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, 2014. The results of operations for the three and six month periods ended March 31, 2015 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 an allowance for doubtful accounts of $23.2 million at March 31, 2015 and $19.4 million at September 30, 2014. In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $12.2 million at March 31, 2015 and $11.6 million at September 30, 2014.

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,
	2015			2014			2015			2014
Net income	$	206.0		$	180.3		$	420.2		$	378.4
Less: Allocation to participating securities	(0.2		)	(0.2		)	(0.4		)	(0.5		)
Net income available to common shareowners	$	205.8		$	180.1		$	419.8		$	377.9
Basic weighted average outstanding shares	134.9			138.5			135.3			138.5
Effect of dilutive securities
Stock options	1.1			1.5			1.1			1.5
Performance shares	—			0.2			0.1			0.2
Diluted weighted average outstanding shares	136.0			140.2			136.5			140.2
Earnings per share:
Basic	$	1.53		$	1.30		$	3.10		$	2.73
Diluted	$	1.51		$	1.28		$	3.08		$	2.70

For the three and six months ended March 31, 2015, share-based compensation awards for 1.6 million shares 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, 2014, share-based compensation awards for 0.9 million shares were excluded from the diluted EPS calculation because they were antidilutive.

Recent Accounting Pronouncements

In May 2014, the FASB issued a new standard on revenue recognition from contracts with customers. This standard supersedes nearly all existing revenue recognition guidance and involves a five-step approach to recognizing revenue based on individual performance obligations in a contract. The new standard will also require additional qualitative and quantitative disclosures about contracts with customers, significant judgments made in applying the revenue guidance, and assets recognized from the costs to obtain or fulfill a contract. This guidance is effective for us for reporting periods beginning October 1, 2017. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures.