QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
☑ | Accelerated Filer | ☐ | ||||||||||||||||||
Non-accelerated Filer | ☐ | Smaller Reporting Company | ||||||||||||||||||
Emerging Growth Company |
Page No. | |||||
December 31, 2020 | September 30, 2020 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Receivables | |||||||||||
Inventories | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property, net of accumulated depreciation of $1,719.9 and $1,674.9, respectively | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Deferred income taxes | |||||||||||
Long-term investments | |||||||||||
Other assets | |||||||||||
Total | $ | $ | |||||||||
LIABILITIES AND SHAREOWNERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Short-term debt | $ | $ | |||||||||
Accounts payable | |||||||||||
Compensation and benefits | |||||||||||
Contract liabilities | |||||||||||
Customer returns, rebates and incentives | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Retirement benefits | |||||||||||
Operating lease liabilities | |||||||||||
Other liabilities | |||||||||||
Commitments and contingent liabilities (Note 13) | |||||||||||
Shareowners’ equity: | |||||||||||
Common stock ($1.00 par value, shares issued: 181.4) | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Common stock in treasury, at cost (shares held: 65.2 and 65.2, respectively) | ( | ( | |||||||||
Shareowners’ equity attributable to Rockwell Automation, Inc. | |||||||||||
Noncontrolling interests | |||||||||||
Total shareowners’ equity | |||||||||||
Total | $ | $ |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Sales | |||||||||||
Products and solutions | $ | $ | |||||||||
Services | |||||||||||
Cost of sales | |||||||||||
Products and solutions | ( | ( | |||||||||
Services | ( | ( | |||||||||
( | ( | ||||||||||
Gross profit | |||||||||||
Selling, general and administrative expenses | ( | ( | |||||||||
Change in fair value of investments | |||||||||||
Other income (expense) (Note 11) | ( | ||||||||||
Interest expense | ( | ( | |||||||||
Income before income taxes | |||||||||||
Income tax provision (Note 14) | ( | ( | |||||||||
Net income | |||||||||||
Net (loss) income attributable to noncontrolling interests | ( | ||||||||||
Net income attributable to Rockwell Automation, Inc. | $ | $ | |||||||||
Earnings per share: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
Weighted average outstanding shares: | |||||||||||
Basic | |||||||||||
Diluted |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Net income | $ | $ | |||||||||
Other comprehensive income (loss), net of tax: | |||||||||||
Pension and other postretirement benefit plan adjustments (net of tax (expense) of ($8.2) and ($7.9)) | |||||||||||
Currency translation adjustments | |||||||||||
Net change in unrealized gains and losses on cash flow hedges (net of tax benefit of $3.7 and $1.1) | ( | ( | |||||||||
Other comprehensive income | |||||||||||
Comprehensive income | |||||||||||
Comprehensive (loss) income attributable to noncontrolling interests | ( | ||||||||||
Comprehensive income attributable to Rockwell Automation, Inc. | $ | $ |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to arrive at cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization of intangible assets | |||||||||||
Change in fair value of investments | ( | ( | |||||||||
Share-based compensation expense | |||||||||||
Retirement benefit expense | |||||||||||
Pension contributions | ( | ( | |||||||||
Net loss on disposition of property | |||||||||||
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments: | |||||||||||
Receivables | ( | ( | |||||||||
Inventories | ( | ||||||||||
Accounts payable | ( | ||||||||||
Contract liabilities | |||||||||||
Compensation and benefits | ( | ||||||||||
Income taxes | ( | ||||||||||
Other assets and liabilities | |||||||||||
Cash provided by operating activities | |||||||||||
Investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Acquisition of businesses, net of cash acquired | ( | ( | |||||||||
Purchases of investments | ( | ||||||||||
Proceeds from maturities of investments | |||||||||||
Proceeds from sale of investments | |||||||||||
Proceeds from sale of property | |||||||||||
Cash used for investing activities | ( | ( | |||||||||
Financing activities: | |||||||||||
Net issuance of short-term debt | |||||||||||
Cash dividends | ( | ( | |||||||||
Purchases of treasury stock | ( | ( | |||||||||
Proceeds from the exercise of stock options | |||||||||||
Other financing activities | ( | ||||||||||
Cash used for financing activities | ( | ( | |||||||||
Effect of exchange rate changes on cash | |||||||||||
Increase (decrease) in cash, cash equivalents, and restricted cash | ( | ||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||||||
Components of cash, cash equivalents, and restricted cash | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash, noncurrent (Other assets) | |||||||||||
Total cash, cash equivalents, and restricted cash | $ | $ |
Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Common stock in treasury, at cost | Total attributable to Rockwell Automation, Inc. | Noncontrolling interests | Total shareowners' equity | |||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued (including share-based compensation impact) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Share repurchases | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared (1) | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ |
Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Common stock in treasury, at cost | Total attributable to Rockwell Automation, Inc. | Noncontrolling interests | Total shareowners' equity | |||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued (including share-based compensation impact) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Share repurchases | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared (1) | — | — | ( | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Adoption of accounting standards | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Change in noncontrolling interest | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | $ | $ |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Net income attributable to Rockwell Automation | $ | $ | |||||||||
Less: Allocation to participating securities | ( | ( | |||||||||
Net income available to common shareowners | $ | $ | |||||||||
Basic weighted average outstanding shares | |||||||||||
Effect of dilutive securities | |||||||||||
Stock options | |||||||||||
Performance shares | |||||||||||
Diluted weighted average outstanding shares | |||||||||||
Earnings per share: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ |
Three Months Ended December 31, 2020 | |||||||||||||||||||||||
Intelligent Devices | Software & Control | Lifecycle Services | Total | ||||||||||||||||||||
North America | $ | $ | $ | $ | |||||||||||||||||||
Europe, Middle East and Africa (EMEA) | |||||||||||||||||||||||
Asia Pacific | |||||||||||||||||||||||
Latin America | |||||||||||||||||||||||
Total Company Sales | $ | $ | $ | $ |
Three Months Ended December 31, 2019 | |||||||||||||||||||||||
Intelligent Devices | Software & Control | Lifecycle Services | Total | ||||||||||||||||||||
North America | $ | $ | $ | $ | |||||||||||||||||||
Europe, Middle East and Africa (EMEA) | |||||||||||||||||||||||
Asia Pacific | |||||||||||||||||||||||
Latin America | |||||||||||||||||||||||
Total Company Sales | $ | $ | $ | $ |
December 31, 2020 | December 31, 2019 | ||||||||||
Balance as of beginning of fiscal year | $ | $ | |||||||||
Balance as of end of period |
Three Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Grants | Wtd. Avg. Share Fair Value | Grants | Wtd. Avg. Share Fair Value | ||||||||||||||||||||
Stock options | $ | $ | |||||||||||||||||||||
Performance shares | |||||||||||||||||||||||
Restricted stock and restricted stock units | |||||||||||||||||||||||
Unrestricted stock |
December 31, 2020 | September 30, 2020 | ||||||||||
Finished goods | $ | $ | |||||||||
Work in process | |||||||||||
Raw materials | |||||||||||
Inventories | $ | $ |
Purchase Price Allocation | ||||||||
Accounts receivable | $ | |||||||
All other assets | ||||||||
Goodwill | ||||||||
Intangible assets | ||||||||
Total assets acquired | ||||||||
Less: Liabilities assumed | ( | |||||||
Less: Deferred income taxes | ( | |||||||
Net assets acquired | $ | |||||||
Purchase Consideration | ||||||||
Total purchase consideration, net of cash acquired | $ |
Architecture & Software | Control Products & Solutions | Intelligent Devices | Software & Control | Lifecycle Services | Total | ||||||||||||||||||||||||||||||
Balance as of September 30, 2020 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Reallocation due to change in Segments | ( | ( | — | ||||||||||||||||||||||||||||||||
Acquisition of businesses | |||||||||||||||||||||||||||||||||||
Translation | |||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | $ | $ | $ | $ | $ |
December 31, 2020 | |||||||||||||||||
Carrying Amount | Accumulated Amortization | Net | |||||||||||||||
Amortized intangible assets: | |||||||||||||||||
Computer software products | $ | $ | $ | ||||||||||||||
