ph-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File number 1-4982

PARKER-HANNIFIN CORPORATION

(Exact name of registrant as specified in its charter)


Ohio			34-0451060
(State or other jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)

6035 Parkland Boulevard,	Cleveland,	Ohio	44124-4141
(Address of Principal Executive Offices)			(Zip Code)

Registrant’s telephone number, including area code: (216) 896-3000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on which Registered

Common Shares, $.50 par value

New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Number of Common Shares outstanding at March 31, 2021: 129,055,945

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PARKER-HANNIFIN CORPORATION

CONSOLIDATED STATEMENT OF INCOME

(Dollars in thousands, except per share amounts)

(Unaudited)


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Net sales	$	3,746,326	$	3,702,432	$	10,388,771	$	10,534,917
Cost of sales	2,714,773		2,766,693		7,618,646		7,929,199
Selling, general and administrative expenses	386,831		413,460		1,113,254		1,303,760

Interest expense	60,830		80,765		189,778		233,612
Other (income), net	(13,460)		(12,643)		(122,066)		(73,713)
Income before income taxes	597,352		454,157		1,589,159		1,142,059
Income taxes	125,619		86,788		348,212		231,051
Net income	471,733		367,369		1,240,947		911,008
Less: Noncontrolling interest in subsidiaries' earnings	86		116		585		383
Net income attributable to common shareholders	$	471,647	$	367,253	$	1,240,362	$	910,625

Earnings per share attributable to common shareholders:
Basic	$	3.65	$	2.86	$	9.62	$	7.09
Diluted	$	3.59	$	2.83	$	9.50	$	7.01

See accompanying notes to consolidated financial statements.

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PARKER-HANNIFIN CORPORATION

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Net income	$	471,733	$	367,369	$	1,240,947	$	911,008
Less: Noncontrolling interests in subsidiaries' earnings	86		116		585		383
Net income attributable to common shareholders	471,647		367,253		1,240,362		910,625

Other comprehensive (loss) income, net of tax
Foreign currency translation adjustment	(65,970)		(282,815)		282,539		(233,953)
Retirement benefits plan activity	39,723		32,125		120,859		96,567
Other comprehensive (loss) income	(26,247)		(250,690)		403,398		(137,386)
Less: Other comprehensive (loss) income for noncontrolling interests	(463)		(960)		813		(972)
Other comprehensive (loss) income attributable to common shareholders	(25,784)		(249,730)		402,585		(136,414)
Total comprehensive income attributable to common shareholders	$	445,863	$	117,523	$	1,642,947	$	774,211

See accompanying notes to consolidated financial statements.

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PARKER-HANNIFIN CORPORATION

CONSOLIDATED BALANCE SHEET

(Dollars in thousands)

(Unaudited)



	March 31, 2021		June 30, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	489,600	$	685,514
Marketable securities and other investments	40,270		70,805
Trade accounts receivable, net	2,118,437		1,854,398
Non-trade and notes receivable	309,568		244,870
Inventories	1,898,159		1,814,631
Prepaid expenses and other	193,019		214,986
Total current assets	5,049,053		4,885,204
Property, plant and equipment	5,989,920		5,810,681
Less: Accumulated depreciation	3,740,798		3,517,946
Property, plant and equipment, net	2,249,122		2,292,735
Deferred income taxes	125,382		126,839
Investments and other assets	791,221		764,563
Intangible assets, net	3,595,182		3,798,913
Goodwill	8,031,586		7,869,935
Total assets	$	19,841,546	$	19,738,189
LIABILITIES
Current liabilities:
Notes payable and long-term debt payable within one year	$	186,388	$	809,529
Accounts payable, trade	1,551,460		1,111,759
Accrued payrolls and other compensation	430,008		424,231
Accrued domestic and foreign taxes	204,241		195,314
Other accrued liabilities	664,550		607,540
Total current liabilities	3,036,647		3,148,373
Long-term debt	6,571,908		7,652,256
Pensions and other postretirement benefits	1,777,137		1,887,414
Deferred income taxes	416,223		382,528
Other liabilities	631,702		539,089
Total liabilities	12,433,617		13,609,660
EQUITY
Shareholders’ equity:
Serial preferred stock, $.50 par value; authorized 3,000,000 shares; none issued	—		—
Common stock, $.50 par value; authorized 600,000,000 shares; issued 181,046,128 shares at March 31 and June 30	90,523		90,523
Additional capital	374,497		416,585
Retained earnings	14,429,912		13,530,666
Accumulated other comprehensive (loss)	(2,156,290)		(2,558,875)
Treasury shares, at cost; 51,990,183 shares at March 31 and 52,490,165 shares at June 30	(5,346,440)		(5,364,916)
Total shareholders’ equity	7,392,202		6,113,983
Noncontrolling interests	15,727		14,546
Total equity	7,407,929		6,128,529
Total liabilities and equity	$	19,841,546	$	19,738,189

