Document and Entity Information
Document and Entity Information - Jun. 30, 2015 - shares | Total |
Document Information [Line Items] | |
Entity Registrant Name | ROCKWELL AUTOMATION INC. |
Entity Central Index Key | 1,024,478 |
Document Type | 10-Q |
Document Period End Date | Jun. 30, 2015 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | Q3 |
Current Fiscal Year End Date | --09-30 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 134,105,606 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet (Unaudited) - USD ($) $ in Millions | Jun. 30, 2015 | Sep. 30, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 1,567.2 | $ 1,191.3 |
Short-term investments | 590.6 | 628.5 |
Receivables | 1,084.3 | 1,215.8 |
Inventories | 599.4 | 588.4 |
Deferred income taxes | 151.8 | 163.5 |
Other current assets | 181.6 | 146.7 |
Total current assets | 4,174.9 | 3,934.2 |
Property, net of accumulated depreciation of $1,305.2 and $1,255.5, respectively | 590.7 | 632.9 |
Goodwill | 1,043.3 | 1,050.6 |
Other intangible assets, net | 241.2 | 246.2 |
Deferred income taxes | 193.6 | 205.7 |
Other assets | 162.8 | 159.9 |
Total | 6,406.5 | 6,229.5 |
Current liabilities: | ||
Short-term debt | 0 | 325 |
Accounts payable | 547.1 | 520.6 |
Compensation and benefits | 209.8 | 277.7 |
Advance payments from customers and deferred revenue | 212 | 196.5 |
Customer returns, rebates and incentives | 169 | 184 |
Other current liabilities | 278.1 | 188.3 |
Total current liabilities | 1,416 | 1,692.1 |
Long-term debt | 1,492.2 | 905.6 |
Retirement benefits | 727.2 | 767.9 |
Other liabilities | $ 215.1 | $ 205.8 |
Commitments and contingent liabilities (Note 11) | ||
Shareowners' equity: | ||
Common stock ($1.00 par value, shares issued: 181.4) | $ 181.4 | $ 181.4 |
Additional paid-in capital | 1,541.9 | 1,512.3 |
Retained earnings | 5,115.3 | 4,839.6 |
Accumulated other comprehensive loss | (1,015.4) | (948) |
Common stock in treasury, at cost (shares held: June 30, 2015, 47.3; September 30, 2014, 44.7) | (3,267.2) | (2,927.2) |
Total shareowners' equity | 2,556 | 2,658.1 |
Total | $ 6,406.5 | $ 6,229.5 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) - USD ($) shares in Millions, $ in Millions | Jun. 30, 2015 | Sep. 30, 2014 |
Accumulated depreciation | $ 1,305.2 | $ 1,255.5 |
Common stock, par value per share | $ 1 | $ 1 |
Common stock, shares issued | 181.4 | 181.4 |
Treasury stock, shares | 47.3 | 44.7 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Sales | ||||
Products and solutions | $ 1,410.5 | $ 1,481.2 | $ 4,214.8 | $ 4,332.6 |
Services | 164.7 | 168.3 | 485.6 | 509.1 |
Total sales | 1,575.2 | 1,649.5 | 4,700.4 | 4,841.7 |
Cost of sales | ||||
Products and solutions | (782.2) | (849.8) | (2,327.6) | (2,485.3) |
Services | (114.8) | (118.2) | (333.9) | (355.4) |
Total cost of sales | (897) | (968) | (2,661.5) | (2,840.7) |
Gross profit | 678.2 | 681.5 | 2,038.9 | 2,001 |
Selling, general and administrative expenses | (376.4) | (394.4) | (1,145.7) | (1,172.3) |
Other (expense) income | (0.8) | 1.3 | 2.4 | 10.8 |
Interest expense | (16.4) | (14.4) | (47) | (44.3) |
Income before income taxes | 284.6 | 274 | 848.6 | 795.2 |
Income tax provision | (78.5) | (74.3) | (222.3) | (217.1) |
Net income | $ 206.1 | $ 199.7 | $ 626.3 | $ 578.1 |
Earnings Per Share, Basic [Abstract] | ||||
Basic | $ 1.53 | $ 1.44 | $ 4.64 | $ 4.17 |
Earnings Per Share, Diluted [Abstract] | ||||
Diluted | 1.52 | 1.43 | 4.60 | 4.12 |
Cash dividends per share | $ 1.30 | $ 1.16 | $ 2.60 | $ 2.32 |
Weighted average outstanding shares: | ||||
Basic | 134.3 | 138 | 134.9 | 138.3 |
Diluted | 135.5 | 139.6 | 136.1 | 140 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Comprehensive income | ||||
Net income | $ 206.1 | $ 199.7 | $ 626.3 | $ 578.1 |
Other comprehensive income (loss), net of tax: | ||||
Pension and other postretirement benefit plan adjustments (net of tax expense of $9.0, $7.9, $27.4 and $23.6) | 17.4 | 14.6 | 52.2 | 43.7 |
Currency translation adjustments | 27.4 | 1.2 | (133.2) | 15.5 |
Net change in unrealized gains and losses on cash flow hedges (net of tax (benefit) expense of ($2.6), $1.6, $5.0 and $2.4) | (19.5) | (0.8) | 13.6 | (2.1) |
Other comprehensive income (loss) | 25.3 | 15 | (67.4) | 57.1 |
Comprehensive income | $ 231.4 | $ 214.7 | $ 558.9 | $ 635.2 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Other Comprehensive Income (Loss), Tax, Parenthetical Disclosures [Abstract] | ||||
Tax expense from pension and other postretirement benefit plan adjustments | $ 9 | $ 7.9 | $ 27.4 | $ 23.6 |
Tax (benefit) expense from net change in unrealized gains and losses on cash flow hedges | $ (2.6) | $ 1.6 | $ 5 | $ 2.4 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating activities: | ||
Net income | $ 626.3 | $ 578.1 |
Adjustments to arrive at cash provided by operating activities: | ||
Depreciation | 99.6 | 91.6 |
Amortization of intangible assets | 21.3 | 22.8 |
Share-based compensation expense | 31.4 | 32.1 |
Retirement benefit expense | 106.4 | 100 |
Pension contributions | (30.9) | (32.7) |
Net (gain) loss on disposition of property | (1) | 0.1 |
Income tax benefit from the exercise of stock options | 0 | 0.1 |
Excess income tax benefit from share-based compensation | (12.2) | (29.1) |
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments: | ||
Receivables | 60.7 | 15.1 |
Inventories | (45) | (42.3) |
Accounts payable | 53.4 | 31.4 |
Advance payments from customers and deferred revenue | 26.2 | 25.5 |
Compensation and benefits | (58.1) | (21.3) |
Income taxes | (12.7) | (29.1) |
Other assets and liabilities | (25.7) | (34.9) |
Cash provided by operating activities | 839.7 | 707.4 |
Investing activities: | ||
Capital expenditures | (83.2) | (96.4) |
Acquisition of businesses, net of cash acquired | (21.2) | (81.5) |
Purchases of short-term investments | (470.8) | (487) |
Proceeds from maturities of short-term investments | 501.8 | 285.3 |
Proceeds from sale of property | 2 | 0.3 |
Other investing activities | 0 | (3.4) |
Cash used for investing activities | (71.4) | (382.7) |
Financing activities: | ||
Net (repayment) issuance of short-term debt | (325) | 100.9 |
Issuance of long-term debt, net of discount and issuance costs | 594.3 | 0 |
Cash dividends | (263.3) | (240.9) |
Purchases of treasury stock | (404.8) | (345.2) |
Proceeds from the exercise of stock options | 55.5 | 104.7 |
Excess income tax benefit from share-based compensation | 12.2 | 29.1 |
Other financing activities | (1.6) | 0 |
Cash used for financing activities | (332.7) | (351.4) |
Effect of exchange rate changes on cash | (59.7) | 0.9 |
Increase (decrease) in cash and cash equivalents | 375.9 | (25.8) |
Cash and cash equivalents at beginning of period | 1,191.3 | 1,200.9 |
Cash and cash equivalents at end of period | $ 1,567.2 | $ 1,175.1 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 9 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Policies | Basis of Presentation and Accounting Policies In the opinion of management of Rockwell Automation, Inc. (the Company or Rockwell Automation), the unaudited Condensed Consolidated Financial Statements contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the periods presented and, except as otherwise indicated, such adjustments consist only of those of a normal recurring nature. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, 2014 . The results of operations for the three and nine month periods ended June 30, 2015 are not necessarily indicative of the results for the full year. All date references to years and quarters herein refer to our fiscal year and fiscal quarter unless otherwise stated. Receivables Receivables are stated net of an allowance for doubtful accounts of $25.5 million at June 30, 2015 and $19.4 million at September 30, 2014 . In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $9.7 million at June 30, 2015 and $11.6 million at September 30, 2014 . Earnings Per Share The following table reconciles basic and diluted earnings per share (EPS) amounts (in millions, except per share amounts): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Net income $ 206.1 $ 199.7 $ 626.3 $ 578.1 Less: Allocation to participating securities (0.3 ) (0.3 ) (0.5 ) (0.8 ) Net income available to common shareowners $ 205.8 $ 199.4 $ 625.8 $ 577.3 Basic weighted average outstanding shares 134.3 138.0 134.9 138.3 Effect of dilutive securities Stock options 1.1 1.4 1.1 1.5 Performance shares 0.1 0.2 0.1 0.2 Diluted weighted average outstanding shares 135.5 139.6 136.1 140.0 Earnings per share: Basic $ 1.53 $ 1.44 $ 4.64 $ 4.17 Diluted $ 1.52 $ 1.43 $ 4.60 $ 4.12 For the three and nine months ended June 30, 2015 , share-based compensation awards for 1.2 million shares and 1.5 million shares, respectively, were excluded from the diluted EPS calculation because they were antidilutive. For the three and nine months ended June 30, 2014 , share-based compensation awards for 0.6 million shares and 0.8 million shares, respectively, were excluded from the diluted EPS calculation because they were antidilutive. Recent Accounting Pronouncements In May 2014, the FASB issued a new standard on revenue recognition from contracts with customers. This standard supersedes nearly all existing revenue recognition guidance and involves a five-step approach to recognizing revenue based on individual performance obligations in a contract. The new standard will also require additional qualitative and quantitative disclosures about contracts with customers, significant judgments made in applying the revenue guidance, and assets recognized from the costs to obtain or fulfill a contract. This guidance is effective for us for reporting periods beginning October 1, 2018. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation We recognized $10.2 million and $31.4 million of pre-tax share-based compensation expense during the three and nine months ended June 30, 2015 , respectively. We recognized $10.2 million and $32.1 million of pre-tax share-based compensation expense during the three and nine months ended June 30, 2014 , respectively. Our annual grant of share-based compensation takes place during the first quarter of each fiscal year. The number of shares granted to employees and non-employee directors and the weighted average fair value per share during the periods presented were (in thousands except per share amounts): Nine Months Ended June 30, 2015 2014 Grants Wtd. Avg. Share Fair Value Grants Wtd. Avg. Share Fair Value Stock options 1,038 $ 26.70 935 $ 34.00 Performance shares 87 103.70 69 108.48 Restricted stock and restricted stock units 51 115.10 52 109.56 Unrestricted stock 7 111.43 8 108.86 |
