Parker-Hannifin (PH) 10-Q 4 Feb 10 2010 Q2 Quarterly report Financial data

Statement Of Income

Statement Of Income (USD $)
In Thousands, except Per Share data	3 Months Ended Dec. 31, 2009	3 Months Ended Dec. 31, 2008	6 Months Ended Dec. 31, 2009	6 Months Ended Dec. 31, 2008
Net sales	$2,354,708	$2,688,656	$4,591,873	$5,753,344
Cost of sales	1,869,481	2,121,450	3,670,426	4,458,672
Gross profit	485,227	567,206	921,447	1,294,672
Selling, general and administrative expenses	309,840	337,183	611,683	669,866
Interest expense	25,029	30,307	50,752	58,403
Other expense, net	8,123	483	2,748	8,782
Income before income taxes	142,235	199,233	256,264	557,621
Income taxes	37,272	42,472	77,331	149,025
Net income	104,963	156,761	178,933	408,596
Less: Noncontrolling interests	417	1,360	894	3,019
Net income attributable to common shareholders	$104,546	$155,401	$178,039	$405,577
Earnings per share attributable to common shareholders:
Basic	0.65	0.97	1.11	2.49
Diluted	0.64	0.96	1.1	2.47
Cash dividends per common share	0.25	0.25	0.5	0.5

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Thousands	Dec. 31, 2009	Jun. 30, 2009
Current assets:
Cash and cash equivalents	$233,899	$187,611
Accounts receivable, net	1,368,449	1,417,305
Inventories:
Finished products	509,724	514,495
Work in process	566,483	581,266
Raw materials	156,772	158,789
Inventory, Net, Total	1,232,979	1,254,550
Prepaid expenses	98,989	142,335
Deferred income taxes	124,182	121,980
Total current assets	3,058,498	3,123,781
Plant and equipment	4,785,143	4,705,060
Less accumulated depreciation	2,942,393	2,824,506
Property, Plant and Equipment, Net, Total	1,842,750	1,880,554
Goodwill	2,948,304	2,903,077
Intangible assets, net	1,254,982	1,273,862
Other assets	689,655	674,628
Total assets	9,794,189	9,855,902
Current liabilities:
Notes payable	389,715	481,467
Accounts payable, trade	692,721	649,718
Accrued payrolls and other compensation	261,835	356,776
Accrued domestic and foreign taxes	153,152	113,107
Other accrued liabilities	418,615	404,686
Total current liabilities	1,916,038	2,005,754
Long-term debt	1,554,088	1,839,705
Pensions and other postretirement benefits	1,258,258	1,233,271
Deferred income taxes	186,493	183,457
Other liabilities	241,526	243,275
Total liabilities	5,156,403	5,505,462
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 December 31 and June 30	90,523	90,523
Additional capital	624,906	588,201
Retained earnings	5,808,915	5,722,038
Accumulated other comprehensive (loss)	(705,524)	(843,019)
Treasury shares, at cost; 20,246,697 shares at December 31 and 20,557,537 shares at June 30	(1,266,793)	(1,289,544)
Total shareholders' equity	4,552,027	4,268,199
Noncontrolling interests	85,759	82,241
Total equity	4,637,786	4,350,440
Total liabilities and shareholders' equity	$9,794,189	$9,855,902

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
	Dec. 31, 2009	Jun. 30, 2009
Serial preferred stock, par value	0.5	0.5
Serial preferred stock, authorized	3,000,000	3,000,000
Serial preferred stock, issued	0	0
Common stock, par value	0.5	0.5
Common stock, authorized	600,000,000	600,000,000
Common stock, issued	181,046,128	181,046,128
Treasury shares, shares	20,246,697	20,557,537