Customer relationships | |||||||||||||||||
Technology | |||||||||||||||||
Trademarks | |||||||||||||||||
Other | |||||||||||||||||
Total amortized intangible assets | |||||||||||||||||
Allen-Bradley® trademark not subject to amortization | — | ||||||||||||||||
Total | $ | $ | $ |
September 30, 2020 | |||||||||||||||||
Carrying Amount | Accumulated Amortization | Net | |||||||||||||||
Amortized intangible assets: | |||||||||||||||||
Computer software products | $ | $ | $ | ||||||||||||||
Customer relationships | |||||||||||||||||
Technology | |||||||||||||||||
Trademarks | |||||||||||||||||
Other | |||||||||||||||||
Total amortized intangible assets | |||||||||||||||||
Allen-Bradley® trademark not subject to amortization | — | ||||||||||||||||
Total | $ | $ | $ |
December 31, 2020 | September 30, 2020 | ||||||||||
Unrealized losses on foreign exchange contracts | $ | $ | |||||||||
Product warranty obligations | |||||||||||
Taxes other than income taxes | |||||||||||
Accrued interest | |||||||||||
Income taxes payable | |||||||||||
Operating lease liabilities | |||||||||||
Other | |||||||||||
Other current liabilities | $ | $ |
December 31, 2020 | September 30, 2020 | |||||||||||||
Fixed income securities | $ | $ | ||||||||||||
Equity securities | ||||||||||||||
Other | ||||||||||||||
Total investments | ||||||||||||||
Less: Short-term investments(1) | ( | ( | ||||||||||||
Long-term investments | $ | $ |
Level 1: | Quoted prices in active markets for identical assets or liabilities. |
Level 2: | Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. |
Level 3: | Unobservable inputs for the asset or liability. |
Pension Benefits | |||||||||||
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Service cost | $ | $ | |||||||||
Interest cost | |||||||||||
Expected return on plan assets | ( | ( | |||||||||
Amortization: | |||||||||||
Prior service cost | |||||||||||
Net actuarial loss | |||||||||||
Settlements | ( | ( | |||||||||
Net periodic benefit cost | $ | $ |
Other Postretirement Benefits | |||||||||||
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Service cost | $ | $ | |||||||||
Interest cost | |||||||||||
Amortization: | |||||||||||
Prior service credit | ( | ( | |||||||||
Net actuarial loss | |||||||||||
Net periodic benefit credit | $ | ( | $ | ( |
Three Months Ended December 31, | ||||||||||||||
2020 | 2019 | |||||||||||||
Interest income | $ | $ | ||||||||||||
Royalty income | ||||||||||||||
Legacy product liability and environmental charges | ( | ( | ||||||||||||
Non-operating pension and postretirement benefit cost | ( | ( | ||||||||||||
Legal settlement (Note 13) | ||||||||||||||
Other | ( | |||||||||||||
Other income (expense) | $ | $ | ( |
Three Months Ended December 31, 2020 | |||||||||||||||||||||||
Pension and other postretirement benefit plan adjustments, net of tax | Accumulated currency translation adjustments, net of tax | Net unrealized gains (losses) on cash flow hedges, net of tax | Total accumulated other comprehensive loss, net of tax | ||||||||||||||||||||
Balance as of September 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||||||||||||||
Other comprehensive income (loss) | ( | ||||||||||||||||||||||
Balance as of December 31, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Three Months Ended December 31, 2019 | |||||||||||||||||||||||
Pension and other postretirement benefit plan adjustments, net of tax | Accumulated currency translation adjustments, net of tax | Net unrealized gains (losses) on cash flow hedges, net of tax | Total accumulated other comprehensive loss, net of tax | ||||||||||||||||||||
Balance as of September 30, 2019 | $ | ( | $ | ( | $ | ( | ( | ||||||||||||||||
Other comprehensive income (loss) before reclassifications | |||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | ( | ||||||||||||||||||||||
Other comprehensive income (loss) | ( | ||||||||||||||||||||||
Adoption of accounting standard/other | ( | ( | |||||||||||||||||||||
Balance as of December 31, 2019 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Three Months Ended December 31, | Affected Line in the Consolidated Statement of Operations | ||||||||||||||||
2020 | 2019 | ||||||||||||||||
Pension and other postretirement benefit plan adjustments(1): | |||||||||||||||||
Amortization of prior service credit | $ | ( | $ | ( | Other income (expense) | ||||||||||||
Amortization of net actuarial loss | Other income (expense) | ||||||||||||||||
Settlements | ( | ( | Other income (expense) | ||||||||||||||
Income before income taxes | |||||||||||||||||
( | ( | Income tax provision | |||||||||||||||
$ | $ | Net income attributable to Rockwell Automation | |||||||||||||||
Net unrealized losses (gains) on cash flow hedges: | |||||||||||||||||
Forward exchange contracts | $ | ( | $ | ( | Sales | ||||||||||||
Forward exchange contracts | ( | Cost of sales | |||||||||||||||
Forward exchange contracts | ( | Selling, general and administrative expenses | |||||||||||||||
Treasury locks related to 2019 debt issuance | Interest expense | ||||||||||||||||
( | Income before income taxes | ||||||||||||||||
( | Income tax provision | ||||||||||||||||
$ | $ | ( | Net income attributable to Rockwell Automation | ||||||||||||||
Total reclassifications | $ | $ | Net income attributable to Rockwell Automation |
Intelligent Devices | Software & Control(1) | Lifecycle Services(2) | ||||||||||||
Drives(2) | Control software & hardware | Consulting | ||||||||||||
Motion(1) | Visualization software & hardware | Professional services and solutions | ||||||||||||
Safety(1) | Digital twin & simulation software | Connected services | ||||||||||||
Sensing(1) | Information solutions software | Maintenance services | ||||||||||||
Industrial components(2) | Network & security infrastructure | Sensia joint venture | ||||||||||||
Configured-to-order products(2) |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Sales | |||||||||||
Intelligent Devices | $ | $ | |||||||||
Software & Control | |||||||||||
Lifecycle Services | |||||||||||
Total | $ | $ | |||||||||
Segment operating earnings | |||||||||||
Intelligent Devices | $ | $ | |||||||||
Software & Control | |||||||||||
Lifecycle Services | |||||||||||
Total | |||||||||||
Purchase accounting depreciation and amortization | ( | ( | |||||||||
Corporate and other | ( | ( | |||||||||
Non-operating pension and postretirement benefit cost | ( | ( | |||||||||
Gain on investments | |||||||||||
Legal Settlement | |||||||||||
Interest (expense) income - net | ( | ( | |||||||||
Income before income taxes | $ | $ |
December 31, 2020 | September 30, 2020 | ||||||||||
Identifiable assets: | |||||||||||
Intelligent Devices | $ | $ | |||||||||
Software & Control | |||||||||||
Lifecycle Services | |||||||||||
Corporate | |||||||||||
Total | $ | $ |
IP Index | PMI | ||||||||||
Fiscal 2021 quarter ended: | |||||||||||
December 2020 | 104.5 | 60.7 | |||||||||
Fiscal 2020 quarter ended: | |||||||||||
September 2020 | 102.4 | 55.4 | |||||||||
June 2020 | 93.7 | 52.6 | |||||||||
March 2020 | 107.7 | 49.1 | |||||||||
December 2019 | 109.6 | 47.8 | |||||||||
Fiscal 2019 quarter ended: | |||||||||||
September 2019 | 109.5 | 48.2 |
Sales Growth Guidance | EPS Guidance | |||||||||||||||||||
Reported sales growth | 8.5% - 11.5% | Diluted EPS | $11.07 - $11.47 | |||||||||||||||||
Organic sales growth1 | 4.5% - 7.5% | Adjusted EPS1 | $8.70 - $9.10 | |||||||||||||||||
Inorganic sales growth | ~1.5% | |||||||||||||||||||
Currency translation | ~2.5% |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Sales | |||||||||||
Intelligent Devices (a) | $ | 721.7 | $ | 776.6 | |||||||
Software & Control (b) | 441.0 | 452.5 | |||||||||
Lifecycle Services (c) | 402.6 | 455.4 | |||||||||
Total sales (d) | $ | 1,565.3 | $ | 1,684.5 | |||||||
Segment operating earnings(1) | |||||||||||
Intelligent Devices (e) | $ | 140.2 | $ | 160.6 | |||||||
Software & Control (f) | 133.1 | 140.4 | |||||||||
Lifecycle Services (g) | 36.0 | 38.1 | |||||||||
Total segment operating earnings(2) (h) | 309.3 | 339.1 | |||||||||
Purchase accounting depreciation and amortization | (11.7) | (10.0) | |||||||||
Corporate and other | (28.0) | (32.8) | |||||||||
Non-operating pension and postretirement benefit cost | (7.0) | (8.7) | |||||||||
Gain on investments | 390.4 | 71.0 | |||||||||
Legal settlement | 70.0 | — | |||||||||
Interest (expense) income, net | (22.3) | (24.0) | |||||||||
Income before income taxes (i) | 700.7 | 334.6 | |||||||||
Income tax provision | (110.3) | (19.2) | |||||||||
Net income | 590.4 | 315.4 | |||||||||
Net (loss) income attributable to noncontrolling interests | (2.9) | 4.70 | |||||||||
Net income attributable to Rockwell Automation | $ | 593.3 | $ | 310.7 | |||||||
Diluted EPS | $ | 5.06 | $ | 2.66 | |||||||
Adjusted EPS(3) | $ | 2.38 | $ | 2.15 | |||||||
Diluted weighted average outstanding shares | 117.1 | 116.6 | |||||||||
Total segment operating margin(2) (h/d) | 19.8 | % | 20.1 | % | |||||||
Pre-tax margin (i/d) | 44.8 | % | 19.9 | % | |||||||
Intelligent Devices segment operating margin (e/a) | 19.4 | % | 20.7 | % | |||||||
Software & Control segment operating margin (f/b) | 30.2 | % | 31.0 | % | |||||||