Inventories
Inventories | 9 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of (in millions): June 30, September 30, Finished goods $ 249.4 $ 240.3 Work in process 171.2 156.9 Raw materials, parts and supplies 178.8 191.2 Inventories $ 599.4 $ 588.4 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Changes in the carrying amount of goodwill for the nine months ended June 30, 2015 are (in millions): Architecture & Software Control Products & Solutions Total Balance as of September 30, 2014 $ 395.6 $ 655.0 $ 1,050.6 Acquisition of business — 14.9 14.9 Translation and other (4.8 ) (17.4 ) (22.2 ) Balance as of June 30, 2015 $ 390.8 $ 652.5 $ 1,043.3 During the nine months ended June 30, 2015 , we recognized goodwill of $14.9 million and intangible assets of $5.4 million resulting from the acquisition of the assets of ESC Services, Inc., a global provider of lockout-tagout services and solutions. We assigned the full amount of goodwill related to ESC Services, Inc. to our Control Products & Solutions segment. Other intangible assets consist of (in millions): June 30, 2015 Carrying Amount Accumulated Amortization Net Amortized intangible assets: Computer software products $ 182.4 $ 88.7 $ 93.7 Customer relationships 89.9 49.7 40.2 Technology 84.3 43.0 41.3 Trademarks 33.1 16.0 17.1 Other 15.0 9.8 5.2 Total amortized intangible assets 404.7 207.2 197.5 Intangible assets not subject to amortization 43.7 — 43.7 Total $ 448.4 $ 207.2 $ 241.2 September 30, 2014 Carrying Amount Accumulated Amortization Net Amortized intangible assets: Computer software products $ 169.1 $ 82.5 $ 86.6 Customer relationships 89.8 45.4 44.4 Technology 84.0 38.2 45.8 Trademarks 33.7 14.0 19.7 Other 15.5 9.5 6.0 Total amortized intangible assets 392.1 189.6 202.5 Intangible assets not subject to amortization 43.7 — 43.7 Total $ 435.8 $ 189.6 $ 246.2 The Allen-Bradley ® trademark has an indefinite life and therefore is not subject to amortization. Estimated amortization expense is $29.7 million in 2015 , $30.9 million in 2016 , $26.9 million in 2017 , $20.9 million in 2018 and $17.6 million in 2019 . We performed the annual evaluation of our goodwill and indefinite life intangible assets for impairment as required by accounting principles generally accepted in the United States (U.S. GAAP) during the second quarter of 2015 and concluded that these assets are not impaired. |
Long-term and Short-term Debt
Long-term and Short-term Debt | 9 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-term and Short-term Debt | Long-term and Short-term Debt Long-term debt consists of (in millions): June 30, September 30, 5.65% notes, payable in December 2017 $ 250.0 $ 250.0 2.050% notes, payable in March 2020 298.5 — 2.875% notes, payable in March 2025 288.7 — 6.70% debentures, payable in January 2028 250.0 250.0 6.25% debentures, payable in December 2037 250.0 250.0 5.20% debentures, payable in January 2098 200.0 200.0 Unamortized discount and other (45.0 ) (44.4 ) Long-term debt $ 1,492.2 $ 905.6 In February 2015, we issued $600.0 million of aggregate principal amount of long-term notes in a public offering. The offering consisted of $300.0 million in 2.050% notes payable in March 2020 (2020 Notes) and $300.0 million in 2.875% notes payable in March 2025 (2025 Notes), both issued at a discount. This debt offering yielded $594.3 million in net proceeds. We used the net proceeds from the offering primarily to repay our outstanding commercial paper, with the remaining proceeds to be used for general corporate purposes. Upon issuance of these notes, we entered into fixed-to-floating interest rate swap contracts with multiple banks that effectively converted the $600.0 million aggregate principal amount of our 2020 Notes and 2025 Notes to floating rate debt, each at a rate based on three-month LIBOR plus a fixed spread. The effective floating interest rates were 0.721 percent for the 2020 Notes and 1.131 percent for the 2025 Notes at June 30, 2015 . We have designated these swaps as fair value hedges. The aggregate fair value of the interest rate swap contracts at June 30, 2015 was a net unrealized loss of $12.8 million . The individual contracts are recorded in other liabilities on the Condensed Consolidated Balance Sheet with corresponding adjustments to the carrying value of the underlying debt. Additional information related to our interest rate swap contracts is included in Note 8. Our short-term debt obligations are primarily comprised of commercial paper borrowings. There were no commercial paper borrowings outstanding at June 30, 2015 . Commercial paper borrowings outstanding were $325.0 million at September 30, 2014 . The weighted average interest rate of the commercial paper outstanding was 0.17 percent at September 30, 2014 . On March 24, 2015 , we replaced our former five-year $750.0 million unsecured revolving credit facility with a new five-year $1.0 billion unsecured revolving credit facility expiring in March 2020 . We can increase the aggregate amount of this credit facility by up to $350.0 million , subject to the consent of the banks in the credit facility. We have not borrowed against either credit facility during the periods ended June 30, 2015 or September 30, 2014 . |
Other Current Liabilities
Other Current Liabilities | 9 Months Ended |
Jun. 30, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities consist of (in millions): June 30, September 30, Unrealized losses on foreign exchange contracts $ 29.6 $ 5.8 Product warranty obligations 30.5 34.1 Taxes other than income taxes 35.0 37.2 Accrued interest 16.2 15.6 Dividends payable 87.2 — Income taxes payable 34.1 41.0 Other 45.5 54.6 Other current liabilities $ 278.1 $ 188.3 |
Product Warranty Obligations
Product Warranty Obligations | 9 Months Ended |
Jun. 30, 2015 | |
Product Warranties Disclosures [Abstract] | |
Product Warranty Obligations | Product Warranty Obligations We record a liability for product warranty obligations at the time of sale to a customer based upon historical warranty experience. Most of our products are covered under a warranty period that runs for twelve months from either the date of sale or installation. We also record a liability for specific warranty matters when they become probable and reasonably estimable. Our product warranty obligations are included in other current liabilities in the Condensed Consolidated Balance Sheet. Changes in product warranty obligations for the nine months ended June 30, 2015 and 2014 are (in millions): Nine Months Ended 2015 2014 Balance at beginning of period $ 34.1 $ 36.9 Accruals for warranties issued during the current period 20.0 23.3 Adjustments to pre-existing warranties (2.7 ) (2.7 ) Settlements of warranty claims (20.9 ) (20.8 ) Balance at end of period $ 30.5 $ 36.7 |
Derivative Instruments and Fair
Derivative Instruments and Fair Value Measurement | 9 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Fair Value Measurement | Derivative Instruments and Fair Value Measurement We use foreign currency forward exchange contracts and foreign currency denominated debt obligations to manage certain foreign currency risks. We also use interest rate swap contracts to manage risks associated with interest rate fluctuations. The following information explains how we use and value these types of derivative instruments and how they impact our Condensed Consolidated Financial Statements. Additional information related to hedging instruments associated with our long-term debt is included in Note 5. Additional information related to the impacts of cash flow hedges on other comprehensive income is included in Note 10. Types of Derivative Instruments and Hedging Activities Cash Flow Hedges We enter into foreign currency forward exchange contracts to hedge our exposure to foreign currency exchange rate variability in the expected future cash flows associated with certain third-party and intercompany transactions denominated in foreign currencies forecasted to occur within the next two years (cash flow hedges). We report in other comprehensive income (loss) the effective portion of the gain or loss on derivative financial instruments that we designate and that qualify as cash flow hedges. We reclassify these gains or losses into earnings in the same periods when the hedged transactions affect earnings. To the extent forward exchange contracts designated as cash flow hedges are ineffective, changes in value are recorded in earnings through the maturity date. There was no impact on earnings due to ineffective cash flow hedges. At June 30, 2015 , we had a U.S. dollar-equivalent gross notional amount of $735.6 million of foreign currency forward exchange contracts designated as cash flow hedges. The pre-tax amount of (losses) gains recorded in other comprehensive income related to cash flow hedges that would have been recorded in the Condensed Consolidated Statement of Operations had they not been so designated was (in millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Forward exchange contracts $ (8.0 ) $ (1.7 ) $ 42.7 $ (0.8 ) The pre-tax amount of (losses) gains reclassified from accumulated other comprehensive loss into the Condensed Consolidated Statement of Operations related to derivative forward exchange contracts designated as cash flow hedges, which offset the related gains and losses on the hedged items during the periods presented, was (in millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Sales $ (2.0 ) $ (0.6 ) $ (5.6 ) $ (1.6 ) Cost of sales 16.1 (2.0 ) 29.7 0.4 Total $ 14.1 $ (2.6 ) $ 24.1 $ (1.2 ) Approximately $28.8 million ( $24.6 million after tax) of net unrealized gains on