Capital Retained Earnings* Accumulated Other Comprehensive (Loss) Treasury Shares Noncontrolling Total Equity* Balance at June 30, 2020 $ 90,523 $ 416,585 $ 13,643,907 $ (2,558,875) $ (5,364,916) $ 14,546 $ 6,241,770 Net income 319,803 308 320,111 Other comprehensive income 170,403 431 170,834 Dividends paid ($0.88 per share) (113,542) (113,542) Stock incentive plan activity 11,744 24,967 36,711 Balance at September 30, 2020 $ 90,523 $ 428,329 $ 13,850,168 $ (2,388,472) $ (5,339,949) $ 15,285 $ 6,655,884 *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. Changes in accumulated other comprehensive (loss) in shareholders' equity by component for the three months ended September 30, 2021 and 2020 are as follows: Foreign Currency Translation Adjustment Retirement Benefit Plans Total Balance at June 30, 2021 $ (865,865) $ (700,862) $ (1,566,727) Other comprehensive (loss) before reclassifications (67,785) — (67,785) Amounts reclassified from accumulated other comprehensive (loss) — 29,022 29,022 Balance at September 30, 2021 $ (933,650) $ (671,840) $ (1,605,490) Foreign Currency Translation Adjustment Retirement Benefit Plans Total Balance at June 30, 2020 $ (1,193,937) $ (1,364,938) $ (2,558,875) Other comprehensive income before reclassifications 130,251 — 130,251 Amounts reclassified from accumulated other comprehensive (loss) — 40,152 40,152 Balance at September 30, 2020 $ (1,063,686) $ (1,324,786) $ (2,388,472) Significant reclassifications out of accumulated other comprehensive (loss) in shareholders' equity for the three months ended September 30, 2021 and 2020 are as follows: Details about Accumulated Other Comprehensive (Loss) Components Income (Expense) Reclassified from Accumulated Other Comprehensive (Loss) Consolidated Statement of Income Classification Three Months Ended September 30, 2021 Retirement benefit plans Amortization of prior service cost and initial net obligation $ (936) Other expense (income), net Recognized actuarial loss (37,503) Other expense (income), net Total before tax (38,439) Tax benefit 9,417 Net of tax $ (29,022) Details about Accumulated Other Comprehensive (Loss) Components Income (Expense) Reclassified from Accumulated Other Comprehensive (Loss) Consolidated Statement of Income Classification Three Months Ended September 30, 2020 Retirement benefit plans Amortization of prior service cost and initial net obligation $ (818) Other expense (income), net Recognized actuarial loss (52,265) Other expense (income), net Total before tax (53,083) Tax benefit 12,931 Net of tax $ (40,152) |
Goodwill and intangible assets
Goodwill and intangible assets | 3 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | Goodwill and intangible assets The changes in the carrying amount of goodwill for the three months ended September 30, 2021 are as follows: Diversified Industrial Aerospace Total Balance at June 30, 2021 $ 7,457,309 $ 602,378 $ 8,059,687 Foreign currency translation and other (50,340) (7) (50,347) Balance at September 30, 2021 $ 7,406,969 $ 602,371 $ 8,009,340 Intangible assets are amortized using the straight-line method over their legal or estimated useful lives. The following summarizes the gross carrying value and accumulated amortization for each major category of intangible assets: September 30, 2021 June 30, 2021 Gross Carrying Accumulated Gross Carrying Accumulated Patents and technology $ 997,890 $ 227,415 $ 999,952 $ 216,314 Trademarks 757,627 338,001 762,130 331,905 Customer lists and other 3,847,159 1,610,720 3,869,772 1,563,838 Total $ 5,602,676 $ 2,176,136 $ 5,631,854 $ 2,112,057 Total intangible amortization expense for the three months ended September 30, 2021 and 2020 was $80 million and $82 million, respectively. The estimated amortization expense for the five years ending June 30, 2022 through 2026 is $320 million, $305 million, $298 million, $288 million and $282 million, respectively. Intangible assets are evaluated for impairment whenever events or circumstances indicate that the undiscounted net cash flows to be generated by their use over their expected useful lives and eventual disposition may be less than their net carrying value. No material intangible asset impairments occurred during the three months ended September 30, 2021 and 2020. |
Retirement benefits
Retirement benefits | 3 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Retirement benefits | Retirement benefits Net pension benefit expense recognized included the following components: Three Months Ended September 30, 2021 2020 Service cost $ 20,662 $ 22,810 Interest cost 27,429 25,417 Expected return on plan assets (67,328) (66,402) Amortization of prior service cost 934 843 Amortization of net actuarial loss 37,531 52,331 Amortization of initial net obligation 2 5 Net pension benefit expense $ 19,230 $ 35,004 During the three months ended September 30, 2021 and 2020, we recognized $0.3 million and $0.4 million, respectively, in expense related to other postretirement benefits. Components of retirement benefits expense, other than service cost, are included in other expense (income), net in the Consolidated Statement of Income. |
Debt
Debt | 3 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt In connection with the proposed Acquisition of Meggitt, the Company entered into a Bridge Credit Agreement on August 2, 2021. Under the Bridge Credit Agreement, the lenders committed to provide senior, unsecured financing in the aggregate principal amount of £6,524 million at August 2, 2021. As permanent financing for the proposed Acquisition is secured, the principal amount of the Bridge Credit Agreement is reduced. At September 30, 2021, the aggregate principal amount was £5,100 million. Any borrowings made under the Bridge Credit Agreement would mature 364 days from the initial funding date. The commitments are intended to be drawn to finance the proposed Acquisition only to the extent that we do not arrange for alternative financing prior to closing. We incurred $39 million in financing fees related to the Bridge Credit Agreement, all of which was included in Other expense (income), net within the Consolidated Statement of Income. On August 27, 2021, the Company entered into a credit agreement, which provides for a senior, unsecured delayed-draw term loan facility in an aggregate principal amount of $2,000 million (the “Term Loan Facility”). The proceeds of the Term Loan Facility, if drawn, will be used solely by the Company to finance a portion of the consideration of its proposed Acquisition and would mature in its entirety three years after the initial draw. Additionally, the provisions of the Term Loan Facility allow for prepayments at the Company's discretion. During the first three months of fiscal 2022, we amended our existing multi-currency credit agreement, increasing its capacity to $3,000 million. There were no outstanding commercial paper notes as of September 30, 2021 and June 30, 2021. Based on the Company’s rating level at September 30, 2021, the most restrictive financial covenant provides that the ratio of debt to debt-shareholders' equity cannot exceed 0.65 to 1.0. At September 30, 2021, our debt to debt-shareholders' equity ratio was 0.44 to 1.0. We are in compliance, and expect to remain in compliance, with all covenants set forth in the credit agreements and indentures. |
