Basis of Presentation and Accounting Policies

3 Months Ended

Dec. 31, 2021

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, 2021. The results of operations for the three months ended December 31, 2021, 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 and economic conditions. Receivables are stated net of an allowance for doubtful accounts of $13.7 million at December 31, 2021, and $13.2 million at September 30, 2021. In addition, receivables are recorded net of an allowance for certain customer returns, rebates and incentives of $10.5 million at December 31, 2021, and $6.7 million at September 30, 2021. The changes to our allowance for doubtful accounts during the three months ended December 31, 2021, were not material and primarily consisted of current-period provisions, write-offs 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):


	Three Months Ended December 31,
		2021		2020
Net income attributable to Rockwell Automation		$	241.5	$	593.3
Less: Allocation to participating securities		(0.7)		(0.7)
Net income available to common shareowners		$	240.8	$	592.6
Basic weighted average outstanding shares		116.0		116.1
Effect of dilutive securities
Stock options		1.1		0.9
Performance shares		0.2		0.1
Diluted weighted average outstanding shares		117.3		117.1
Earnings per share:


Basic		$	2.08	$	5.11



Diluted		$	2.05	$	5.06

For the three months ended December 31, 2021, and 2020, respectively, there were 0.3 million and 0.2 million shares related to share-based compensation awards that were excluded from the diluted EPS calculation because they were antidilutive.

Non-Cash Investing and Financing Activities

Capital expenditures of $27.3 million and $21.5 million were accrued within accounts payable and other current liabilities at December 31, 2021, and 2020, respectively. At December 31, 2021, and 2020, respectively, there were $1.4 million and $4.2 million 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.

Recently Adopted Accounting Pronouncements

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.