See accompanying notes to consolidated financial statements.

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PARKER-HANNIFIN CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


	Nine Months Ended
	March 31,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,240,947	$	911,008
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	204,615		187,054
Amortization	244,193		203,895

Share incentive plan compensation	101,907		91,857
Deferred income taxes	(12,127)		9,954
Foreign currency transaction gain	(8,239)		(13,040)
Gain on property, plant and equipment	(108,449)		(5,194)

(Gain) loss on marketable securities	(8,489)		434
Gain on investments	(6,008)		(1,849)

Other	11,149		14,303
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable, net	(238,882)		173,310
Inventories	(51,150)		(8,019)
Prepaid expenses and other	24,757		21,783
Other assets	(22,191)		(13,268)
Accounts payable, trade	417,196		(53,875)
Accrued payrolls and other compensation	(2,645)		(68,091)
Accrued domestic and foreign taxes	4,768		(19,985)
Other accrued liabilities	17,396		(82,896)
Pensions and other postretirement benefits	32,418		36,229
Other liabilities	40,239		(92,751)
Net cash provided by operating activities	1,881,405		1,290,859
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions (net of cash of $82,192 in 2020)	—		(5,076,064)
Capital expenditures	(136,064)		(182,502)
Proceeds from sale of property, plant and equipment	132,740		25,398


Purchases of marketable securities and other investments	(30,608)		(191,277)
Maturities and sales of marketable securities and other investments	71,225		249,306
Other	14,120		129,938
Net cash provided by (used in) investing activities	51,413		(5,045,201)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options	4,012		2,459
Payments for common shares	(129,531)		(194,633)

(Payments for) proceeds from notes payable, net	(539,500)		362,346
Proceeds from long-term borrowings	2,016		1,721,211
Payments for long-term borrowings	(1,211,334)		(278,347)
Dividends paid	(341,333)		(340,291)
Net cash (used in) provided by financing activities	(2,215,670)		1,272,745
Effect of exchange rate changes on cash	86,938		(40,553)
Net decrease in cash and cash equivalents	(195,914)		(2,522,150)
Cash and cash equivalents at beginning of year	685,514		3,219,767
Cash and cash equivalents at end of period	$	489,600	$	697,617

See accompanying notes to consolidated financial statements.

- 5 -

PARKER-HANNIFIN CORPORATION

BUSINESS SEGMENT INFORMATION

(Dollars in thousands)

(Unaudited)

The Company operates in two reportable business segments: Diversified Industrial and Aerospace Systems.

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 a significant portion of 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				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Net sales
Diversified Industrial:
North America	$	1,758,383	$	1,775,578	$	4,853,371	$	5,016,035
International	1,388,999		1,182,273		3,777,875		3,408,207
Aerospace Systems	598,944		744,581		1,757,525		2,110,675
Total net sales	$	3,746,326	$	3,702,432	$	10,388,771	$	10,534,917
Segment operating income
Diversified Industrial:
North America	$	336,589	$	279,628	$	887,041	$	766,159
International	274,427		176,954		681,541		499,343
Aerospace Systems	102,303		127,440		279,798		371,459
Total segment operating income	713,319		584,022		1,848,380		1,636,961
Corporate general and administrative expenses	48,089		48,342		123,544		132,904
Income before interest expense and other expense	665,230		535,680		1,724,836		1,504,057
Interest expense	60,830		80,765		189,778		233,612
Other expense (income)	7,048		758		(54,101)		128,386
Income before income taxes	$	597,352	$	454,157	$	1,589,159	$	1,142,059

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PARKER-HANNIFIN CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share amounts or as otherwise noted)

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.