cash flow hedges as of June 30, 2015 will be reclassified into earnings during the next 12 months. We expect that these net unrealized gains will be offset when the hedged items are recognized in earnings. Net Investment Hedges We use foreign currency forward exchange contracts and foreign currency denominated debt obligations to hedge portions of our net investments in non-U.S. subsidiaries (net investment hedges) against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. For all instruments that are designated as net investment hedges and meet effectiveness requirements, the net changes in value of the designated hedging instruments are recorded in accumulated other comprehensive loss within shareowners’ equity where they offset gains and losses recorded on our net investments globally. To the extent forward exchange contracts or foreign currency denominated debt designated as net investment hedges are ineffective, changes in value are recorded in earnings through the maturity date. There was no impact on earnings due to ineffective net investment hedges. At June 30, 2015 , we had a gross notional amount of $431.2 million of foreign currency forward exchange contracts and $14.1 million of foreign currency denominated debt designated as net investment hedges. The pre-tax amount of (losses) gains recorded in other comprehensive income related to net investment hedges that would have been recorded in the Condensed Consolidated Statement of Operations had they not been so designated was (in millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Forward exchange contracts $ (10.2 ) $ — $ (16.6 ) $ — Foreign currency denominated debt (0.8 ) (0.4 ) 0.6 (0.9 ) Total $ (11.0 ) $ (0.4 ) $ (16.0 ) $ (0.9 ) Fair Value Hedges We use interest rate swap contracts to manage the borrowing costs of certain long-term debt. In February 2015, we issued $600.0 million in aggregate principal amount of fixed rate notes. Upon issuance of these notes, we entered into fixed-to-floating interest rate swap contracts that effectively convert these notes from fixed rate debt to floating rate debt. We designate these contracts as fair value hedges because they hedge the changes in fair value of the fixed rate notes resulting from changes in interest rates. The changes in value of these fair value hedges are recorded as gains or losses in interest expense and are offset by the losses or gains on the underlying debt instruments, which are also recorded in interest expense. There was no impact on earnings due to ineffective fair value hedges. At June 30, 2015 , the aggregate notional value of our interest rate swaps designated as fair value hedges was $600.0 million . The pre-tax amount of net losses recognized within the Condensed Consolidated Statement of Operations related to derivative instruments designated as fair value hedges, which fully offset the related net gains on the hedged debt instruments during the periods presented, was (in millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Interest expense $ (13.2 ) $ — $ (12.8 ) $ — Derivatives Not Designated as Hedging Instruments Certain of our locations have assets and liabilities denominated in currencies other than their functional currencies resulting from intercompany loans and other transactions with third parties denominated in foreign currencies. We enter into foreign currency forward exchange contracts that we do not designate as hedging instruments to offset the transaction gains or losses associated with some of these assets and liabilities. Gains and losses on derivative financial instruments for which we do not elect hedge accounting are recognized in the Condensed Consolidated Statement of Operations in each period, based on the change in the fair value of the derivative financial instruments. At June 30, 2015 , we had a U.S. dollar-equivalent gross notional amount of $263.8 million of foreign currency forward exchange contracts not designated as hedging instruments. The pre-tax amount of (losses) gains from forward exchange contracts not designated as hedging instruments recognized in the Condensed Consolidated Statement of Operations was (millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Other (expense) income $ (0.1 ) $ (5.2 ) $ 15.2 $ 1.3 Fair Value of Financial Instruments 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. We recognize all derivative financial instruments as either assets or liabilities at fair value in the Consolidated Balance Sheet. We value our forward exchange contracts using a market approach. We use a valuation model based on observable market inputs including forward and spot prices for currency and interest rate curves. We did not change our valuation techniques during the nine months ended June 30, 2015 . It is our policy to execute such instruments with major financial institutions that we believe to be creditworthy and not to enter into derivative financial instruments for speculative purposes. We diversify our foreign currency forward exchange contracts among counterparties to minimize exposure to any one of these entities. Our foreign currency forward exchange contracts are usually denominated in currencies of major industrial countries. The U.S. dollar-equivalent gross notional amount of our forward exchange contracts totaled $1,430.6 million at June 30, 2015 . Currency pairs (buy/sell) comprising the most significant contract notional values were United States dollar (USD)/euro, USD/Swiss franc, USD/Canadian dollar, Swiss franc/euro, Mexican peso/USD, Singapore dollar/USD, and Swiss franc/Canadian dollar. We value interest rate swap contracts using a market approach based on observable market inputs including publicized swap curves. Assets and liabilities measured at fair value on a recurring basis and their location in our Condensed Consolidated Balance Sheet were (in millions): Fair Value (Level 2) Derivatives Designated as Hedging Instruments Balance Sheet Location June 30, September 30, Forward exchange contracts Other current assets $ 34.3 $ 13.1 Forward exchange contracts Other assets 4.6 5.0 Forward exchange contracts Other current liabilities (27.4 ) (4.1 ) Forward exchange contracts Other liabilities (0.7 ) (0.3 ) Interest rate swap contracts Other liabilities (12.8 ) — Total $ (2.0 ) $ 13.7 Fair Value (Level 2) Derivatives Not Designated as Hedging Instruments Balance Sheet Location June 30, September 30, Forward exchange contracts Other current assets $ 20.9 $ 3.5 Forward exchange contracts Other current liabilities (2.2 ) (1.8 ) Total $ 18.7 $ 1.7 We also hold financial instruments consisting of cash, short-term investments, short-term debt and long-term debt. The fair values of our cash, short-term investments and short-term debt approximate their carrying amounts as reported in our Condensed Consolidated Balance Sheet due to the short-term nature of these instruments. We base the fair value of long-term debt upon quoted market prices for the same or similar issues. The fair value of long-term debt below considers the terms of the debt excluding the impact of derivative and hedging activity. The carrying amount of a portion of our long-term debt is impacted by fixed-to-floating interest rate swap contracts that are designated as fair value hedges. The following table presents the carrying amounts and estimated fair values of financial instruments not measured at fair value in the Condensed Consolidated Balance Sheet (in millions): June 30, 2015 Fair Value Carrying Amount Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 1,567.2 $ 1,567.2 $ 1,491.6 $ 75.6 $ — Short-term investments 590.6 590.6 — 590.6 — Short-term debt — — — — — Long-term debt 1,492.2 1,659.8 — 1,659.8 — September 30, 2014 Fair Value Carrying Amount Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 1,191.3 $ 1,191.3 $ 1,154.2 $ 37.1 $ — Short-term investments 628.5 628.5 — 628.5 — Short-term debt 325.0 325.0 — 325.0 — Long-term debt 905.6 1,119.4 — 1,119.4 — |
Retirement Benefits
Retirement Benefits | 9 Months Ended |
Jun. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Benefits | Retirement Benefits The components of net periodic benefit cost are (in millions): Pension Benefits Three Months Ended Nine Months Ended 2015 2014 2015 2014 Service cost $ 21.3 $ 19.7 $ 64.5 $ 59.0 Interest cost 41.7 43.6 125.6 130.8 Expected return on plan assets (55.7 ) (54.5 ) (167.6 ) (163.5 ) Amortization: Prior service credit (0.7 ) (0.7 ) (2.0 ) (2.1 ) Net actuarial loss 29.6 25.0 89.2 74.8 Net periodic benefit cost $ 36.2 $ 33.1 $ 109.7 $ 99.0 Other Postretirement Benefits Three Months Ended Nine Months Ended 2015 2014 2015 2014 Service cost $ 0.4 $ 0.5 $ 1.2 $ 1.5 Interest cost 1.0 1.7 3.1 4.9 Amortization: Prior service credit (3.7 ) (2.6 ) (11.1 ) (7.8 ) Net actuarial loss 1.2 0.8 3.5 2.4 Net periodic benefit cost $ (1.1 ) $ 0.4 $ (3.3 ) $ 1.0 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component were (in millions): Three Months Ended June 30, 2015 Pension and other postretirement benefit plan adjustments, net of tax Accumulated currency translation adjustments, net of tax Net unrealized gains (losses) on cash flow hedges, net of tax Total accumulated other comprehensive loss, net of tax Balance as of March 31, 2015 $ (874.6 ) $ (213.1 ) $ 47.0 $ (1,040.7 ) Other comprehensive income (loss) before reclassifications — 27.4 (6.1 ) 21.3 Amounts reclassified from accumulated other comprehensive loss 17.4 — (13.4 ) 4.0 Other comprehensive income (loss) 17.4 27.4 (19.5 ) 25.3 Balance as of June 30, 2015 $ (857.2 ) $ (185.7 ) $ 27.5 $ (1,015.4 ) Nine Months Ended June 30, 2015 Pension and other postretirement benefit plan adjustments, net of tax Accumulated currency translation adjustments, net of tax Net unrealized gains (losses) on cash flow hedges, net of tax Total accumulated other comprehensive loss, net of tax Balance as of September 30, 2014 $ (909.4 ) $ (52.5 ) $ 13.9 $ (948.0 ) Other comprehensive (loss) income before reclassifications — (133.2 ) 37.5 (95.7 ) Amounts reclassified from accumulated other comprehensive loss 52.2 — (23.9 ) 28.3 Other comprehensive income (loss) 52.2 (133.2 ) 13.6 (67.4 ) Balance as