Lifecycle Services segment operating margin (g/c) | 8.9 | % | 8.4 | % |
Change vs. | Change in Organic Sales(1) vs. | ||||||||||||||||
Three Months Ended December 31, 2020 | Three Months Ended December 31, 2019 | Three Months Ended December 31, 2019 | |||||||||||||||
North America | $ | 912.3 | (9.4) | % | (10.6) | % | |||||||||||
EMEA | 320.7 | 3.4 | % | (7.8) | % | ||||||||||||
Asia Pacific | 221.9 | (3.4) | % | (7.1) | % | ||||||||||||
Latin America | 110.4 | (19.9) | % | (11.5) | % | ||||||||||||
Total Sales | $ | 1,565.3 | (7.1) | % | (9.7) | % |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Purchase accounting depreciation and amortization | |||||||||||
Intelligent Devices | $ | 0.7 | $ | 0.7 | |||||||
Software & Control | 2.7 | 1.2 | |||||||||
Lifecycle Services | 8.0 | 7.8 | |||||||||
Non-operating pension and postretirement benefit cost | |||||||||||
Intelligent Devices | 1.2 | 1.7 | |||||||||
Software & Control | 1.2 | 1.7 | |||||||||
Lifecycle Services | 1.5 | 2.2 |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Net income attributable to Rockwell Automation | $ | 593.3 | $ | 310.7 | |||||||
Non-operating pension and postretirement benefit cost | 7.0 | 8.7 | |||||||||
Tax effect of non-operating pension and postretirement benefit cost | (2.0) | (2.4) | |||||||||
Change in fair value of investments1 | (390.4) | (71.0) | |||||||||
Tax effect of the change in fair value of investments1 | 64.2 | — | |||||||||
Purchase accounting depreciation and amortization attributable to Rockwell Automation | 8.7 | 7.0 | |||||||||
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation | (2.1) | (1.6) | |||||||||
Adjusted Income | $ | 278.7 | $ | 251.4 | |||||||
Diluted EPS | $ | 5.06 | $ | 2.66 | |||||||
Non-operating pension and postretirement benefit cost | 0.06 | 0.08 | |||||||||
Tax effect of non-operating pension and postretirement benefit cost | (0.02) | (0.02) | |||||||||
Change in fair value of investments1 | (3.33) | (0.61) | |||||||||
Tax effect of the change in fair value of investments1 | 0.55 | — | |||||||||
Purchase accounting depreciation and amortization attributable to Rockwell Automation | 0.08 | 0.06 | |||||||||
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation | (0.02) | (0.02) | |||||||||
Adjusted EPS | $ | 2.38 | $ | 2.15 | |||||||
Effective tax rate | 15.8 | % | 5.7 | % | |||||||
Tax effect of non-operating pension and postretirement benefit cost | 0.1 | % | 0.6 | % | |||||||
Tax effect of the change in fair value of investments1 | (0.7) | % | 1.6 | % | |||||||
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation | 0.2 | % | 0.4 | % | |||||||
Adjusted Effective Tax Rate | 15.4 | % | 8.3 | % |
Fiscal 2021 Guidance | ||||||||
Diluted EPS | $11.07 - $11.47 | |||||||
Non-operating pension and postretirement benefit cost | 0.23 | |||||||
Tax effect of non-operating pension and postretirement benefit cost | (0.07) | |||||||
Change in fair value of investments1 | (3.33) | |||||||
Tax effect of change in fair value of investments1 | 0.55 | |||||||
Purchase accounting depreciation and amortization attributable to Rockwell Automation | 0.33 | |||||||
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation | (0.08) | |||||||
Adjusted EPS2 | $8.70 - $9.10 | |||||||
Effective tax rate | ~ 14.1% | |||||||
Tax effect of non-operating pension and postretirement benefit cost | ~ 0.2% | |||||||
Tax effect of change in fair value of investments1 | ~ (0.7)% | |||||||
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation | ~ 0.4% | |||||||
Adjusted Effective Tax Rate | ~ 14.0% |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Cash provided by (used for): | |||||||||||
Operating activities | $ | 346.5 | $ | 231.1 | |||||||
Investing activities | (310.1) | (233.0) | |||||||||
Financing activities | (37.2) | (95.6) | |||||||||
Effect of exchange rate changes on cash | 26.6 | 5.3 | |||||||||
Increase (decrease) in cash, cash equivalents, and restricted cash | $ | 25.8 | $ | (92.2) |
Three Months Ended December 31, | |||||||||||
2020 | 2019 | ||||||||||
Cash provided by operating activities | $ | 346.5 | $ | 231.1 | |||||||
Capital expenditures | (27.1) | (37.0) | |||||||||
Free cash flow | $ | 319.4 | $ | 194.1 |
Credit Rating Agency | Short-Term Rating | Long-Term Rating | Outlook | |||||||||||||||||
Standard & Poor’s | A-1 | A | Stable | |||||||||||||||||
Moody’s | P-2 | A3 | Stable | |||||||||||||||||
Fitch Ratings | F1 | A | Stable |
Three Months Ended December 31, 2020 | Three Months Ended December 31, 2019 | ||||||||||||||||||||||||||||
Sales | Effect of Acquisitions | Effect of Changes in Currency | Organic Sales | Sales | |||||||||||||||||||||||||
North America | $ | 912.3 | $ | (11.1) | $ | (1.3) | $ | 899.9 | $ | 1,006.9 | |||||||||||||||||||
EMEA | 320.7 | (18.5) | (16.4) | 285.8 | 310.1 | ||||||||||||||||||||||||
Asia Pacific | 221.9 | (0.3) | (8.4) | 213.2 | 229.6 | ||||||||||||||||||||||||
Latin America | 110.4 | — | 11.7 | 122.1 | 137.9 | ||||||||||||||||||||||||
Total Company Sales | $ | 1,565.3 | $ | (29.9) | $ | (14.4) | $ | 1,521.0 | $ | 1,684.5 |
Three Months Ended December 31, 2020 | Three Months Ended December 31, 2019 | ||||||||||||||||||||||||||||
Sales | Effect of Acquisitions | Effect of Changes in Currency | Organic Sales | Sales | |||||||||||||||||||||||||
Intelligent Devices | $ | 721.7 | $ | — | $ | (6.4) | $ | 715.3 | $ | 776.6 | |||||||||||||||||||
Software & Control | 441.0 | (12.0) | (4.5) | 424.5 | 452.5 | ||||||||||||||||||||||||
Lifecycle Services | 402.6 | (17.9) | (3.5) | 381.2 | 455.4 | ||||||||||||||||||||||||
Total Company Sales | $ | 1,565.3 | $ | (29.9) | $ | (14.4) | $ | 1,521.0 | $ | 1,684.5 |
Period | Total Number of Shares Purchased(1) | Average Price Paid Per Share(2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Approx. Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(3) | ||||||||||||||||||||||
October 1 - 31, 2020 | 46,115 | $ | 238.47 | 46,115 | $ | 842,691,304 | ||||||||||||||||||||
November 1 - 30, 2020 | 123,471 | 247.20 | 123,471 | 812,169,732 | ||||||||||||||||||||||
December 1 - 31, 2020 | 186,424 | 247.80 | 186,424 | 765,973,291 | ||||||||||||||||||||||
Total | 356,010 | 246.38 | 356,010 |
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Exhibit 101 | — | Interactive Data Files. | ||||||||||||
* | Management contract or compensatory plan or arrangement |
ROCKWELL AUTOMATION, INC. (Registrant) | |||||||||||||||||
Date: | January 26, 2021 | By | /s/ STEVEN W. ETZEL | ||||||||||||||
Steven W. Etzel Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
Date: | January 26, 2021 | By | /s/ TERRY L. RIESTERER | ||||||||||||||
Terry L. Riesterer Vice President and Controller (Principal Accounting Officer) |
Date of Grant | Type of Grant | Number of Shares | Award Price | ||||||||
<award date> | <award type> | <award amount> | <award price> |
ROCKWELL AUTOMATION, INC. | |||||
By: | |||||
Rebecca W. House | |||||
Senior Vice President, | |||||
Chief Administrative and Legal Officer and Secretary |
/s/ BLAKE D. MORET | ||
Blake D. Moret President and Chief Executive Officer |
/s/ STEVEN W. ETZEL | ||
Steven W. Etzel Senior Vice President and Chief Financial Officer |
/s/ BLAKE D. MORET | ||
Blake D. Moret President and Chief Executive Officer |
/s/ STEVEN W. ETZEL | ||
Steven W. Etzel Senior Vice President and Chief Financial Officer |
Consolidated Balance Sheet (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Dec. 31, 2020 |
Sep. 30, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 1,719.9 | $ 1,674.9 |
Common stock, par value per share (in usd per share) | $ 1.00 | $ 1.00 |
Common stock, shares issued (in shares) | 181.4 | 181.4 |
Treasury stock, shares (in shares) | 65.2 | 65.2 |
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 590.4 | $ 315.4 |
Other comprehensive income (loss), net of tax: | ||
Pension and other postretirement benefit plan adjustments (net of tax (expense) of ($8.2) and ($7.9)) | 27.6 | 27.4 |
Currency translation adjustments | 69.2 | 22.1 |
Net change in unrealized gains and losses on cash flow hedges (net of tax benefit of $3.7 and $1.1) | (9.8) | (2.5) |
Other comprehensive income | 87.0 | 47.0 |
Comprehensive income | 677.4 | 362.4 |
Comprehensive (loss) income attributable to noncontrolling interests | (2.8) | 5.0 |
Comprehensive income attributable to Rockwell Automation, Inc. | $ 680.2 | $ 357.4 |
Consolidated Statement of Comprehensive Income (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||
Pension and other postretirement benefit plan adjustments tax expense | $ (8.2) | $ (7.9) |
Net change in unrealized gains and losses on cash flow hedges tax benefit | $ 3.7 | $ 1.1 |
Consolidated Statement of Shareowners' Equity - USD ($) $ in Millions |
Total |
Cumulative Effect, Period of Adoption, Adjustment |
Common stock |
Additional paid-in capital |
Retained earnings |
Retained earnings
Cumulative Effect, Period of Adoption, Adjustment
|
Accumulated other comprehensive loss |
Accumulated other comprehensive loss
Cumulative Effect, Period of Adoption, Adjustment
|
Common stock in treasury, at cost |
Total attributable to Rockwell Automation, Inc. |
Total attributable to Rockwell Automation, Inc.