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 adjustments) necessary to present fairly the Company's financial position as of March 31, 2021, the results of operations for the three and nine months ended March 31, 2021 and 2020 and cash flows for the nine months then ended. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s 2020 Annual Report on Form 10-K.

The novel coronavirus ("COVID-19") pandemic is having, and will likely continue to have, an adverse effect on our business, and its future impacts remain unpredictable. 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.

The Company has evaluated subsequent events that occurred through the date these financial statements were issued. No subsequent events have occurred that required adjustment to or disclosure in these financial statements.

2. New accounting pronouncements

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, "Measurement of Credit Losses on Financial Instruments." ASU 2016-13 requires a financial asset (or a group of financial assets) measured at amortized cost to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. We adopted ASU 2016-13 on July 1, 2020. The adoption of this guidance, using the modified retrospective method, did not result in a cumulative-effect adjustment to retained earnings and did not have a material impact on the consolidated financial statements or related disclosures.

3. 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				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Motion Systems	$	820,514	$	778,840	$	2,197,971	$	2,297,961
Flow and Process Control	1,081,570		1,015,430		2,955,643		2,969,033
Filtration and Engineered Materials	1,245,298		1,163,581		3,477,632		3,157,248
Total	$	3,147,382	$	2,957,851	$	8,631,246	$	8,424,242

- 7 -

Aerospace Systems Segment revenues by product platform:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Flight Control Actuation	$	174,067	$	175,871	$	499,432	$	529,553
Fuel, Inerting and Engine Motion Control	129,866		159,837		384,937		471,525
Hydraulics	75,430		114,763		222,193		333,523
Engine Components	145,819		181,173		436,119		454,572
Airframe and Engine Fluid Conveyance	49,190		83,555		141,737		247,356
Other	24,572		29,382		73,107		74,146
Total	$	598,944	$	744,581	$	1,757,525	$	2,110,675

Total Company revenues by geographic region based on the Company's selling operation's location:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
North America	$	2,354,251	$	2,507,566	$	6,598,238	$	7,107,655
Europe	788,498		726,577		2,087,030		2,018,301
Asia Pacific	561,274		430,500		1,586,375		1,292,054
Latin America	42,303		37,789		117,128		116,907
Total	$	3,746,326	$	3,702,432	$	10,388,771	$	10,534,917

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:


	March 31, 2021		June 30, 2020
Contract assets, current (included within Prepaid expenses and other)	$	35,616	$	30,827
Contract assets, noncurrent (included within Investments and other assets)	2,089		1,497
Total contract assets	37,705		32,324
Contract liabilities, current (included within Other accrued liabilities)	(52,834)		(51,278)
Contract liabilities, noncurrent (included within Other liabilities)	(3,910)		(3,232)
Total contract liabilities	(56,744)		(54,510)
Net contract liabilities	$	(19,039)	$	(22,186)

At March 31, 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 nine months ended March 31, 2021, approximately $29 million of revenue was recognized that was included in the contract liabilities at June 30, 2020.

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 March 31, 2021 was $6,185 million, of which approximately 87 percent is expected to be recognized as revenue within the next 12 months and the balance thereafter.

- 8 -

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 nine months ended March 31, 2021 and 2020.


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Numerator:
Net income attributable to common shareholders	$	471,647	$	367,253	$	1,240,362	$	910,625
Denominator:
Basic - weighted average common shares	129,085,563		128,289,720		128,935,696		128,383,549
Increase in weighted average common shares from dilutive effect of equity-based awards	2,292,370		1,456,827		1,690,904		1,479,266
Diluted - weighted average common shares, assuming exercise of equity-based awards	131,377,933		129,746,547		130,626,600		129,862,815

Basic earnings per share	$	3.65	$	2.86	$	9.62	$	7.09
Diluted earnings per share	$	3.59	$	2.83	$	9.50	$	7.01

For the three months ended March 31, 2021 and 2020, 133 and 753,028 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 nine months ended March 31, 2021 and 2020, 589,364 and 516,067 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.

