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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 December 31, 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)
_________________________________________
Delaware25-1797617
(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 classTrading SymbolName of each exchange on which registered
Common Stock ($1.00 par value)ROKNew 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 filerAccelerated filer
Non-accelerated filerSmaller 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  ☑
114,592,022 shares of registrant’s Common Stock were outstanding on December 31, 2023.


Table of Contents
INDEX
 
 Page No.


3

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ROCKWELL AUTOMATION, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in millions, except per share amounts)
December 31,
2023
September 30,
2023
ASSETS
Current assets
Cash and cash equivalents$439.5 $1,071.8 
Receivables1,934.9 2,167.4 
Inventories1,474.0 1,404.9 
Other current assets287.5 266.7 
Total current assets4,135.9 4,910.8 
Property, net of accumulated depreciation of $1,866.3 and $1,828.3, respectively
705.0 684.2 
Operating lease right-of-use assets350.1 349.4 
Goodwill3,966.7 3,529.2 
Other intangible assets, net1,190.4 852.4 
Deferred income taxes461.8 459.3 
Long-term investments161.9 157.1 
Other assets361.5 361.6 
Total$11,333.3 $11,304.0 
LIABILITIES AND SHAREOWNERS’ EQUITY
Current liabilities
Short-term debt$501.4 $94.7 
Current portion of long-term debt9.9 8.6 
Accounts payable935.0 1,150.2 
Compensation and benefits269.9 499.9 
Contract liabilities595.3 592.5 
Customer returns, rebates and incentives390.8 452.0 
Other current liabilities608.6 567.4 
Total current liabilities3,310.9 3,365.3 
Long-term debt2,863.0 2,862.9 
Retirement benefits513.4 503.6 
Operating lease liabilities277.9 285.3 
Other liabilities581.0 543.5 
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 capital2,111.3 2,102.5 
Retained earnings9,326.5 9,255.2 
Accumulated other comprehensive loss(729.8)(790.1)
Common stock in treasury, at cost (shares held: 66.8 and 66.6, respectively)
(7,281.7)(7,187.4)
Shareowners’ equity attributable to Rockwell Automation, Inc.3,607.7 3,561.6 
Noncontrolling interests179.4 181.8 
Total shareowners’ equity3,787.1 3,743.4 
Total$11,333.3 $11,304.0 
See Notes to Consolidated Financial Statements.
4

Table of Contents
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(in millions, except per share amounts)
 Three Months Ended
December 31,
 20232022
Sales
Products and solutions$1,833.2 $1,789.7 
Services218.9 191.3 
2,052.1 1,981.0 
Cost of sales
Products and solutions(1,130.1)(1,044.7)
Services(127.4)(122.7)
(1,257.5)(1,167.4)
Gross profit794.6 813.6 
Selling, general and administrative expenses(513.7)(469.5)
Change in fair value of investments3.1 140.6 
Other income (Note 11)8.9 17.3 
Interest expense(33.3)(34.1)
Income before income taxes259.6 467.9 
Income tax provision (Note 14)(46.9)(89.2)
Net income212.7 378.7 
Net loss attributable to noncontrolling interests(2.5)(5.3)
Net income attributable to Rockwell Automation, Inc.$215.2 $384.0 
Earnings per share:
Basic$1.87 $3.33 
Diluted$1.86 $3.31 
Weighted average outstanding shares:
Basic114.6 114.8 
Diluted115.2 115.5 
See Notes to Consolidated Financial Statements.
5

Table of Contents
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
(in millions)
 Three Months Ended
December 31,
 20232022
Net income$212.7 $378.7 
Other comprehensive income (loss)
Pension and other postretirement benefit plan adjustments (net of tax benefit of $0.0 and $0.4)
0.1 (0.4)
Currency translation adjustments84.2 85.8 
Net change in cash flow hedges (net of tax benefit of $9.0 and $8.9)
(23.9)(21.1)
Other comprehensive income60.4 64.3 
Comprehensive income273.1 443.0 
Comprehensive loss attributable to noncontrolling interests(2.4)(5.3)
Comprehensive income attributable to Rockwell Automation, Inc.$275.5 $448.3 
See Notes to Consolidated Financial Statements.
6

Table of Contents
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(in millions)
 Three Months Ended
December 31,
 20232022
Operating activities:
Net income$212.7 $378.7 
Adjustments to arrive at cash provided by operating activities
Depreciation38.8 29.0 
Amortization of intangible assets38.1 28.8 
Change in fair value of investments(3.1)(140.6)
Share-based compensation expense24.2 18.4 
Retirement benefit expense (income)4.5 (1.7)
Net loss on disposition of property0.2 0.9 
Pension contributions(5.9)(7.0)
Changes in assets and liabilities, excluding effects of acquisitions and foreign
currency adjustments
Receivables280.4 (32.6)
Inventories(27.7)(175.3)
Accounts payable(200.3)(29.8)
Contract liabilities13.8 52.7 
Compensation and benefits(243.4)(40.2)
Income taxes1.6 73.1 
Other assets and liabilities(101.3)(88.1)
Cash provided by operating activities32.6 66.3 
Investing activities:
Capital expenditures(67.9)(24.2)
Acquisition of businesses, net of cash acquired(748.7)(133.8)
Proceeds from sale of investments 144.8 
Other investing activities(0.8)(5.1)
Cash used for investing activities(817.4)(18.3)
Financing activities:
Net issuance of short-term debt409.0 206.9 
Repayment of short-term debt (18.8)
Cash dividends(144.0)(135.9)
Purchases of treasury stock(120.3)(156.8)
Proceeds from the exercise of stock options11.6 13.4 
Other financing activities(22.1)(14.1)
Cash provided by (used for) financing activities134.2 (105.3)
Effect of exchange rate changes on cash9.7 18.0 
Decrease in cash, cash equivalents, and restricted cash(640.9)(39.3)
Cash, cash equivalents, and restricted cash at beginning of period1,080.4 507.9 
Cash, cash equivalents, and restricted cash at end of period$439.5 $468.6 
Components of cash, cash equivalents, and restricted cash
Cash and cash equivalents$439.5 $460.0 
Restricted cash, current (Other current assets) 8.6 
Total cash, cash equivalents, and restricted cash$439.5 $468.6 
See Notes to Consolidated Financial Statements.
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CONSOLIDATED STATEMENT OF SHAREOWNERS’ EQUITY
(Unaudited)
(in millions, except per share amounts)
Common stockAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossCommon stock in treasury, at costTotal attributable to Rockwell Automation, Inc.Noncontrolling interestsTotal shareowners' equity
Balance at September 30, 2023$181.4 $2,102.5 $9,255.2 $(790.1)$(7,187.4)$3,561.6 $181.8 $3,743.4 
Net income (loss)— — 215.2 — — 215.2 (2.5)212.7 
Other comprehensive income— — — 60.3 — 60.3 0.1 60.4 
Common stock issued (including share-based compensation impact)— 8.8 — — 26.9 35.7 — 35.7 
Share repurchases— — — — (121.2)(121.2)— (121.2)
Cash dividends declared (1)
— — (143.9)— — (143.9)— (143.9)
Balance at December 31, 2023$181.4 $2,111.3 $9,326.5 $(729.8)$(7,281.7)$3,607.7 $179.4 $3,787.1 
Common stockAdditional paid-in capitalRetained earningsAccumulated other comprehensive lossCommon stock in treasury, at costTotal attributable to Rockwell Automation, Inc.Noncontrolling interestsTotal 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)— — 384.0 — — 384.0 (5.3)378.7 
Other comprehensive income— — — 64.3 — 64.3  64.3 
Common stock issued (including share-based compensation impact)— 8.6 — — 24.2 32.8 — 32.8 
Share repurchases— — — — (156.0)(156.0)— (156.0)
Cash dividends declared (1)
— — (135.9)— — (135.9)— (135.9)
Balance at December 31, 2022$181.4 $2,015.7 $8,659.9 $(853.2)$(7,089.0)$2,914.8 $285.8 $3,200.6 
(1) Cash dividends were $1.25 per share and $1.18 per share in the three months ended December 31, 2023 and 2022, respectively.