Cumulative Effect, Period of Adoption, Adjustment
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Noncontrolling interests |
||
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Balance at beginning of period at Sep. 30, 2019 | $ 404.2 | $ 2.2 | $ 181.4 | $ 1,709.1 | $ 6,440.2 | $ 149.0 | $ (1,488.0) | $ (146.8) | $ (6,438.5) | $ 404.2 | $ 2.2 | $ 0.0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income (loss) | 315.4 | 310.7 | 310.7 | 4.7 | ||||||||||
Other comprehensive income (loss) | 47.0 | 46.7 | 46.7 | 0.3 | ||||||||||
Common stock issued (including share-based compensation impact) | 117.4 | 16.3 | 101.1 | 117.4 | ||||||||||
Share repurchases | (100.2) | (100.2) | (100.2) | |||||||||||
Cash dividends declared | [1] | (117.9) | (117.9) | (117.9) | ||||||||||
Change in noncontrolling interest | 368.4 | 50.1 | 3.8 | 53.9 | 314.5 | |||||||||
Balance at end of period at Dec. 31, 2019 | 1,036.5 | 181.4 | 1,775.5 | 6,782.0 | (1,584.3) | $ (143.0) | (6,437.6) | 717.0 | 319.5 | |||||
Balance at beginning of period at Sep. 30, 2020 | 1,346.8 | 181.4 | 1,830.7 | 7,139.8 | (1,614.2) | (6,509.9) | 1,027.8 | 319.0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net income (loss) | 590.4 | 593.3 | 593.3 | (2.9) | ||||||||||
Other comprehensive income (loss) | 87.0 | 86.9 | 86.9 | 0.1 | ||||||||||
Common stock issued (including share-based compensation impact) | 61.6 | 25.6 | 36.0 | 61.6 | ||||||||||
Share repurchases | (87.7) | (87.7) | (87.7) | |||||||||||
Cash dividends declared | [1] | (124.3) | (124.3) | (124.3) | ||||||||||
Balance at end of period at Dec. 31, 2020 | $ 1,873.8 | $ 181.4 | $ 1,856.3 | $ 7,608.8 | $ (1,527.3) | $ (6,561.6) | $ 1,557.6 | $ 316.2 | ||||||
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Consolidated Statement of Shareowners' Equity (Parenthetical) - $ / shares |
3 Months Ended | |
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Dec. 31, 2020 |
Dec. 31, 2019 |
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Statement of Stockholders' Equity [Abstract] | ||
Cash dividends per share (in usd per share) | $ 1.07 | $ 1.02 |
Basis of Presentation and Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Accounting Policies | Basis of Presentation and Accounting Policies In the opinion of management of Rockwell Automation, Inc. ("Rockwell Automation" or "the Company"), the unaudited 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, 2020. The results of operations for the three-month period ended December 31, 2020, 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 We record an allowance for doubtful accounts based on customer-specific analysis and general matters such as current assessments of past due balances, historic writeoff experience, and economic conditions and expected changes in market conditions. Receivables are stated net of an allowance for doubtful accounts of $14.4 million at December 31, 2020, and $15.2 million at September 30, 2020. In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $9.4 million at December 31, 2020, and $8.1 million at September 30, 2020. The changes to our allowance for doubtful accounts during the three months ended December 31, 2020, were not material and primarily consisted of current-period provisions, writeoffs charged against the allowance, recoveries collected, and foreign currency translation. Earnings Per Share The following table reconciles basic and diluted earnings per share (EPS) amounts (in millions, except per share amounts):
For the three months ended December 31, 2020, there were 0.2 million shares related to share-based compensation awards that were excluded from the diluted EPS calculation because they were antidilutive. For the three months ended December 31, 2019, 2.4 million shares related to share-based compensation awards were excluded from the diluted EPS calculation because they were antidilutive. Non-Cash Investing and Financing Activities Capital expenditures of $21.5 million and $10.9 million were accrued within accounts payable and other current liabilities at December 31, 2020 and 2019, respectively. At December 31, 2020 and 2019, there were $4.2 million and $3.5 million, respectively, of outstanding common stock share repurchases recorded in accounts payable that did not settle until the next fiscal quarter. These non-cash investing and financing activities have been excluded from cash used for capital expenditures and treasury stock purchases in the Consolidated Statement of Cash Flows. Goodwill We perform our annual evaluation of goodwill and indefinite life intangible assets for impairment as required under accounting principles generally accepted in the United States (U.S. GAAP) during the second quarter of each year, or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Any excess in carrying value over the estimated fair value is charged to results of operations. For our annual evaluation of goodwill, we may perform a qualitative test to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount in order to determine whether it is necessary to perform a quantitative goodwill impairment test. When performing the quantitative goodwill impairment test, we determine the fair value of each reporting unit under a combination of an income approach derived from discounted cash flows and a market multiples approach using selected comparable public companies. Significant assumptions used in the income approach include: management’s forecasted cash flows, including estimated future revenue growth rates and margins, discount rates, and terminal value. Forecasted future revenue growth rates and margins are based on management’s best estimate about current and future conditions. Discount rates are determined using a weighted average cost of capital adjusted for risk factors specific to the reporting unit, with comparison to market and industry data. The terminal value is estimated following common methodology of calculating the present value of estimated perpetual cash flow beyond the last projected period assuming constant discount and long-term growth rates. Significant assumptions used in the market multiples approach include selection of the comparable public companies and calculation of the appropriate market multiples. Leases We have operating leases primarily for real estate, vehicles, and equipment. We determine if a contract is, or contains, a lease at contract inception. A right-of-use (ROU) asset and a corresponding lease liability are recognized at commencement for contracts that are, or contain, a lease with an original term greater than 12 months. ROU assets represent our right to use an underlying asset during the lease term, including periods for which renewal options are reasonably certain to be exercised, and lease liabilities represent our obligation to make lease payments arising from the lease. Lease expense is recognized on a straight-line basis over the lease term for operating leases with an original term of 12 months or less. Some leasing arrangements require variable payments that are dependent on usage or may vary for other reasons, such as payments for insurance and tax payments. A portion of our real estate leases is generally subject to annual changes based upon an index. The changes based upon the index are treated as variable lease payments. The variable portion of lease payments is not included in our ROU assets or lease liabilities and is expensed when incurred. We elected to not separate lease and nonlease components of contracts for all underlying asset classes. Accordingly, all expenses associated with a lease contract are accounted for as lease expenses. Lease liabilities are recognized at the contract commencement date based on the present value of remaining lease payments over the lease term. To calculate the lease liabilities we use our incremental borrowing rate. We determine our incremental borrowing rate at the commencement date using our unsecured borrowing rate, adjusted for collateralization and lease term. For leases denominated in a currency other than the U.S. dollar, the collateralized borrowing rate in the foreign currency is determined using the U.S. dollar and foreign currency swap spread. Long-term lease liabilities are presented as operating lease liabilities and current lease liabilities are included in other current liabilities in the Consolidated Balance Sheet. ROU assets are recognized at the contract commencement date at the value of the related lease liability, adjusted for any prepayments, lease incentives received and initial direct costs incurred. Operating lease ROU assets are presented as operating lease right-of-use assets in the Consolidated Balance Sheet. Lease expenses for operating leases are recognized on a straight-line basis over the lease term and recorded in cost of sales and selling, general and administrative expenses in the Consolidated Statement of Operations. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued a new standard on accounting for leases that requires lessees to recognize right-of-use assets and lease liabilities for most leases, among other changes to existing lease accounting guidance. The new standard also requires additional qualitative and quantitative disclosures about leasing activities. We adopted the new standard using the modified retrospective transition method, which resulted in an immaterial cumulative-effect adjustment to the opening balance of retained earnings as of October 1, 2019, our adoption date. The amounts of lease right-of-use assets and corresponding lease liabilities recorded in the Consolidated Balance Sheet upon adoption were $316 million and $329 million, respectively. We have implemented necessary changes to accounting policies, processes, controls and systems to enable compliance with this new standard. In February 2018, the FASB issued a new standard regarding the reporting of comprehensive loss, which gives entities the option to reclassify tax effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) stranded in accumulated other comprehensive loss into retained earnings. We adopted the new standard as of October 1, 2019, and elected to reclassify tax effects of $147 million from accumulated other comprehensive loss into retained earnings. In June 2016, the FASB issued a new standard that requires companies to utilize a current expected credit losses impairment (CECL) model for certain financial assets, including trade and other receivables. The CECL model requires that estimated expected credit losses, including allowance for doubtful accounts, consider a broader range of information such as economic conditions and expected changes in market conditions. We adopted the new standard as of October 1, 2020. The adoption of this standard did not have a material impact on our Consolidated financial statements.