Income taxes
Income taxes | 3 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes We file income tax returns in the United States and in various foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world. We are open to assessment on our U.S. federal income tax returns by the Internal Revenue Service for fiscal years after 2013, and our state and local returns for fiscal years after 2016. We are also open to assessment for significant foreign jurisdictions for fiscal years after 2011. Unrecognized tax benefits reflect the difference between positions taken or expected to be taken on income tax returns and the amounts reflected in the financial statements. As of September 30, 2021, we had gross unrecognized tax benefits of $99 million, all of which, if recognized, would impact the effective tax rate. The accrued interest related to the gross unrecognized tax benefits, excluded from the amount above, is $18 million. It is reasonably possible that within the next 12 months the amount of gross unrecognized tax benefits could be reduced by up to approximately $40 million as a result of the revaluation of existing uncertain tax positions arising from developments in the examination process or the closure of tax statutes. Any increase in the amount of gross unrecognized tax benefits within the next 12 months is expected to be insignificant. |
Financial instruments
Financial instruments | 3 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Financial instruments | Financial instruments Our financial instruments consist primarily of cash and cash equivalents, marketable securities and other investments, accounts receivable and long-term investments, as well as obligations under accounts payable, trade, notes payable and long-term debt. Due to their short-term nature, the carrying values for cash and cash equivalents, accounts receivable, accounts payable, trade and notes payable approximate fair value. Marketable securities and other investments include deposits and equity investments. Deposits are recorded at cost, and equity investments are recorded at fair value. Changes in fair value related to equity investments are recorded in net income. Unrealized gains and losses related to equity investments were not material as of September 30, 2021 and 2020. The carrying value of long-term debt, which excludes the impact of net unamortized debt issuance costs, and estimated fair value of long-term debt are as follows: September 30, June 30, Carrying value of long-term debt $ 6,625,692 $ 6,646,029 Estimated fair value of long-term debt 7,406,724 7,527,268 The fair value of long-term debt is classified within level 2 of the fair value hierarchy. We utilize derivative and non-derivative financial instruments, including forward exchange contracts, costless collar contracts, cross-currency swap contracts and certain foreign denominated debt designated as net investment hedges, to manage foreign currency transaction and translation risk. The derivative financial instrument contracts are with major investment grade financial institutions, and we do not anticipate any material non-performance by any of the counterparties. We do not hold or issue derivative financial instruments for trading purposes. The Company’s €700 million aggregate principal amount of Senior Notes due 2025 have been designated as a hedge of the Company’s net investment in certain foreign subsidiaries. The translation of the Senior Notes due 2025 into U.S. dollars is recorded in accumulated other comprehensive (loss) and remains there until the underlying net investment is sold or substantially liquidated. Derivative financial instruments are recognized on the Consolidated Balance Sheet as either assets or liabilities and are measured at fair value. The location and fair value of derivative financial instruments reported in the Consolidated Balance Sheet are as follows: Balance Sheet Caption September 30, June 30, Net investment hedges Cross-currency swap contracts Other liabilities $ 53,723 $ 71,798 Cash flow hedges Forward exchange contracts Non-trade and notes receivable 9,463 5,376 Forward exchange contracts Other accrued liabilities 6,364 9,435 Costless collar contracts Non-trade and notes receivable 807 110 Costless collar contracts Other accrued liabilities 3,308 901 The cross-currency swap, forward exchange, and costless collar contracts are reflected on a gross basis in the Consolidated Balance Sheet. We have not entered into any master netting arrangements. The cross-currency swap contracts have been designated as hedging instruments. The forward exchange and costless collar contracts have not been designated as hedging instruments and are considered to be economic hedges of forecasted transactions. Derivatives not designated as hedges are adjusted to fair value by recording gains and losses through the cost of sales caption in the Consolidated Statement of Income. Derivatives designated as hedges are adjusted to fair value by recording gains and losses through accumulated other comprehensive (loss) on the Consolidated Balance Sheet until the hedged item is recognized in earnings. We assess the effectiveness of the €69 million, €290 million and ¥2,149 million cross-currency swap hedging instruments using the spot method. Under this method, the periodic interest settlements are recognized directly in earnings through interest expense. Net gains of $4 million and $20 million relating to forward exchange contracts were recorded within cost of sales in the Consolidated Statement of Income for the three months ended September 30, 2021 and 2020, respectively. All other gains or losses on derivative financial instruments that were recorded in the Consolidated Statement of Income for the three months ended September 30, 2021 and 2020 were not material. Gains (losses) on derivative and non-derivative financial instruments that