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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, 2023. The results of operations for the three months ended December 31, 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 $19.3 million at December 31, 2023, and $16.8 million at September 30, 2023. The changes to our allowance for doubtful accounts during the three months ended December 31, 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
December 31,
 20232022
Net income attributable to Rockwell Automation, Inc.$215.2 $384.0 
Less: Allocation to participating securities(1.0)(1.5)
Net income available to common shareowners$214.2 $382.5 
Basic weighted average outstanding shares114.6 114.8 
Effect of dilutive securities
Stock options0.6 0.6 
Performance shares 0.1 
Diluted weighted average outstanding shares115.2 115.5 
Earnings per share:
Basic$1.87 $3.33 
Diluted$1.86 $3.31 
For the three months ended December 31, 2023 and 2022, there were 0.5 million and 0.6 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 $20.5 million and $32.9 million were accrued within Accounts payable and Other current liabilities at December 31, 2023 and 2022, respectively. At December 31, 2023 and 2022, respectively, there were $1.1 million and $0.8 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.

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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)


Supplier Financing Arrangements
The Company maintains agreements with third-party financial institutions that offer voluntary supply chain financing (SCF) programs to suppliers. The SCF programs enable suppliers, at their sole discretion, to sell their receivables to third-party financial institutions in order to receive payment on receivables earlier than the negotiated commercial terms between suppliers and the Company. Supplier sale of receivables to third-party financial institutions is on terms negotiated between the supplier and the respective third-party financial institution. The Company agrees on commercial terms for the goods and services procured from suppliers, including prices, quantities, and payment terms, regardless of whether the supplier elects to participate in the SCF programs. A supplier’s voluntary participation in the SCF programs has no bearing on the Company's payment terms and the Company has no economic interest in a supplier’s decision to participate in the SCF programs. The Company agrees to pay participating third-party financial institutions the stated amount of confirmed invoices from suppliers on the original maturity dates of the invoices. Amounts outstanding related to SCF programs are included in Accounts payable in the Consolidated Balance Sheet and in changes in Accounts payable on the Consolidated Statement of Cash Flows. Accounts payable included approximately $117.5 million and $126.7 million related to these agreements as of December 31, 2023, and September 30, 2023, respectively. The impact of these programs is not material to the Company's overall liquidity.
Recently Adopted Accounting Pronouncements
In September 2022, the Financial Accounting Standards Board (FASB) issued a new standard that requires companies to apply Accounting Standards Codification (ASC) 405-50 to disclose supplier finance program obligations. We adopted the new standard as of October 1, 2023. The adoption of this standard did not have a material impact on our Consolidated Financial Statements.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-08, which requires expanded interim and annual disclosures of segment information regularly provided to the chief operating decision maker (CODM), the title and position of the CODM, an explanation of how the CODM uses the information in assessing segment performance and deciding how to allocate resources, and an amount for other segment items by reportable segment and a description of its composition. We will expand our disclosures in our fiscal 2025 Annual Report on Form 10-K when the standard becomes effective for us.
In December 2023, the FASB issued ASU 2023-09, which requires expanded annual disclosures to the income tax rate reconciliation and the amount of income taxes paid. We will expand our disclosures in our fiscal 2026 Annual Report on Form 10-K when the standard becomes effective for us.
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
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.
In most countries, we sell primarily through independent distributors in conjunction with our direct sales force. We sell large systems and service offerings principally through our direct sales force, though opportunities are sometimes identified through distributors.
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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Unfulfilled Performance Obligations
As of December 31, 2023, we expect to recognize approximately $1,121 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 December 31, 2023.
Disaggregation of Revenue
The following table presents 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 December 31, 2023Three Months Ended December 31, 2022
Intelligent DevicesSoftware & ControlLifecycle ServicesTotalIntelligent DevicesSoftware & ControlLifecycle ServicesTotal
North America$604.3 $386.6 $256.2 $1,247.1 $567.4 $384.1 $227.4 $1,178.9 
Europe, Middle East, and Africa166.6 99.8 121.9 388.3 171.2 85.8 115.8 372.8 
Asia Pacific97.9 79.0 98.7 275.6 131.3 68.4 96.8 296.5 
Latin America58.5 38.2 44.4 141.1 66.3 35.0 31.5 132.8 
Total Company Sales$927.3 $603.6 $521.2 $2,052.1 $936.2 $573.3 $471.5 $1,981.0 
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):
December 31, 2023December 31, 2022
Balance as of beginning of year$653.6 $541.3 
Balance as of end of period673.9 602.4 
The most significant changes in our Contract liabilities balance during both the three months ended December 31, 2023 and 2022, were due to amounts billed, partially offset by revenue recognized that was included in the Contract liabilities balance at the beginning of the period and revenue recognized on amounts billed during the period.
In the three months ended December 31, 2023, we recognized revenue of approximately $237.8 million that was included in the Contract liabilities balance at September 30, 2023. In the three months ended December 31, 2022, we recognized revenue of approximately $200.9 million that was included in the Contract liabilities balance at September 30, 2022. We did not have a material amount of revenue recognized in the three months ended December 31, 2023 and 2022, from performance obligations satisfied or partially satisfied in previous periods.
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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
3. Share-Based Compensation
We recognized $24.2 million and $18.4 million of pre-tax share-based compensation expense during the three months ended December 31, 2023 and 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):
 Three Months Ended December 31,
 20232022
GrantsWtd. Avg.
Share
Fair Value
GrantsWtd. Avg.
Share
Fair Value
Stock options217 $85.91 233 $77.62 
Performance shares79 295.06 66 340.77 
Restricted stock units235 276.46 211 259.67 
Unrestricted stock5 279.50 6 259.81 
4. Inventories
Inventories consist of (in millions):
December 31, 2023September 30, 2023
Finished goods$569.9 $545.9 
Work in process367.5 395.7 
Raw materials536.6 463.3 
Inventories$1,474.0 $1,404.9 
5. Acquisitions
2024 Acquisitions
In October 2023, we acquired Clearpath Robotics, Inc. (Clearpath), a company that specializes in autonomous robotics for industrial applications, headquartered in Ontario, Canada. 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 2, 2023. The preliminary aggregate purchase price allocation is as follows (in millions):
Purchase Price Allocation
Receivables$8.2 
Inventory22.1 
Goodwill 267.0 
Intangible assets313.1 
All other assets10.8 
Total assets acquired621.2 
Less: Liabilities assumed(12.7)
Net assets acquired$608.5 
Purchase Consideration
Cash consideration, net of cash acquired$565.5 
Contingent consideration43.0 
Total purchase consideration, net of cash acquired$608.5 
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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Intangible assets identified include $269.6 million of technology, $41.6 million of trademarks, and $1.9 million of customer relationships. We assigned the full amount of goodwill and all other assets acquired to our Intelligent Devices segment. The goodwill recorded represents intangible assets that do not qualify for separate recognition. This goodwill arises because the purchase price for Clearpath reflects a number of factors including the future earnings and cash flow potential for the business and resulting synergies from the business portfolio and industry expertise. We do not expect the goodwill to be deductible for tax purposes. The intangible assets were valued using an income approach, specifically the relief from royalty method and multi-period excess earnings method. The relief from royalty method calculates value based on hypothetical payments that would be saved by owning an asset rather than licensing it. The multi-period excess earnings method is the isolation of cash flows from a single intangible asset and measures fair value by discounting them to present value. These values are considered level 3 measurements under the U.S. GAAP fair value hierarchy. The key assumption requiring the use of judgement in the valuation of the technology asset was the obsolescence factor, where we estimated a phase out over 12 years; other assumptions included forecasted revenue growth rates and margin and the discount rate. The key assumption requiring the use of judgement in the valuation of the trademarks asset was the weighted average royalty rate of 2.05 percent; other assumptions included forecasted revenue growth rates and the discount rate.
The purchase price includes up to $50 million in contingent consideration dependent on future Clearpath revenue performance. We developed various risk-based scenarios and a probability outcome model to measure the fair value of the contingent consideration, which is considered a level 3 measurement under the U.S. GAAP fair value hierarchy. At the acquisition date and December 31, 2023, we determined the fair value of the contingent consideration to be $43.0 million, of which $17.5 million is recorded in Other current liabilities and $25.5 million in Other liabilities on the Consolidated Balance Sheet.
In November 2023, we acquired Verve Industrial Protection (Verve), a cybersecurity software and services company that focuses specifically on industrial environments. We recorded assets acquired and liabilities assumed in connection with this acquisition based on their estimated fair values as of the acquisition date of November 1, 2023. The preliminary aggregate purchase price allocation is as follows (in millions):
Purchase Price Allocation
Receivables$8.0 
Goodwill 133.0 
Intangible assets47.0 
All other assets1.4 
Total assets acquired189.4 
Less: Liabilities assumed(6.2)
Net assets acquired$183.2 
Purchase Consideration
Total purchase consideration, net of cash acquired$183.2 
We assigned the full amount of goodwill to our Lifecycle Services segment. We expect the goodwill to be deductible for tax purposes. The goodwill recorded represents intangible assets that do not qualify for separate recognition.
The allocations of the purchase prices 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.
Pro forma consolidated sales for the three months ended December 31, 2023 and 2022, were $2.1 billion and $2.0 billion, respectively, and the impact on earnings was not material. The preceding pro forma consolidated financial results of operations are as if the preceding 2024 acquisitions occurred on October 1, 2022. 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.
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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Total sales from all of the above 2024 acquisitions in the three months ended December 31, 2023 were $17.2 million. Total acquisition-related costs from all of the above 2024 acquisitions in the three months ended December 31, 2023, were not material.
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 assigned the full amount of goodwill related to this acquisition to our Intelligent Devices segment.
In February 2023, we acquired Knowledge Lens, a services and solutions provider headquartered in Bengaluru, India. We assigned the full amount of goodwill related to this acquisition to our Lifecycle Services segment.
We recorded assets acquired and liabilities assumed in connection with these acquisitions based on their estimated fair values as of the acquisition dates of October 31, 2022, and February 28, 2023, respectively. The aggregate purchase price allocation is as follows (in millions):
Purchase Price Allocation
Receivables$23.8 
Inventories17.7 
Property27.5 
Goodwill111.3 
Other intangible assets54.1 
All other assets21.0 
Total assets acquired255.4 
Less: Liabilities assumed(12.6)
Less: Deferred income taxes(56.6)
Net assets acquired, excluding cash$186.2 
Purchase Consideration
Total purchase consideration, net of cash acquired$186.2 
Pro forma consolidated sales for the three months ended December 31, 2022, were $2.0 billion, and the impact on earnings was not material. The preceding pro forma consolidated financial results of operations are as if the preceding 2023 acquisitions occurred on October 1, 2022. 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 months ended December 31, 2023 and 2022, were $26.8 million and $13.7 million, respectively. Total acquisition-related costs from all of the above 2023 acquisitions in the three months ended December 31, 2022, were not material.
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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 three months ended December 31, 2023, were (in millions):
Intelligent DevicesSoftware & ControlLifecycle ServicesTotal
Balance as of September 30, 2023$595.8 $2,420.1 $513.3 $3,529.2 
Acquisition of businesses267.0  133.0 400.0 
Translation16.9 13.5 7.1 37.5 
Balance as of December 31, 2023$879.7 $2,433.6 $653.4 $3,966.7 
Gross carrying value of goodwill879.7 2,433.6 810.9 4,124.2 
Accumulated impairment losses  (157.5)(157.5)
Goodwill$879.7 $2,433.6 $653.4 $3,966.7 
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 during the first quarter of 2024 and concluded that no triggering events, which would require interim quantitative testing, occurred.
Other intangible assets consist of (in millions):
 December 31, 2023
Carrying
Amount
Accumulated
Amortization
Net
Amortized intangible assets
Software products$105.1 $67.8 $37.3 
Customer relationships618.4 152.2 466.2 
Technology737.6 194.8 542.8 
Trademarks133.0 33.1 99.9 
Other5.7 5.2 0.5 
Total amortized intangible assets1,599.8 453.1 1,146.7 
Allen-Bradley® trademark not subject to amortization
43.7 — 43.7 
Other intangible assets$1,643.5 $453.1 $1,190.4 
 September 30, 2023
Carrying
Amount
Accumulated
Amortization
Net
Amortized intangible assets
Software products$100.4 $65.1 $35.3 
Customer relationships606.1 141.3 464.8 
Technology424.1 173.1 251.0 
Trademarks86.3 29.3 57.0 
Other6.0 5.4 0.6 
Total amortized intangible assets1,222.9 414.2 808.7 
Allen-Bradley® trademark not subject to amortization
43.7 — 43.7 
Other intangible assets$1,266.6 $414.2 $852.4 
Estimated total amortization expense for all amortized intangible assets is $153.5 million in 2024, $150.0 million in 2025, $148.7 million in 2026, $140.6 million in 2027, and $127.8 million in 2028.
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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
7. Short-Term and Long-Term Debt
Our Short-term debt as of December 31, 2023, includes commercial paper borrowings of $407.0 million, with a weighted average interest rate of 5.41 percent, and a weighted average maturity period of 13 days. We had no commercial paper borrowings as of September 30, 2023. In December 2022, Sensia entered into an unsecured $75.0 million line of credit. As of December 31, 2023, and September 30, 2023, included in Short-term debt was $70.0 million borrowed against the line of credit with an interest rate of 6.25 percent and 6.29 percent, respectively. Also included in Short-term debt as of December 31, 2023, and September 30, 2023, is $23.5 million of interest-bearing loans from Schlumberger (SLB) to Sensia due December 31, 2024.
The following table presents the carrying amounts and estimated fair values of Long-term debt in the Consolidated Balance Sheet (in millions):
 December 31, 2023September 30, 2023
 Carrying ValueFair ValueCarrying ValueFair Value
Current portion of long-term debt$9.9 $9.9 $8.6 $8.6 
Long-term debt2,863.0 2,623.1 2,862.9 2,442.6 
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):
December 31, 2023September 30, 2023
Unrealized losses on foreign exchange contracts$26.5 $10.8 
Product warranty obligations19.0 18.3 
Taxes other than income taxes48.8 56.9 
Accrued interest38.1 18.6 
Income taxes payable262.1 248.6 
Operating lease liabilities91.3 83.4 
Other122.8 130.8 
Other current liabilities$608.6 $567.4 
9. Investments
Our investments consist of (in millions):
December 31, 2023September 30, 2023
Fixed income securities$0.6 $0.6 
Equity securities (other)98.5 96.0 
Other63.4 61.1 
Total investments162.5 157.7 
Less: Short-term investments (1)
(0.6)(0.6)
Long-term investments$161.9 $157.1 
(1) Short-term investments are included in Other current assets in the Consolidated Balance Sheet.
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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Equity Securities
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 December 31, 2023, and September 30, 2023, include cumulative upward adjustments from observed price changes of $20.0 million and $17.5 million, respectively.
We record gains and losses on investments within the Change in fair value of investments line in the Consolidated Statement of Operations. The gains and losses on investments we recorded for the following periods were (in millions):
Three Months Ended
December 31,
 20232022
Net gain on equity securities (level 1)$ $141.0 
Net gain on equity securities (other)2.5  
Equity method gain (loss) on Other investments0.6 (0.4)
Change in fair value of investments3.1 140.6 
Total net realized gain on equity securities 33.9 
Total net unrealized gain on equity securities$2.5 $107.1 
Net gain on equity securities (level 1) in the prior year consisted of the change in fair value and gain on sale of shares of PTC Inc. (PTC) common stock (PTC Shares). As of September 30, 2023, all PTC Shares have been sold.
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.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
10. Retirement Benefits
The components of net periodic pension and postretirement benefit cost (credit) were (in millions):
 Pension Benefits
 
