UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

_________________________________________

FORM 10-Q 

_________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _______ to _______

Commission file number 1-12383

_________________________________________

Rockwell Automation, Inc.

(Exact name of registrant as specified in its charter)

_________________________________________

Delaware		25-1797617
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1201 South Second Street
Milwaukee,	Wisconsin	53204
(Address of principal executive offices)		(Zip Code)

+1 (414) 382-2000

(Registrant’s telephone number, including area code) 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

_________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock ($1.00 par value)	ROK	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☑    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☑    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No  ☑

114,860,091 shares of registrant’s Common Stock were outstanding on June 30, 2023.

INDEX

	Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet	4
Consolidated Statement of Operations	5
Consolidated Statement of Comprehensive Income	6
Consolidated Statement of Cash Flows	7
Consolidated Statement of Shareowners' Equity	8
Notes to Consolidated Financial Statements	10
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)	24
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures About Market Risk	42
Item 4. Controls and Procedures	42
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	43
Item 1A. Risk Factors	43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 5. Other Information	44
Item 6. Exhibits	45
Signatures	46

3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ROCKWELL AUTOMATION, INC.

CONSOLIDATED BALANCE SHEET

(Unaudited)

(in millions, except per share amounts)

	June 30, 2023		September 30, 2022
ASSETS
Current assets
Cash and cash equivalents	$	443.5	$	490.7
Receivables	2,245.0		1,736.7
Inventories	1,435.2		1,054.2
Other current assets	277.4		329.1
Total current assets	4,401.1		3,610.7
Property, net of accumulated depreciation of $1,798.6 and $1,702.3, respectively	654.1		586.5
Operating lease right-of-use assets	318.1		321.0
Goodwill	3,700.9		3,524.0
Other intangible assets, net	883.1		902.0
Deferred income taxes	360.9		384.3
Long-term investments	1,002.0		1,056.0
Other assets	423.1		374.2
Total	$	11,743.3	$	10,758.7
LIABILITIES AND SHAREOWNERS’ EQUITY
Current liabilities
Short-term debt	$	278.5	$	359.3
Current portion of long-term debt	608.3		609.1
Accounts payable	1,009.1		1,028.0
Compensation and benefits	365.6		292.7
Contract liabilities	621.2		507.0
Customer returns, rebates and incentives	462.3		373.1
Other current liabilities	577.1		403.0
Total current liabilities	3,922.1		3,572.2
Long-term debt	2,866.9		2,867.8
Retirement benefits	517.2		471.2
Operating lease liabilities	256.6		263.5
Other liabilities	558.3		567.3
Commitments and contingent liabilities (Note 13)
Shareowners’ equity
Common stock ($1.00 par value, shares issued: 181.4)	181.4		181.4
Additional paid-in capital	2,078.2		2,007.1
Retained earnings	8,952.2		8,411.8
Accumulated other comprehensive loss	(725.5)		(917.5)
Common stock in treasury, at cost (shares held: 66.5 and 66.2, respectively)	(7,143.1)		(6,957.2)
Shareowners’ equity attributable to Rockwell Automation, Inc.	3,343.2		2,725.6
Noncontrolling interests	279.0		291.1
Total shareowners’ equity	3,622.2		3,016.7
Total	$	11,743.3	$	10,758.7

See Notes to Consolidated Financial Statements.

4

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

(in millions, except per share amounts)

	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Sales
Products and solutions	$	2,031.8	$	1,768.4	$	5,891.4	$	5,063.6
Services	206.9		200.3		603.7		570.5
	2,238.7		1,968.7		6,495.1		5,634.1
Cost of sales
Products and solutions	(1,189.9)		(1,042.7)		(3,440.9)		(3,061.8)
Services	(133.4)		(123.6)		(392.7)		(356.7)
	(1,323.3)		(1,166.3)		(3,833.6)		(3,418.5)
Gross profit	915.4		802.4		2,661.5		2,215.6
Selling, general and administrative expenses	(501.4)		(442.0)		(1,472.1)		(1,318.0)
Change in fair value of investments	85.7		(5.2)		289.3		(138.3)
Other income (expense) (Note 11)	6.5		19.8		(83.3)		(1.0)
Interest expense	(34.4)		(30.8)		(104.3)		(90.5)
Income before income taxes	471.8		344.2		1,291.1		667.8
Income tax provision (Note 14)	(73.1)		(49.4)		(218.8)		(84.7)
Net income	398.7		294.8		1,072.3		583.1
Net loss attributable to noncontrolling interests	(1.5)		(3.1)		(12.2)		(10.2)
Net income attributable to Rockwell Automation, Inc.	$	400.2	$	297.9	$	1,084.5	$	593.3
Earnings per share:
Basic	$	3.47	$	2.56	$	9.41	$	5.10
Diluted	$	3.45	$	2.55	$	9.34	$	5.06
Weighted average outstanding shares:
Basic	114.8		116.0		114.8		116.1
Diluted	115.6		116.5		115.6		116.9