of June 30, 2015 $ (857.2 ) $ (185.7 ) $ 27.5 $ (1,015.4 ) Three Months Ended June 30, 2014 Pension and other postretirement benefit plan adjustments, net of tax Accumulated currency translation adjustments, net of tax Net unrealized gains (losses) on cash flow hedges, net of tax Total accumulated other comprehensive loss, net of tax Balance as of March 31, 2014 $ (794.7 ) $ 23.1 $ (4.0 ) $ (775.6 ) Other comprehensive income (loss) before reclassifications — 1.2 (3.3 ) (2.1 ) Amounts reclassified from accumulated other comprehensive loss 14.6 — 2.5 17.1 Other comprehensive income (loss) 14.6 1.2 (0.8 ) 15.0 Balance as of June 30, 2014 $ (780.1 ) $ 24.3 $ (4.8 ) $ (760.6 ) Nine Months Ended June 30, 2014 Pension and other postretirement benefit plan adjustments, net of tax Accumulated currency translation adjustments, net of tax Net unrealized gains (losses) on cash flow hedges, net of tax Total accumulated other comprehensive loss, net of tax Balance as of September 30, 2013 $ (823.8 ) $ 8.8 $ (2.7 ) $ (817.7 ) Other comprehensive income (loss) before reclassifications — 15.5 (4.3 ) 11.2 Amounts reclassified from accumulated other comprehensive loss 43.7 — 2.2 45.9 Other comprehensive income (loss) 43.7 15.5 (2.1 ) 57.1 Balance as of June 30, 2014 $ (780.1 ) $ 24.3 $ (4.8 ) $ (760.6 ) 10. Accumulated Other Comprehensive Loss (continued) The reclassifications out of accumulated other comprehensive loss to the Consolidated Statement of Operations were (in millions): Three Months Ended Nine Months Ended Affected Line in the Consolidated Statement of Operations 2015 2014 2015 2014 Pension and other postretirement benefit plan adjustments: Amortization of prior service credit $ (4.4 ) $ (3.3 ) $ (13.1 ) $ (9.9 ) (a) Amortization of net actuarial loss 30.8 25.8 92.7 77.2 (a) 26.4 22.5 79.6 67.3 Total before tax (9.0 ) (7.9 ) (27.4 ) (23.6 ) Provision for tax $ 17.4 $ 14.6 $ 52.2 $ 43.7 After tax Net unrealized losses (gains) on cash flow hedges: Forward exchange contracts $ 2.0 $ 0.6 $ 5.6 $ 1.6 Sales Forward exchange contracts (16.1 ) 2.0 (29.7 ) (0.4 ) Cost of sales (14.1 ) 2.6 (24.1 ) 1.2 Total before tax 0.7 (0.1 ) 0.2 1.0 Provision for tax $ (13.4 ) $ 2.5 $ (23.9 ) $ 2.2 After tax Total reclassifications $ 4.0 $ 17.1 $ 28.3 $ 45.9 After tax (a) Reclassified from accumulated other comprehensive loss into cost of sales and selling, general and administrative expenses. These components are included in the computation of net periodic benefit costs. See Note 9 for further information. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 9 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Various lawsuits, claims and proceedings have been or may be instituted or asserted against us relating to the conduct of our business, including those pertaining to product liability, environmental, safety and health, intellectual property, employment and contract matters. Although the outcome of litigation cannot be predicted with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to us, we believe the disposition of matters that are pending or have been asserted will not have a material effect on our business, financial condition or results of operations. 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. Currently there are a few thousand claimants in lawsuits that name us as defendants, together with hundreds of other companies. In some cases, the claims involve products from divested businesses, and we are indemnified for most of the costs. However, we have agreed to defend and indemnify asbestos claims associated with products manufactured or sold by our former Dodge mechanical and Reliance Electric motors and motor repair services businesses prior to their divestiture by us, which occurred on January 31, 2007. We are also responsible for half of the costs and liabilities associated with asbestos cases against the former Rockwell International Corporation’s (RIC’s) divested measurement and flow control business. But in all cases, for those claimants who do show that they worked with our products or products of divested businesses for which we are responsible, we nevertheless believe we have meritorious defenses, in substantial part due to the integrity of the products, the encapsulated nature of any asbestos-containing components, and the lack of any impairing medical condition on the part of many claimants. We defend those cases vigorously. Historically, we have been dismissed from the vast majority of these claims with no payment to claimants. We have maintained insurance coverage that we believe covers indemnity and defense costs, over and above self-insured retentions, for claims arising from our former Allen-Bradley subsidiary. Our insurance carrier entered into a cost share agreement with us to pay the substantial majority of future defense and indemnity costs for Allen-Bradley asbestos claims. We believe that this arrangement will continue to provide coverage for Allen-Bradley asbestos claims throughout the remaining life of the asbestos liability. The uncertainties of asbestos claim litigation make it difficult to predict accurately the ultimate outcome of asbestos claims. That uncertainty is increased by the possibility of adverse rulings or new legislation affecting asbestos claim litigation or the settlement process. Subject to these uncertainties and based on our experience defending asbestos claims, we do not believe these lawsuits will have a material effect on our 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. In connection with the spin-offs of our former automotive component systems business, semiconductor systems business and Rockwell Collins avionics and communications business, the spun-off companies have agreed to indemnify us for substantially all contingent liabilities related to the respective businesses, including environmental and intellectual property matters. In connection with the sale of our Dodge mechanical and Reliance Electric motors and motor repair services businesses, we agreed to indemnify Baldor Electric Company for costs and damages related to certain legal, legacy environmental and asbestos matters of these businesses arising before January 31, 2007, for which the maximum exposure would be capped at the amount received for the sale. In many countries we provide a limited intellectual property indemnity as part of our terms and conditions of sale. We also at times provide limited intellectual property indemnities in other contracts with third parties, such as contracts concerning the development and manufacture of our products. As of June 30, 2015 , 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 operating results, financial position or cash flows; 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 results of operations or cash flows in a particular period. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At the end of each interim period, we estimate a base effective tax rate that we expect for the full fiscal year based on our most recent forecast of pre-tax income, permanent book and tax differences and global tax planning strategies. We use this base rate to provide for income taxes on a year-to-date basis, excluding the effect of significant unusual or extraordinary items and items that are reported net of their related tax effects. We record the tax effect of significant unusual or extraordinary items and items that are reported net of their tax effects in the period in which they occur. The effective tax rate was 27.6 percent and 26.2 percent in the three and nine months ended June 30, 2015 , respectively, compared to 27.1 percent and 27.3 percent in the three and nine months ended June 30, 2014 , respectively. The effective tax rate was lower than the U.S. statutory rate of 35 percent in each period primarily because we benefited from lower non-U.S. tax rates. The amount of gross unrecognized tax benefits was $40.5 million and $38.9 million at June 30, 2015 and September 30, 2014 , respectively, of which the entire amount would reduce our effective tax rate if recognized. Accrued interest and penalties related to unrecognized tax benefits were $5.8 million and $8.1 million at June 30, 2015 and September 30, 2014 , respectively. We recognize interest and penalties related to unrecognized tax benefits in the income tax provision. If 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, would be $22.5 million as of June 30, 2015 . There was no material change in the amount of unrecognized tax benefits in the nine months ended June 30, 2015 . We believe it is reasonably possible that the amount of gross unrecognized tax benefits could be reduced by up to $22.4 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 $5.1 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 2012 and are no longer subject to state, local and foreign income tax examinations for years before 2003 . |
Business Segment Information
Business Segment Information | 9 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information The following tables reflect the sales and operating results of our reportable segments (in millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Sales Architecture & Software $ 683.5 $ 715.2 $ 2,065.6 $ 2,097.9 Control Products & Solutions 891.7 934.3 2,634.8 2,743.8 Total $ 1,575.2 $ 1,649.5 $ 4,700.4 $ 4,841.7 Segment operating earnings Architecture & Software $ 199.9 $ 204.8 $ 622.1 $ 606.9 Control Products & Solutions 143.8 121.3 402.6 349.3 Total 343.7 326.1 1,024.7 956.2 Purchase accounting depreciation and amortization (5.2 ) (5.5 ) (15.8 ) (15.9 ) General corporate – net (21.9 ) (18.1 ) (66.1 ) (58.7 ) Non-operating pension costs (15.6 ) (14.1 ) (47.2 ) (42.1 ) Interest expense (16.4 ) (14.4 ) (47.0 ) (44.3 ) Income before income taxes $ 284.6 $ 274.0 $ 848.6 $ 795.2 Among other considerations, we evaluate performance and allocate resources based upon segment operating earnings before income taxes, interest expense, costs related to corporate offices, non-operating pension costs, certain nonrecurring corporate initiatives, gains and losses from the disposition of businesses and purchase accounting depreciation and amortization. Depending on the product, intersegment sales within a single legal entity are either at cost or cost plus a mark-up, which does not necessarily represent a market price. Sales between legal entities are at an appropriate transfer price. We allocate costs related to shared segment operating activities to the segments using a methodology consistent with the expected benefit. |