Three Months Ended
December 31,
 20232022
Service cost$9.3 $10.6 
Interest cost36.6 39.2 
Expected return on plan assets(42.2)(51.3)
Amortization of net actuarial gain(0.3)(1.0)
Net periodic pension benefit cost (credit)$3.4 $(2.5)
 Other Postretirement Benefits
 
Three Months Ended
December 31,
 20232022
Service cost$0.1 $0.1 
Interest cost0.6 0.6 
Amortization of net actuarial loss0.4 0.1 
Net periodic postretirement benefit cost$1.1 $0.8 
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 in the Consolidated Statement of Operations.
11. Other Income
The components of Other income were (in millions):
Three Months Ended
December 31,
20232022
Interest income$5.0 $1.3 
Royalty income2.8 2.5 
Legacy product liability and environmental charges(5.0)(2.8)
Non-operating pension and postretirement benefit credit4.9 12.4 
Other1.2 3.9 
Other income$8.9 $17.3 
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
12. Accumulated Other Comprehensive Loss
Changes in Accumulated other comprehensive loss attributable to Rockwell Automation by component for the following periods were (in millions):
Three Months Ended December 31, 2023Pension and other postretirement benefit plan adjustments, net of taxAccumulated currency translation adjustments, net of taxNet unrealized losses on cash flow hedges, net of taxTotal accumulated other comprehensive loss, net of tax
Balance as of September 30, 2023$(407.1)$(364.9)$(18.1)$(790.1)
Other comprehensive income (loss) before reclassifications 84.1 (17.7)66.4 
Amounts reclassified from accumulated other comprehensive loss0.1  (6.2)(6.1)
Other comprehensive income (loss)0.1 84.1 (23.9)60.3 
Balance as of December 31, 2023$(407.0)$(280.8)$(42.0)$(729.8)
Three Months Ended December 31, 2022Pension and other postretirement benefit plan adjustments, net of taxAccumulated currency translation adjustments, net of taxNet unrealized losses on cash flow hedges, net of taxTotal accumulated other comprehensive loss, net of tax
Balance as of September 30, 2022$(447.8)$(465.0)$(4.7)$(917.5)
Other comprehensive income (loss) before reclassifications 85.9 (12.0)73.9 
Amounts reclassified from accumulated other comprehensive loss(0.5) (9.1)(9.6)
Other comprehensive (loss) income(0.5)85.9 (21.1)64.3 
Balance as of December 31, 2022$(448.3)$(379.1)$(25.8)$(853.2)