See Notes to Consolidated Financial Statements.

5

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)

(in millions)

	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Net income	$	398.7	$	294.8	$	1,072.3	$	583.1
Other comprehensive income (loss)
Pension and other postretirement benefit plan adjustments (net of tax (expense) benefit of $(12.8), $22.3, $(22.6), and $(49.6))	41.3		(72.9)		72.0		131.4
Currency translation adjustments	35.5		(62.0)		146.6		(91.3)
Net change in cash flow hedges (net of tax benefit (expense) of $2.1, $(4.0), $10.6, and $(7.2))	(5.7)		10.3		(26.5)		19.6
Other comprehensive income (loss)	71.1		(124.6)		192.1		59.7
Comprehensive income	469.8		170.2		1,264.4		642.8
Comprehensive loss attributable to noncontrolling interests	(1.0)		(3.3)		(12.1)		(10.1)
Comprehensive income attributable to Rockwell Automation, Inc.	$	470.8	$	173.5	$	1,276.5	$	652.9

See Notes to Consolidated Financial Statements.

6

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(in millions)

	Nine Months Ended June 30,
	2023		2022
Operating activities:
Net income	$	1,072.3	$	583.1
Adjustments to arrive at cash provided by operating activities
Depreciation	95.2		93.6
Amortization of intangible assets	86.8		84.6
Change in fair value of investments	(289.3)		138.3
Share-based compensation expense	65.0		48.8
Retirement benefit expense	118.5		61.7
Net loss on disposition of property	0.8		0.4
Pension contributions	(18.5)		(23.1)
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments
Receivables	(415.2)		(326.1)
Inventories	(309.9)		(206.2)
Accounts payable	(74.6)		118.5
Contract liabilities	119.8		96.8
Compensation and benefits	74.9		(114.9)
Income taxes	(49.2)		(202.6)
Other assets and liabilities	58.5		70.8
Cash provided by operating activities	535.1		423.7
Investing activities:
Capital expenditures	(97.3)		(100.3)
Acquisition of businesses, net of cash acquired	(168.0)		(16.5)
Purchases of investments	(5.2)		(48.5)
Proceeds from sale of investments	355.2		66.0
Other investing activities	3.9		0.1
Cash provided by (used for) investing activities	88.6		(99.2)
Financing activities:
Net (repayment) issuance of short-term debt	(74.1)		301.8
Repayment of short-term debt	(18.8)		(210.0)
Cash dividends	(406.9)		(390.4)
Purchases of treasury stock	(257.1)		(218.5)
Proceeds from the exercise of stock options	75.4		46.1
Other financing activities	(27.7)		(7.5)
Cash used for financing activities	(709.2)		(478.5)
Effect of exchange rate changes on cash	29.7		(25.3)
Decrease in cash, cash equivalents, and restricted cash	(55.8)		(179.3)
Cash, cash equivalents, and restricted cash at beginning of period	507.9		679.4
Cash, cash equivalents, and restricted cash at end of period	$	452.1	$	500.1
Components of cash, cash equivalents, and restricted cash
Cash and cash equivalents	$	443.5	$	482.9
Restricted cash, current (Other current assets)	8.6		8.6
Restricted cash, noncurrent (Other assets)	—		8.6
Total cash, cash equivalents, and restricted cash	$	452.1	$	500.1

See Notes to Consolidated Financial Statements.