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition Nature of Products and Services Substantially all of our revenue is from contracts with customers. We recognize revenue as promised products are transferred to, or services are performed for, customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those products and services. Our offerings consist of industrial automation and information products, solutions and services. Our products include hardware, software, and configured-to-order products. Our solutions include custom-engineered systems and software. Our services include customer technical support and repair, asset management and optimization consulting, and training. Also included in our services is a portion of revenue related to spare parts that are managed within our services offering. Our operations are comprised of the Intelligent Devices segment, Software & Control segment, and Lifecycle Services segment. Revenue from the Intelligent Devices and Software & Control segments is predominantly comprised of product sales which are recognized at a point in time. The Software & Control segment also contains revenue from software products which may be recognized over time if certain criteria are met. Revenue from the Lifecycle Services segment is predominantly comprised of solutions and services which are primarily recognized over time. See Note 16 for more information. Unfulfilled Performance Obligations As of December 31, 2020, we expect to recognize approximately $580 million of revenue in future periods from unfulfilled performance obligations from existing contracts with customers. We expect to recognize revenue of approximately $340 million from our remaining performance obligations over the next 12 months with the remaining balance recognized thereafter. We have applied the practical expedient to exclude the value of remaining performance obligations for (i) contracts with an original term of one year or less and (ii) contracts for which we recognize revenue in proportion to the amount we have the right to invoice for services performed. The amounts above also do not include the impact of contract renewal options that are unexercised as of December 31, 2020. Disaggregation of Revenue The following tables present our revenue disaggregation by geographic region for our three operating segments (in millions). We attribute sales to the geographic regions based on the country of destination. Information for the three months ended December 31, 2019, has been recast to reflect our new operating segments. See Note 15 for further information on our change in operating segments.
Contract Balances Contract liabilities primarily relate to consideration received in advance of performance under the contract. We do not have significant contract assets as of December 31, 2020. Below is a summary of our contract liabilities balance:
The most significant changes in our contract liabilities balance during the three months ended December 31, 2020, were due to amounts billed, partially offset by revenue recognized that was included in the contract liabilities balance at the beginning of the period. In the three months ended December 31, 2020, we recognized revenue of approximately $113.4 million that was included in the contract liabilities balance at September 30, 2020. We did not have a material amount of revenue recognized in the three months ended December 31, 2020, from performance obligations satisfied or partially satisfied in previous periods.
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Share-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation We recognized $11.5 million of pre-tax share-based compensation expense during each of the three months ended December 31, 2020, and 2019, respectively. Our annual grant of share-based compensation takes place during the first quarter of each fiscal year. The number of shares granted to employees and non-employee directors and the weighted average fair value per share during the periods presented were (in thousands, except per share amounts):
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consist of (in millions):
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Acquisitions |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions In October 2020, we acquired Oylo, a privately-held industrial cybersecurity services provider based in Barcelona, Spain. We assigned the full amount of goodwill related to this acquisition to our Lifecycle Services segment. In December 2020, we acquired Fiix Inc., a privately-held, artificial intelligence enabled computerized maintenance management system (CMMS) company based in Toronto, Ontario, Canada. We assigned the full amount of goodwill related to this acquisition to our Software & Control segment. We recorded assets acquired and liabilities assumed in connection with these acquisitions based on their estimated fair values as of the respective acquisition dates. The preliminary aggregate purchase price allocation for these acquisitions is as follows (in millions):
Intangible assets identified include $72.1 million of customer relationships, technology, and trade names (approximately 11-year weighted average useful life). We assigned $12.4 million of goodwill to our Lifecycle Services segment and $209.4 million of goodwill to our Software & Control segment, which represents intangible assets that are not separable such as synergy effects. We do not expect the goodwill to be deductible for tax purposes. The allocation of the purchase price to identifiable assets for these acquisitions are based on the preliminary valuations performed to determine the fair value of the net assets as of their respective acquisition dates. The measurement period for the valuation of net assets acquired ends as soon as information on the facts and circumstances that existed as of the acquisition dates becomes available, but not to exceed 12 months following the acquisition date. Adjustments in purchase price allocations may require a change in the amounts allocated to net assets acquired during the periods in which the adjustments are determined. Total sales from these acquisitions included in our consolidated results for the three months ended December 31, 2020, and their impact on proforma sales and earnings for the three months ended December 31, 2019, were not material. Acquisition-related costs recorded as expenses for these acquisitions in the three months ended December 31, 2020, were not material.
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Changes in the carrying amount of goodwill for the three months ended December 31, 2020, are (in millions):
During the first quarter of fiscal 2021, we changed our organizational structure resulting in three operating segments: Intelligent Devices, Software & Control, and Lifecycle Services. This change also resulted in the identification of new reporting units. We reassigned our goodwill balances to reflect this new structure using the relative fair value allocation approach required under U.S. GAAP. Under this approach, the fair values of each of our new reporting units were compared to the total fair value of their prior respective reporting units immediately prior to the reorganization to arrive at the reassigned goodwill balances. We determined the reporting unit fair values using the same approach for quantitative goodwill impairment tests described in Note 1 to the Consolidated Financial Statements. We also tested goodwill at the affected reporting units for impairment prior to and subsequent to the reassignment of goodwill and concluded that goodwill was not impaired. We perform our annual evaluation of goodwill and indefinite life intangible assets for impairment during the second quarter of each year, or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We assessed the changes in events and circumstances subsequent to our annual test and concluded that no triggering events which would require interim quantitative testing occurred except as described above. Other intangible assets consist of (in millions):
Estimated amortization expense is $59.5 million in 2021, $57.9 million in 2022, $56.6 million in 2023, $53.6 million in 2024, and $51.4 million in 2025.