Basis of Presentation and Acc21
Basis of Presentation and Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Receivables | Receivables Receivables are stated net of an allowance for doubtful accounts of $25.5 million at June 30, 2015 and $19.4 million at September 30, 2014 . In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $9.7 million at June 30, 2015 and $11.6 million at September 30, 2014 . |
Recent accounting pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued a new standard on revenue recognition from contracts with customers. This standard supersedes nearly all existing revenue recognition guidance and involves a five-step approach to recognizing revenue based on individual performance obligations in a contract. The new standard will also require additional qualitative and quantitative disclosures about contracts with customers, significant judgments made in applying the revenue guidance, and assets recognized from the costs to obtain or fulfill a contract. This guidance is effective for us for reporting periods beginning October 1, 2018. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. |
Product warranty obligations | We record a liability for product warranty obligations at the time of sale to a customer based upon historical warranty experience. Most of our products are covered under a warranty period that runs for twelve months from either the date of sale or installation. We also record a liability for specific warranty matters when they become probable and reasonably estimable. Our product warranty obligations are included in other current liabilities in the Condensed Consolidated Balance Sheet. |
Fair value of financial instruments | Fair Value of Financial Instruments 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. We recognize all derivative financial instruments as either assets or liabilities at fair value in the Consolidated Balance Sheet. We value our forward exchange contracts using a market approach. We use a valuation model based on observable market inputs including forward and spot prices for currency and interest rate curves. We did not change our valuation techniques during the nine months ended June 30, 2015 . It is our policy to execute such instruments with major financial institutions that we believe to be creditworthy and not to enter into derivative financial instruments for speculative purposes. We diversify our foreign currency forward exchange contracts among counterparties to minimize exposure to any one of these entities. Our foreign currency forward exchange contracts are usually denominated in currencies of major industrial countries. The U.S. dollar-equivalent gross notional amount of our forward exchange contracts totaled $1,430.6 million at June 30, 2015 . Currency pairs (buy/sell) comprising the most significant contract notional values were United States dollar (USD)/euro, USD/Swiss franc, USD/Canadian dollar, Swiss franc/euro, Mexican peso/USD, Singapore dollar/USD, and Swiss franc/Canadian dollar. We value interest rate swap contracts using a market approach based on observable market inputs including publicized swap curves. |
Fair value measurement of non-derivative instruments | We also hold financial instruments consisting of cash, short-term investments, short-term debt and long-term debt. The fair values of our cash, short-term investments and short-term debt approximate their carrying amounts as reported in our Condensed Consolidated Balance Sheet due to the short-term nature of these instruments. |
Income Taxes | At the end of each interim period, we estimate a base effective tax rate that we expect for the full fiscal year based on our most recent forecast of pre-tax income, permanent book and tax differences and global tax planning strategies. We use this base rate to provide for income taxes on a year-to-date basis, excluding the effect of significant unusual or extraordinary items and items that are reported net of their related tax effects. We record the tax effect of significant unusual or extraordinary items and items that are reported net of their tax effects in the period in which they occur. |
Basis of Presentation and Acc22
Basis of Presentation and Accounting Policies (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles basic and diluted earnings per share (EPS) amounts (in millions, except per share amounts): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Net income $ 206.1 $ 199.7 $ 626.3 $ 578.1 Less: Allocation to participating securities (0.3 ) (0.3 ) (0.5 ) (0.8 ) Net income available to common shareowners $ 205.8 $ 199.4 $ 625.8 $ 577.3 Basic weighted average outstanding shares 134.3 138.0 134.9 138.3 Effect of dilutive securities Stock options 1.1 1.4 1.1 1.5 Performance shares 0.1 0.2 0.1 0.2 Diluted weighted average outstanding shares 135.5 139.6 136.1 140.0 Earnings per share: Basic $ 1.53 $ 1.44 $ 4.64 $ 4.17 Diluted $ 1.52 $ 1.43 $ 4.60 $ 4.12 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Activity | The number of shares granted to employees and non-employee directors and the weighted average fair value per share during the periods presented were (in thousands except per share amounts): Nine Months Ended June 30, 2015 2014 Grants Wtd. Avg. Share Fair Value Grants Wtd. Avg. Share Fair Value Stock options 1,038 $ 26.70 935 $ 34.00 Performance shares 87 103.70 69 108.48 Restricted stock and restricted stock units 51 115.10 52 109.56 Unrestricted stock 7 111.43 8 108.86 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consist of (in millions): June 30, September 30, Finished goods $ 249.4 $ 240.3 Work in process 171.2 156.9 Raw materials, parts and supplies 178.8 191.2 Inventories $ 599.4 $ 588.4 |
Goodwill and Other Intangible25
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill for the nine months ended June 30, 2015 are (in millions): Architecture & Software Control Products & Solutions Total Balance as of September 30, 2014 $ 395.6 $ 655.0 $ 1,050.6 Acquisition of business — 14.9 14.9 Translation and other (4.8 ) (17.4 ) (22.2 ) Balance as of June 30, 2015 $ 390.8 $ 652.5 $ 1,043.3 |
Schedule of Finite Lived and Indefinite Lived Intangible Assets by Major Class | Other intangible assets consist of (in millions): June 30, 2015 Carrying Amount Accumulated Amortization Net Amortized intangible assets: Computer software products $ 182.4 $ 88.7 $ 93.7 Customer relationships 89.9 49.7 40.2 Technology 84.3 43.0 41.3 Trademarks 33.1 16.0 17.1 Other 15.0 9.8 5.2 Total amortized intangible assets 404.7 207.2 197.5 Intangible assets not subject to amortization 43.7 — 43.7 Total $ 448.4 $ 207.2 $ 241.2 September 30, 2014 Carrying Amount Accumulated Amortization Net Amortized intangible assets: Computer software products $ 169.1 $ 82.5 $ 86.6 Customer relationships 89.8 45.4 44.4 Technology 84.0 38.2 45.8 Trademarks 33.7 14.0 19.7 Other 15.5 9.5 6.0 Total amortized intangible assets 392.1 189.6 202.5 Intangible assets not subject to amortization 43.7 — 43.7 Total $ 435.8 $ 189.6 $ 246.2 |
Long-term and Short-term Debt (
Long-term and Short-term Debt (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt consists of (in millions): June 30, September 30, 5.65% notes, payable in December 2017 $ 250.0 $ 250.0 2.050% notes, payable in March 2020 298.5 — 2.875% notes, payable in March 2025 288.7 — 6.70% debentures, payable in January 2028 250.0 250.0 6.25% debentures, payable in December 2037 250.0 250.0 5.20% debentures, payable in January 2098 200.0 200.0 Unamortized discount and other (45.0 ) (44.4 ) Long-term debt $ 1,492.2 $ 905.6 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other current liabilities consist of (in millions): June 30, September 30, Unrealized losses on foreign exchange contracts $ 29.6 $ 5.8 Product warranty obligations 30.5 34.1 Taxes other than income taxes 35.0 37.2 Accrued interest 16.2 15.6 Dividends payable 87.2 — Income taxes payable 34.1 41.0 Other 45.5 54.6 Other current liabilities $ 278.1 $ 188.3 |
Product Warranty Obligations (T
Product Warranty Obligations (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | Changes in product warranty obligations for the nine months ended June 30, 2015 and 2014 are (in millions): Nine Months Ended 2015 2014 Balance at beginning of period $ 34.1 $ 36.9 Accruals for warranties issued during the current period 20.0 23.3 Adjustments to pre-existing warranties (2.7 ) (2.7 ) Settlements of warranty claims (20.9 ) (20.8 ) Balance at end of period $ 30.5 $ 36.7 |
Derivative Instruments and Fa29
Derivative Instruments and Fair Value Measurement (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) | The pre-tax amount of (losses) gains recorded in other comprehensive income related to cash flow hedges that would have been recorded in the Condensed Consolidated Statement of Operations had they not been so designated was (in millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Forward exchange contracts $ (8.0 ) $ (1.7 ) $ 42.7 $ (0.8 ) |
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The pre-tax amount of (losses) gains reclassified from accumulated other comprehensive loss into the Condensed Consolidated Statement of Operations related to derivative forward exchange contracts designated as cash flow hedges, which offset the related gains and losses on the hedged items during the periods presented, was (in millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Sales $ (2.0 ) $ (0.6 ) $ (5.6 ) $ (1.6 ) Cost of sales 16.1 (2.0 ) 29.7 0.4 Total $ 14.1 $ (2.6 ) $ 24.1 $ (1.2 ) |
Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) | The pre-tax amount of (losses) gains recorded in other comprehensive income related to net investment hedges that would have been recorded in the Condensed Consolidated Statement of Operations had they not been so designated was (in millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Forward exchange contracts $ (10.2 ) $ — $ (16.6 ) $ — Foreign currency denominated debt (0.8 ) (0.4 ) 0.6 (0.9 ) Total $ (11.0 ) $ (0.4 ) $ (16.0 ) $ (0.9 ) |
Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The pre-tax amount of net losses recognized within the Condensed Consolidated Statement of Operations related to derivative instruments designated as fair value hedges, which fully offset the related net gains on the hedged debt instruments during the periods presented, was (in millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Interest expense $ (13.2 ) $ — $ (12.8 ) $ — |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The pre-tax amount of (losses) gains from forward exchange contracts not designated as hedging instruments recognized in the Condensed Consolidated Statement of Operations was (millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Other (expense) income $ (0.1 ) $ (5.2 ) $ 15.2 $ 1.3 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | Assets and liabilities measured at fair value on a recurring basis and their location in our Condensed Consolidated Balance Sheet were (in millions): Fair Value (Level 2) Derivatives Designated as Hedging Instruments Balance Sheet Location June 30, September 30, Forward exchange contracts Other current assets $ 34.3 $ 13.1 Forward exchange contracts Other assets 4.6 5.0 Forward exchange contracts Other current liabilities (27.4 ) (4.1 ) Forward exchange contracts Other liabilities (0.7 ) (0.3 ) Interest rate swap contracts Other liabilities (12.8 ) — Total $ (2.0 ) $ 13.7 Fair Value (Level 2) Derivatives Not Designated as Hedging Instruments Balance Sheet Location June 30, September 30, Forward exchange contracts Other current assets $ 20.9 $ 3.5 Forward exchange contracts Other current liabilities (2.2 ) (1.8 ) Total $ 18.7 $ 1.7 |
Fair Value, by Balance Sheet Grouping | The following table presents the carrying amounts and estimated fair values of financial instruments not measured at fair value in the Condensed Consolidated Balance Sheet (in millions): June 30, 2015 Fair Value Carrying Amount Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 1,567.2 $ 1,567.2 $ 1,491.6 $ 75.6 $ — Short-term investments 590.6 590.6 — 590.6 — Short-term debt — — — — — Long-term debt 1,492.2 1,659.8 — 1,659.8 — September 30, 2014 Fair Value Carrying Amount Total Level 1 Level 2 Level 3 Cash and cash equivalents $ 1,191.3 $ 1,191.3 $ 1,154.2 $ 37.1 $ — Short-term investments 628.5 628.5 — 628.5 — Short-term debt 325.0 325.0 — 325.0 — Long-term debt 905.6 1,119.4 — 1,119.4 — |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Benefit Costs | The components of net periodic benefit cost are (in millions): Pension Benefits Three Months Ended Nine Months Ended 2015 2014 2015 2014 Service cost $ 21.3 $ 19.7 $ 64.5 $ 59.0 Interest cost 41.7 43.6 125.6 130.8 Expected return on plan assets (55.7 ) (54.5 ) (167.6 ) (163.5 ) Amortization: Prior service credit (0.7 ) (0.7 ) (2.0 ) (2.1 ) Net actuarial loss 29.6 25.0 89.2 74.8 Net periodic benefit cost $ 36.2 $ 33.1 $ 109.7 $ 99.0 Other Postretirement Benefits Three Months Ended Nine Months Ended 2015 2014 2015 2014 Service cost $ 0.4 $ 0.5 $ 1.2 $ 1.5 Interest cost 1.0 1.7 3.1 4.9 Amortization: Prior service credit (3.7 ) (2.6 ) (11.1 ) (7.8 ) Net actuarial loss 1.2 0.8 3.5 2.4 Net periodic benefit cost $ (1.1 ) $ 0.4 $ (3.3 ) $ 1.0 |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Loss [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive loss by component were (in millions): Three Months Ended June 30, 2015 Pension and other postretirement benefit plan adjustments, net of tax Accumulated currency translation adjustments, net of tax Net unrealized gains (losses) on cash flow hedges, net of tax Total accumulated other comprehensive loss, net of tax Balance as of March 31, 2015 $ (874.6 ) $ (213.1 ) $ 47.0 $ (1,040.7 ) Other comprehensive income (loss) before reclassifications — 27.4 (6.1 ) 21.3 Amounts reclassified from accumulated other comprehensive loss 17.4 — (13.4 ) 4.0 Other comprehensive income (loss) 17.4 27.4 (19.5 ) 25.3 Balance as of June 30, 2015 $ (857.2 ) $ (185.7 ) $ 27.5 $ (1,015.4 ) Nine Months Ended June 30, 2015 Pension and other postretirement benefit plan adjustments, net of tax Accumulated currency translation adjustments, net of tax Net unrealized gains (losses) on cash flow hedges, net of tax Total accumulated other comprehensive loss, net of tax Balance as of September 30, 2014 $ (909.4 ) $ (52.5 ) $ 13.9 $ (948.0 ) Other comprehensive (loss) income before reclassifications — (133.2 ) 37.5 (95.7 ) Amounts reclassified from accumulated other comprehensive loss 52.2 — (23.9 ) 28.3 Other comprehensive income (loss) 52.2 (133.2 ) 13.6 (67.4 ) Balance as of June 30, 2015 $ (857.2 ) $ (185.7 ) $ 27.5 $ (1,015.4 ) Three Months Ended June 30, 2014 Pension and other postretirement benefit plan adjustments, net of tax Accumulated currency translation adjustments, net of tax Net unrealized gains (losses) on cash flow hedges, net of tax Total accumulated other comprehensive loss, net of tax Balance as of March 31, 2014 $ (794.7 ) $ 23.1 $ (4.0 ) $ (775.6 ) Other comprehensive income (loss) before reclassifications — 1.2 (3.3 ) (2.1 ) Amounts reclassified from accumulated other comprehensive loss 14.6 — 2.5 17.1 Other comprehensive income (loss) 14.6 1.2 (0.8 ) 15.0 Balance as of June 30, 2014 $ (780.1 ) $ 24.3 $ (4.8 ) $ (760.6 ) Nine Months Ended June 30, 2014 Pension and other postretirement benefit plan adjustments, net of tax Accumulated currency translation adjustments, net of tax Net unrealized gains (losses) on cash flow hedges, net of tax Total accumulated other comprehensive loss, net of tax Balance as of September 30, 2013 $ (823.8 ) $ 8.8 $ (2.7 ) $ (817.7 ) Other comprehensive income (loss) before reclassifications — 15.5 (4.3 ) 11.2 Amounts reclassified from accumulated other comprehensive loss 43.7 — 2.2 45.9 Other comprehensive income (loss) 43.7 15.5 (2.1 ) 57.1 Balance as of June 30, 2014 $ (780.1 ) $ 24.3 $ (4.8 ) $ (760.6 ) |
Reclassification out of Accumulated Other Comprehensive Income | The reclassifications out of accumulated other comprehensive loss to the Consolidated Statement of Operations were (in millions): Three Months Ended Nine Months Ended Affected Line in the Consolidated Statement of Operations 2015 2014 2015 2014 Pension and other postretirement benefit plan adjustments: Amortization of prior service credit $ (4.4 ) $ (3.3 ) $ (13.1 ) $ (9.9 ) (a) Amortization of net actuarial loss 30.8 25.8 92.7 77.2 (a) 26.4 22.5 79.6 67.3 Total before tax (9.0 ) (7.9 ) (27.4 ) (23.6 ) Provision for tax $ 17.4 $ 14.6 $ 52.2 $ 43.7 After tax Net unrealized losses (gains) on cash flow hedges: Forward exchange contracts $ 2.0 $ 0.6 $ 5.6 $ 1.6 Sales Forward exchange contracts (16.1 ) 2.0 (29.7 ) (0.4 ) Cost of sales (14.1 ) 2.6 (24.1 ) 1.2 Total before tax 0.7 (0.1 ) 0.2 1.0 Provision for tax $ (13.4 ) $ 2.5 $ (23.9 ) $ 2.2 After tax Total reclassifications $ 4.0 $ 17.1 $ 28.3 $ 45.9 After tax (a) Reclassified from accumulated other comprehensive loss into cost of sales and selling, general and administrative expenses. These components are included in the computation of net periodic benefit costs. See Note 9 for further information. |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Jun. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables reflect the sales and operating results of our reportable segments (in millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Sales Architecture & Software $ 683.5 $ 715.2 $ 2,065.6 $ 2,097.9 Control Products & Solutions 891.7 934.3 2,634.8 2,743.8 Total $ 1,575.2 $ 1,649.5 $ 4,700.4 $ 4,841.7 Segment operating earnings Architecture & Software $ 199.9 $ 204.8 $ 622.1 $ 606.9 Control Products & Solutions 143.8 121.3 402.6 349.3 Total 343.7 326.1 1,024.7 956.2 Purchase accounting depreciation and amortization (5.2 ) (5.5 ) (15.8 ) (15.9 ) General corporate – net (21.9 ) (18.1 ) (66.1 ) (58.7 ) Non-operating pension costs (15.6 ) (14.1 ) (47.2 ) (42.1 ) Interest expense (16.4 ) (14.4 ) (47.0 ) (44.3 ) Income before income taxes $ 284.6 $ 274.0 $ 848.6 $ 795.2 |
Basis of Presentation and Acc33
Basis of Presentation and Accounting Policies (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reconciled Basic and Diluted EPS | ||||
Net income | $ 206.1 | $ 199.7 | $ 626.3 | $ 578.1 |
Less: Allocation to participating securities | (0.3) | (0.3) | (0.5) | (0.8) |
Net income available to common shareowners | $ 205.8 | $ 199.4 | $ 625.8 | $ 577.3 |
Basic weighted average outstanding shares | 134.3 | 138 | 134.9 | 138.3 |
Effect of dilutive securities | ||||
Stock options | 1.1 | 1.4 | 1.1 | 1.5 |
Performance shares | 0.1 | 0.2 | 0.1 | 0.2 |
Diluted weighted average outstanding shares | 135.5 | 139.6 | 136.1 | 140 |
Earnings Per Share, Basic [Abstract] | ||||
Basic | $ 1.53 | $ 1.44 | $ 4.64 | $ 4.17 |
Earnings Per Share, Diluted [Abstract] | ||||
Diluted | $ 1.52 | $ 1.43 | $ 4.60 | $ 4.12 |
Basis of Presentation and Acc34
Basis of Presentation and Accounting Policies (Details Textual) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Sep. 30, 2014 | |
Accounting Policies [Abstract] | |||||
Allowance for doubtful accounts | $ 25.5 | $ 25.5 | $ 19.4 | ||
Allowance for certain customer returns, rebates and incentives | $ 9.7 | $ 9.7 | $ 11.6 | ||
Antidilutive share-based compensation awards | 1.2 | 0.6 | 1.5 | 0.8 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-Based Compensation (Textual) [Abstract] | ||||
Pre-tax share-based compensation expense | $ 10.2 | $ 10.2 | $ 31.4 | $ 32.1 |
Stock options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants | 1,038 | 935 | ||
Wtd. Avg. Share Fair Value | $ 26.70 | $ 34 | ||
Performance shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants | 87 | 69 | ||
Wtd. Avg. Share Fair Value | $ 103.70 | $ 108.48 | ||
Restricted stock and restricted stock units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants | 51 | 52 | ||
Wtd. Avg. Share Fair Value | $ 115.10 | $ 109.56 | ||