were recorded in accumulated other comprehensive (loss) on the Consolidated Balance Sheet are as follows: Three Months Ended September 30, 2021 2020 Cross-currency swap contracts $ 12,371 $ (17,134) Foreign denominated debt 14,864 (25,727) During the three months ended September 30, 2021 and 2020, the periodic interest settlements related to the cross-currency swaps were not material. A summary of financial assets and liabilities that were measured at fair value on a recurring basis at September 30, 2021 and June 30, 2021 are as follows: Quoted Prices Significant Other Significant Fair In Active Observable Unobservable Value at Markets Inputs Inputs September 30, 2021 (Level 1) (Level 2) (Level 3) Assets: Equity securities $ 19,169 $ 19,169 $ — $ — Derivatives 10,270 — 10,270 — Liabilities: Derivatives 63,395 — 63,395 — Quoted Prices Significant Other Significant Fair In Active Observable Unobservable Value at Markets Inputs Inputs June 30, 2021 (Level 1) (Level 2) (Level 3) Assets: Equity securities $ 20,517 $ 20,517 $ — $ — Derivatives 5,486 — 5,486 — Liabilities: Derivatives 82,134 — 82,134 — The fair values of the equity securities are determined using the closing market price reported in the active market in which the fund is traded. Derivatives consist of forward exchange, costless collar and cross-currency swap contracts, the fair values of which are calculated using market observable inputs including both spot and forward prices for the same underlying currencies. The calculation of the fair value of the cross-currency swap contracts also utilizes a present value cash flow model that has been adjusted to reflect the credit risk of either the Company or the counterparty. The primary investment objective for all investments is the preservation of principal and liquidity while earning income. |
Revenue recognition (Policies)
Revenue recognition (Policies) | 3 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognition | Revenue is derived primarily from the sale of products in a variety of mobile, industrial and aerospace markets. A majority of the Company’s revenues are recognized at a point in time. However, a portion of the Company’s revenues are recognized over time. Contract balances Contract assets and contract liabilities are reported on a contract-by-contract basis. Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. Payments from customers are received based on the terms established in the contract with the customer. |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment reporting information | Three Months Ended September 30, 2021 2020* Net sales Diversified Industrial: North America $ 1,793,715 $ 1,528,111 International 1,376,436 1,129,251 Aerospace Systems 592,658 573,178 Total net sales $ 3,762,809 $ 3,230,540 Segment operating income Diversified Industrial: North America $ 333,702 $ 268,833 International 291,176 186,901 Aerospace Systems 118,251 86,766 Total segment operating income 743,129 542,500 Corporate general and administrative expenses 49,072 36,735 Income before interest expense and other expense 694,057 505,765 Interest expense 59,350 65,958 Other expense 62,962 26,633 Income before income taxes $ 571,745 $ 413,174 *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Revenue recognition (Tables)
Revenue recognition (Tables) | 3 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | Diversified Industrial Segment revenues by technology platform: Three Months Ended September 30, 2021 2020 Motion Systems $ 828,672 $ 657,141 Flow and Process Control 1,085,423 924,125 Filtration and Engineered Materials 1,256,056 1,076,096 Total $ 3,170,151 $ 2,657,362 Aerospace Systems Segment revenues by product platform: Three Months Ended September 30, 2021 2020 Flight Control Actuation $ 177,353 $ 158,102 Fuel, Inerting and Engine Motion Control 122,319 118,963 Hydraulics 73,341 75,918 Engine Components 141,608 149,037 Airframe and Engine Fluid Conveyance 54,033 47,362 Other 24,004 23,796 Total $ 592,658 $ 573,178 Total Company revenues by geographic region based on the Company's selling operation's location: Three Months Ended September 30, 2021 2020 North America $ 2,384,974 $ 2,096,165 Europe 761,970 615,572 Asia Pacific 568,134 485,148 Latin America 47,731 33,655 Total $ 3,762,809 $ 3,230,540 |
Contract assets and liabilities | Total contract assets and contract liabilities are as follows: September 30, June 30, Contract assets, current (included within Prepaid expenses and other) $ 25,936 $ 34,190 Contract assets, noncurrent (included within Investments and other assets) 2,471 1,884 Total contract assets 28,407 36,074 Contract liabilities, current (included within Other accrued liabilities) (45,439) (51,211) Contract liabilities, noncurrent (included within Other liabilities) (2,250) (3,080) Total contract liabilities (47,689) (54,291) Net contract liabilities $ (19,282) $ (18,217) |
Earnings per share (Tables)
Earnings per share (Tables) | 3 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Basic and diluted earnings per share | The following table presents a reconciliation of the numerator and denominator of basic and diluted earnings per share for the three months ended September 30, 2021 and 2020. Three Months Ended September 30, 2021 2020* Numerator: Net income attributable to common shareholders $ 451,157 $ 319,803 Denominator: Basic - weighted average common shares 128,726,721 128,707,745 Increase in weighted average common shares from dilutive effect of equity-based awards 2,101,250 1,586,478 Diluted - weighted average common shares, assuming exercise of equity-based awards 130,827,971 130,294,223 Basic earnings per share $ 3.50 $ 2.48 Diluted earnings per share $ 3.45 $ 2.45 *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Non-trade and notes receivable
Non-trade and notes receivable (Tables) | 3 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Non-trade and notes receivable | The non-trade and notes receivable caption in the Consolidated Balance Sheet is comprised of the following components: September 30, June 30, Notes receivable $ 128,414 $ 144,441 Accounts receivable, other 187,157 181,874 Total $ 315,571 $ 326,315 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Sep. 30, 2021 | |
Inventory, Net [Abstract] | |
Inventories | The inventories caption in the Consolidated Balance Sheet is comprised of the following components: September 30, June 30, Finished products $ 774,749 $ 733,744 Work in process 1,189,194 1,089,976 Raw materials 300,782 266,922 Total $ 2,264,725 $ 2,090,642 |
Business realignment and acqu_2
