Business Segment Information

12 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

Rockwell Automation is a leading global provider of industrial automation power, control and information solutions that help manufacturers achieve a competitive advantage for their businesses. We determine our operating segments based on the information used by our chief operating decision maker, our Chief Executive Officer, to allocate resources and assess performance. Based upon these criteria, we organized our products and services into two operating segments: Architecture & Software and Control Products & Solutions.

Architecture & Software

The Architecture & Software segment contains all of the hardware, software and communication components of our integrated control and information architecture capable of controlling the customer’s industrial processes and connecting with their manufacturing enterprise. Architecture & Software has a broad portfolio of products including:

• Control platforms that perform multiple control disciplines and monitoring of applications, including discrete, batch, continuous process, drives control, motion control and machine safety control. Our platform products include controllers, electronic operator interface devices, electronic input/output devices, communication and networking products and industrial computers. The information-enabled Logix controllers provide integrated multi-discipline control that is modular and scalable.

• Software products that include configuration and visualization software used to operate and supervise control platforms, advanced process control software and manufacturing execution software (MES) that addresses information needs between the factory floor and a customer’s enterprise business system.

• Other Architecture & Software products, including rotary and linear motion control products, sensors and machine safety components.

Control Products & Solutions

The Control Products & Solutions segment combines a comprehensive portfolio of intelligent motor control and industrial control products, application expertise and project management capabilities. This comprehensive portfolio includes:

• Low and medium voltage electro-mechanical and electronic motor starters, motor and circuit protection devices, AC/DC variable frequency drives, push buttons, signaling devices, termination and protection devices, relays and timers and condition sensors.

• Value-added solutions ranging from packaged solutions such as configured drives and motor control centers to automation and information solutions where we provide design, integration and start-up services for custom-engineered hardware and software systems primarily for manufacturing applications.

• Services designed to help maximize a customer’s automation investment and provide total life-cycle support, including technical support and repair, customized safety solutions, asset management, training and predictive and preventative maintenance.

The following tables reflect the sales and operating results of our reportable segments for the years ended September 30 (in millions):

	2012			2011			2010
Sales:
Architecture & Software	$	2,650.4		$	2,594.3		$	2,115.0
Control Products & Solutions	3,609.0			3,406.1			2,742.0
Total	$	6,259.4		$	6,000.4		$	4,857.0
Segment operating earnings:
Architecture & Software	$	702.8		$	659.1		$	475.4
Control Products & Solutions	428.6			368.5			241.8
Total	1,131.4			1,027.6			717.2
Purchase accounting depreciation and amortization	(19.8		)	(19.8		)	(18.9		)
General corporate-net	(85.6		)	(80.7		)	(93.6		)
Interest expense	(60.1		)	(59.5		)	(60.5		)
Income from continuing operations before income taxes	$	965.9		$	867.6		$	544.2

Among other considerations, we evaluate performance and allocate resources based upon segment operating earnings before income taxes, interest expense, costs related to corporate offices, certain nonrecurring corporate initiatives, gains and losses from the disposition of businesses and incremental acquisition related expenses resulting from purchase accounting adjustments such as intangible asset amortization, depreciation, inventory and purchased research and development charges. Depending on the product, intersegment sales within a single legal entity are either at cost or cost plus a mark-up, which does not necessarily represent a market price. Sales between legal entities are at an appropriate transfer price. We allocate costs related to shared segment operating activities to the segments using a methodology consistent with the expected benefit.

Redefining segment operating earnings for fiscal 2013

Beginning in fiscal 2013, we are changing our definition of segment operating earnings to also exclude non-operating pension costs. Non-operating pension costs consist of defined benefit plan interest cost, expected return on plan assets, amortization of actuarial gains and losses and the impacts of any plan curtailments or settlements. We will continue to include service cost and amortization of prior service cost in the business segment that incurred the expense.

The following tables summarize the identifiable assets at September 30 and the provision for depreciation and amortization and the amount of capital expenditures for property for the years ended September 30 for each of the reportable segments and Corporate (in millions):

	2012		2011		2010
Identifiable assets:
Architecture & Software	$	1,648.4	$	1,608.4	$	1,238.8
Control Products & Solutions	2,270.7		2,116.1		1,897.1
Corporate	1,717.4		1,560.4		1,612.4
Total	$	5,636.5	$	5,284.9	$	4,748.3
Depreciation and amortization:
Architecture & Software	$	61.6	$	60.0	$	54.0
Control Products & Solutions	57.1		51.4		54.3
Corporate	0.1		0.1		0.1
Total	118.8		111.5		108.4
Purchase accounting depreciation and amortization	19.8		19.8		18.9
Total	$	138.6	$	131.3	$	127.3
Capital expenditures for property:
Architecture & Software	$	24.6	$	28.1	$	33.0
Control Products & Solutions	55.3		38.2		26.6
Corporate	59.7		53.8		39.8
Total	$	139.6	$	120.1	$	99.4

Identifiable assets at Corporate consist principally of cash, net deferred income tax assets, prepaid pension and property. Property shared by the segments and used in operating activities is also reported in Corporate identifiable assets and Corporate capital expenditures. Corporate identifiable assets include shared net property balances of $318.0 million, $315.7 million and $293.2 million at September 30, 2012, 2011 and 2010, respectively, for which depreciation expense has been allocated to segment operating earnings based on the expected benefit to be realized by each segment. Corporate capital expenditures include $59.7 million, $53.8 million and $39.1 million in 2012, 2011 and 2010, respectively, that will be shared by our operating segments.

We conduct a significant portion of our business activities outside the United States. The following tables present sales and property by geographic region (in millions):

	Sales						Property
	2012		2011		2010		2012		2011		2010
United States	$	3,067.3	$	2,917.8	$	2,456.2	$	458.8	$	446.1	$	424.9
Canada	464.3		396.2		321.0		8.6		9.2		9.7
Europe, Middle East and Africa	1,280.6		1,267.6		987.3		41.6		42.6		40.3
Asia-Pacific	942.4		910.6		724.3		39.4		36.8		34.2
Latin America	504.8		508.2		368.2		38.7		26.7		27.8
Total	$	6,259.4	$	6,000.4	$	4,857.0	$	587.1	$	561.4	$	536.9

We attribute sales to the geographic regions based on the country of destination.

In the United States, Canada and certain other countries, we sell our products primarily through independent distributors. In the remaining countries, we sell products through a combination of direct sales and sales through distributors. We sell large systems and service offerings principally through a direct sales force, though opportunities are sometimes identified through distributors. Sales to our largest distributor in 2012, 2011 and 2010, which are attributable to both segments, were approximately 10 percent of our total sales.