5. Share repurchase program

The 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. In March 2020, the Company suspended the share repurchase program in response to business uncertainty resulting from the COVID-19 pandemic. During fiscal 2021, the Company reinitiated the share repurchase program and began repurchasing shares under the program in February 2021. During the three and nine months ended March 31, 2021, we repurchased 169,814 shares at an average price, including commissions, of $294.44 per share.

6. Trade accounts receivable, net

Trade 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 $12,734 and $11,644 at March 31, 2021 and June 30, 2020, respectively.

7. Non-trade and notes receivable

The non-trade and notes receivable caption in the Consolidated Balance Sheet is comprised of the following components:


	March 31, 2021		June 30, 2020
Notes receivable	$	141,333	$	97,370

Accounts receivable, other	168,235		147,500
Total	$	309,568	$	244,870

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8. Inventories

The inventories caption in the Consolidated Balance Sheet is comprised of the following components:


	March 31, 2021		June 30, 2020
Finished products	$	715,218	$	694,577
Work in process	944,378		881,104
Raw materials	238,563		238,950
Total	$	1,898,159	$	1,814,631

9. Business realignment and acquisition integration charges

We incurred business realignment and acquisition integration charges in the first nine months of fiscal 2021 and 2020. During fiscal 2021, business realignment charges primarily consisted of actions taken to address the impact of COVID-19 on our business. In both fiscal 2021 and 2020, 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. 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				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Diversified Industrial	$	4,139	$	12,720	$	31,247	$	27,112
Aerospace Systems	1,306		613		6,643		658
Corporate general and administrative expenses	156		71		954		193
Other expense	1		50		1,226		50

Workforce reductions in connection with business realignment charges in the Business Segment Information are as follows:


	Three Months Ended		Nine Months Ended
	March 31,		March 31,
	2021	2020	2021	2020
Diversified Industrial	65	336	741	1,154
Aerospace Systems	41	34	326	50
Corporate general and administrative expenses	1	3	19	8

The business realignment charges are presented in the Consolidated Statement of Income as follows:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Cost of sales	$	3,056	$	10,201	$	29,389	$	21,225
Selling, general and administrative expenses	2,545		3,203		9,455		6,738
Other (income), net	1		50		1,226		50

During the first nine months of fiscal 2021, approximately $43 million in payments were made relating to business realignment charges. Remaining payments related to business realignment actions of approximately $19 million, a majority of which are expected to be paid by March 31, 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.

- 10 -

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				Nine Months Ended
	March 31,				March 31,
	2021		2020		2021		2020
Diversified Industrial	$	2,631	$	8,364	$	9,495	$	18,503
Aerospace Systems	24		486		699		1,570

These charges are primarily included in selling, general and administrative expenses within the Consolidated Statement of Income.

10. Equity

Changes in equity for the three months ended March 31, 2021 and 2020 are as follows:


	Common Stock		Additional Capital		Retained Earnings		Accumulated Other Comprehensive (Loss)		Treasury Shares		Noncontrolling Interests		Total Equity
Balance at December 31, 2020	$	90,523	$	385,049	$	14,072,152	$	(2,130,506)	$	(5,311,236)	$	16,322	$	7,122,304
Net income					471,647						86		471,733

Other comprehensive (loss)							(25,784)				(463)		(26,247)
Dividends paid ($0.88 per share)					(113,887)						(218)		(114,105)
Stock incentive plan activity			(10,552)						14,796				4,244

Shares purchased at cost									(50,000)				(50,000)
Balance at March 31, 2021	$	90,523	$	374,497	$	14,429,912	$	(2,156,290)	$	(5,346,440)	$	15,727	$	7,407,929


	Common Stock		Additional Capital		Retained Earnings		Accumulated Other Comprehensive (Loss)		Treasury Shares		Noncontrolling Interests		Total Equity
Balance at December 31, 2019	$	90,523	$	455,862	$	13,094,252	$	(1,945,732)	$	(5,364,730)	$	12,326	$	6,342,501
Net income					367,253						116		367,369
Other comprehensive (loss)							(249,730)				(960)		(250,690)
Dividends paid ($0.88 per share)					(113,214)						(52)		(113,266)
Stock incentive plan activity			(3,705)						11,978				8,273
Acquisition activity											7		7
Shares purchased at cost									(46,767)				(46,767)
Balance at March 31, 2020	$	90,523	$	452,157	$	13,348,291	$	(2,195,462)	$	(5,399,519)	$	11,437	$	6,307,427