Business realignment and acquisition integration charges (Tables) | 3 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Business realignment charges and acquisition integration charges | Business realignment charges presented in the Business Segment Information are as follows: Three Months Ended September 30, 2021 2020 Diversified Industrial $ 3,017 $ 10,572 Aerospace Systems (3) 3,951 Corporate general and administrative expenses — 614 Other expense — 564 Workforce reductions in connection with business realignment charges in the Business Segment Information are as follows: Three Months Ended September 30, 2021 2020 Diversified Industrial 35 384 Aerospace Systems — 240 Corporate general and administrative expenses — 13 The business realignment charges are presented in the Consolidated Statement of Income as follows: Three Months Ended September 30, 2021 2020 Cost of sales $ 1,001 $ 12,150 Selling, general and administrative expenses 2,013 2,987 Other expense (income), net — 564 We also incurred the following acquisition integration charges related to the fiscal 2020 acquisitions of LORD Corporation ("Lord") and Exotic Metals Forming Company ("Exotic"): Three Months Ended September 30, 2021 2020 Diversified Industrial $ 1,202 $ 3,615 Aerospace Systems — 332 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Changes in equity | Changes in equity for the three months ended September 30, 2021 and 2020 are as follows: Common Stock Additional Capital Retained Earnings Accumulated Other Comprehensive (Loss) Treasury Shares Noncontrolling Total Equity Balance at June 30, 2021 $ 90,523 $ 329,619 $ 14,915,497 $ (1,566,727) $ (5,370,605) $ 15,363 $ 8,413,670 Net income 451,157 306 451,463 Other comprehensive (loss) (38,763) (539) (39,302) Dividends paid ($1.03 per share) (132,855) (66) (132,921) Stock incentive plan activity 29,058 14,211 43,269 Shares purchased at cost (230,334) (230,334) Balance at September 30, 2021 $ 90,523 $ 358,677 $ 15,233,799 $ (1,605,490) $ (5,586,728) $ 15,064 $ 8,505,845 Common Stock Additional Capital Retained Earnings* Accumulated Other Comprehensive (Loss) Treasury Shares Noncontrolling Total Equity* Balance at June 30, 2020 $ 90,523 $ 416,585 $ 13,643,907 $ (2,558,875) $ (5,364,916) $ 14,546 $ 6,241,770 Net income 319,803 308 320,111 Other comprehensive income 170,403 431 170,834 Dividends paid ($0.88 per share) (113,542) (113,542) Stock incentive plan activity 11,744 24,967 36,711 Balance at September 30, 2020 $ 90,523 $ 428,329 $ 13,850,168 $ (2,388,472) $ (5,339,949) $ 15,285 $ 6,655,884 *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Changes in accumulated other comprehensive income (loss) in shareholders' equity by component | Changes in accumulated other comprehensive (loss) in shareholders' equity by component for the three months ended September 30, 2021 and 2020 are as follows: Foreign Currency Translation Adjustment Retirement Benefit Plans Total Balance at June 30, 2021 $ (865,865) $ (700,862) $ (1,566,727) Other comprehensive (loss) before reclassifications (67,785) — (67,785) Amounts reclassified from accumulated other comprehensive (loss) — 29,022 29,022 Balance at September 30, 2021 $ (933,650) $ (671,840) $ (1,605,490) Foreign Currency Translation Adjustment Retirement Benefit Plans Total Balance at June 30, 2020 $ (1,193,937) $ (1,364,938) $ (2,558,875) Other comprehensive income before reclassifications 130,251 — 130,251 Amounts reclassified from accumulated other comprehensive (loss) — 40,152 40,152 Balance at September 30, 2020 $ (1,063,686) $ (1,324,786) $ (2,388,472) |
Reclassifications out of accumulated other comprehensive income (loss) in shareholders' equity | Significant reclassifications out of accumulated other comprehensive (loss) in shareholders' equity for the three months ended September 30, 2021 and 2020 are as follows: Details about Accumulated Other Comprehensive (Loss) Components Income (Expense) Reclassified from Accumulated Other Comprehensive (Loss) Consolidated Statement of Income Classification Three Months Ended September 30, 2021 Retirement benefit plans Amortization of prior service cost and initial net obligation $ (936) Other expense (income), net Recognized actuarial loss (37,503) Other expense (income), net Total before tax (38,439) Tax benefit 9,417 Net of tax $ (29,022) Details about Accumulated Other Comprehensive (Loss) Components Income (Expense) Reclassified from Accumulated Other Comprehensive (Loss) Consolidated Statement of Income Classification Three Months Ended September 30, 2020 Retirement benefit plans Amortization of prior service cost and initial net obligation $ (818) Other expense (income), net Recognized actuarial loss (52,265) Other expense (income), net Total before tax (53,083) Tax benefit 12,931 Net of tax $ (40,152) |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 3 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in carrying amount of goodwill | The changes in the carrying amount of goodwill for the three months ended September 30, 2021 are as follows: Diversified Industrial Aerospace Total Balance at June 30, 2021 $ 7,457,309 $ 602,378 $ 8,059,687 Foreign currency translation and other (50,340) (7) (50,347) Balance at September 30, 2021 $ 7,406,969 $ 602,371 $ 8,009,340 |
Intangible assets by major category | The following summarizes the gross carrying value and accumulated amortization for each major category of intangible assets: September 30, 2021 June 30, 2021 Gross Carrying Accumulated Gross Carrying Accumulated Patents and technology $ 997,890 $ 227,415 $ 999,952 $ 216,314 Trademarks 757,627 338,001 762,130 331,905 Customer lists and other 3,847,159 1,610,720 3,869,772 1,563,838 Total $ 5,602,676 $ 2,176,136 $ 5,631,854 $ 2,112,057 |
Retirement benefits (Tables)
Retirement benefits (Tables) | 3 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Net pension benefit expense | Net pension benefit expense recognized included the following components: Three Months Ended September 30, 2021 2020 Service cost $ 20,662 $ 22,810 Interest cost 27,429 25,417 Expected return on plan assets (67,328) (66,402) Amortization of prior service cost 934 843 Amortization of net actuarial loss 37,531 52,331 Amortization of initial net obligation 2 5 Net pension benefit expense $ 19,230 $ 35,004 |
Financial instruments (Tables)
Financial instruments (Tables) | 3 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Carrying values and estimated fair values of long-term debt | The carrying value of long-term debt, which excludes the impact of net unamortized debt issuance costs, and estimated fair value of long-term debt are as follows: September 30, June 30, Carrying value of long-term debt $ 6,625,692 $ 6,646,029 Estimated fair value of long-term debt 7,406,724 7,527,268 |