7

CONSOLIDATED STATEMENT OF SHAREOWNERS’ EQUITY

(Unaudited)

(in millions, except per share amounts)

	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 March 31, 2023	$	181.4	$	2,049.0	$	8,824.2	$	(796.1)	$	(7,103.0)	$	3,155.5	$	280.0	$	3,435.5
Net income (loss)	—		—		400.2		—		—		400.2		(1.5)		398.7
Other comprehensive income	—		—		—		70.6		—		70.6		0.5		71.1
Common stock issued (including share-based compensation impact)	—		29.2		—		—		22.2		51.4		—		51.4
Share repurchases	—		—		—		—		(62.3)		(62.3)		—		(62.3)
Cash dividends declared (1)	—		—		(272.2)		—		—		(272.2)		—		(272.2)
Balance at June 30, 2023	$	181.4	$	2,078.2	$	8,952.2	$	(725.5)	$	(7,143.1)	$	3,343.2	$	279.0	$	3,622.2

	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 March 31, 2022	$	181.4	$	1,967.3	$	8,035.1	$	(833.1)	$	(6,718.5)	$	2,632.2	$	297.7	$	2,929.9
Net income (loss)	—		—		297.9		—		—		297.9		(3.1)		294.8
Other comprehensive loss	—		—		—		(124.4)		—		(124.4)		(0.2)		(124.6)
Common stock issued (including share-based compensation impact)	—		18.6		—		—		3.2		21.8		—		21.8
Share repurchases	—		—		—		—		(176.1)		(176.1)		—		(176.1)
Cash dividends declared (1)	—		—		(260.2)		—		—		(260.2)		—		(260.2)
Balance at June 30, 2022	$	181.4	$	1,985.9	$	8,072.8	$	(957.5)	$	(6,891.4)	$	2,391.2	$	294.4	$	2,685.6

(1) Cash dividends were $2.36 per share and $2.24 per share in the three months ended June 30, 2023 and 2022, respectively.

8

	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, 2022	$	181.4	$	2,007.1	$	8,411.8	$	(917.5)	$	(6,957.2)	$	2,725.6	$	291.1	$	3,016.7
Net income (loss)	—		—		1,084.5		—		—		1,084.5		(12.2)		1,072.3
Other comprehensive income	—		—		—		192.0		—		192.0		0.1		192.1
Common stock issued (including share-based compensation impact)	—		71.1		—		—		70.9		142.0		—		142.0
Share repurchases	—		—		—		—		(256.8)		(256.8)		—		(256.8)
Cash dividends declared (1)	—		—		(544.1)		—		—		(544.1)		—		(544.1)
Balance at June 30, 2023	$	181.4	$	2,078.2	$	8,952.2	$	(725.5)	$	(7,143.1)	$	3,343.2	$	279.0	$	3,622.2

	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, 2021	$	181.4	$	1,933.6	$	8,000.4	$	(1,017.1)	$	(6,708.7)	$	2,389.6	$	304.5	$	2,694.1
Net income (loss)	—		—		593.3		—		—		593.3		(10.2)		583.1
Other comprehensive income	—		—		—		59.6		—		59.6		0.1		59.7
Common stock issued (including share-based compensation impact)	—		52.3		—		—		42.8		95.1		—		95.1
Share repurchases	—		—		—		—		(225.5)		(225.5)		—		(225.5)
Cash dividends declared (1)	—		—		(520.9)		—		—		(520.9)		—		(520.9)
Balance at June 30, 2022	$	181.4	$	1,985.9	$	8,072.8	$	(957.5)	$	(6,891.4)	$	2,391.2	$	294.4	$	2,685.6

(1) Cash dividends were $4.72 per share and $4.48 per share in the nine months ended June 30, 2023 and 2022, respectively.

See Notes to Consolidated Financial Statements.