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Thousands	6 Months Ended Dec. 31, 2009	6 Months Ended Dec. 31, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$178,933	$408,596
Adjustments to reconcile net income to net cash provided by operations:
Depreciation	128,919	127,173
Amortization	61,018	48,712
Stock-based compensation	37,060	28,451
Deferred income taxes	(39,165)	7,070
Foreign currency transaction (gain)	(1,136)	(8)
Loss on sale of plant and equipment	5,582	2,947
Changes in assets and liabilities, net of effect of acquisitions:
Accounts receivable, net	73,842	329,637
Inventories	44,867	(54,855)
Prepaid expenses	44,928	9,550
Other assets	19,454	47,127
Accounts payable, trade	36,522	(202,631)
Accrued payrolls and other compensation	(98,140)	(124,407)
Accrued domestic and foreign taxes	32,263	(45,560)
Other accrued liabilities	26,776	(86,505)
Pensions and other postretirement benefits	50,619	16,609
Other liabilities	3,908	(67,391)
Net cash provided by operating activities	606,250	444,515
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions (less cash acquired of $24,191 in 2008)	0	(705,128)
Capital expenditures	(61,232)	(174,391)
Proceeds from sale of plant and equipment	5,665	10,550
Other	(14,310)	(2,973)
Net cash (used in) investing activities	(69,877)	(871,942)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options	4,538	969
(Payments for) common shares	(10,000)	(433,960)
Tax benefit from share-based compensation	1,489	2,911
(Payments for) proceeds from notes payable, net	(378,174)	924,457
Proceeds from long-term borrowings	1,937	13,057
(Payments for) long-term borrowings	(23,696)	(26,086)
Dividends	(80,363)	(81,331)
Net cash (used in) provided by financing activities	(484,269)	400,017
Effect of exchange rate changes on cash	(5,816)	(36,648)
Net increase (decrease) in cash and cash equivalents	46,288	(64,058)
Cash and cash equivalents at beginning of year	187,611	326,048
Cash and cash equivalents at end of period	$233,899	$261,990

2_Statement Of Cash Flows Indir

Statement Of Cash Flows Indirect (Parenthetical) (USD $)
In Thousands	6 Months Ended Dec. 31, 2009	6 Months Ended Dec. 31, 2008
Acquisitions, cash acquired	$0	$24,191

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION
	6 Months Ended Dec. 31, 2009 USD / shares
BUSINESS SEGMENT INFORMATION	BUSINESS SEGMENT INFORMATION (Dollars in thousands) (Unaudited) The Company operates in three reportable business segments: Industrial, Aerospace and Climate Industrial Controls. The Industrial Segment is the largest and includes a significant portion of international operations. 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, agricultural and military machinery and equipment. Sales are made directly to major original equipment manufacturers (OEMs) and through a broad distribution network to smaller OEMs and the aftermarket. Aerospace - 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 Segment provides a full range of systems and components for hydraulic, pneumatic and fuel applications. Climate Industrial Controls - This segment manufactures motion-control systems and components for use primarily in the refrigeration and air conditioning and transportation industries. Three Months Ended December31, Six Months Ended December31, 2009 2008 2009 2008 Net sales Industrial: North America $ 847,208 $ 993,040 $ 1,630,293 $ 2,100,117 International 932,057 1,042,741 1,782,307 2,265,933 Aerospace 400,551 473,667 817,407 952,140 Climate Industrial Controls 174,892 179,208 361,866 435,154 Total $ 2,354,708 $ 2,688,656 $ 4,591,873 $ 5,753,344 Segment operating income Industrial: North America $ 114,435 $ 107,615 $ 190,606 $ 268,101 International 82,636 115,122 144,459 318,074 Aerospace 41,026 69,658 94,172 137,806 Climate Industrial Controls 6,144 (12,814 ) 16,641 2,685 Total segment operating income 244,241 279,581 445,878 726,666 Corporate general and administrative expenses 31,472 42,372 57,774 82,746 Income from operations before interest expense and other 212,769 237,209 388,104 643,920 Interest expense 25,029 30,307 50,752 58,403 Other expense 45,505 7,669 81,088 27,896 Income before income taxes $ 142,235 $ 199,233 $ 256,264 $ 557,621

Management representation

Management representation
	6 Months Ended Dec. 31, 2009 USD / shares
Management representation	1. 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 accruals) necessary to present fairly the financial position as of December31, 2009, the results of operations for the three and six months ended December31, 2009 and 2008 and cash flows for the six months then ended. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Companys 2009 Annual Report on Form 10-K. Interim period results are not necessarily indicative of the results to be expected for the full fiscal year. Certain prior period amounts have been reclassified to conform to the current year presentation. These include the adoption of new accounting rules regarding noncontrolling interests. The Company has evaluated for disclosure subsequent events that have occurred up to February4, 2010, the date of the filing of the Companys Form 10-Q for the quarter ended December31, 2009.