Fair value derivative instruments reported in consolidated balance sheet | The location and fair value of derivative financial instruments reported in the Consolidated Balance Sheet are as follows: Balance Sheet Caption September 30, June 30, Net investment hedges Cross-currency swap contracts Other liabilities $ 53,723 $ 71,798 Cash flow hedges Forward exchange contracts Non-trade and notes receivable 9,463 5,376 Forward exchange contracts Other accrued liabilities 6,364 9,435 Costless collar contracts Non-trade and notes receivable 807 110 Costless collar contracts Other accrued liabilities 3,308 901 |
Derivative and non-derivative financial instruments, gain (losses) recorded in accumulated other comprehensive (loss) | Gains (losses) on derivative and non-derivative financial instruments that were recorded in accumulated other comprehensive (loss) on the Consolidated Balance Sheet are as follows: Three Months Ended September 30, 2021 2020 Cross-currency swap contracts $ 12,371 $ (17,134) Foreign denominated debt 14,864 (25,727) |
Financial assets and liabilities measured at fair value on a recurring basis | A summary of financial assets and liabilities that were measured at fair value on a recurring basis at September 30, 2021 and June 30, 2021 are as follows: Quoted Prices Significant Other Significant Fair In Active Observable Unobservable Value at Markets Inputs Inputs September 30, 2021 (Level 1) (Level 2) (Level 3) Assets: Equity securities $ 19,169 $ 19,169 $ — $ — Derivatives 10,270 — 10,270 — Liabilities: Derivatives 63,395 — 63,395 — Quoted Prices Significant Other Significant Fair In Active Observable Unobservable Value at Markets Inputs Inputs June 30, 2021 (Level 1) (Level 2) (Level 3) Assets: Equity securities $ 20,517 $ 20,517 $ — $ — Derivatives 5,486 — 5,486 — Liabilities: Derivatives 82,134 — 82,134 — |
Business Segment Information (D
Business Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | ||
Segment Reporting [Abstract] | |||
Number of reportable business segments | segment | 2 | ||
Segment Reporting Information [Line Items] | |||
Net sales | $ 3,762,809 | $ 3,230,540 | [1],[2],[3],[4],[5],[6] |
Operating income | 694,057 | 505,765 | [1],[2],[3],[4],[5],[6] |
Corporate general and administrative expenses | 407,765 | 369,851 | [1],[2],[3],[4],[5],[6] |
Interest expense | 59,350 | 65,958 | [1],[2],[3],[4],[5],[6] |
Other expense | 62,962 | 26,633 | [1],[2],[3],[4],[5],[6] |
Income before income taxes | 571,745 | 413,174 | [1],[2],[3],[4],[5],[6] |
North America | |||
Segment Reporting Information [Line Items] | |||
Net sales | 2,384,974 | 2,096,165 | |
Diversified Industrial | |||
Segment Reporting Information [Line Items] | |||
Net sales | 3,170,151 | 2,657,362 | |
Aerospace Systems | |||
Segment Reporting Information [Line Items] | |||
Net sales | 592,658 | 573,178 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net sales | 3,762,809 | 3,230,540 | [1],[2],[3],[4],[5],[6] |
Operating income | 743,129 | 542,500 | [1],[2],[3],[4],[5],[6] |
Operating Segments | Diversified Industrial | North America | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,793,715 | 1,528,111 | [1],[2],[3],[4],[5],[6] |
Operating income | 333,702 | 268,833 | [1],[2],[3],[4],[5],[6] |
Operating Segments | Diversified Industrial | International | |||
Segment Reporting Information [Line Items] | |||
Net sales | 1,376,436 | 1,129,251 | [1],[2],[3],[4],[5],[6] |
Operating income | 291,176 | 186,901 | [1],[2],[3],[4],[5],[6] |
Operating Segments | Aerospace Systems | |||
Segment Reporting Information [Line Items] | |||
Net sales | 592,658 | 573,178 | [1],[2],[3],[4],[5],[6] |
Operating income | 118,251 | 86,766 | [1],[2],[3],[4],[5],[6] |
Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
Corporate general and administrative expenses | $ 49,072 | $ 36,735 | [1],[2],[3],[4],[5],[6] |
[1] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[2] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[3] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[4] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[5] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[6] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Management representation (Deta
Management representation (Details) £ in Millions, $ in Millions | Dec. 31, 2021GBP (£) | Oct. 31, 2021GBP (£) | Oct. 31, 2021USD ($) | Oct. 30, 2021USD ($) | Sep. 30, 2021GBP (£) | Aug. 02, 2021GBP (£) |
Subsequent Event | ||||||
Short-term Debt [Line Items] | ||||||
Escrow deposit | $ | $ 2,487 | $ 2,272 | ||||
Subsequent Event | Foreign Exchange Forward | Forecast | ||||||
Short-term Debt [Line Items] | ||||||
Notional amount of derivative | £ 6,415 | |||||
Commercial Paper | Subsequent Event | ||||||
Short-term Debt [Line Items] | ||||||
Short-term debt | $ | $ 2,126 | |||||
Bridge Loan | Line of Credit | Bridge Credit Agreement | ||||||
Short-term Debt [Line Items] | ||||||
Aggregate principal amount | £ 5,100 | £ 6,524 | ||||
Bridge Loan | Subsequent Event | Line of Credit | Bridge Credit Agreement | ||||||
Short-term Debt [Line Items] | ||||||
Aggregate principal amount | £ 3,200 |
Revenue recognition - Revenues
Revenue recognition - Revenues by segment and by platform (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | ||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | $ 3,762,809 | $ 3,230,540 | [1],[2],[3],[4],[5],[6] |
Diversified Industrial Segment | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 3,170,151 | 2,657,362 | |
Diversified Industrial Segment | Motion Systems | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 828,672 | 657,141 | |
Diversified Industrial Segment | Flow and Process Control | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 1,085,423 | 924,125 | |
Diversified Industrial Segment | Filtration and Engineered Materials | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 1,256,056 | 1,076,096 | |
Aerospace Systems Segment | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 592,658 | 573,178 | |
Aerospace Systems Segment | Flight Control Actuation | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 177,353 | 158,102 | |
Aerospace Systems Segment | Fuel, Inerting and Engine Motion Control | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 122,319 | 118,963 | |
Aerospace Systems Segment | Hydraulics | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 73,341 | 75,918 | |
Aerospace Systems Segment | Engine Components | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 141,608 | 149,037 | |