9

ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. 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, 2022. The results of operations for the three and nine months ended June 30, 2023, 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 recorded net of an allowance for doubtful accounts of $17.4 million at June 30, 2023, and $13.1 million at September 30, 2022. In addition, receivables are recorded net of an allowance for certain customer returns, rebates, and incentives of $14.6 million at June 30, 2023, and $13.9 million at September 30, 2022. The changes to our allowance for doubtful accounts during the three and nine months ended June 30, 2023 and 2022, 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 June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Net income attributable to Rockwell Automation, Inc.	$	400.2	$	297.9	$	1,084.5	$	593.3
Less: Allocation to participating securities	(1.7)		(1.0)		(4.6)		(1.9)
Net income available to common shareowners	$	398.5	$	296.9	$	1,079.9	$	591.4
Basic weighted average outstanding shares	114.8		116.0		114.8		116.1
Effect of dilutive securities
Stock options	0.7		0.5		0.7		0.8
Performance shares	0.1		—		0.1		—
Diluted weighted average outstanding shares	115.6		116.5		115.6		116.9
Earnings per share:
Basic	$	3.47	$	2.56	$	9.41	$	5.10
Diluted	$	3.45	$	2.55	$	9.34	$	5.06

For the three and nine months ended June 30, 2023, there were 0.4 million and 0.5 million shares, respectively, related to share-based compensation awards that were excluded from the diluted EPS calculation because they were antidilutive. For the three and nine months ended June 30, 2022, there were 0.6 million and 0.4 million shares, respectively, 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 $42.5 million and $15.5 million were accrued within Accounts payable and Other current liabilities at June 30, 2023 and 2022, respectively. At June 30, 2023 and 2022, respectively, there were $0.8 million and $8.8 million of outstanding common stock share repurchases recorded in Accounts payable that did not settle until the next 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.

10

ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board (FASB) issued a new standard that requires companies to apply Accounting Standards Codification (ASC) 606 to recognize and measure contract assets and contract liabilities in a business combination. We retroactively adopted the new standard as of October 1, 2021. The adoption of this standard did not have a material impact on our Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

In September 2022, the FASB issued a new standard, which requires the buyer in a supplier finance program to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. We will expand our disclosures when we adopt this standard in the first quarter of 2024.

We do not expect any other recently issued accounting pronouncements to have a material impact on our Consolidated Financial Statements and related disclosures.

2. 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, the Software & Control segment, and the 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 15 for more information.

Unfulfilled Performance Obligations

As of June 30, 2023, we expect to recognize approximately $1,126 million of revenue in future periods from unfulfilled performance obligations from existing contracts with customers. We expect to recognize revenue of approximately $716 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 June 30, 2023.

11

ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

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.

	Three Months Ended June 30, 2023								Three Months Ended June 30, 2022
	Intelligent Devices		Software & Control		Lifecycle Services		Total		Intelligent Devices		Software & Control		Lifecycle Services		Total
North America	$	548.5	$	460.9	$	251.5	$	1,260.9	$	549.6	$	437.8	$	252.5	$	1,239.9
Europe, Middle East and Africa	220.4		137.3		136.7		494.4		162.5		72.3		117.8		352.6
Asia Pacific	133.7		113.6		96.2		343.5		106.4		61.3		79.1		246.8
Latin America	65.5		38.8		35.6		139.9		59.8		35.5		34.1		129.4
Total Company Sales	$	968.1	$	750.6	$	520.0	$	2,238.7	$	878.3	$	606.9	$	483.5	$	1,968.7

	Nine Months Ended June 30, 2023								Nine Months Ended June 30, 2022
	Intelligent Devices		Software & Control		Lifecycle Services		Total		Intelligent Devices		Software & Control		Lifecycle Services		Total
North America	$	1,714.6	$	1,297.0	$	738.8	$	3,750.4	$	1,604.4	$	1,104.9	$	702.9	$	3,412.2
Europe, Middle East and Africa	608.2		371.7		373.8		1,353.7		467.7		246.1		342.4		1,056.2
Asia Pacific	401.7		281.6		290.9		974.2		334.3		213.1		244.5		791.9
Latin America	203.0		114.7		99.1		416.8		180.8		91.6		101.4		373.8
Total Company Sales	$	2,927.5	$	2,065.0	$	1,502.6	$	6,495.1	$	2,587.2	$	1,655.7	$	1,391.2	$	5,634.1

Contract Liabilities

Contract liabilities primarily relate to consideration received in advance of performance under the contract.