New accounting pronouncements

New accounting pronouncements
	6 Months Ended Dec. 31, 2009 USD / shares
New accounting pronouncements	2. New accounting pronouncements Effective July1, 2009, the Company adopted the Financial Accounting Standards Boards (FASB) new guidance regarding business combinations. This guidance changed the accounting for business combinations both during the period of acquisition and in subsequent periods. Acquisition costs will generally be expensed as incurred; noncontrolling interests will be valued at fair value at the acquisition date; in-process research and development will be recorded at fair value as an indefinite-lived asset at the acquisition date; restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense. The adoption of this guidance did not have a material effect on the Companys financial position or results of operations during the six months ended December31, 2009. In December 2008, the FASB issued new guidance requiring detailed disclosures regarding the investment strategies, fair value measurements and concentrations of risk of plan assets of a defined benefit pension or other postretirement plan. This guidance is effective for fiscal years ending after December31, 2009, and the Company has not yet determined the impact it will have on the Companys retirement benefits disclosures.

Product warranty

Product warranty
	6 Months Ended Dec. 31, 2009 USD / shares
Product warranty	3. Product warranty In the ordinary course of business, the Company warrants its products against defect in design, materials and workmanship over various time periods. The warranty accrual as of December31, 2009 and June30, 2009 is immaterial to the financial position of the Company and the change in the accrual for the current quarter and first six months of fiscal 2010 is immaterial to the Companys results of operations and cash flows.

Earnings per share

Earnings per share
	6 Months Ended Dec. 31, 2009 USD / shares
Earnings per share	4. Earnings per share The following table presents a reconciliation of the numerator and denominator of basic and diluted earnings per share for the three and six months ended December31, 2009 and 2008. Three Months Ended December31, Six Months Ended December31, 2009 2008 2009 2008 Numerator: Net income attributable to common shareholders $ 104,546 $ 155,401 $ 178,039 $ 405,577 Denominator: Basic - weighted average common shares 160,767,790 160,839,120 160,698,541 162,627,269 Increase in weighted average from dilutive effect of equity-based awards 1,976,998 916,466 1,679,541 1,644,797 Diluted - weighted average common shares, assuming exercise of equity-based awards 162,744,788 161,755,586 162,378,082 164,272,066 Basic earnings per share $ .65 $ .97 $ 1.11 $ 2.49 Diluted earnings per share $ .64 $ .96 $ 1.10 $ 2.47 For the three months ended December31, 2009 and 2008, 7,905,697 and 9,904,439 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. For the six months ended December31, 2009 and 2008, 9,729,440 and 4,694,129 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
	6 Months Ended Dec. 31, 2009 USD / shares
Share repurchase program	5. Share repurchase program The Company has a program to repurchase its common shares. Under the program, the Company is authorized to repurchase an amount of common shares each fiscal year equal to the greater of 7.5million shares or five percent of the shares outstanding as of the end of the prior fiscal year. Repurchases are funded primarily from operating cash flows and commercial paper borrowings, and the shares are initially held as treasury stock. During the three-month period ended December31, 2009, the Company repurchased 91,902 shares of its common stock at an average price of $54.41 per share. Fiscal year-to-date, the Company repurchased 197,832 shares at an average price of $50.55 per share.

