Document and Entity Information
Document and Entity Information | 3 Months Ended |
Dec. 31, 2016shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | ROCKWELL AUTOMATION INC. |
Entity Central Index Key | 1,024,478 |
Document Type | 10-Q |
Document Period End Date | Dec. 31, 2016 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q1 |
Current Fiscal Year End Date | --09-30 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 128,599,808 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet (Unaudited) - USD ($) $ in Millions | Dec. 31, 2016 | Sep. 30, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,594.6 | $ 1,526.4 |
Short-term investments | 888 | 902.8 |
Receivables | 1,036.5 | 1,079 |
Inventories | 541.7 | 526.6 |
Other current assets | 426.4 | 150.2 |
Total current assets | 4,487.2 | 4,185 |
Property, net of accumulated depreciation of $1,396.3 and $1,404.5, respectively | 562.6 | 578.3 |
Goodwill | 1,052.2 | 1,073.9 |
Other intangible assets, net | 246.2 | 255.3 |
Deferred income taxes | 617.3 | 633.9 |
Other assets | 128.8 | 374.8 |
Total | 7,094.3 | 7,101.2 |
Current liabilities: | ||
Short-term Debt | 408.6 | 448.6 |
Current portion of long-term debt | 250 | 0 |
Accounts payable | 506.8 | 543.1 |
Compensation and benefits | 164.2 | 145.6 |
Advance payments from customers and deferred revenue | 226.4 | 214.5 |
Customer returns, rebates and incentives | 176.4 | 176.5 |
Other current liabilities | 471.5 | 447.6 |
Total current liabilities | 2,203.9 | 1,975.9 |
Long-term debt | 1,240.9 | 1,516.3 |
Retirement benefits | 1,404.3 | 1,430.2 |
Other liabilities | 195.5 | 188.7 |
Commitments and contingent liabilities (Note 10) | ||
Shareowners' equity: | ||
Common stock ($1.00 par value, shares issued: 181.4) | 181.4 | 181.4 |
Additional paid-in capital | 1,603.4 | 1,588.2 |
Retained earnings | 5,785.6 | 5,668.4 |
Accumulated other comprehensive loss | (1,588.9) | (1,538.8) |
Common stock in treasury, at cost (shares held: December 31, 2016, 52.8; September 30, 2016, 52.9) | (3,931.8) | (3,909.1) |
Total shareowners' equity | 2,049.7 | 1,990.1 |
Total | $ 7,094.3 | $ 7,101.2 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2016 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 1,396.3 | $ 1,404.5 |
Common stock, par value per share | $ 1 | $ 1 |
Common stock, shares issued | 181.4 | 181.4 |
Treasury stock, shares | 52.8 | 52.9 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Sales | ||
Products and solutions | $ 1,330.2 | $ 1,271.3 |
Services | 160.1 | 155.3 |
Total sales | 1,490.3 | 1,426.6 |
Cost of sales | ||
Products and solutions | (747.1) | (708.6) |
Services | (100.9) | (105.3) |
Total cost of sales | (848) | (813.9) |
Gross profit | 642.3 | 612.7 |
Selling, general and administrative expenses | (370) | (359.9) |
Other income | 4 | 1.5 |
Interest expense | (18.7) | (17.4) |
Income before income taxes | 257.6 | 236.9 |
Income tax provision | (42.9) | (51.4) |
Net income | $ 214.7 | $ 185.5 |
Basic earnings per share: | ||
Basic | $ 1.67 | $ 1.41 |
Diluted earnings per share: | ||
Diluted | 1.65 | 1.40 |
Cash dividends per share | $ 0.76 | $ 0.725 |
Weighted average outstanding shares: | ||
Basic | 128.3 | 131.8 |
Diluted | 129.7 | 132.6 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Comprehensive income | ||
Net income | $ 214.7 | $ 185.5 |
Other comprehensive income (loss), net of tax: | ||
Pension and other postretirement benefit plan adjustments (net of tax expense of $12.8 and $9.8) | 24.5 | 18.4 |
Currency translation adjustments | (86.2) | (24.4) |
Net change in unrealized gains and losses on cash flow hedges (net of tax expense of $4.0 and $0.2) | 11.6 | 1.6 |
Other comprehensive income (loss) | (50.1) | (4.4) |
Comprehensive income | $ 164.6 | $ 181.1 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Other Comprehensive Income (Loss), Tax, Parenthetical Disclosures [Abstract] | ||
Tax expense from pension and other postretirement benefit plan adjustments | $ 12.8 | $ 9.8 |