Below is a summary of our Contract liabilities balance, the portion not expected to be recognized within twelve months is included within Other liabilities in the Consolidated Balance Sheet (in millions):

	June 30, 2023		June 30, 2022
Balance as of beginning of year	$	541.3	$	462.5
Balance as of end of period	672.5		549.5

The most significant changes in our Contract liabilities balance during both the nine months ended June 30, 2023 and 2022, were due to amounts billed, partially offset by revenue recognized on amounts billed during the period and revenue recognized that was included in the Contract liabilities balance at the beginning of the period.

In the nine months ended June 30, 2023, we recognized revenue of approximately $362.7 million that was included in the Contract liabilities balance at September 30, 2022. In the nine months ended June 30, 2022, we recognized revenue of approximately $296.8 million that was included in the Contract liabilities balance at September 30, 2021. We did not have a material amount of revenue recognized in the nine months ended June 30, 2023 and 2022, from performance obligations satisfied or partially satisfied in previous periods.

12

ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

3. Share-Based Compensation

We recognized $23.4 million and $65.0 million of pre-tax share-based compensation expense during the three and nine months ended June 30, 2023, respectively. We recognized $17.6 million and $48.8 million of pre-tax share-based compensation expense during the three and nine months ended June 30, 2022, respectively. Our annual grant of share-based compensation takes place during first quarter of each 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):

	Nine Months Ended June 30,
	2023			2022
	Grants	Wtd. Avg. Share Fair Value		Grants	Wtd. Avg. Share Fair Value
Stock options	233	$	77.62	164	$	87.68
Performance shares	66	340.77		37	481.28
Restricted stock and restricted stock units	236	262.24		214	307.31
Unrestricted stock	7	261.72		3	345.00

4. Inventories

Inventories consist of (in millions):

	June 30, 2023		September 30, 2022
Finished goods	$	507.5	$	325.0
Work in process	373.8		317.3
Raw materials	553.9		411.9
Inventories	$	1,435.2	$	1,054.2

5. Acquisitions

2023 Acquisitions

In October 2022, we acquired CUBIC, a company that specializes in modular systems for the construction of electrical panels, headquartered in Bronderslev, Denmark. We recorded assets acquired and liabilities assumed in connection with this acquisition based on their estimated fair values as of the acquisition date of October 31, 2022. The preliminary aggregate purchase price allocation is as follows (in millions):

	Purchase Price Allocation
Receivables	$	20.2
Inventories	17.7
Property	27.5
Goodwill	66.3
Other intangible assets	36.4
All other assets	9.2
Total assets acquired	177.3
Less: Total liabilities assumed	(43.5)
Net assets acquired, excluding cash	$	133.8
	Purchase Consideration
Total purchase consideration, net of cash acquired	$	133.8

We assigned the full amount of goodwill and all other net assets acquired related to this acquisition to our Intelligent Devices segment. The goodwill recorded represents intangible assets that do not qualify for separate recognition. We do not expect the goodwill to be deductible for tax purposes.

13

ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

In February 2023, we acquired Knowledge Lens, a services and solutions provider headquartered in Bengaluru, India. We recorded assets acquired and liabilities assumed in connection with this acquisition based on their estimated fair values as of the acquisition date of February 28, 2023. The preliminary aggregate purchase price allocation is as follows (in millions):

	Purchase Price Allocation
Receivables	$	3.6
Goodwill	35.2
Other intangible assets	17.7
All other assets	3.5
Total assets acquired	60.0
Less: Total liabilities assumed	(8.0)
Net assets acquired, excluding cash	$	52.0
	Purchase Consideration
Total purchase consideration, net of cash acquired	$	52.0

We assigned the full amount of goodwill and all other net assets acquired related to this acquisition to our Lifecycle Services segment. The goodwill recorded represents intangible assets that do not qualify for separate recognition. We do not expect the goodwill to be deductible for tax purposes.

The allocation of the purchase price to identifiable assets above is based on the preliminary valuations performed to determine the fair value of the net assets as of the acquisition date. 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 date 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.

2022 Acquisitions

In November 2021, we acquired AVATA, a services provider for supply chain management, enterprise resource planning, and enterprise performance management solutions. We assigned the full amount of goodwill related to this acquisition to our Lifecycle Services segment.