Business realignment charges

Business realignment charges
	6 Months Ended Dec. 31, 2009 USD / shares
Business realignment charges	6. Business realignment charges During the second quarter and first six months of fiscal 2010, the Company recorded charges of $7.1 million and $26.4 million, respectively, for the costs to structure its businesses in light of current and anticipated customer demand. The charges primarily consist of severance costs related to plant closures as well as general work force reductions implemented by various operating units throughout the world. The Company believes the realignment actions will positively impact future results of operations but will have no material effect on liquidity and sources and uses of capital. The Industrial Segment recognized $5.6 million and $22.7 million of the total charge for the second quarter and first six months of fiscal 2010, respectively, relating to approximately 195 and 1,015 employees, respectively. The Climate Industrial Controls Segment recognized $0.9 million and $3.1 million of the total charge for the second quarter and first six months of fiscal 2010, respectively, relating to approximately 237 employees for the first six months of fiscal 2010. The Aerospace Segment recognized $0.6 million of the total charge for the second quarter and first six months of fiscal 2010 relating to approximately 50 employees. The charge is presented primarily in the Cost of sales caption in the Consolidated Statement of Income for the three and six months ended December31, 2009. As of December31, 2009, approximately $13.7 million in severance payments have been made with the remaining payments expected to be made by June30, 2010. During the second quarter and first six months of fiscal 2009, the Company recorded charges of $9.6 million and $11.7 million, respectively, for the costs to structure its businesses in light of current and anticipated customer demand. The charges primarily consisted of severance costs related to plant closures as well as general work force reductions implemented by various operating units throughout the world. The Company believes the realignment actions will positively impact future results of operations but will have no material effect on liquidity and sources and uses of capital. The Industrial Segment recognized $4.2 million and $5.7 million of the total charge for the second quarter and first six months of fiscal 2009, respectively, relating to approximately 1,000 and 1,075 employees, respectively. The Climate Industrial Controls Segment recognized $5.4 million and $6.0 million of the total charge for the second quarter and first six months of fiscal 2009, respectively, relating to approximately 175 and 245 employees, respectively. The charge is presented primarily in the Cost of sales caption in the Consolidated Statement of Income for the three and six months ended December31, 2008. All severance payments have been made. Additional charges to be recognized in future periods related to the specific actions discussed above are not expected to be material.

Equity

Equity
	6 Months Ended Dec. 31, 2009 USD / shares
Equity	7. Equity Effective July1, 2009, the Company adopted the FASBs new guidance regarding the accounting for noncontrolling interests. The new rules require the recognition of a noncontrolling interest as equity in the consolidated financial statements and separate from the parents equity. The amount of net income attributable to the noncontrolling interest is included in Net income on the face of the Consolidated Statement of Income. Changes in equity for the three months ended December31, 2008 and December31, 2009 are as follows: Shareholders Equity Noncontrolling Interests Total Equity Balance September30, 2008 $ 4,736,618 $ 79,255 $ 4,815,873 Net income 155,401 1,360 156,761 Other comprehensive (loss) income: Foreign currency translation (279,655 ) 10,322 (269,333 ) Retirement benefits plan activity 5,036 5,036 Net unrealized (loss) (1,877 ) (1,877 ) Total comprehensive (loss) income (121,095 ) 11,682 (109,413 ) Dividends paid (40,222 ) (4,685 ) (44,907 ) Stock incentive plan activity 8,809 8,809 Shares purchased at cost (20,001 ) (20,001 ) Acquisition activity 3,776 3,776 Balance December31, 2008 $ 4,564,109 $ 90,028 $ 4,654,137 Balance September30, 2009 $ 4,481,984 $ 87,629 $ 4,569,613 Net income 104,546 417 104,963 Other comprehensive (loss) income: Foreign currency translation (22,935 ) (2,281 ) (25,216 ) Retirement benefits plan activity 13,169 13,169 Net unrealized gain 442 442 Total comprehensive (loss) income 95,222 (1,864 ) 93,358 Dividends paid (40,192 ) (6 ) (40,198 ) Stock incentive plan activity 13,552 13,552 Shares purchased at cost (5,000 ) (5,000 ) Retirement benefits plan activity 6,461 6,461 Balance December31, 2009 $ 4,552,027 $ 85,759 $ 4,637,786 Changes in equity for the six months ended December31, 2008 and December31, 2009 are as follows: Shareholders Equity Noncontrolling Interests Total Equity Balance July1, 2008 $ 5,251,553 $ 78,589 $ 5,330,142 Net income 405,577 3,019 408,596 Other comprehensive (loss) income: Foreign currency translation (640,150 ) 10,154 (629,996 ) Retirement benefits plan activity 13,036 13,036 Net unrealized (loss) (3,277 ) (3,277 ) Total comprehensive (loss) income (224,814 ) 13,173 (211,641 ) Dividends paid (81,331 ) (4,685 ) (86,016 ) Stock incentive plan activity 39,802 39,802 Shares purchased at cost (43