Aerospace Systems Segment | Airframe and Engine Fluid Conveyance | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 54,033 | 47,362 | |
Aerospace Systems Segment | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | $ 24,004 | $ 23,796 | |
[1] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[2] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[3] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[4] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[5] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[6] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Revenue recognition - Revenue b
Revenue recognition - Revenue by geographic region (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | ||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | $ 3,762,809 | $ 3,230,540 | [1],[2],[3],[4],[5],[6] |
North America | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 2,384,974 | 2,096,165 | |
Europe | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 761,970 | 615,572 | |
Asia Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | 568,134 | 485,148 | |
Latin America | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from contracts | $ 47,731 | $ 33,655 | |
[1] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[2] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[3] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[4] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[5] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[6] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Revenue recognition - Contract
Revenue recognition - Contract assets and liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets, current (included within Prepaid expenses and other) | $ 25,936 | $ 34,190 |
Contract assets, noncurrent (included within Investments and other assets) | 2,471 | 1,884 |
Total contract assets | 28,407 | 36,074 |
Contract liabilities, current (included within Other accrued liabilities) | (45,439) | (51,211) |
Contract liabilities, noncurrent (included within Other liabilities) | (2,250) | (3,080) |
Total contract liabilities | (47,689) | (54,291) |
Net contract liabilities | $ (19,282) | $ (18,217) |
Revenue recognition - Narrative
Revenue recognition - Narrative (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2021USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognized | $ 21 |
Remaining performance obligation, amount | $ 6,783 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, percentage | 85.00% |
Remaining performance obligation, period | 12 months |
Proposed Acquisition (Details)
Proposed Acquisition (Details) - Meggitt £ / shares in Units, £ in Millions, $ in Millions | 3 Months Ended | |||
Dec. 31, 2021GBP (£) | Dec. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Jun. 30, 2022£ / shares | |
Business Acquisition [Line Items] | ||||
Acquisition-related transaction costs | $ 13 | |||
Restricted cash | $ 215 | |||
Forecast | ||||
Business Acquisition [Line Items] | ||||
Price per share of stock acquired (in pounds per share) | £ / shares | £ 8 | |||
Forecast | Subsequent Event | ||||
Business Acquisition [Line Items] | ||||
Purchase price to acquire business | £ | £ 6,255 | |||
Aggregate annual sales for business, to be acquired, for their most recent fiscal year prior to acquisition | $ 2,300 |
Earnings per share - Computatio
Earnings per share - Computation of basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | ||
Numerator: | |||
Net income attributable to common shareholders | $ 451,157 | $ 319,803 | [1] |
Denominator: | |||
Basic - weighted average common shares (in shares) | 128,726,721 | 128,707,745 | |
Increase in weighted average common shares from dilutive effect of equity-based awards (in shares) | 2,101,250 | 1,586,478 | |
Diluted - weighted average common shares, assuming exercise of equity-based awards (in shares) | 130,827,971 | 130,294,223 | |
Basic earnings per share (in USD per share) | $ 3.50 | $ 2.48 | [2] |
Diluted earnings per share (in USD per share) | $ 3.45 | $ 2.45 | [3] |
[1] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[2] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[3] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Earnings per share - Narrative
Earnings per share - Narrative (Details) - shares | 3 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||
Excluded from the computation of diluted earnings per share since anti-dilutive (in shares) | 165,732 | 530,438 |
Share repurchase program (Detai
Share repurchase program (Details) - $ / shares | 3 Months Ended | |
Sep. 30, 2021 | Oct. 22, 2014 | |
Equity [Abstract] | ||
Authorized to be repurchased (in shares) | 35,000,000 | |
Repurchased (in shares) | 767,600 | |
Repurchased, average price (in USD per share) | $ 300.07 |
Trade accounts receivable, net
Trade accounts receivable, net (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Jun. 30, 2021 |
Receivables [Abstract] | ||
Allowance for credit losses | $ 12 | $ 12 |
Non-trade and notes receivabl_2
Non-trade and notes receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 |
Receivables [Abstract] | ||
Notes receivable | $ 128,414 | $ 144,441 |
Accounts receivable, other | 187,157 | 181,874 |
Total | $ 315,571 | $ 326,315 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 |
Inventory, Net [Abstract] | ||
Finished products | $ 774,749 | $ 733,744 |
Work in process | 1,189,194 | 1,089,976 |
Raw materials | 300,782 | 266,922 |
Total | $ 2,264,725 | $ 2,090,642 |
Business realignment and acqu_3
Business realignment and acquisition integration charges - Business segment information (Details) $ in Thousands | 3 Months Ended | |
Sep. 30, 2021USD ($)employee | Sep. 30, 2020USD ($)employee | |
Corporate, Non-Segment | ||
Restructuring Cost and Reserve [Line Items] | ||
Business realignment charges | $ 0 | $ 614 |
Number of positions eliminated (employees) | employee | 0 | 13 |
Segment Reconciling Items | ||
Restructuring Cost and Reserve [Line Items] | ||
Business realignment charges | $ 0 | $ 564 |
Diversified Industrial | Operating Segments | ||
Restructuring Cost and Reserve [Line Items] | ||
Business realignment charges | $ 3,017 | $ 10,572 |
Number of positions eliminated (employees) | employee | 35 | 384 |
Aerospace Systems | Operating Segments | ||
Restructuring Cost and Reserve [Line Items] | ||
Business realignment charges | $ (3) | $ 3,951 |
Number of positions eliminated (employees) | employee | 0 | 240 |
Business realignment and acqu_4
Business realignment and acquisition integration charges - Income statement location (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cost of sales | ||