Unrestricted stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants | 7 | 8 | ||
Wtd. Avg. Share Fair Value | $ 111.43 | $ 108.86 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Sep. 30, 2014 |
Inventories | ||
Finished goods | $ 249.4 | $ 240.3 |
Work in process | 171.2 | 156.9 |
Raw materials, parts and supplies | 178.8 | 191.2 |
Inventories | $ 599.4 | $ 588.4 |
Goodwill and Other Intangible37
Goodwill and Other Intangible Assets (Details) $ in Millions | 9 Months Ended |
Jun. 30, 2015USD ($) | |
Goodwill | |
Balance as of September 30, 2014 | $ 1,050.6 |
Acquisition of business | 14.9 |
Translation and other | (22.2) |
Balance as of June 30, 2015 | 1,043.3 |
Finite-lived Intangible Assets Acquired | 5.4 |
Architecture & Software [Member] | |
Goodwill | |
Balance as of September 30, 2014 | 395.6 |
Acquisition of business | 0 |
Translation and other | (4.8) |
Balance as of June 30, 2015 | 390.8 |
Control Products & Solutions [Member] | |
Goodwill | |
Balance as of September 30, 2014 | 655 |
Acquisition of business | 14.9 |
Translation and other | (17.4) |
Balance as of June 30, 2015 | $ 652.5 |
Goodwill and Other Intangible38
Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Millions | Jun. 30, 2015 | Sep. 30, 2014 |
Other intangible assets | ||
Amortized intangible assets, carrying amount | $ 404.7 | $ 392.1 |
Amortized intangible assets, accumulated amortization | 207.2 | 189.6 |
Amortized intangible assets, net | 197.5 | 202.5 |
Intangible assets not subject to amortization | 43.7 | 43.7 |
Total other intangible assets, carrying amount | 448.4 | 435.8 |
Total other intangible assets, net | 241.2 | 246.2 |
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||
Estimated amortization expense in 2015 | 29.7 | |
Estimated amortization expense in 2016 | 30.9 | |
Estimated amortization expense in 2017 | 26.9 | |
Estimated amortization expense in 2018 | 20.9 | |
Estimated amortization expense in 2019 | 17.6 | |
Computer software products [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 182.4 | 169.1 |
Amortized intangible assets, accumulated amortization | 88.7 | 82.5 |
Amortized intangible assets, net | 93.7 | 86.6 |
Customer relationships [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 89.9 | 89.8 |
Amortized intangible assets, accumulated amortization | 49.7 | 45.4 |
Amortized intangible assets, net | 40.2 | 44.4 |
Technology [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 84.3 | 84 |
Amortized intangible assets, accumulated amortization | 43 | 38.2 |
Amortized intangible assets, net | 41.3 | 45.8 |
Trademarks [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 33.1 | 33.7 |
Amortized intangible assets, accumulated amortization | 16 | 14 |
Amortized intangible assets, net | 17.1 | 19.7 |
Other [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 15 | 15.5 |
Amortized intangible assets, accumulated amortization | 9.8 | 9.5 |
Amortized intangible assets, net | $ 5.2 | $ 6 |
Long-term and Short-term Debt39
Long-term and Short-term Debt (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2015 | Sep. 30, 2014 | |
Long-term debt | ||
Unamortized discount and other | $ (45) | $ (44.4) |
Long-term debt | 1,492.2 | 905.6 |
5.65% notes, payable in December 2017 | ||
Long-term debt | ||
Debt instruments | $ 250 | 250 |
Stated interest rate | 5.65% | |
Maturity date | Dec. 1, 2017 | |
2.050% notes, payable in March 2020 | ||
Long-term debt | ||
Debt instruments | $ 298.5 | 0 |
Stated interest rate | 2.05% | |
Maturity date | Mar. 1, 2020 | |
2.875% notes, payable in March 2025 | ||
Long-term debt | ||
Debt instruments | $ 288.7 | 0 |
Stated interest rate | 2.875% | |
Maturity date | Mar. 1, 2025 | |
6.70% debentures, payable in January 2028 | ||
Long-term debt | ||
Debt instruments | $ 250 | 250 |
Stated interest rate | 6.70% | |
Maturity date | Jan. 15, 2028 | |
6.25% debentures, payable in December 2037 | ||
Long-term debt | ||
Debt instruments | $ 250 | 250 |
Stated interest rate | 6.25% | |
Maturity date | Dec. 1, 2037 | |
5.20% debentures, payable in January 2098 | ||
Long-term debt | ||
Debt instruments | $ 200 | $ 200 |
Stated interest rate | 5.20% | |
Maturity date | Jan. 15, 2098 |
Long-term and Short-term Debt40
Long-term and Short-term Debt (Details Textuals 1) - USD ($) $ in Millions | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Sep. 30, 2014 | |
Issuance of long-term debt | |||
Net proceeds from debt offering | $ 594.3 | $ 0 | |
Fair value of interest rate swap contracts | 12.8 | ||
Short-term debt | |||
Commercial paper borrowings outstanding | 0 | $ 325 | |
Weighted average interest rate of commercial paper outstanding | 0.17% | ||
2.050% notes, payable in March 2020 | |||
Issuance of long-term debt | |||
Long-term debt issued | $ 300 | ||
Stated interest rate | 2.05% | ||
Maturity date | Mar. 1, 2020 | ||
Effective floating interest rate | 0.721% | ||
2.875% notes, payable in March 2025 | |||
Issuance of long-term debt | |||
Long-term debt issued | $ 300 | ||
Stated interest rate | 2.875% | ||
Maturity date | Mar. 1, 2025 | ||
Effective floating interest rate | 1.131% | ||
Aggregate principal amount of notes issued | |||
Issuance of long-term debt | |||
Long-term debt issued | $ 600 |
Long-term and Short-term Debt41
Long-term and Short-term Debt (Details Textuals 2) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2015 | Sep. 30, 2014 | |
Former Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Borrowing capacity | $ 750 | |
New Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Borrowing capacity | $ 1,000 | |
Expiration date | Mar. 24, 2020 | |
Option to increase borrowing capacity of credit facility | $ 350 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2013 |
Other current liabilities | ||||
Unrealized losses on foreign exchange contracts | $ 29.6 | $ 5.8 | ||
Product warranty obligations | 30.5 | 34.1 | $ 36.7 | $ 36.9 |
Taxes other than income taxes | 35 | 37.2 | ||
Accrued interest | 16.2 | 15.6 | ||
Dividends payable | 87.2 | 0 | ||
Income taxes payable | 34.1 | 41 | ||
Other | 45.5 | 54.6 | ||
Other current liabilities | $ 278.1 | $ 188.3 |
Product Warranty Obligations (D
Product Warranty Obligations (Details) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Changes in product warranty obligations | ||
Balance at beginning of period | $ 34.1 | $ 36.9 |
Accruals for warranties issued during the current period | 20 | 23.3 |
Adjustments to pre-existing warranties | (2.7) | (2.7) |
Settlements of warranty claims | (20.9) | (20.8) |
Balance at end of period | $ 30.5 | $ 36.7 |
Derivative Instruments and Fa44
Derivative Instruments and Fair Value Measurement (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net [Abstract] | ||||
Pre-tax (losses) gains recorded in other comprehensive income related to cash flow hedges | $ (8) | $ (1.7) | $ 42.7 | $ (0.8) |
Pre-tax (losses) gains recorded in other comprehensive income related to net investment hedges | (11) | (0.4) | (16) | (0.9) |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | ||||
Pre-tax amount of gains (losses) reclassified from accumulated other comprehensive income into the Condensed Consolidated Statement of Operations related to derivative forward exchange contracts designated as cash flow hedges | 14.1 | (2.6) | 24.1 | (1.2) |
Reclassification of Cash Flow Hedge Gain (Loss) [Abstract] | ||||
Net unrealized gains on cash flow hedges to be reclassified into earnings during the next 12 months | 28.8 | 28.8 | ||
Net unrealized gains on cash flow hedges to be reclassified into earnings during the next 12 months, after tax | 24.6 | $ 24.6 | ||
General Discussion of Derivative Instruments and Hedging Activities [Abstract] | ||||
Maximum length of time hedged in cash flow hedges | 2 years | |||
No impact on earnings due to ineffective cash flow hedges | no impact | |||
No impact on earnings due to ineffective net investment hedges | no impact | |||
No impact on earnings due to ineffective fair value hedges | no impact | |||
Sales [Member] | ||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | ||||
Pre-tax amount of gains (losses) reclassified from accumulated other comprehensive income into the Condensed Consolidated Statement of Operations related to derivative forward exchange contracts designated as cash flow hedges | (2) | (0.6) | $ (5.6) | (1.6) |
Cost of sales [Member] | ||||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net [Abstract] | ||||
Pre-tax amount of gains (losses) reclassified from accumulated other comprehensive income into the Condensed Consolidated Statement of Operations related to derivative forward exchange contracts designated as cash flow hedges | 16.1 | (2) | 29.7 | 0.4 |
Interest expense [Member] | ||||
Gain (Loss) on Fair Value Hedges Recognized in Earnings [Abstract] | ||||
Pre-tax amount of net losses recognized within the Condensed Consolidated Statement of Operations related to derivative instruments designated as fair value hedges, which fully offset the related net gains on the hedged debt instruments | (13.2) | 0 | (12.8) | 0 |
Other (expense) income [Member] | ||||
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments [Abstract] | ||||
Pre-tax amount of gains (losses) from forward exchange contracts not designated as hedging instruments recognized in the Consolidated Statement of Operations | (0.1) | (5.2) | 15.2 | 1.3 |
Foreign Exchange Forward [Member] | ||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net [Abstract] | ||||
Pre-tax (losses) gains recorded in other comprehensive income related to net investment hedges | (10.2) | 0 | (16.6) | 0 |
Foreign Currency Denominated Debt [Member] | ||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net [Abstract] | ||||
Pre-tax (losses) gains recorded in other comprehensive income related to net investment hedges | $ (0.8) | $ (0.4) | $ 0.6 | $ (0.9) |
Derivative Instruments and Fa45
Derivative Instruments and Fair Value Measurement (Details 1) - USD ($) $ in Millions | Jun. 30, 2015 | Sep. 30, 2014 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Net derivative asset / (liability) designated as hedging instruments | $ (2) | $ 13.7 |
