Basis of Presentation and Accounting Policies

In the opinion of management of Rockwell Automation, Inc. (the Company or Rockwell Automation), the unaudited Condensed Consolidated Financial Statements contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the periods presented and, except as otherwise indicated, such adjustments consist only of those of a normal recurring nature. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, 2012. The results of operations for the three and six month periods ended March 31, 2013 are not necessarily indicative of the results for the full year. All date references to years and quarters herein refer to our fiscal year and fiscal quarter unless otherwise stated.

Receivables

Receivables are stated net of allowances for doubtful accounts of $25.9 million at March 31, 2013 and $28.0 million at September 30, 2012. In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $9.6 million at March 31, 2013 and $7.9 million at September 30, 2012.

Earnings Per Share

The following table reconciles basic and diluted earnings per share (EPS) amounts (in millions, except per share amounts):



	Three Months Ended March 31,						Six Months Ended March 31,
	2013			2012			2013			2012
Net income	$	175.9		$	167.8		$	337.3		$	351.1
Less: Allocation to participating securities	(0.3		)	(0.3		)	(0.5		)	(0.7		)
Net income available to common shareowners	$	175.6		$	167.5		$	336.8		$	350.4
Basic weighted average outstanding shares	140.0			142.5			139.6			142.1
Effect of dilutive securities
Stock options	1.6			1.9			1.6			1.8
Performance shares	0.2			0.3			0.2			0.4
Diluted weighted average outstanding shares	141.8			144.7			141.4			144.3
Earnings per share:
Basic	$	1.25		$	1.18		$	2.41		$	2.47
Diluted	$	1.24		$	1.16		$	2.38		$	2.43

For the three and six months ended March 31, 2013, share-based compensation awards for 1.1 million and 1.7 million shares, respectively, were excluded from the diluted EPS calculation because they were antidilutive. For the three and six months ended March 31, 2012, share-based compensation awards for 1.7 million and 2.1 million shares, respectively, were excluded from the diluted EPS calculation because they were antidilutive.

Recent Accounting Pronouncements

In March 2013, the FASB issued new guidance related to the release of cumulative translation adjustment related to an entity's investment in a foreign entity. The guidance clarifies that the guidance in Subtopic 830-30, Foreign Currency Matters - Translation of Financial Statements, applies to the release of cumulative translation adjustment into net income when a reporting entity either sells a part or all of its investment in a foreign entity or ceases to have a controlling financial interest in a subsidiary or group of assets that constitute a business within a foreign entity. This guidance is effective for us prospectively for reporting periods beginning October 1, 2014. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

In February 2013, the FASB issued new accounting guidance, which requires companies to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income and the respective line items of net income affected by the reclassification, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, companies are required to cross-reference to other disclosures that provide additional detail on those amounts. This guidance is effective for us prospectively for reporting periods beginning October 1, 2013. Other than enhanced disclosures, the adoption of this guidance is not expected to have a material impact on our consolidated financial statements.