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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
The reclassifications out of Accumulated other comprehensive loss in the Consolidated Statement of Operations were (in millions):
Three Months Ended
December 31,
Affected Line in the Consolidated Statement of Operations
 20232022
Pension and other postretirement benefit plan adjustments (1)
Amortization of net actuarial loss (gain)$0.1 $(0.9)Other income
0.1 (0.9)Income before income taxes
 0.4 Income tax provision
$0.1 $(0.5)Net income attributable to Rockwell Automation, Inc.
Net unrealized (gains) losses on cash flow hedges
Forward exchange contracts$(1.3)$(1.0)Sales
Forward exchange contracts(8.1)(12.9)Cost of sales
Forward exchange contracts 0.3 Selling, general and administrative expenses
Treasury locks related to 2019 and 2021 debt issuances0.9 0.9 Interest expense
(8.5)(12.7)Income before income taxes
2.3 3.6 Income tax provision
$(6.2)$(9.1)Net income attributable to Rockwell Automation, Inc.
Total reclassifications$(6.1)$(9.6)Net income attributable to Rockwell Automation, Inc.
(1) These components are included in the computation of net periodic benefit cost. See Note 10 for further information.
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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
13. 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 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 caused by our products. 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 for many years into the future. 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 and at times in other contracts with third parties. As of December 31, 2023, 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.
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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
14. Income Taxes
At the end of each interim period, we estimate a base effective tax rate that we expect for the full 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 18.1 percent for the three months ended December 31, 2023, compared to 19.1 percent for the three months ended December 31, 2022. The effective tax rate was lower than the U.S. statutory rate of 21 percent for the three months ended December 31, 2023, and December 31, 2022, primarily due to the geographical mix of pre-tax income.
An income tax liability of $175.3 million related to the U.S. transition tax under the Tax Cuts and Jobs Act of 2017 (the "Tax Act") that is payable greater than 12 months after December 31, 2023, and September 30, 2023, is recorded in Other liabilities in the Consolidated Balance Sheet.
Unrecognized Tax Benefits
The amount of gross unrecognized tax benefits was $10.8 million at December 31, 2023, and $9.8 million at September 30, 2023, of which the entire amount would reduce our effective tax rate if recognized.
Accrued interest and penalties related to unrecognized tax benefits were $1.0 million at December 31, 2023, and $0.9 million at September 30, 2023. 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 $2.3 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 $3.1 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 2018, state and local income tax examinations for years before 2014, and foreign income tax examinations for years before 2008.
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ROCKWELL AUTOMATION, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
15. Business Segment Information
Sales and operating results of our reportable segments were (in millions):
 Three Months Ended
December 31,
 20232022
Sales
Intelligent Devices$927.3 $936.2 
Software & Control603.6 573.3 
Lifecycle Services521.2 471.5 
Total$2,052.1 $1,981.0 
Segment operating earnings
Intelligent Devices$150.2 $209.4 
Software & Control151.0 167.3 
Lifecycle Services54.3 24.3 
Total355.5 401.0 
Purchase accounting depreciation and amortization(35.6)(26.0)
Corporate and other(40.0)(27.3)
Non-operating pension and postretirement benefit credit4.9 12.4 
Change in fair value of investments3.1 140.6 
Interest expense, net(28.3)(32.8)
Income before income taxes$259.6 $467.9 
Among other considerations, we evaluate performance and allocate resources based upon segment operating earnings before purchase accounting depreciation and amortization, corporate and other, non-operating pension and postretirement benefit credit, change in fair value of investments, interest expense, net, and income tax provision. 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.
23


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareowners of
Rockwell Automation, Inc.
Milwaukee, Wisconsin

Results of Review of Interim Financial Information
We have reviewed the accompanying consolidated balance sheet of Rockwell Automation, Inc. and subsidiaries (the "Company") as of December 31, 2023, the related consolidated statements of operations, comprehensive income, cash flows and shareowners’ equity for the three-month periods ended December 31, 2023, and 2022, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of September 30, 2023, and the related consolidated statements of operations, comprehensive income, cash flows and shareowners’ equity for the year then ended (not presented herein); and in our report dated November 8, 2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of September 30, 2023, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin
January 31, 2024