Goodwill and intangible assets

Goodwill and intangible assets
	6 Months Ended Dec. 31, 2009 USD / shares
Goodwill and intangible assets	8. Goodwill and intangible assets The changes in the carrying amount of goodwill for the six months ended December31, 2009 are as follows: Industrial Segment Aerospace Segment Climate Industrial Controls Segment Total Balance June30, 2009 $ 2,496,449 $ 98,709 $ 307,919 $ 2,903,077 Foreign currency translation 42,229 8 1,734 43,971 Goodwill adjustments 1,256 1,256 Balance December31, 2009 $ 2,539,934 $ 98,717 $ 309,653 $ 2,948,304 Goodwill adjustments primarily represent final adjustments to the purchase price allocation during the twelve-month period subsequent to the acquisition date and primarily involved the valuation of income tax liabilities. Intangible assets are amortized on 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: December31, 2009 June30, 2009 GrossCarrying Amount Accumulated Amortization GrossCarrying Amount Accumulated Amortization Patents $ 121,406 $ 47,213 $ 119,811 $ 42,188 Trademarks 292,051 76,597 287,691 62,926 Customer lists and other 1,188,358 223,023 1,154,713 183,239 Total $ 1,601,815 $ 346,833 $ 1,562,215 $ 288,353 Total intangible amortization expense for the six months ended December31, 2009 was $61,018. The estimated amortization expense for the five years ending June30, 2010 through 2014 is $112,719, $107,931, $95,160, $86,729 and $85,124, respectively.

Retirement benefits

Retirement benefits
	6 Months Ended Dec. 31, 2009 USD / shares
Retirement benefits	9. Retirement benefits Net periodic pension cost recognized included the following components: Three Months Ended December31, Six Months Ended December31, 2009 2008 2009 2008 Service cost $ 17,316 $ 15,805 $ 36,383 $ 33,455 Interest cost 44,880 45,155 88,087 86,952 Expected return on plan assets (44,152 ) (47,222 ) (87,484 ) (93,773 ) Amortization of prior service cost 3,351 2,230 6,506 5,635 Amortization of net actuarial loss 17,094 5,888 32,601 15,525 Amortization of initial net (asset) obligation (14 ) 52 (8 ) (30 ) Net periodic benefit cost $ 38,475 $ 21,908 $ 76,085 $ 47,764 Postretirement benefit cost recognized included the following components: ThreeMonthsEnded December31, Six Months Ended December31, 2009 2008 2009 2008 Service cost $ 127 $ 380 $ 278 $ 759 Interest cost 1,037 1,425 1,963 2,850 Net amortization and deferral and other (114 ) (185 ) (229 ) (371 ) Net periodic benefit cost $ 1,050 $ 1,620 $ 2,012 $ 3,238 During the first six months of fiscal 2010, the Company made $22 million in cash contributions to its qualified defined benefit plans and expects to contribute approximately $118 million in cash to its qualified defined benefit plans during the last six months of fiscal 2010. The majority of the remaining cash contribution expected to be made in fiscal 2010 is discretionary.

Income taxes

Income taxes
	6 Months Ended Dec. 31, 2009 USD / shares
Income taxes	10. Income taxes As of December31, 2009, the Company had gross unrecognized tax benefits of $141,596. The total amount of unrecognized benefits that, if recognized, would affect the effective tax rate was $122,405. The accrued interest related to the gross unrecognized tax benefits, excluded from the amounts above, was $11,007. The Company and its subsidiaries file income tax returns in the United States and various state and foreign jurisdictions. In the normal course of business, the Companys tax returns are subject to examination by taxing authorities throughout the world. The Company is no longer subject to examinations of its U.S. federal income tax returns by the Internal Revenue Service (IRS) for fiscal years through 2005. All significant state, local and foreign tax returns have been examined for fiscal years through 2001. The Company believes that it is reasonably possible that within the next 12 months the IRS examination for fiscal years 2006 and 2007 will be settled. The Company anticipates that within the next 12 months the total amount of unrecognized tax benefits related to income inclusion items, loss deductions and loss carryforwards may be reduced by an amount of up to $65 million due to the settlement of examinations and the expiration of statutes of limitation.