In March 2022, we, through our Sensia affiliate, acquired Swinton Technology, a provider of metering supervisory systems and measurement expertise in the Oil & Gas industry. We assigned the full amount of goodwill related to this acquisition to our Lifecycle Services segment.

Pro forma consolidated sales for the three and nine months ended June 30, 2023, were $2.2 billion and $6.5 billion, respectively, and the impact on earnings was not material. Pro forma consolidated sales for the three and nine months ended June 30, 2022, were $2.0 billion and $5.7 billion, respectively, and the impact on earnings was not material. The preceding pro forma consolidated financial results of operations are as if the preceding 2023 and 2022 acquisitions occurred on October 1, 2021. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the transaction occurred as of that time.

Total sales from all of the above 2023 acquisitions in the three and nine months ended June 30, 2023, were $23.8 million and $59.4 million, respectively. Total sales from all of the above 2022 acquisitions in the three and nine months ended June 30, 2022, were not material. Total acquisition-related costs from all of the above 2023 and 2022 acquisitions in the three and nine months ended June 30, 2023 and 2022, were not material.

14

ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

6. Goodwill and Other Intangible Assets

Changes in the carrying amount of Goodwill for the nine months ended June 30, 2023, were (in millions):

	Intelligent Devices		Software & Control		Lifecycle Services		Total
Balance as of September 30, 2022	$	503.0	$	2,398.7	$	622.3	$	3,524.0
Acquisition of businesses	66.3		—		35.2		101.5
Translation and other	26.9		31.6		16.9		75.4
Balance as of June 30, 2023	$	596.2	$	2,430.3	$	674.4	$	3,700.9

We performed our annual evaluation of goodwill and indefinite life intangible assets for impairment during the second quarter of fiscal 2023 and concluded that these assets are not impaired. For our annual evaluation, we performed qualitative tests for our Intelligent Devices, Software & Control, and Lifecycle Services (excluding Sensia) reporting units and a quantitative test for our Sensia reporting unit. We also 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.

Other intangible assets consist of (in millions):

	June 30, 2023
	Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets
Software products	$	101.1	$	65.7	$	35.4
Customer relationships	614.2		136.7		477.5
Technology	426.1		160.3		265.8
Trademarks	87.1		27.0		60.1
Other	6.8		6.2		0.6
Total amortized intangible assets	1,235.3		395.9		839.4
Allen-Bradley® trademark not subject to amortization	43.7		—		43.7
Other intangible assets	$	1,279.0	$	395.9	$	883.1

	September 30, 2022
	Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets
Software products	$	97.6	$	57.9	$	39.7
Customer relationships	582.7		107.2		475.5
Technology	410.8		119.3		291.5
Trademarks	70.4		19.4		51.0
Other	6.4		5.8		0.6
Total amortized intangible assets	1,167.9		309.6		858.3
Allen-Bradley® trademark not subject to amortization	43.7		—		43.7
Other intangible assets	$	1,211.6	$	309.6	$	902.0

Estimated total amortization expense for all amortized intangible assets is $115.4 million in 2023, $113.7 million in 2024, $110.5 million in 2025, $109.3 million in 2026, and $102.3 million in 2027.

15

ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

7. Short-Term and Long-Term Debt

Our Short-term debt as of June 30, 2023, and September 30, 2022, includes commercial paper borrowings of $183.0 million and $317.0 million, respectively, with weighted average interest rates of 5.10 percent and 3.03 percent, respectively, and weighted average maturity periods of 9 days and 22 days, respectively. In December 2022, Sensia entered into an unsecured $75.0 million line of credit. As of June 30, 2023, included in Short-term debt was $65.0 million borrowed against the line of credit with an interest rate of 6.14 percent. Also included in Short-term debt as of June 30, 2023, and September 30, 2022, is $23.5 million and $42.3 million, respectively, of interest-bearing loans from Schlumberger (SLB) to Sensia due December 29, 2023.

The following table presents the carrying amounts and estimated fair values of Long-term debt in the Consolidated Balance Sheet (in millions):

	June 30, 2023				September 30, 2022
	Carrying Value		Fair Value		Carrying Value		Fair Value
Current portion of long-term debt	$	608.3	$	605.0	$	609.1	$	589.1
Long-term debt	2,866.9		2,585.8		2,867.8		2,485.4

We base the fair value of Long-term debt upon quoted market prices for the same or similar issues and therefore consider this a level 2 fair value measurement. The fair value of Long-term debt considers the terms of the debt excluding the impact of derivative and hedging activity. Refer to Note 9 for further information regarding levels in the fair value hierarchy. The carrying value of our Short-term debt approximates fair value.