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains statements (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Words such as “believe”, “estimate”, “project”, “plan”, “expect”, “anticipate”, “will”, “intend”, and other similar expressions may identify forward-looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties, many of which are beyond our control, including but not limited to:
macroeconomic factors, including inflation, global and regional business conditions (including adverse impacts in certain markets, such as Oil & Gas), commodity prices, currency exchange rates, the cyclical nature of our customers’ capital spending, and sovereign debt concerns;
the availability and price of components and materials;
the severity and duration of disruptions to our business due to pandemics, natural disasters (including those as a result of climate change), acts of war, strikes, terrorism, social unrest or other causes, liquidity and financial markets, demand for our hardware and software products, solutions, and services, our supply chain, our work force, our liquidity and the value of the assets we own;
the availability, effectiveness, and security of our information technology systems;
our ability to attract, develop, and retain qualified employees;
our ability to manage and mitigate the risk related to security vulnerabilities and breaches of our hardware and software products, solutions, and services;
the successful integration and management of strategic transactions and achievement of the expected benefits of these transactions;
laws, regulations, and governmental policies affecting our activities in the countries where we do business, including those related to tariffs, taxation, trade controls (including sanctions placed on Russia), cybersecurity, and climate change;
the successful development of advanced technologies and demand for and market acceptance of new and existing hardware and software products;
our ability to manage and mitigate the risks associated with our solutions and services businesses;
the successful execution of our cost productivity initiatives;
competitive hardware and software products, solutions, and services, pricing pressures, and our ability to provide high quality products, solutions, and services;
the availability and cost of capital;
disruptions to our distribution channels or the failure of distributors to develop and maintain capabilities to sell our products;
intellectual property infringement claims by others and the ability to protect our intellectual property;
the uncertainty of claims by taxing authorities in the various jurisdictions where we do business;
the uncertainties of litigation, including liabilities related to the safety and security of the hardware and software products, solutions, and services we sell;
our ability to manage costs related to employee retirement and health care benefits; and
other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission (SEC) filings.
These forward-looking statements reflect our beliefs as of the date of filing this report. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. See Item 1A. Risk Factors, of our Annual Report on Form 10-K for the year ended September 30, 2023, for more information.
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Non-GAAP Measures
The following discussion includes organic sales, total segment operating earnings and margin, adjusted income, adjusted EPS, adjusted effective tax rate, and free cash flow, which are non-GAAP measures. See Supplemental Sales Information for a reconciliation of reported sales to organic sales and a discussion of why we believe this non-GAAP measure is useful to investors. See Summary of Results of Operations for a reconciliation of Income before income taxes to total segment operating earnings and margin and a discussion of why we believe these non-GAAP measures are useful to investors. See Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation for a reconciliation of Net income attributable to Rockwell Automation, diluted EPS, and effective tax rate to adjusted income, adjusted EPS, and adjusted effective tax rate, respectively, and a discussion of why we believe these non-GAAP measures are useful to investors. See Financial Condition for a reconciliation of Cash provided by operating activities to free cash flow and a discussion of why we believe this non-GAAP measure is useful to investors.
Overview
Rockwell Automation, Inc. is the world’s largest company dedicated to industrial automation and digital transformation. Overall demand for our hardware and software products, solutions, and services is driven by: 
investments in manufacturing, including new facilities or production lines, upgrades, modifications and expansions of existing facilities or production lines;
investments in basic materials production capacity, which may be related to commodity pricing levels;
our customers’ needs for faster time to market, agility to address evolving consumer preferences, operational productivity, asset management and reliability, and business resilience, including security and enterprise risk management;
our customers’ needs to continuously improve quality, safety, and sustainability;
industry factors that include our customers’ new product introductions, demand for our customers’ products or services, and the regulatory and competitive environments in which our customers operate;
levels of global industrial production and capacity utilization;
regional factors that include local political, social, regulatory, and economic circumstances; and
the spending patterns of our customers due to their annual budgeting processes and their working schedules.
Long-term Strategy
Our strategy is to expand human possibility. Our vision is to create the future of industrial operations. As the world’s largest company dedicated to industrial automation and digital transformation, our strategy is to bring the Connected Enterprise® to life. We understand and simplify our customers’ complex production challenges and deliver the most valued solutions that combine technology and industry expertise. As a result, we make our customers more resilient, agile, and sustainable, creating more ways to win. We deliver value by helping our customers optimize production, build resilience, empower people, become more sustainable, and accelerate transformation.
Rockwell Automation stands at the intersection of the technological and societal trends that are shaping the future of industrial operations. We see converging megatrends including digitization and artificial intelligence, energy transition and sustainability, shifting demographics, and an increased need for resiliency.
Our long-term profitable growth framework outlines how we will deliver accelerated growth while we continue to transform our company to meet stakeholder expectations over the longer term:
achieve faster secular growth in traditional markets due to customer needs for resiliency (including cybersecurity), agility, sustainability, and mitigating impacts of labor shortages;
grow share and create new ways to win through technology differentiation, industry focus, go to market acceleration, expanded offerings and new markets;
accelerate growth in annual recurring revenue;
add 1% growth from acquisitions annually; and
deliver profitable growth within a disciplined financial framework.
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U.S. Economic Trends
In the first quarter of 2024, sales in the U.S. accounted for over half of our total sales. The various indicators we use to gauge the direction and momentum of our served U.S. markets include:
The Industrial Production (IP) Index, published by the Federal Reserve, which measures the real output of manufacturing, mining, and electric and gas utilities. The IP Index is expressed as a percentage of real output in a base year, currently 2017.
The Manufacturing Purchasing Managers’ Index (PMI), published by the Institute for Supply Management (ISM), which indicates the current and near-term state of manufacturing activity in the U.S. According to the ISM, a PMI measure above 50 indicates that the U.S. manufacturing economy is generally expanding while a measure below 50 indicates that it is generally contracting.
The table below depicts trends in these indicators since the quarter ended September 2022. These figures are as of January 31, 2024, and are subject to revision by the issuing organizations. The IP index declined in the first quarter of fiscal 2024 versus the fourth quarter of fiscal 2023. Manufacturing PMI results remained soft in the first quarter of 2024.
IP IndexPMI
Fiscal 2024 quarter ended:
December 202399.0 47.4
Fiscal 2023 quarter ended:
September 202399.649.0
June 202399.946.0
March 202399.546.3
December 202299.648.4
Fiscal 2022 quarter ended:
September 2022100.450.9
Inflation in the U.S. has also had an impact on our input costs and pricing. We used the Producer Price Index (PPI), published by the Bureau of Labor Statistics, which measures the average change over time in the selling prices received by domestic producers for their output. PPI growth has remained in the low single digits during the first quarter, consistent with most of 2023. Producer prices remain elevated, however, year over year increases continued to decelerate following last years' surge in prices.
Non-U.S. Economic Trends
In the first quarter of 2024, sales to customers outside the U.S. accounted for less than half of our total sales. These customers include both indigenous companies and multinational companies with a global presence. In addition to the global factors previously mentioned in the Overview section, international demand, particularly in emerging markets, has historically been driven by the strength of the industrial economy in each region, investments in infrastructure, and expanding consumer markets. We use changes in key countries' gross domestic product (GDP), IP, and PMI as indicators of the growth opportunities in each region where we do business. Industrial output was mostly higher outside the U.S. in the first quarter of fiscal 2024 versus the fourth quarter of 2023. Manufacturing PMI readings were mostly lower and many countries continue to report readings below 50.
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Supply Chain
We have a global supply chain, including a network of suppliers and distribution and manufacturing facilities, that play a critical role in serving our channel partners and customers. Recent supply chain challenges have resulted in and could continue to result in:
difficulty in procuring or inability to procure components and materials necessary for our products, solutions, and services;
increased costs for commodities and components; and
delays in delivering, or an inability to deliver, our products, solutions, and services.
We are continuing to see improvement in our supply chain environment and are closely managing our end-to-end supply chain, from sourcing to production to customer delivery, with a particular focus on all critical and at-risk suppliers and supplier locations globally. Actions we have taken include:
extending order visibility to our supply base to ensure we are appropriately planning for extended component lead times;
securing longer-term supply agreements with critical partners;
re-engineering of existing products to increase component supply resiliency;
investing in capacity, including redundant manufacturing lines and additional electronic assembly equipment;
qualification of additional suppliers to diversify our supplier base; and
adapting logistics to secure additional capacity.
We believe these actions are enabling us to normalize our product lead times and better serve our customers.
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Summary of Results of Operations
The following table reflects our sales and operating results (in millions, except per share amounts and percentages):
 Three Months Ended
December 31,
 20232022
Sales
Intelligent Devices (a)$927.3 $936.2 
Software & Control (b)603.6 573.3 
Lifecycle Services (c)521.2 471.5 
Total sales (d)$2,052.1 $1,981.0 
Segment operating earnings (1)
Intelligent Devices (e)$150.2 $209.4 
Software & Control (f)151.0 167.3 
Lifecycle Services (g)54.3 24.3 
Total segment operating earnings (2) (h)
355.5 401.0 
Purchase accounting depreciation and amortization(35.6)(26.0)
Corporate and other(40.0)(27.3)
Non-operating pension and postretirement benefit credit4.9 12.4 
Change in fair value of investments3.1 140.6 
Interest expense, net(28.3)(32.8)
Income before income taxes (i)259.6 467.9 
Income tax provision(46.9)(89.2)
Net income212.7 378.7 
Net loss attributable to noncontrolling interests(2.5)(5.3)
Net income attributable to Rockwell Automation$215.2 $384.0 
Diluted EPS$1.86 $3.31 
Adjusted EPS (3)
$2.04 $2.46 
Diluted weighted average outstanding shares115.2 115.5 
Pre-tax margin (i/d)12.7 %23.6 %
Intelligent Devices segment operating margin (e/a)16.2 %22.4 %
Software & Control segment operating margin (f/b)25.0 %29.2 %
Lifecycle Services segment operating margin (g/c)10.4 %5.2 %
Total segment operating margin (2) (h/d)
17.3 %20.2 %
(1) See Note 15 in the Consolidated Financial Statements for the definition of segment operating earnings.
(2) Total segment operating earnings and total segment operating margin are non-GAAP financial measures. We exclude purchase accounting depreciation and amortization, corporate and other, non-operating pension and postretirement benefit credit, change in fair value of investments, interest expense, net, and income tax provision because we do not consider these items to be directly related to the operating performance of our segments. We believe total segment operating earnings and total segment operating margin are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating segments. Our measures of total segment operating earnings and total segment operating margin may be different from measures used by other companies.
(3) Adjusted EPS is a non-GAAP earnings measure. See Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation for more information on this non-GAAP measure.
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Three Months Ended December 31, 2023, Compared to Three Months Ended December 31, 2022
Sales
Sales increased 3.6 percent year over year in the three months ended December 31, 2023. Organic sales increased 1.0 percent, currency translation increased sales by 1.2 percentage points, and acquisitions increased sales by 1.4 percentage points year over year in the three months ended December 31, 2023. Pricing increased total company sales by approximately 3 percentage points, realized in the Intelligent Devices and Software & Control segments. Volume decreased total company sales by approximately 2 percentage points.
The table below presents our sales, attributed to the geographic regions based upon country of destination, and the percentage change from the same period a year ago (in millions, except percentages). Asia Pacific was negatively impacted by the results of China, which experienced a high teens decrease in reported and organic sales.
Change vs.
Change in Organic
Sales (1) vs.
Three Months Ended December 31, 2023Three Months Ended December 31, 2022Three Months Ended December 31, 2022
North America$1,247.1 5.8 %4.2 %
Europe, Middle East, and Africa388.3 4.2 %(2.2)%
Asia Pacific275.6 (7.0)%(7.4)%
Latin America141.1 6.2 %(0.5)%
Total Company Sales$2,052.1 3.6 %1.0 %
(1) Organic sales and organic sales growth exclude the effect of acquisitions, changes in currency exchange rates, and divestitures. See Supplemental Sales Information for information on these non-GAAP measures.
Corporate and Other
Corporate and other expenses were $40.0 million in the three months ended December 31, 2023, compared to $27.3 million in the three months ended December 31, 2022. The increase includes the year over year impact of costs associated with the acquisition of Clearpath and mark-to-market adjustments related to our deferred and non-qualified compensation plans.
Income before Income Taxes
Income before income taxes was $259.6 million in the three months ended December 31, 2023, compared to $467.9 million in the three months ended December 31, 2022. The decrease was primarily due to the mark-to-market gains recognized in the first quarter of the prior year related to our previous investment in PTC and lower segment operating earnings.
Total segment operating earnings decreased 11.3 percent in the three months ended December 31, 2023, primarily due to higher investment spend and lower supply chain utilization.
Income Taxes
The effective tax rate for the three months ended December 31, 2023, was 18.1 percent compared to 19.1 percent for the three months ended December 31, 2022. The decrease in the effective tax rate was primarily due to tax effects in the prior year related to our previous investment in PTC. Our adjusted effective tax rate for the three months ended December 31, 2023, was 17.9 percent compared to 17.1 percent for the three months ended December 31, 2022. The increase in the adjusted effective tax rate was primarily due to the geographical mix of pre-tax income.
Diluted EPS and Adjusted EPS
2024 first quarter Net income attributable to Rockwell Automation was $215.2 million or $1.86 per share, compared to $384.0 million or $3.31 per share in the first quarter of 2023. The decreases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to lower pre-tax margin. Pre-tax margin was 12.7 percent in the first quarter of 2024 compared to 23.6 percent in the same period last year. The decrease in pre-tax margin was primarily due to mark-to market gains recognized in the first quarter of the prior year related to our previous investment in PTC and lower segment operating earnings. 2024 first quarter adjusted EPS was $2.04, down 17.1 percent compared to $2.46 in the first quarter of 2023, primarily due to lower segment operating margin. Total segment operating margin in the first quarter of 2024 was 17.3 percent compared to 20.2 percent a year ago, primarily due to higher investment spend and lower supply chain utilization.
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Intelligent Devices
Sales
Intelligent Devices sales decreased 1.0 percent year over year in the three months ended December 31, 2023. Organic sales decreased 4.5 percent year over year, the effects of currency translation increased sales by 1.2 percentage points year over year, and acquisitions increased sales by 2.3 percentage points year over year in the three months ended December 31, 2023. For the three months ended December 31, 2023, reported and organic sales decreased in all regions, except for North America.
Segment Operating Margin
Intelligent Devices segment operating earnings decreased 28.3 percent year over year in the three months ended December 31, 2023. Segment operating margin decreased to 16.2 percent in the three months ended December 31, 2023, from 22.4 percent in the same period a year ago, primarily due to lower sales volume, timing of prior-year investment spend, and the impact of acquisitions, partially offset by positive impact of price realization exceeding input costs.
Software & Control
Sales
Software & Control sales increased 5.3 percent year over year in the three months ended December 31, 2023. Organic sales increased 4.0 percent year over year and the effects of currency translation increased sales by 1.3 percentage points year over year in the three months ended December 31, 2023. For the three months ended December 31, 2023, all regions experienced reported and organic sales growth.
Segment Operating Margin
Software & Control segment operating earnings decreased 9.7 percent year over year in the three months ended December 31, 2023. Segment operating margin decreased to 25.0 percent in the three months ended December 31, 2023, from 29.2 percent in the same period a year ago, primarily due to timing of prior-year investment spend and lower supply chain utilization, partially offset by positive impact of price realization exceeding input costs.
Lifecycle Services
Sales
Lifecycle Services sales increased 10.5 percent year over year in the three months ended December 31, 2023. Organic sales increased 8.1 percent year over year, the effects of currency translation increased sales by 1.0 percentage point year over year, and acquisitions increased sales by 1.4 percentage points year over year in the three months ended December 31, 2023. For the three months ended December 31, 2023, all regions experienced reported sales growth. Organic sales increased in North America and Latin America, but decreased in Europe, Middle East, and Africa and Asia Pacific in the three months ended December 31, 2023.
Segment Operating Margin
Lifecycle Services segment operating earnings increased 123.5 percent year over year in the three months ended December 31, 2023. Segment operating margin increased to 10.4 percent in the three months ended December 31, 2023, from 5.2 percent in the same period a year ago, primarily due to higher sales volume, lower incentive compensation, and higher margins in Sensia.