Net derivative asset / (liability) not designated as hedging instruments | 18.7 | 1.7 |
Fair Value, Inputs, Level 2 [Member] | Other current assets [Member] | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Forward exchange contracts designated as hedging instruments | 34.3 | 13.1 |
Forward exchange contracts not designated as hedging instruments | 20.9 | 3.5 |
Fair Value, Inputs, Level 2 [Member] | Other assets [Member] | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Forward exchange contracts designated as hedging instruments | 4.6 | 5 |
Fair Value, Inputs, Level 2 [Member] | Other current liabilities [Member] | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Forward exchange contracts designated as hedging instruments | (27.4) | (4.1) |
Forward exchange contracts not designated as hedging instruments | (2.2) | (1.8) |
Fair Value, Inputs, Level 2 [Member] | Other liabilities [Member] | ||
Assets and liabilities measured at fair value on a recurring basis | ||
Forward exchange contracts designated as hedging instruments | (0.7) | (0.3) |
Interest rate swap contracts designated as hedging instruments | (12.8) | $ 0 |
Foreign Exchange Forward [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 1,430.6 | |
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 263.8 | |
Foreign Exchange Forward [Member] | Cash Flow Hedging [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 735.6 | |
Foreign Exchange Forward [Member] | Net Investment Hedging [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 431.2 | |
Interest Rate Swap [Member] | Fair Value Hedging [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 600 | |
Foreign Currency Denominated Debt [Member] | Net Investment Hedging [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Long-term debt | 14.1 | |
Aggregate principal amount of notes issued | ||
Derivatives, Fair Value [Line Items] | ||
Long-term debt | $ 600 |
Derivative Instruments and Fa46
Derivative Instruments and Fair Value Measurement (Details 2) - USD ($) $ in Millions | Jun. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2013 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents, carrying amount | $ 1,567.2 | $ 1,191.3 | $ 1,175.1 | $ 1,200.9 |
Cash and cash equivalents, fair value | 1,567.2 | 1,191.3 | ||
Short-term investments, carrying amount | 590.6 | 628.5 | ||
Short-term investments, fair value | 590.6 | 628.5 | ||
Short-term debt | 0 | 325 | ||
Short-term debt, fair value | 0 | 325 | ||
Long-term debt, carrying amount | 1,492.2 | 905.6 | ||
Long-term debt, fair value | 1,659.8 | 1,119.4 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents, fair value | 1,491.6 | 1,154.2 | ||
Short-term investments, fair value | 0 | 0 | ||
Short-term debt, fair value | 0 | 0 | ||
Long-term debt, fair value | 0 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents, fair value | 75.6 | 37.1 | ||
Short-term investments, fair value | 590.6 | 628.5 | ||
Short-term debt, fair value | 0 | 325 | ||
Long-term debt, fair value | 1,659.8 | 1,119.4 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and cash equivalents, fair value | 0 | 0 | ||
Short-term investments, fair value | 0 | 0 | ||
Short-term debt, fair value | 0 | 0 | ||
Long-term debt, fair value | $ 0 | $ 0 |
Retirement Benefits (Details)
Retirement Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Pension Benefits [Member] | ||||
Components of net periodic benefit cost | ||||
Service cost | $ 21.3 | $ 19.7 | $ 64.5 | $ 59 |
Interest cost | 41.7 | 43.6 | 125.6 | 130.8 |
Expected return on plan assets | (55.7) | (54.5) | (167.6) | (163.5) |
Amortization: | ||||
Prior service credit | (0.7) | (0.7) | (2) | (2.1) |
Net actuarial loss | 29.6 | 25 | 89.2 | 74.8 |
Net periodic benefit cost | 36.2 | 33.1 | 109.7 | 99 |
Other Postretirement Benefits [Member] | ||||
Components of net periodic benefit cost | ||||
Service cost | 0.4 | 0.5 | 1.2 | 1.5 |
Interest cost | 1 | 1.7 | 3.1 | 4.9 |
Amortization: | ||||
Prior service credit | (3.7) | (2.6) | (11.1) | (7.8) |
Net actuarial loss | 1.2 | 0.8 | 3.5 | 2.4 |
Net periodic benefit cost | $ (1.1) | $ 0.4 | $ (3.3) | $ 1 |
Accumulated Other Comprehensi48
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Mar. 31, 2015 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Accumulated other comprehensive income (loss), net of tax | $ (1,015.4) | $ (760.6) | $ (1,015.4) | $ (760.6) | $ (1,040.7) | $ (948) | $ (775.6) | $ (817.7) |
Other comprehensive income (loss) before reclassifications, net of tax | 21.3 | (2.1) | (95.7) | 11.2 | ||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | 4 | 17.1 | 28.3 | 45.9 | ||||
Other comprehensive income (loss), net of tax | 25.3 | 15 | (67.4) | 57.1 | ||||
Pension and other postretirement benefit plan adjustments [Member] | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Accumulated other comprehensive income (loss), net of tax | (857.2) | (780.1) | (857.2) | (780.1) | (874.6) | (909.4) | (794.7) | (823.8) |
Other comprehensive income (loss) before reclassifications, net of tax | 0 | 0 | 0 | 0 | ||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | 17.4 | 14.6 | 52.2 | 43.7 | ||||
Other comprehensive income (loss), net of tax | 17.4 | 14.6 | 52.2 | 43.7 | ||||
Accumulated currency translation adjustments [Member] | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Accumulated other comprehensive income (loss), net of tax | (185.7) | 24.3 | (185.7) | 24.3 | (213.1) | (52.5) | 23.1 | 8.8 |
Other comprehensive income (loss) before reclassifications, net of tax | 27.4 | 1.2 | (133.2) | 15.5 | ||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | 0 | 0 | 0 | 0 | ||||
Other comprehensive income (loss), net of tax | 27.4 | 1.2 | (133.2) | 15.5 | ||||
Net unrealized gains (losses) on cash flow hedges [Member] | ||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||||
Accumulated other comprehensive income (loss), net of tax | 27.5 | (4.8) | 27.5 | (4.8) | $ 47 | $ 13.9 | $ (4) | $ (2.7) |
Other comprehensive income (loss) before reclassifications, net of tax | (6.1) | (3.3) | 37.5 | (4.3) | ||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | (13.4) | 2.5 | (23.9) | 2.2 | ||||
Other comprehensive income (loss), net of tax | $ (19.5) | $ (0.8) | $ 13.6 | $ (2.1) |
Accumulated Other Comprehensi49
Accumulated Other Comprehensive Loss (Details 1) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total before tax | $ 284.6 | $ 274 | $ 848.6 | $ 795.2 |
Provision for tax | (78.5) | (74.3) | (222.3) | (217.1) |
After tax | 206.1 | 199.7 | 626.3 | 578.1 |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
After tax | 4 | 17.1 | 28.3 | 45.9 |
Pension and other postretirement benefit plan adjustments [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of prior service credit | (4.4) | (3.3) | (13.1) | (9.9) |
Amortization of net actuarial loss | 30.8 | 25.8 | 92.7 | 77.2 |
Pension and other postretirement benefit plan adjustments [Member] | Reclassification out of Accumulated Other Comprehensive Loss [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total before tax | 26.4 | 22.5 | 79.6 | 67.3 |
Provision for tax | (9) | (7.9) | (27.4) | (23.6) |
After tax | 17.4 | 14.6 | 52.2 | 43.7 |
Net unrealized gains (losses) on cash flow hedges [Member] | Reclassification out of Accumulated Other Comprehensive Loss [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total before tax | (14.1) | 2.6 | (24.1) | 1.2 |
Provision for tax | 0.7 | (0.1) | 0.2 | 1 |
After tax | (13.4) | 2.5 | (23.9) | 2.2 |
Foreign Exchange Forward [Member] | Sales [Member] | Net unrealized gains (losses) on cash flow hedges [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | 2 | 0.6 | 5.6 | 1.6 |
Foreign Exchange Forward [Member] | Cost of sales [Member] | Net unrealized gains (losses) on cash flow hedges [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amounts reclassified from accumulated other comprehensive loss, net of tax | $ (16.1) | $ 2 | $ (29.7) | $ (0.4) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 27.60% | 27.10% | 26.20% | 27.30% | |
U.S. statutory rate | 35.00% | 35.00% | 35.00% | 35.00% | |
Gross unrecognized tax benefits | $ 40.5 | $ 40.5 | $ 38.9 | ||
Accrued interest and penalties related to unrecognized tax benefits | 5.8 | 5.8 | $ 8.1 | ||
Net reduction of income tax provision related to unrecognized tax benefits, tax penalties, accrued interest and offsetting tax assets | 22.5 | 22.5 | |||
Reasonably possible amount of decrease in gross unrecognized tax benefits for the next twelve months | 22.4 | 22.4 | |||
Reasonably possible amount of net reduction to income tax provision if unrecognized tax benefits were recognized | $ 5.1 | $ 5.1 | |||
Earliest open year for income tax examinations, U.S. federal | 2,012 | ||||
Earliest open tax year for income tax examinations, state, local and non-U.S. | 2,003 |
Business Segment Information (D
Business Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Sales and operating results of reportable segments | ||||
Sales | $ 1,575.2 | $ 1,649.5 | $ 4,700.4 | $ 4,841.7 |
Income before income taxes | 284.6 | 274 | 848.6 | 795.2 |
Interest expense | (16.4) | (14.4) | (47) | (44.3) |
Operating Segments [Member] | ||||
Sales and operating results of reportable segments | ||||
Income before income taxes | 343.7 | 326.1 | 1,024.7 | 956.2 |
Architecture & Software [Member] | ||||
Sales and operating results of reportable segments | ||||
Sales | 683.5 | 715.2 | 2,065.6 | 2,097.9 |
Income before income taxes | 199.9 | 204.8 | 622.1 | 606.9 |
Control Products & Solutions [Member] | ||||
Sales and operating results of reportable segments | ||||
Sales | 891.7 | 934.3 | 2,634.8 | 2,743.8 |
Income before income taxes | 143.8 | 121.3 | 402.6 | 349.3 |
Segment Reconciling Items [Member] | ||||
Sales and operating results of reportable segments | ||||
Purchase accounting depreciation and amortization | (5.2) | (5.5) | (15.8) | (15.9) |
Non-operating pension costs | (15.6) | (14.1) | (47.2) | (42.1) |
Corporate, Non-Segment [Member] | ||||
Sales and operating results of reportable segments | ||||
General corporate - net | (21.9) | (18.1) | (66.1) | (58.7) |
Interest expense | $ (16.4) | $ (14.4) | $ (47) | $ (44.3) |