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Short-term Debt |
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Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Short-term Debt | Short-term DebtOur short-term debt as of December 31, 2020, primarily consisted of $125.0 million of commercial paper borrowings and $23.5 million of interest-bearing loans from Schlumberger to Sensia which were originally due September 30, 2020, and are now due September 30, 2021. The weighted average interest rate of the commercial paper outstanding at December 31, 2020 was 0.22 percent. There were no commercial paper borrowings outstanding at September 30, 2020. The short-term loans from Schlumberger were entered into following formation of Sensia in fiscal 2020. |
Other Current Liabilities |
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Other Current Liabilities | Other Current LiabilitiesOther current liabilities consist of (in millions):
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Investments |
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Investments | Investments Our investments consist of (in millions):
(1) Short-term investments are included in other current assets in the Consolidated Balance Sheet. Equity Securities On July 19, 2018, we purchased 10,582,010 shares of PTC Inc. ("PTC") common stock (the "PTC Shares") in a private placement at a purchase price of $94.50 per share for an aggregate purchase price of approximately $1.0 billion (the "Purchase"). The PTC Shares are considered equity securities. For a period of approximately 3 years after the Purchase, we are subject to entity-specific transfer restrictions subject to certain exceptions. Since the first anniversary of the Purchase, the Company has had the ability to transfer, in the aggregate in any 90-day period, a number of PTC Shares equal to up to 1.0 percent of PTC's total outstanding shares of common stock as of the first day in such 90-day period, but no more than 2.0 percent of PTC's total outstanding shares of common stock in each of the second year and the third year after the Purchase. Fair Value of Investments U.S. GAAP defines fair value as the price that would be received for an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. U.S. GAAP also classifies the inputs used to measure fair value into the following hierarchy:
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. We did not have any transfers between levels of fair value measurements during the period presented. The PTC Shares are classified as level 1 in the fair value hierarchy and recognized at fair value in the Consolidated Balance Sheet using the most recent closing price of PTC common stock quoted on Nasdaq. At December 31, 2020, the fair value of the PTC Shares was $1,265.7 million, which was recorded in long-term investments in the Consolidated Balance Sheet. For the three months ended December 31, 2020, and 2019, we recorded gains of $390.4 million and $71.0 million related to the PTC Shares, respectively.
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Retirement Benefits | Retirement Benefits The components of net periodic benefit cost are (in millions):
The service cost component is included in cost of sales and selling, general and administrative expenses in the Consolidated Statement of Operations. All other components are included in other income (expense) in the Consolidated Statement of Operations.
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Other Income (Expense) | Other Income (Expense) The components of other income (expense) are (in millions):
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss attributable to Rockwell Automation by component were (in millions):
The reclassifications out of accumulated other comprehensive loss in the Consolidated Statement of Operations were (in millions):
(1) These components are included in the computation of net periodic benefit cost (credit). See Note 10 for further information.
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Commitments and Contingent Liabilities |
3 Months Ended |
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Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Various lawsuits, claims and proceedings have been or may be instituted or asserted against us relating to the conduct of our business, including those pertaining to product liability, environmental, safety and health, intellectual property, employment and contract matters. Although the outcome of litigation cannot be predicted with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to us, we believe the disposition of matters that are pending or have been asserted will not have a material effect on our business, financial condition or results of operations. The following outlines additional background for obligations associated with asbestos, divested businesses and intellectual property. We (including our subsidiaries) have been named as a defendant in lawsuits alleging personal injury as a result of exposure to asbestos that was used in certain components of our products many years ago, including products from divested businesses for which we have agreed to defend and indemnify claims. Currently there are a few thousand claimants in lawsuits that name us as defendants, together with hundreds of other companies. But in all cases, for those claimants who do show that they worked with our products or products of divested businesses for which we are responsible, we nevertheless believe we have meritorious defenses, in substantial part due to the integrity of the products, the encapsulated nature of any asbestos-containing components, and the lack of any impairing medical condition on the part of many claimants. We defend those cases vigorously. Historically, we have been dismissed from the vast majority of these claims with no payment to claimants. Additionally, we have maintained insurance coverage that includes indemnity and defense costs, over and above self-insured retentions, for many of these claims. We believe these arrangements will provide substantial coverage for future defense and indemnity costs for these asbestos claims throughout the remaining life of asbestos liability. The uncertainties of asbestos claim litigation make it difficult to predict accurately the ultimate outcome of asbestos claims. That uncertainty is increased by the possibility of adverse rulings or new legislation affecting asbestos claim litigation or the settlement process. Subject to these uncertainties and based on our experience defending asbestos claims, we do not believe these lawsuits will have a material effect on our business, financial condition or results of operations. We have, from time to time, divested certain of our businesses. In connection with these divestitures, certain lawsuits, claims and proceedings may be instituted or asserted against us related to the period that we owned the businesses, either because we agreed to retain certain liabilities related to these periods or because such liabilities fall upon us by operation of law. In some instances the divested business has assumed the liabilities; however, it is possible that we might be responsible to satisfy those liabilities if the divested business is unable to do so. We do not believe these liabilities will have a material effect on our business, financial condition or results of operations. In many countries we provide a limited intellectual property indemnity as part of our terms and conditions of sale. We also at times provide limited intellectual property indemnities in other contracts with third parties, such as contracts concerning the development and manufacture of our hardware and software products. As of December 31, 2020, we were not aware of any material indemnification claims that were probable or reasonably possible of an unfavorable outcome. Historically, claims that have been made under the indemnification agreements have not had a material impact on our business, financial condition or results of operations; however, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our business, financial condition or results of operations in a particular period. During the first quarter of fiscal 2021, we reached a favorable settlement agreement regarding ongoing litigation of a trademark infringement and false advertising matter and received $70 million. The settlement gain is recorded in other income (expense) in the Consolidated statement of operations.
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Income Taxes |
3 Months Ended |
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Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At the end of each interim period, we estimate a base effective tax rate that we expect for the full fiscal year based on our most recent forecast of pre-tax income, permanent book and tax differences and global tax planning strategies. We use this base rate to provide for income taxes on a year-to-date basis, excluding the effect of significant unusual items and items that are reported net of their related tax effects in the period in which they occur. The effective tax rate was 15.8 percent in the three months ended December 31, 2020, compared to 5.7 percent in the three months ended December 31, 2019. The effective tax rate was lower than the U.S. statutory rate of 21 percent in the three months ended December 31, 2020, primarily due to PTC investment adjustments and because we benefited from lower non-U.S. tax rates. The effective tax rate was lower than the U.S. statutory rate of 21 percent in the three months ended December 31, 2019, primarily due to PTC investment adjustments, tax benefits recognized upon the formation of the Sensia joint venture, and excess income tax benefits of share-based compensation. An income tax liability of $296.0 million related to the U.S. transition tax under the Tax Act that is payable greater than 12 months after both December 31, 2020, and September 30, 2020, is recorded in other liabilities in the Consolidated Balance Sheet. Unrecognized Tax Benefits The amount of gross unrecognized tax benefits was $22.5 million and $25.5 million at December 31, 2020, and September 30, 2020, respectively, of which the entire amount would reduce our effective tax rate if recognized. Accrued interest and penalties related to unrecognized tax benefits were $4.2 million and $4.0 million at December 31, 2020, and September 30, 2020, respectively. We recognize interest and penalties related to unrecognized tax benefits in the income tax provision. We believe it is reasonably possible that the amount of gross unrecognized tax benefits could be reduced by up to $22.1 million in the next 12 months as a result of the resolution of tax matters in various global jurisdictions and the lapses of statutes of limitations. If all of the unrecognized tax benefits were recognized, the net reduction to our income tax provision, including the recognition of interest and penalties and offsetting tax assets, could be up to $25.6 million. We conduct business globally and are routinely audited by the various tax jurisdictions in which we operate. We are no longer subject to U.S. federal income tax examinations for years before 2016 and are no longer subject to state, local and foreign income tax examinations for years before 2009.
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Business Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segment Information | Business Segment Information 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. Beginning in fiscal year 2021, we organize our business into three operating segments: Intelligent Devices, Software & Control, and Lifecycle Services. This change simplifies our structure around essential offerings, leverages our sharpened industry focus, and recognizes the growing importance of software in delivering value to our customers. The composition of our segments is as follows:
(1) Formerly part of the Architecture & Software segment (2) Formerly part of the Control Products & Solutions segment The following tables reflect the sales and operating results of our reportable segments including recast information for the three months ended December 31, 2019 (in millions):
Among other considerations, we evaluate performance and allocate resources based upon segment operating earnings before income taxes, interest (expense) income - net, costs related to corporate offices, non-operating pension and postretirement benefit cost, certain corporate initiatives, gains and losses on investments, gains and losses from the disposition of businesses, and purchase accounting depreciation and amortization. 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 consistent with the methodology used by management to assess segment performance. The following table summarizes the identifiable assets at December 31, 2020, and September 30, 2020 for each of the reportable segments and Corporate (in millions):
Identifiable assets at Corporate consist principally of cash, net deferred income tax assets, prepaid pension obligations, and property. Property shared by the segments and used in operating activities is also reported in Corporate identifiable assets. Corporate identifiable assets include shared net property balances of $253.3 million and $247.3 million at December 31, 2020, and September 30, 2020, respectively, for which depreciation expense has been allocated to segment operating earnings consistent with the methodology used by management to assess segment performance.