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Supplemental Segment Information
Purchase accounting depreciation and amortization and non-operating pension and postretirement benefit cost are not allocated to our operating segments because these costs are excluded from our measurement of each segment's operating performance for internal purposes. If we were to allocate these costs, we would attribute them to each of our segments as follows (in millions):
 Three Months Ended
December 31,
 20232022
Purchase accounting depreciation and amortization
Intelligent Devices$9.3 $1.0 
Software & Control17.0 16.9 
Lifecycle Services9.1 7.8 
Non-operating pension and postretirement benefit credit
Intelligent Devices$(1.8)$(3.9)
Software & Control(1.8)(3.9)
Lifecycle Services(2.4)(5.3)
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Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate Reconciliation
Adjusted income, adjusted EPS, and adjusted effective tax rate are non-GAAP earnings measures that exclude non-operating pension and postretirement benefit credit, purchase accounting depreciation and amortization attributable to Rockwell Automation, change in fair value of investments, and Net loss attributable to noncontrolling interests, including their respective tax effects. Non-operating pension and postretirement benefit credit is defined as all components of our net periodic pension and postretirement benefit cost (credit) except for service cost. See Note 10 in the Consolidated Financial Statements for more information on our net periodic pension and postretirement benefit cost.
We believe that adjusted income, adjusted EPS, and adjusted effective tax rate provide useful information to our investors about our operating performance and allow management and investors to compare our operating performance period over period. Adjusted EPS is also used as a financial measure of performance for our annual incentive compensation. Our measures of adjusted income, adjusted EPS, and adjusted effective tax rate may be different from measures used by other companies. These non-GAAP measures should not be considered a substitute for Net income attributable to Rockwell Automation, diluted EPS, and effective tax rate.
The following are reconciliations of Net income attributable to Rockwell Automation, diluted EPS, and effective tax rate to adjusted income, adjusted EPS, and adjusted effective tax rate, respectively (in millions, except per share amounts and percentages):
Three Months Ended
December 31,
20232022
Net income attributable to Rockwell Automation$215.2 $384.0 
Non-operating pension and postretirement benefit credit(4.9)(12.4)
Tax effect of non-operating pension and postretirement benefit credit1.0 2.8 
Purchase accounting depreciation and amortization attributable to Rockwell Automation32.7 23.0 
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation(5.5)(5.6)
Change in fair value of investments (1)
(3.1)(140.6)
Tax effect of change in fair value of investments (1)
0.6 34.1 
Adjusted income$236.0 $285.3 
Diluted EPS$1.86 $3.31 
Non-operating pension and postretirement benefit credit(0.04)(0.10)
Tax effect of non-operating pension and postretirement benefit credit0.01 0.02 
Purchase accounting depreciation and amortization attributable to Rockwell Automation0.28 0.20 
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation(0.05)(0.05)
Change in fair value of investments (1)
(0.03)(1.22)
Tax effect of change in fair value of investments (1)
0.01 0.30 
Adjusted EPS$2.04 $2.46 
Effective tax rate18.1 %19.1 %
Tax effect of non-operating pension and postretirement benefit credit(0.1)%(0.1)%
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation(0.1)%0.5 %
Tax effect of change in fair value of investments (1)
— %(2.4)%
Adjusted effective tax rate17.9 %17.1 %
(1) Amount in the three months ended December 31, 2022 primarily relates to the change in fair value of previous investment in PTC.