Fair value measurement

Fair value measurement
	6 Months Ended Dec. 31, 2009 USD / shares
Fair value measurement	11. Fair value measurement On July1, 2009, the Company adopted the FASBs new guidance relating to fair value measurements of nonfinancial assets and nonfinancial liabilities. The adoption of this provision did not have a material effect on the Companys financial position or results of operations. The Companys financial instruments consist primarily of investments in cash, cash equivalents and long-term investments as well as obligations under notes payable and long-term debt. Due to their short-term nature, the carrying values of Cash and cash equivalents, Investments and Notes payable approximate fair value. The carrying value of Long-term debt (excluding leases) was $1,881,971 and $1,889,844 at December31, 2009 and June30, 2009, respectively, and was estimated to have a fair value of $1,984,434 and $1,899,246 at December31, 2009 and June30, 2009, respectively. The fair value of Long-term debt was estimated using discounted cash flow analyses assuming current interest rates for similar types of borrowing arrangements and maturities. The fair value of financial assets and financial liabilities that were measured at fair value on a recurring basis at December31, 2009 follows: Total QuotedPrices In Active Markets (Level 1) SignificantOther Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Available for sale equity securities $ 3,959 $ 3,959 $ $ Derivatives 229 229 Liabilities: Deferred compensation Plans 112,951 112,951 Derivatives 2,945 2,945 Available for sale equity securities consists of an investment in an electronic and electrical equipment company, the fair of which is measured using quoted market prices. Derivatives primarily consist of costless collar contracts, the fair value of which is calculated through a model that utilizes market observable inputs including both spot and forward prices for the same underlying currencies. The Company has established nonqualified deferred compensation programs which permit officers, directors and certain management employees to defer a portion of their compensation, on a pre-tax basis, until their termination of employment. Changes in the value of the compensation deferred under these programs are recognized based on quoted market prices for the participants investment elections.

Contingencies

Contingencies
	6 Months Ended Dec. 31, 2009 USD / shares
Contingencies	12. Contingencies The Company is involved in various litigation matters arising in the normal course of business, including proceedings based on product liability claims, workers compensation claims and alleged violations of various environmental laws. The Company is self-insured in the United States for health care, workers compensation, general liability and product liability up to predetermined amounts, above which, subject to certain limitations, third-party insurance applies. Management regularly reviews the probable outcome of these proceedings, the expenses expected to be incurred, the availability and limits of the insurance coverage, and the established accruals for liabilities. While the outcome of pending proceedings cannot be predicted with certainty, management believes that any liabilities that may result from these proceedings will not have a material adverse effect on the Companys liquidity, financial condition or results of operations. Parker ITR S.r.l. (Parker ITR), a subsidiary acquired on January31, 2002, has been the subject of a number of lawsuits and regulatory investigations, which are more fully described in Part II, Item1 of this Quarterly Report on Form 10-Q. Each of these lawsuits and regulatory investigations was also described in the Companys Annual Report on Form 10-K for the fiscal year ended June30, 2009. With respect to the class action lawsuits, the Company recognized $20,000 in expense in fiscal 2008 and $2,322 in expense in fiscal 2009, $1,167 of which was recognized in the first six months of fiscal 2009. No expenses related to the class action lawsuits were recognized during the first six months of fiscal 2010. With respect to the regulatory investigations, the Company recognized $35,084 in expense in fiscal 2009, none of which was recognized during the first six months of fiscal 2009, and recognized $189 in expense during the first six months of fiscal 2010. The Company has made all required payments relating to the class action lawsuits and regulatory investigations. With respect to the class action lawsuits, the Company made payments of $22,322 in fiscal 2009, none of which were made during the first six months of fiscal 2009, and made no payments in the first six months of fiscal 2010. With respect to the regulatory investigations, the Company made payments of $32,794 in fiscal 2009, none of which were made during the first six months of fiscal 2009, and made payments of $35 in the first six months of fiscal 2010. As of December31, 2009, the Company had a remaining reserve of $2,444 related to the class action lawsuits and regulatory investigations. Legal expenses related to these matters are being expensed as incurred and totaled $797 and $659 for the second quarter of fiscal 2010 and 2009, respectively, and $1,081 and $1,804 during the first six months of fiscal 2010 and 2009, respectively.

Document Information

Document Information
	6 Months Ended Dec. 31, 2009 USD / shares
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	6 Months Ended Dec. 31, 2009
Trading Symbol	PH
Entity Registrant Name	PARKER HANNIFIN CORP
Entity Central Index Key	0000076334
Current Fiscal Year End Date	--06-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	160,799,431