Restructuring Cost and Reserve [Line Items] | ||
Business realignment charges | $ 1,001 | $ 12,150 |
Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Business realignment charges | 2,013 | 2,987 |
Other expense (income), net | ||
Restructuring Cost and Reserve [Line Items] | ||
Business realignment charges | $ 0 | $ 564 |
Business realignment and acqu_5
Business realignment and acquisition integration charges - Narrative (Details) - Employee severance $ in Millions | 3 Months Ended |
Sep. 30, 2021USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Payments made relating to business realignment charges | $ 9 |
Remaining payments related to business realignment actions | $ 9 |
Business realignment and acqu_6
Business realignment and acquisition integration charges - Acquisition integration charges related to the Lord and Exotic acquisitions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Diversified Industrial | ||
Restructuring Cost and Reserve [Line Items] | ||
Acquisition integration charges | $ 1,202 | $ 3,615 |
Aerospace Systems | ||
Restructuring Cost and Reserve [Line Items] | ||
Acquisition integration charges | $ 0 | $ 332 |
Equity - Changes in equity (Det
Equity - Changes in equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | $ 8,413,670 | $ 6,241,770 | |
Net income | 451,463 | 320,111 | [1],[2],[3],[4],[5],[6] |
Other comprehensive income (loss) | (39,302) | 170,834 | [4] |
Dividends paid | $ (132,921) | $ (113,542) | |
Dividends paid (in USD per share) | $ 1.03 | $ 0.88 | |
Stock incentive plan activity | $ 43,269 | $ 36,711 | |
Shares purchased at cost | (230,334) | ||
Ending balance | 8,505,845 | 6,655,884 | |
Common Stock | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 90,523 | 90,523 | |
Ending balance | 90,523 | 90,523 | |
Additional Capital | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 329,619 | 416,585 | |
Stock incentive plan activity | 29,058 | 11,744 | |
Ending balance | 358,677 | 428,329 | |
Retained Earnings | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 14,915,497 | 13,643,907 | |
Net income | 451,157 | 319,803 | |
Dividends paid | (132,855) | (113,542) | |
Ending balance | 15,233,799 | 13,850,168 | |
Accumulated Other Comprehensive (Loss) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | (1,566,727) | (2,558,875) | |
Other comprehensive income (loss) | (38,763) | 170,403 | |
Ending balance | (1,605,490) | (2,388,472) | |
Treasury Shares | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | (5,370,605) | (5,364,916) | |
Stock incentive plan activity | 14,211 | 24,967 | |
Shares purchased at cost | (230,334) | ||
Ending balance | (5,586,728) | (5,339,949) | |
Noncontrolling Interests | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance | 15,363 | 14,546 | |
Net income | 306 | 308 | |
Other comprehensive income (loss) | (539) | 431 | |
Dividends paid | (66) | ||
Ending balance | $ 15,064 | $ 15,285 | |
[1] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[2] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[3] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[4] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[5] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[6] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Equity - Changes in accumulated
Equity - Changes in accumulated other comprehensive income (loss) in shareholders' equity by component (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | $ 8,413,670 | $ 6,241,770 |
Ending balance | 8,505,845 | 6,655,884 |
Foreign Currency Translation Adjustment | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (865,865) | (1,193,937) |
Other comprehensive income (loss) before reclassifications | (67,785) | 130,251 |
Amounts reclassified from accumulated other comprehensive (loss) | 0 | 0 |
Ending balance | (933,650) | (1,063,686) |
Retirement Benefit Plans | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (700,862) | (1,364,938) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive (loss) | 29,022 | 40,152 |
Ending balance | (671,840) | (1,324,786) |
Accumulated Other Comprehensive (Loss) | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (1,566,727) | (2,558,875) |
Other comprehensive income (loss) before reclassifications | (67,785) | 130,251 |
Amounts reclassified from accumulated other comprehensive (loss) | 29,022 | 40,152 |
Ending balance | $ (1,605,490) | $ (2,388,472) |
Equity - Reclassifications out
Equity - Reclassifications out of accumulated other comprehensive income (loss) in shareholders' equity (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other expense (income), net | $ (10,052) | $ 4,892 | [1],[2],[3],[4],[5],[6] |
Income before income taxes | 571,745 | 413,174 | [1],[2],[3],[4],[5],[6] |
Tax benefit | (120,282) | (93,063) | [1],[2],[3],[4],[5],[6] |
Net income | 451,463 | 320,111 | [1],[2],[3],[4],[5],[6] |
Income (Expense) Reclassified from Accumulated Other Comprehensive (Loss) | Amortization of prior service cost and initial net obligation | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other expense (income), net | (936) | (818) | |
Income (Expense) Reclassified from Accumulated Other Comprehensive (Loss) | Recognized actuarial loss | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other expense (income), net | (37,503) | (52,265) | |
Income (Expense) Reclassified from Accumulated Other Comprehensive (Loss) | Retirement benefit plans | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Income before income taxes | (38,439) | (53,083) | |
Tax benefit | 9,417 | 12,931 | |
Net income | $ (29,022) | $ (40,152) | |
[1] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[2] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[3] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[4] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[5] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. | ||
[6] | *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2021 Annual Report on Form 10-K. |
Goodwill and intangible asset_2
Goodwill and intangible assets - Changes in carrying amount of goodwill (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2021USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 8,059,687 |
Foreign currency translation and other | (50,347) |
Ending balance | 8,009,340 |
Diversified Industrial Segment | |
Goodwill [Roll Forward] | |
Beginning balance | 7,457,309 |
Foreign currency translation and other | (50,340) |
Ending balance | 7,406,969 |
Aerospace Systems Segment | |
Goodwill [Roll Forward] | |
Beginning balance | 602,378 |