8. Other Current Liabilities

Other current liabilities consist of (in millions):

	June 30, 2023		September 30, 2022
Unrealized losses on foreign exchange contracts	$	22.0	$	31.2
Product warranty obligations	17.0		16.5
Taxes other than income taxes	54.0		65.6
Accrued interest	39.8		18.1
Dividends payable	137.0		0.6
Income taxes payable	130.0		81.1
Operating lease liabilities	83.2		83.3
Other	94.1		106.6
Other current liabilities	$	577.1	$	403.0

9. Investments

Our investments consist of (in millions):

	June 30, 2023		September 30, 2022
Fixed income securities	$	0.6	$	12.6
Equity securities (level 1)	863.9		928.8
Equity securities (other)	81.4		76.4
Other	56.7		50.8
Total investments	1,002.6		1,068.6
Less: Short-term investments (1)	(0.6)		(12.6)
Long-term investments	$	1,002.0	$	1,056.0

(1) Short-term investments are included in Other current assets in the Consolidated Balance Sheet.

16

ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Equity Securities

Equity securities (level 1) consist of 6,070,905 and 8,879,717 shares of PTC Inc. ("PTC") common stock (the "PTC Shares") at June 30, 2023, and September 30, 2022, respectively. The PTC Shares are classified as level 1 in the fair value hierarchy, as described below, and are recognized at fair value in the Consolidated Balance Sheet using the most recent closing price of PTC common stock quoted on Nasdaq.

Equity securities (other) consist of various securities that do not have a readily determinable fair value, which we account for using the measurement alternative under U.S. GAAP. These securities are recorded at the investment cost, less impairment, plus or minus observable price changes (in orderly transactions) of an identical or similar investment of the same issuer in the Consolidated Balance Sheet. Observable price changes are classified as level 2 in the fair value hierarchy, as described below. The carrying values at June 30, 2023, and September 30, 2022, include cumulative upward adjustments from observed price changes of $17.2 million.

We record gains and losses on investments within the Change in fair value of investments line in the Consolidated Statement of Operations. The gains and losses on investments we recorded for the following periods were (in millions):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Net gain (loss) on equity securities (level 1)	$	86.4	$	(8.4)	$	290.4	$	(136.0)
Net gain on equity securities (other)	—		3.2		—		11.9
Equity method loss on Other investments	(0.7)		—		(1.1)		(14.2)
Change in fair value of investments	85.7		(5.2)		289.3		(138.3)
Total net realized gain on equity securities	36.9		12.7		89.8		12.9
Total net unrealized gain (loss) on equity securities	$	49.5	$	(17.9)	$	200.6	$	(137.0)

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:

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.

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.

17

ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

10. Retirement Benefits

The components of net periodic pension and postretirement benefit cost were (in millions):

	Pension Benefits
	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Service cost	$	9.4	$	15.4	$	30.6	$	56.1
Interest cost	35.3		34.5		114.0		99.3
Expected return on plan assets	(44.0)		(56.4)		(147.0)		(175.1)
Amortization of prior service cost	0.1		—		0.1		0.8
Amortization of net actuarial loss (gain)	0.2		10.4		(1.8)		55.0
Settlement and curtailment charges (benefit)	2.2		(0.7)		120.1		24.2
Net periodic pension benefit cost	$	3.2	$	3.2	$	116.0	$	60.3

	Other Postretirement Benefits
	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Service cost	$	0.2	$	0.2	$	0.4	$	0.6
Interest cost	0.6		0.3		1.7		0.9
Amortization of prior service credit	—		(0.2)		—		(0.6)
Amortization of net actuarial loss	0.1		0.2		0.4		0.5
Net periodic postretirement benefit cost	$	0.9	$	0.5	$	2.5	$	1.4

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.