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Basis of Presentation and Accounting Policies (Policies) |
3 Months Ended |
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Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Receivables | ReceivablesWe record an allowance for doubtful accounts based on customer-specific analysis and general matters such as current assessments of past due balances, historic writeoff experience, and economic conditions and expected changes in market conditions. Receivables are stated net of an allowance for doubtful accounts |
Goodwill | Goodwill We perform our annual evaluation of goodwill and indefinite life intangible assets for impairment as required under accounting principles generally accepted in the United States (U.S. GAAP) during the second quarter of each year, or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Any excess in carrying value over the estimated fair value is charged to results of operations. For our annual evaluation of goodwill, we may perform a qualitative test to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount in order to determine whether it is necessary to perform a quantitative goodwill impairment test. When performing the quantitative goodwill impairment test, we determine the fair value of each reporting unit under a combination of an income approach derived from discounted cash flows and a market multiples approach using selected comparable public companies. Significant assumptions used in the income approach include: management’s forecasted cash flows, including estimated future revenue growth rates and margins, discount rates, and terminal value. Forecasted future revenue growth rates and margins are based on management’s best estimate about current and future conditions. Discount rates are determined using a weighted average cost of capital adjusted for risk factors specific to the reporting unit, with comparison to market and industry data. The terminal value is estimated following common methodology of calculating the present value of estimated perpetual cash flow beyond the last projected period assuming constant discount and long-term growth rates. Significant assumptions used in the market multiples approach include selection of the comparable public companies and calculation of the appropriate market multiples.
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Leases | Leases We have operating leases primarily for real estate, vehicles, and equipment. We determine if a contract is, or contains, a lease at contract inception. A right-of-use (ROU) asset and a corresponding lease liability are recognized at commencement for contracts that are, or contain, a lease with an original term greater than 12 months. ROU assets represent our right to use an underlying asset during the lease term, including periods for which renewal options are reasonably certain to be exercised, and lease liabilities represent our obligation to make lease payments arising from the lease. Lease expense is recognized on a straight-line basis over the lease term for operating leases with an original term of 12 months or less. Some leasing arrangements require variable payments that are dependent on usage or may vary for other reasons, such as payments for insurance and tax payments. A portion of our real estate leases is generally subject to annual changes based upon an index. The changes based upon the index are treated as variable lease payments. The variable portion of lease payments is not included in our ROU assets or lease liabilities and is expensed when incurred. We elected to not separate lease and nonlease components of contracts for all underlying asset classes. Accordingly, all expenses associated with a lease contract are accounted for as lease expenses. Lease liabilities are recognized at the contract commencement date based on the present value of remaining lease payments over the lease term. To calculate the lease liabilities we use our incremental borrowing rate. We determine our incremental borrowing rate at the commencement date using our unsecured borrowing rate, adjusted for collateralization and lease term. For leases denominated in a currency other than the U.S. dollar, the collateralized borrowing rate in the foreign currency is determined using the U.S. dollar and foreign currency swap spread. Long-term lease liabilities are presented as operating lease liabilities and current lease liabilities are included in other current liabilities in the Consolidated Balance Sheet. ROU assets are recognized at the contract commencement date at the value of the related lease liability, adjusted for any prepayments, lease incentives received and initial direct costs incurred. Operating lease ROU assets are presented as operating lease right-of-use assets in the Consolidated Balance Sheet. Lease expenses for operating leases are recognized on a straight-line basis over the lease term and recorded in cost of sales and selling, general and administrative expenses in the Consolidated Statement of Operations.
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Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued a new standard on accounting for leases that requires lessees to recognize right-of-use assets and lease liabilities for most leases, among other changes to existing lease accounting guidance. The new standard also requires additional qualitative and quantitative disclosures about leasing activities. We adopted the new standard using the modified retrospective transition method, which resulted in an immaterial cumulative-effect adjustment to the opening balance of retained earnings as of October 1, 2019, our adoption date. The amounts of lease right-of-use assets and corresponding lease liabilities recorded in the Consolidated Balance Sheet upon adoption were $316 million and $329 million, respectively. We have implemented necessary changes to accounting policies, processes, controls and systems to enable compliance with this new standard. In February 2018, the FASB issued a new standard regarding the reporting of comprehensive loss, which gives entities the option to reclassify tax effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) stranded in accumulated other comprehensive loss into retained earnings. We adopted the new standard as of October 1, 2019, and elected to reclassify tax effects of $147 million from accumulated other comprehensive loss into retained earnings. In June 2016, the FASB issued a new standard that requires companies to utilize a current expected credit losses impairment (CECL) model for certain financial assets, including trade and other receivables. The CECL model requires that estimated expected credit losses, including allowance for doubtful accounts, consider a broader range of information such as economic conditions and expected changes in market conditions. We adopted the new standard as of October 1, 2020. The adoption of this standard did not have a material impact on our Consolidated financial statements.
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Income Taxes | Income TaxesAt the end of each interim period, we estimate a base effective tax rate that we expect for the full fiscal year based on our most recent forecast of pre-tax income, permanent book and tax differences and global tax planning strategies. We use this base rate to provide for income taxes on a year-to-date basis, excluding the effect of significant unusual items and items that are reported net of their related tax effects in the period in which they occur. |
Basis of Presentation and Accounting Policies (Tables) |
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Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles basic and diluted earnings per share (EPS) amounts (in millions, except per share amounts):
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Revenue Recognition (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following tables present our revenue disaggregation by geographic region for our three operating segments (in millions). We attribute sales to the geographic regions based on the country of destination. Information for the three months ended December 31, 2019, has been recast to reflect our new operating segments. See Note 15 for further information on our change in operating segments.
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Contract Balances | Below is a summary of our contract liabilities balance:
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Share-Based Compensation (Tables) |
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Activity | The number of shares granted to employees and non-employee directors and the weighted average fair value per share during the periods presented were (in thousands, except per share amounts):
|
Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory, Current | Inventories consist of (in millions):
|
Acquisitions (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The preliminary aggregate purchase price allocation for these acquisitions is as follows (in millions):
|
Goodwill and Other Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Changes in the carrying amount of goodwill for the three months ended December 31, 2020, are (in millions):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite Lived and Indefinite Lived Intangible Assets by Major Class | Other intangible assets consist of (in millions):
|
Other Current Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | Other current liabilities consist of (in millions):
|
Investments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment | Our investments consist of (in millions):
(1) Short-term investments are included in other current assets in the Consolidated Balance Sheet.
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Retirement Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The components of net periodic benefit cost are (in millions):
|
Other Income (Expense) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of Other Expense Income | The components of other income (expense) are (in millions):
|
Accumulated Other Comprehensive Loss (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive loss attributable to Rockwell Automation by component were (in millions):
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Reclassification out of Accumulated Other Comprehensive Income | The reclassifications out of accumulated other comprehensive loss in the Consolidated Statement of Operations were (in millions):
(1) These components are included in the computation of net periodic benefit cost (credit). See Note 10 for further information.