Foreign currency translation and other | (7) |
Ending balance | $ 602,371 |
Goodwill and intangible asset_3
Goodwill and intangible assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible amortization expense | $ 80 | $ 82 |
Estimated amortization expense, year ending June 30, 2022 | 320 | |
Estimated amortization expense, year ending June 30, 2023 | 305 | |
Estimated amortization expense, year ending June 30, 2024 | 298 | |
Estimated amortization expense, year ending June 30, 2025 | 288 | |
Estimated amortization expense, year ending June 30, 2026 | $ 282 |
Goodwill and intangible asset_4
Goodwill and intangible assets - Intangible assets by major category (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,602,676 | $ 5,631,854 |
Accumulated Amortization | 2,176,136 | 2,112,057 |
Patents and technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 997,890 | 999,952 |
Accumulated Amortization | 227,415 | 216,314 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 757,627 | 762,130 |
Accumulated Amortization | 338,001 | 331,905 |
Customer lists and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,847,159 | 3,869,772 |
Accumulated Amortization | $ 1,610,720 | $ 1,563,838 |
Retirement benefits - Net pensi
Retirement benefits - Net pension benefit expense (Details) - Pension Plans - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | $ 20,662 | $ 22,810 |
Interest cost | 27,429 | 25,417 |
Expected return on plan assets | (67,328) | (66,402) |
Amortization of prior service cost | 934 | 843 |
Amortization of net actuarial loss | 37,531 | 52,331 |
Amortization of initial net obligation | 2 | 5 |
Net pension benefit expense | $ 19,230 | $ 35,004 |
Retirement benefits - Narrative
Retirement benefits - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Other Postretirement Benefit Plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Other postretirement benefits expense | $ 0.3 | $ 0.4 |
Debt (Details)
Debt (Details) £ in Millions | Aug. 27, 2021USD ($) | Aug. 02, 2021GBP (£) | Sep. 30, 2021GBP (£) | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($) |
Line of Credit Facility [Line Items] | |||||
Commercial paper | $ 0 | $ 0 | |||
Debt to debt-shareholders' equity ratio | 0.44 | ||||
Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Debt to debt-shareholders' equity ratio, covenant, maximum | 0.65 | ||||
Multi-Currency Credit Agreement | Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Aggregate principal amount | 3,000,000,000 | ||||
Line of Credit | Bridge Credit Agreement | Bridge Loan | |||||
Line of Credit Facility [Line Items] | |||||
Aggregate principal amount | £ | £ 6,524 | £ 5,100 | |||
Expiration period | 364 days | ||||
Financing fee | $ 39,000,000 | ||||
Line of Credit | Term Loan Facility | Senior Notes | |||||
Line of Credit Facility [Line Items] | |||||
Aggregate principal amount | $ 2,000,000,000 | ||||
Debt term | 3 years |
Income taxes (Details)
Income taxes (Details) $ in Millions | Sep. 30, 2021USD ($) |
Income Tax Disclosure [Abstract] | |
Unrecognized tax benefits | $ 99 |
Unrecognized tax benefits that would impact effective tax rate if recognized | 99 |
Accrued interest related to the gross unrecognized tax benefits excluded from the unrecognized tax benefits | 18 |
Decrease in unrecognized tax benefits that is reasonably possible (up to) | $ 40 |
Financial instruments - Carryin
Financial instruments - Carrying values and estimated fair values of long-term debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 |
Carrying value of long-term debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 6,625,692 | $ 6,646,029 |
Estimated fair value of long-term debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 7,406,724 | $ 7,527,268 |
Financial instruments - Narrati
Financial instruments - Narrative (Details) € in Millions, ¥ in Millions, $ in Millions | 3 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021EUR (€) | Sep. 30, 2021JPY (¥) | |
Debt Instrument [Line Items] | ||||
Net gains relating to forward exchange contracts | $ | $ 4 | $ 20 | ||
Currency Swap, Due November 2034 | ||||
Debt Instrument [Line Items] | ||||
Notional amount of derivative | € 69 | ¥ 2,149 | ||
Currency Swap, Due May 2038 | ||||
Debt Instrument [Line Items] | ||||
Notional amount of derivative | 290 | |||
Senior Notes | Senior Notes Due 2025 | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount (in EUR) | € 700 |
Financial instruments - Fair va
Financial instruments - Fair value of derivative instruments reported in consolidated balance sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 |
Cross-currency swap contracts | Other liabilities | ||
Net investment hedges | ||
Cross-currency swap contracts | $ 53,723 | $ 71,798 |
Forward exchange contracts | Non-trade and notes receivable | ||
Cash flow hedges | ||
Cash flow hedge, assets | 9,463 | 5,376 |
Forward exchange contracts | Other accrued liabilities | ||
Cash flow hedges | ||
Cash flow hedge, liability | 6,364 | 9,435 |
Costless collar contracts | Non-trade and notes receivable | ||
Cash flow hedges | ||
Cash flow hedge, assets | 807 | 110 |
Costless collar contracts | Other accrued liabilities | ||
Cash flow hedges | ||
Cash flow hedge, liability | $ 3,308 | $ 901 |
Financial instruments - Gain (l
Financial instruments - Gain (losses) on derivative and non-derivative financial instruments recorded in accumulated other comprehensive (loss) (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cross-currency swap contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative and non-derivative instruments gain (loss) recognized in accumulated other comprehensive income (loss) | $ 12,371 | $ (17,134) |
Foreign denominated debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative and non-derivative instruments gain (loss) recognized in accumulated other comprehensive income (loss) | $ 14,864 | $ (25,727) |
Financial instruments - Financi
Financial instruments - Financial assets and liabilities measured at fair value (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 |
Assets: | ||
Equity securities | $ 19,169 | $ 20,517 |
Derivatives | 10,270 | 5,486 |
Liabilities: | ||
Derivatives | 63,395 | 82,134 |
Quoted Prices In Active Markets (Level 1) | ||
Assets: | ||
Equity securities | 19,169 | 20,517 |
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Equity securities | 0 | 0 |
Derivatives | 10,270 | 5,486 |
Liabilities: | ||
Derivatives | 63,395 | 82,134 |
Significant Unobservable Inputs (Level 3) | ||
Assets: | ||
Equity securities | 0 | 0 |
Derivatives | 0 | 0 |
Liabilities: | ||
Derivatives | $ 0 | $ 0 |