In March and June 2023, we remeasured our U.S. pension plan assets and liabilities in accordance with U.S. GAAP settlement accounting rules. For the three and nine months ended June 30, 2023, we recognized settlement expense of $2.2 million and $120.1 million, respectively. Settlement accounting was required due to the amount of lump-sum payments made by the U.S. pension plan to retirees, current employees electing an in-service distribution, and other separated employees. Remeasurement of our U.S. pension plan assets and liabilities increased our net benefit obligation by $25.3 million in 2023. The discount rate used for the remeasurement as of June 30, 2023, was 5.45 percent compared to 5.65 percent at our September 30, 2022, annual measurement date.

11. Other Income (Expense)

The components of Other income (expense) were (in millions):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Interest income	$	1.5	$	0.6	$	4.1	$	1.6
Royalty income	3.4		3.1		9.3		8.6
Legacy product liability and environmental (charges) benefit	(4.8)		0.8		(10.7)		(6.6)
Non-operating pension and postretirement credit (cost)	5.5		11.9		(87.5)		(5.0)
Other	0.9		3.4		1.5		0.4
Other income (expense)	$	6.5	$	19.8	$	(83.3)	$	(1.0)

18

ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

12. Accumulated Other Comprehensive Loss

Changes in Accumulated other comprehensive loss attributable to Rockwell Automation by component for the following periods were (in millions):

Three Months Ended June 30, 2023	Pension and other postretirement benefit plan adjustments, net of tax		Accumulated currency translation adjustments, net of tax		Net unrealized losses on cash flow hedges, net of tax		Total accumulated other comprehensive loss, net of tax
Balance as of March 31, 2023	$	(417.2)	$	(353.4)	$	(25.5)	$	(796.1)
Other comprehensive income (loss) before reclassifications	38.6		35.6		(0.4)		73.8
Amounts reclassified from accumulated other comprehensive loss	2.1		—		(5.3)		(3.2)
Other comprehensive income (loss)	40.7		35.6		(5.7)		70.6
Balance as of June 30, 2023	$	(376.5)	$	(317.8)	$	(31.2)	$	(725.5)
Nine Months Ended June 30, 2023	Pension and other postretirement benefit plan adjustments, net of tax		Accumulated currency translation adjustments, net of tax		Net unrealized losses on cash flow hedges, net of tax		Total accumulated other comprehensive loss, net of tax
Balance as of September 30, 2022	$	(447.8)	$	(465.0)	$	(4.7)	$	(917.5)
Other comprehensive (loss) income before reclassifications	(18.8)		147.2		(6.3)		122.1
Amounts reclassified from accumulated other comprehensive loss	90.1		—		(20.2)		69.9
Other comprehensive income (loss)	71.3		147.2		(26.5)		192.0
Balance as of June 30, 2023	$	(376.5)	$	(317.8)	$	(31.2)	$	(725.5)

Three Months Ended June 30, 2022	Pension and other postretirement benefit plan adjustments, net of tax		Accumulated currency translation adjustments, net of tax		Net unrealized losses on cash flow hedges, net of tax		Total accumulated other comprehensive loss, net of tax
Balance as of March 31, 2022	$	(489.8)	$	(309.7)	$	(33.6)	$	(833.1)
Other comprehensive (loss) income before reclassifications	(81.0)		(61.7)		15.5		(127.2)
Amounts reclassified from accumulated other comprehensive loss	8.0		—		(5.2)		2.8
Other comprehensive (loss) income	(73.0)		(61.7)		10.3		(124.4)
Balance as of June 30, 2022	$	(562.8)	$	(371.4)	$	(23.3)	$	(957.5)

Nine Months Ended June 30, 2022	Pension and other postretirement benefit plan adjustments, net of tax		Accumulated currency translation adjustments, net of tax		Net unrealized losses on cash flow hedges, net of tax		Total accumulated other comprehensive loss, net of tax
Balance at September 30, 2021	$	(694.1)	$	(280.1)	$	(42.9)	$	(1,017.1)
Other comprehensive income (loss) before reclassifications	70.7		(91.3)		24.2		3.6
Amounts reclassified from accumulated other comprehensive loss	60.6		—		(4.6)		56.0
Other comprehensive income (loss)	131.3		(91.3)		19.6		59.6
Balance as of June 30, 2022