Tax expense from net change in unrealized gains and losses on cash flow hedges | $ 4 | $ 0.2 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | ||
Net income | $ 214.7 | $ 185.5 |
Adjustments to arrive at cash provided by operating activities: | ||
Depreciation | 32.5 | 33.7 |
Amortization of intangible assets | 7.9 | 7.6 |
Share-based compensation expense | 10.7 | 10.8 |
Retirement benefit expense | 43 | 39.2 |
Pension contributions | (13.5) | (10.6) |
Net loss on disposition of property | 0.3 | 0 |
Excess income tax benefit from share-based compensation | 0 | (0.7) |
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments: | ||
Receivables | 6 | 15.1 |
Inventories | (27.9) | (32.7) |
Accounts payable | (10.4) | (19) |
Advance payments from customers and deferred revenue | 16.8 | 18.1 |
Compensation and benefits | 22.4 | (80.6) |
Income taxes | 22.3 | 11.3 |
Other assets and liabilities | (14) | 7.1 |
Cash provided by operating activities | 310.8 | 184.8 |
Investing activities: | ||
Capital expenditures | (39.4) | (40.2) |
Acquisition of businesses, net of cash acquired | (1.1) | 0 |
Purchases of short-term investments | (191.3) | (312.4) |
Proceeds from maturities of short-term investments | 193.9 | 261.1 |
Proceeds from sale of property | 0.3 | 0.2 |
Cash used for investing activities | (37.6) | (91.3) |
Financing activities: | ||
Net (repayment) issuance of short-term debt | (40) | 161 |
Cash dividends | (97.5) | (95.6) |
Purchases of treasury stock | (82) | (127.4) |
Proceeds from the exercise of stock options | 67.6 | 4 |
Excess income tax benefit from share-based compensation | 0 | 0.7 |
Cash used for financing activities | (151.9) | (57.3) |
Effect of exchange rate changes on cash | (53.1) | (14.3) |
Increase in cash and cash equivalents | 68.2 | 21.9 |
Cash and cash equivalents at beginning of period | 1,526.4 | 1,427.3 |
Cash and cash equivalents at end of period | $ 1,594.6 | $ 1,449.2 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 3 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Policies | Basis of Presentation and Accounting Policies In the opinion of management of Rockwell Automation, Inc. ("Rockwell Automation" or "the Company"), the unaudited 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, 2016 . The results of operations for the three -month period ended December 31, 2016 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 $22.6 million at December 31, 2016 and $24.5 million at September 30, 2016 . In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $8.0 million at December 31, 2016 and $7.9 million at September 30, 2016 . Earnings Per Share The following table reconciles basic and diluted earnings per share (EPS) amounts (in millions, except per share amounts): Three Months Ended 2016 2015 Net income $ 214.7 $ 185.5 Less: Allocation to participating securities (0.2 ) (0.2 ) Net income available to common shareowners $ 214.5 $ 185.3 Basic weighted average outstanding shares 128.3 131.8 Effect of dilutive securities Stock options 1.2 0.8 Performance shares 0.2 — Diluted weighted average outstanding shares 129.7 132.6 Earnings per share: Basic $ 1.67 $ 1.41 Diluted $ 1.65 $ 1.40 For the three months ended December 31, 2016 , share-based compensation awards for 1.0 million shares were excluded from the diluted EPS calculation because they were antidilutive. For the three months ended December 31, 2015 , share-based compensation awards for 2.9 million shares were excluded from the diluted EPS calculation because they were antidilutive. Non-Cash Investing and Financing Activities Capital expenditures of $12.9 million and $3.4 million were accrued within accounts payable and other current liabilities at December 31, 2016 and 2015 , respectively. At December 31, 2016 and 2015 , there were $4.5 million and $6.9 million , respectively, of outstanding common stock share repurchases recorded in accounts payable that did not settle until the next fiscal quarter. These non-cash investing and financing activities have been excluded from cash used for capital expenditures and treasury stock purchases in the Condensed Consolidated Statement of Cash Flows. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (FASB) issued a new standard on share-based compensation. This requirement is effective for us no later than October 1, 2017; however, we elected to adopt earlier as of October 1, 2016. This standard requires entities to record the excess income tax benefit or deficiency from share-based compensation within the income tax provision rather than within additional paid-in capital. The standard also requires this benefit or deficiency to be classified as an operating cash flow rather than as a financing cash flow. The requirement to record the benefit or deficiency within the income tax provision is effective on a prospective basis. We have elected to adopt the cash flow presentation requirement on a prospective basis. Our adoption of these and all other requirements under the new standard had no material impact on our financial statements. In February 2016, the FASB issued a new standard on accounting for leases that requires lessees to recognize right-of-use assets and lease liabilities for most leases, among other changes to existing lease accounting guidance. The new standard also requires additional qualitative and quantitative disclosures about leasing activities. This guidance is effective for us for reporting periods beginning October 1, 2019. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. In May 2014, the FASB issued a new standard on revenue recognition related to contracts with customers. This standard supersedes nearly all existing revenue recognition guidance and involves a five-step principles-based approach to recognizing revenue. The underlying principle is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. 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. We will adopt this new standard in the first quarter of fiscal 2019 and have established a cross-functional implementation team to adopt the new standard. We continue to evaluate the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation We recognized $10.7 million and $10.8 million of pre-tax share-based compensation expense during the three months ended December 31, 2016 and December 31, 2015 , 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): Three Months Ended December 31, 2016 2015 Grants Wtd. Avg. Share Fair Value Grants Wtd. Avg. Share Fair Value Stock options 943 $ 25.27 1,122 $ 21.20 Performance shares 42 174.37 96 87.64 Restricted stock and restricted stock units 41 135.17 56 103.90 Unrestricted stock 6 120.57 6 100.36 |
Inventories
Inventories | 3 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of (in millions): December 31, September 30, Finished goods $ 227.7 $ 215.8 Work in process 159.3 158.0 Raw materials 154.7 152.8 Inventories $ 541.7 $ 526.6 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Changes in the carrying amount of goodwill for the three months ended December 31, 2016 are (in millions): Architecture & Software Control Products & Solutions Total Balance as of September 30, 2016 $ 414.5 $ 659.4 $ 1,073.9 Acquisition of business — 0.5 0.5 Translation (4.6 ) (17.6 ) (22.2 ) Balance as of December 31, 2016 $ 409.9 $ 642.3 $ 1,052.2 Other intangible assets consist of (in millions): December 31, 2016 Carrying Amount Accumulated Amortization Net Amortized intangible assets: Computer software products $ 182.4 $ 105.9 $ 76.5 Customer relationships 109.6 51.7 57.9 Technology 102.7 49.7 53.0 Trademarks 30.3 17.0 13.3 Other 10.3 8.5 1.8 Total amortized intangible assets 435.3 232.8 202.5 Allen-Bradley ® trademark not subject to amortization 43.7 — 43.7 Total $ 479.0 $ 232.8 $ 246.2 September 30, 2016 Carrying Amount Accumulated Amortization Net Amortized intangible assets: Computer software products $ 182.4 $ 103.4 $ 79.0 Customer relationships 112.6 51.9 60.7 Technology 103.9 48.5 55.4 Trademarks 31.4 17.0 14.4 Other 11.0 8.9 2.1 Total amortized intangible assets 441.3 229.7 211.6 Allen-Bradley ® trademark not subject to amortization 43.7 — 43.7 Total $ 485.0 $ 229.7 $ 255.3 Estimated amortization expense is $29.6 million in 2017 , $24.9 million in 2018 , $21.7 million in 2019 , $19.0 million in 2020 and $18.3 million in 2021 . We perform 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 each year. |