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Financial Condition
The following is a summary of our cash flows from operating, investing, and financing activities, as reflected in the Consolidated Statement of Cash Flows (in millions):
 Three Months Ended
December 31,
 20232022
Cash provided by (used for)
Operating activities$32.6 $66.3 
Investing activities(817.4)(18.3)
Financing activities134.2 (105.3)
Effect of exchange rate changes on cash9.7 18.0 
Decrease in cash, cash equivalents, and restricted cash$(640.9)$(39.3)
The following table summarizes free cash flow, which is a non-GAAP financial measure (in millions):
 Three Months Ended
December 31,
 20232022
Cash provided by operating activities$32.6 $66.3 
Capital expenditures(67.9)(24.2)
Free cash flow$(35.3)$42.1 
Our definition of free cash flow takes into consideration capital investments required to maintain the operations of our businesses and execute our strategy. Cash provided by operating activities adds back non-cash depreciation expense to earnings but does not reflect a charge for necessary capital expenditures. Our definition of free cash flow excludes the operating cash flows and capital expenditures related to our discontinued operations, if any. Operating, investing, and financing cash flows of our discontinued operations, if any, are presented separately in our Consolidated Statement of Cash Flows. In our opinion, free cash flow provides useful information to investors regarding our ability to generate cash from business operations that is available for acquisitions and other investments, service of debt principal, dividends, and share repurchases. We use free cash flow, as defined, as one measure to monitor and evaluate our performance, including as a financial measure for our annual incentive compensation. Our definition of free cash flow may be different from definitions used by other companies.
Cash provided by operating activities was $32.6 million for the three months ended December 31, 2023, compared to $66.3 million for the three months ended December 31, 2022. Free cash flow was a net outflow of $35.3 million for the three months ended December 31, 2023, compared to a net inflow of $42.1 million for the three months ended December 31, 2022. The year over year decreases in cash provided by operating activities and free cash flow were primarily due to higher incentive compensation payments related to fiscal 2023 performance, lower pre-tax income, and higher tax payments in the first three months of 2023 compared to the first three months of 2022, partially offset by decreases in working capital.
Our Short-term debt as of December 31, 2023, includes commercial paper borrowings of $407.0 million with a weighted average interest rate of 5.41 percent, and a weighted average maturity period of 13 days. We had no commercial paper borrowings as of September 30, 2023. In December 2022, Sensia entered into an unsecured $75.0 million line of credit. As of December 31, 2023, and September 30, 2023, included in Short-term debt was $70.0 million borrowed against the line of credit with an interest rate of 6.25 percent and 6.29 percent, respectively. Also included in Short-term debt as of December 31, 2023, and September 30, 2023, is $23.5 million of interest-bearing loans from SLB to Sensia, due December 31, 2024.
We repurchased approximately 0.4 million shares of our common stock under our share repurchase program in the first three months of 2024. The total cost of these shares was $120.3 million, of which $1.1 million was recorded in Accounts payable at December 31, 2023, related to shares that did not settle until January 2024. At September 30, 2023, there were $1.1 million of outstanding common stock share repurchases recorded in Accounts payable. We repurchased approximately 0.6 million shares of our common stock under our share repurchase program in the first three months of 2023. The total cost of these shares was $156.0 million, of which $0.8 million was recorded in Accounts payable at December 31, 2022, related to shares that did not settle until January 2023. Our decision to repurchase shares in the remainder of 2024 will depend on business conditions, free cash flow generation, other cash requirements, and stock price. On May 2, 2022, the Board of Directors authorized us to expend an additional $1.0 billion to repurchase shares of our common stock. At December 31, 2023, we had approximately $820.0 million remaining for share repurchases under our existing board authorization. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, for additional information regarding share repurchases.
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