Changes in equity for the nine months ended March 31, 2021 and 2020 are as follows:


	Common Stock		Additional Capital		Retained Earnings		Accumulated Other Comprehensive (Loss)		Treasury Shares		Noncontrolling Interests		Total Equity
Balance at June 30, 2020	$	90,523	$	416,585	$	13,530,666	$	(2,558,875)	$	(5,364,916)	$	14,546	$	6,128,529

Net income					1,240,362						585		1,240,947
Other comprehensive income							402,585				813		403,398
Dividends paid ($2.64 per share)					(341,116)						(217)		(341,333)
Stock incentive plan activity			(42,088)						68,476				26,388

Shares purchased at cost									(50,000)				(50,000)
Balance at March 31, 2021	$	90,523	$	374,497	$	14,429,912	$	(2,156,290)	$	(5,346,440)	$	15,727	$	7,407,929

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	Common Stock		Additional Capital		Retained Earnings		Accumulated Other Comprehensive (Loss)		Treasury Shares		Noncontrolling Interests		Total Equity
Balance at June 30, 2019	$	90,523	$	462,086	$	12,777,538	$	(2,059,048)	$	(5,309,130)	$	6,183	$	5,968,152

Net income					910,625						383		911,008
Other comprehensive (loss)							(136,414)				(972)		(137,386)
Dividends paid ($2.64 per share)					(339,872)						(419)		(340,291)
Stock incentive plan activity			(9,929)						56,378				46,449
Acquisition activity											6,262		6,262
Shares purchased at cost									(146,767)				(146,767)
Balance at March 31, 2020	$	90,523	$	452,157	$	13,348,291	$	(2,195,462)	$	(5,399,519)	$	11,437	$	6,307,427

Changes in accumulated other comprehensive (loss) in shareholders' equity by component for the nine months ended March 31, 2021 and 2020 are as follows:


	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	281,726		—		281,726
Amounts reclassified from accumulated other comprehensive (loss)	—		120,859		120,859
Balance at March 31, 2021	$	(912,211)	$	(1,244,079)	$	(2,156,290)


	Foreign Currency Translation Adjustment		Retirement Benefit Plans		Total
Balance at June 30, 2019	$	(1,011,656)	$	(1,047,392)	$	(2,059,048)

Other comprehensive (loss) before reclassifications	(232,981)		—		(232,981)
Amounts reclassified from accumulated other comprehensive (loss)	—		96,567		96,567
Balance at March 31, 2020	$	(1,244,637)	$	(950,825)	$	(2,195,462)

Significant reclassifications out of accumulated other comprehensive (loss) in shareholders' equity for the three and nine months ended March 31, 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		Nine Months Ended
	March 31, 2021		March 31, 2021
Retirement benefit plans
Amortization of prior service cost and initial net obligation	$	(1,304)	$	(3,542)	Other (income), net
Recognized actuarial loss	(51,212)		(156,240)		Other (income), net
Total before tax	(52,516)		(159,782)
Tax benefit	12,793		38,923
Net of tax	$	(39,723)	$	(120,859)

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Details about Accumulated Other Comprehensive (Loss) Components	Income (Expense) Reclassified from Accumulated Other Comprehensive (Loss)				Consolidated Statement of Income Classification
	Three Months Ended		Nine Months Ended
	March 31, 2020		March 31, 2020
Retirement benefit plans
Amortization of prior service cost and initial net obligation	$	(1,385)	$	(4,152)	Other (income), net
Recognized actuarial loss	(41,154)		(123,342)		Other (income), net
Total before tax	(42,539)		(127,494)
Tax benefit	10,414		30,927
Net of tax	$	(32,125)	$	(96,567)

11. Goodwill and intangible assets

The changes in the carrying amount of goodwill for the nine months ended March 31, 2021 are as follows:


	Diversified Industrial Segment		Aerospace Systems Segment		Total
Balance at June 30, 2020	$	7,267,573	$	602,362	$	7,869,935
Acquisitions	3,738		—		3,738


Foreign currency translation and other	157,900		13		157,913
Balance at March 31, 2021	$	7,429,211	$