|
Business Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The composition of our segments is as follows:
(1) Formerly part of the Architecture & Software segment (2) Formerly part of the Control Products & Solutions segment The following tables reflect the sales and operating results of our reportable segments including recast information for the three months ended December 31, 2019 (in millions):
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Components Of Identifiable Assets Depreciation And Amortization And Capital Expenditures For Property | The following table summarizes the identifiable assets at December 31, 2020, and September 30, 2020 for each of the reportable segments and Corporate (in millions):
|
Basis of Presentation and Accounting Policies - Reconciliation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Reconciled Basic and Diluted EPS | ||
Net income attributable to Rockwell Automation | $ 593.3 | $ 310.7 |
Less: Allocation to participating securities | (0.7) | (0.3) |
Net income available to common shareowners | $ 592.6 | $ 310.4 |
Basic weighted average outstanding shares (in shares) | 116.1 | 115.7 |
Effect of dilutive securities | ||
Stock options (in shares) | 0.9 | 0.9 |
Performance shares (in shares) | 0.1 | 0.0 |
Diluted weighted average outstanding shares (in shares) | 117.1 | 116.6 |
Earnings per share: | ||
Basic (in usd per share) | $ 5.11 | $ 2.68 |
Diluted (in usd per share) | $ 5.06 | $ 2.66 |
Revenue Recognition - Narrative (Details) |
3 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
segment
| |
Revenue from Contract with Customer [Abstract] | |
Number of operating segments | segment | 3 |
Contract with customer, asset | $ 0 |
Contract with customer, liability, revenue recognized | $ 113,400,000 |
Revenue Recognition - Performance Obligation (Details) $ in Millions |
Dec. 31, 2020
USD ($)
|
---|---|
Revenue from Contract with Customer [Abstract] | |
Revenue to be recognized in future periods | $ 580 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue to be recognized in future periods | $ 340 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue to be recognized in future periods, expected timing of satisfaction, period | 12 months |
Revenue Recognition - Contract Balances (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Contract With Customer, Liability [Roll Forward] | |||
Balance as of beginning of fiscal year | $ 325.3 | $ 319.2 | $ 275.6 |
Balance as of end of period | $ 383.6 | $ 325.3 | $ 319.2 |
Share-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Share-Based Compensation (Textual) [Abstract] | ||
Pre-tax share-based compensation expense | $ 11.5 | $ 11.5 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants (in shares) | 195 | 953 |
Wtd. Avg. Share Fair Value (usd per share) | $ 55.47 | $ 35.86 |
Performance shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants (in shares) | 44 | 37 |
Wtd. Avg. Share Fair Value (usd per share) | $ 298.10 | $ 265.04 |
Restricted stock and restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants (in shares) | 126 | 45 |
Wtd. Avg. Share Fair Value (usd per share) | $ 245.07 | $ 193.70 |
Unrestricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants (in shares) | 4 | 5 |
Wtd. Avg. Share Fair Value (usd per share) | $ 221.90 | $ 162.29 |
Inventories (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Sep. 30, 2020 |
---|---|---|
Inventories | ||
Finished goods | $ 276.8 | $ 243.0 |
Work in process | 165.4 | 159.1 |
Raw materials | 198.4 | 181.9 |
Inventories | $ 640.6 | $ 584.0 |
Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed - Oylo and Fiix Inc. (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
|
Purchase Price Allocation | ||
Goodwill | $ 1,902.2 | $ 1,650.3 |
Oylo And Fiix Inc. | ||
Purchase Price Allocation | ||
Accounts receivable | 6.2 | |
All other assets | 1.7 | |
Goodwill | 221.8 | |
Intangible assets | 72.1 | |
Total assets acquired | 301.8 | |
Less: Liabilities assumed | (10.5) | |
Less: Deferred income taxes | (4.1) | |
Net assets acquired | 287.2 | |
Purchase Consideration | ||
Total purchase consideration, net of cash acquired | $ 287.2 |
Acquisitions - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Sep. 30, 2020 |
|
Business Acquisition [Line Items] | ||
Goodwill | $ 1,902.2 | $ 1,650.3 |
Lifecycle Services | ||
Business Acquisition [Line Items] | ||
Goodwill | 640.6 | 0.0 |
Software & Control | ||
Business Acquisition [Line Items] | ||
Goodwill | 716.0 | $ 0.0 |
Oylo And Fiix Inc. | ||
Business Acquisition [Line Items] | ||
Goodwill | 221.8 | |
Oylo And Fiix Inc. | Customer Relationships, Technology, Patents | ||
Business Acquisition [Line Items] | ||
Finite-lived intangible assets acquired | $ 72.1 | |
Acquired finite-lived intangible assets, weighted average useful life | 11 years | |
Oylo And Fiix Inc. | Lifecycle Services | ||
Business Acquisition [Line Items] | ||
Goodwill | $ 12.4 | |
Oylo And Fiix Inc. | Software & Control | ||
Business Acquisition [Line Items] | ||
Goodwill | $ 209.4 |
Goodwill and Other Intangible Assets - Narrative (Details) |
3 Months Ended |
---|---|
Dec. 31, 2020
segment
| |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Number of operating segments | 3 |
Short-term Debt - Narrative (Details) - USD ($) |
Dec. 31, 2020 |
Sep. 30, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Short-term debt | $ 150,500,000 | $ 24,600,000 |
Debt, weighted average interest rate | 0.22% | |
Commercial Paper | ||
Debt Instrument [Line Items] | ||
Short-term debt | $ 125,000,000.0 | $ 0 |
Interest Bearing Loan | ||
Debt Instrument [Line Items] | ||
Short-term debt | $ 23,500,000 |
Other Current Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Sep. 30, 2020 |
---|---|---|
Other current liabilities | ||
Unrealized losses on foreign exchange contracts | $ 60.0 | $ 24.3 |
Product warranty obligations | 19.7 | 20.8 |
Taxes other than income taxes | 93.9 | 58.5 |
Accrued interest | 29.8 | 14.9 |
Income taxes payable | 111.4 | 79.8 |
Operating lease liabilities | 94.0 | 89.7 |
Other | 101.6 | 88.5 |
Other current liabilities | $ 510.4 | $ 376.5 |
Investments - Summary of Investments (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Sep. 30, 2020 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Fixed income securities | $ 0.7 | $ 0.6 |
Equity securities | 1,265.7 | 875.3 |
Other | 80.2 | 78.2 |
Total investments | 1,346.6 | 954.1 |
Less: Short-term investments | (0.7) | (0.6) |
Long-term investments | $ 1,345.9 | $ 953.5 |
Investments - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Jul. 19, 2018 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2020 |
|
Subsidiary, Sale of Stock [Line Items] | ||||
Equity securities | $ 1,265.7 | $ 875.3 | ||
Change in fair value of investments | 390.4 | $ 71.0 | ||
PTC | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares purchased (in shares) | 10,582,010 | |||
Purchase of stock price (usd per share) | $ 94.50 | |||
Consideration paid to purchase stock | $ 1,000.0 | |||
Purchase of stock purchase period | 3 years | |||
Sale of stock, subsequent trading period | 90 days | |||
Equity securities | 1,265.7 | |||
Change in fair value of investments | $ 390.4 | $ 71.0 | ||
PTC | Minimum | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Percentage of total outstanding common stock, that can be traded in future periods | 1.00% | |||
PTC | Maximum | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Percentage of total outstanding common stock, that can be traded in future periods | 2.00% |
Retirement Benefits - Components of Net Periodic Benefit Cost (Income) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Pension Benefits | ||
Components of net periodic benefit cost (income) | ||
Service cost | $ 22.7 | $ 22.8 |
Interest cost | 31.3 | 34.2 |
Expected return on plan assets | (60.4) | (61.2) |
Amortization: | ||
Prior service cost | 0.4 | 0.2 |
Net actuarial loss | 36.7 | 36.8 |
Settlements | (0.2) | (0.7) |
Net periodic benefit credit | 30.5 | 32.1 |
Other Postretirement Benefits | ||
Components of net periodic benefit cost (income) | ||
Service cost | 0.3 | 0.3 |
Interest cost | 0.3 | 0.4 |
Amortization: | ||
Prior service cost | (1.4) | (1.4) |
Net actuarial loss | 0.3 | 0.4 |
Net periodic benefit credit | $ (0.5) | $ (0.3) |
Other Income (Expense) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Other Income and Expenses [Abstract] | ||
Interest income | $ 0.3 | $ 2.4 |
Royalty income | 2.1 | 2.5 |
Legacy product liability and environmental charges | (4.6) | (2.7) |
Non-operating pension and postretirement benefit cost | (7.0) | (8.7) |
Legal settlement (Note 13) | 70.0 | 0.0 |
Other | 0.2 | (3.2) |
Other income (expense) | $ 61.0 | $ (9.7) |
Commitments and Contingent Liabilities - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Gain (loss) related to litigation settlement | $ 70.0 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2020 |
|
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 15.80% | 5.70% | |
U.S. statutory rate | 21.00% | 21.00% | |
Income tax liabilities | $ 296.0 | $ 296.0 | |
Gross unrecognized tax benefits | 22.5 | 25.5 | |
Accrued interest and penalties related to unrecognized tax benefits | 4.2 | $ 4.0 | |
Reasonably possible amount of reduction in gross unrecognized tax benefits for the next twelve months | 22.1 | ||
Reasonably possible amount of net reduction to income tax provision if unrecognized tax benefits were recognized | $ 25.6 |
Business Segment Information - Narrative (Details) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2020
USD ($)
segment
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
|
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 3 | ||
Assets | $ 8,171.0 | $ 7,264.7 | $ 7,264.7 |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Assets | 3,147.4 | $ 2,692.0 | |
Corporate | Shared Net Property | |||
Segment Reporting Information [Line Items] | |||
Assets | $ 253.3 | $ 247.3 |
Business Segment Information - Identifiable Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
---|---|---|---|
Segment Reporting Information [Line Items] | |||
Assets | $ 8,171.0 | $ 7,264.7 | $ 7,264.7 |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Assets | 3,147.4 | 2,692.0 | |
Intelligent Devices | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Assets | 1,679.5 | 1,585.0 | |
Software & Control | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Assets | 1,441.3 | 1,072.7 | |
Lifecycle Services | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Assets | $ 1,902.8 | $ 1,915.0 |
Label | Element | Value |
---|---|---|
Restricted Cash and Cash Equivalents, Noncurrent | us-gaap_RestrictedCashAndCashEquivalentsNoncurrent | $ 25,800,000 |
Restricted Cash and Cash Equivalents, Noncurrent | us-gaap_RestrictedCashAndCashEquivalentsNoncurrent | $ 0 |
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