Short-term Debt
Short-term Debt | 3 Months Ended |
Dec. 31, 2016 | |
Short-term Debt [Abstract] | |
Short-term Debt | Short-term Debt Our short-term debt obligations primarily consist of commercial paper borrowings. Commercial paper borrowings outstanding were $408.1 million and $448.6 million at December 31, 2016 and September 30, 2016 , respectively. The weighted average interest rate of the commercial paper outstanding was 0.81 percent and 0.57 percent at December 31, 2016 and September 30, 2016 , respectively. The current portion of long-term debt consists of our $250.0 million , 5.65% notes, due in December 2017. These notes were included within long-term debt at September 30, 2016 but are included within current liabilities at December 31, 2016 as they are due within the next twelve months. At December 31, 2016 and September 30, 2016 , our total borrowing capacity under our unsecured revolving credit facility expiring in March 2020 was $1.0 billion . We did not borrow against this credit facility during the three months ended December 31, 2016 or the twelve months ended September 30, 2016 . In December 2016, we amended the financial covenant under this credit facility. The previous financial covenant, which limited our debt-to-total-capital ratio to 60 percent , was replaced with a minimum EBITDA-to-interest ratio of 3.0 to 1.0. The EBITDA-to-interest ratio is defined in the amendment as the ratio of consolidated EBITDA (as defined in the amendment) for the preceding four quarters to consolidated interest expense for the same period. |
Other Current Liabilities
Other Current Liabilities | 3 Months Ended |
Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities consist of (in millions): December 31, September 30, Unrealized losses on foreign exchange contracts $ 15.4 $ 15.6 Product warranty obligations 27.2 28.0 Taxes other than income taxes 45.2 43.1 Accrued interest 16.2 16.9 Income taxes payable 60.5 28.6 Rocky Flats settlement (Note 13) 242.5 242.5 Other 64.5 72.9 Other current liabilities $ 471.5 $ 447.6 |
Product Warranty Obligations
Product Warranty Obligations | 3 Months Ended |
Dec. 31, 2016 | |
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. Changes in product warranty obligations for the three months ended December 31, 2016 and 2015 are (in millions): Three Months Ended 2016 2015 Balance at beginning of period $ 28.0 $ 27.9 Accruals for warranties issued during the current period 6.1 6.4 Adjustments to pre-existing warranties (0.3 ) (0.5 ) Settlements of warranty claims (6.6 ) (6.2 ) Balance at end of period $ 27.2 $ 27.6 |
Retirement Benefits
Retirement Benefits | 3 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Benefits | Retirement Benefits The components of net periodic benefit cost (income) are (in millions): Pension Benefits Three Months Ended 2016 2015 Service cost $ 24.1 $ 22.1 Interest cost 37.8 42.5 Expected return on plan assets (56.2 ) (54.7 ) Amortization: Prior service credit (0.8 ) (0.7 ) Net actuarial loss 38.0 31.1 Settlements 0.2 — Net periodic benefit cost $ 43.1 $ 40.3 Other Postretirement Benefits Three Months Ended 2016 2015 Service cost $ 0.3 $ 0.3 Interest cost 0.6 0.8 Amortization: Prior service credit (1.5 ) (2.8 ) Net actuarial loss 0.5 0.6 Net periodic benefit income $ (0.1 ) $ (1.1 ) |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component were (in millions): Three Months Ended December 31, 2016 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, 2016 $ (1,239.8 ) $ (294.9 ) $ (4.1 ) $ (1,538.8 ) Other comprehensive income (loss) before reclassifications 0.7 (86.2 ) 11.8 (73.7 ) Amounts reclassified from accumulated other comprehensive loss 23.8 — (0.2 ) 23.6 Other comprehensive income (loss) 24.5 (86.2 ) 11.6 (50.1 ) Balance as of December 31, 2016 $ (1,215.3 ) $ (381.1 ) $ 7.5 $ (1,588.9 ) Three Months Ended December 31, 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, 2015 $ (1,097.1 ) $ (252.4 ) $ 14.9 $ (1,334.6 ) Other comprehensive (loss) income before reclassifications — (24.4 ) 6.5 (17.9 ) Amounts reclassified from accumulated other comprehensive loss 18.4 — (4.9 ) 13.5 Other comprehensive income (loss) 18.4 (24.4 ) 1.6 (4.4 ) Balance as of December 31, 2015 $ (1,078.7 ) $ (276.8 ) $ 16.5 $ (1,339.0 ) 9 . Accumulated Other Comprehensive Loss (continued) The reclassifications out of accumulated other comprehensive loss to the Condensed Consolidated Statement of Operations were (in millions): Three Months Ended Affected Line in the Condensed Consolidated Statement of Operations 2016 2015 Pension and other postretirement benefit plan adjustments: Amortization of prior service credit $ (2.3 ) $ (3.5 ) (a) Amortization of net actuarial loss 38.5 31.7 (a) Settlements 0.2 — (a) 36.4 28.2 Income before income taxes (12.6 ) (9.8 ) Income tax provision $ 23.8 $ 18.4 Net income Net unrealized losses (gains) on cash flow hedges: Forward exchange contracts $ 0.5 $ 2.5 Sales Forward exchange contracts (1.0 ) (8.8 ) Cost of sales Forward exchange contracts 0.3 — Selling, general and administrative expenses (0.2 ) (6.3 ) Income before income taxes — 1.4 Income tax provision $ (0.2 ) $ (4.9 ) Net income Total reclassifications $ 23.6 $ 13.5 Net income (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 cost (income). See Note 8 for further information. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 3 Months Ended |
Dec. 31, 2016 | |
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 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. We also have rights to historic insurance policies that provide indemnity and defense costs, over and above self-insured retentions, for claims arising out of certain asbestos liabilities relating to the divested measurement and flow control business. We initiated litigation against several insurers to pursue coverage for these claims, subject to each carrier's policy limits, and the case is now pending in Los Angeles County Superior Court. In September 2016, we entered into settlement agreements with certain insurance company defendants, and we continue to pursue our claims against the remaining defendants. We believe these settlement agreements will continue to provide partial coverage for these asbestos claims throughout the remaining life of asbestos liability. The uncertainties of asbestos claim litigation make it difficult to predict accurately the ultimate outcome of asbestos claims. That uncertainty is increased by the possibility of adverse rulings or new legislation affecting asbestos claim litigation or the settlement process. Subject to these uncertainties and based on our experience defending asbestos claims, we do not believe these lawsuits will have a material effect on our business, financial condition or results of operations. We have, from time to time, divested certain of our businesses. In connection with these divestitures, certain lawsuits, claims and proceedings may be instituted or asserted against us related to the period that we owned the businesses, either because we agreed to retain certain liabilities related to these periods or because such liabilities fall upon us by operation of law. In some instances, the divested business has assumed the liabilities; however, it is possible that we might be responsible for satisfying those liabilities if the divested business is unable to do so. In connection with the spin-offs of our former automotive business, semiconductor systems business and 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 conjunction 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. 10 . Commitments and Contingent Liabilities (continued) 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 December 31, 2016 , we were not aware of any material indemnification claims where an unfavorable outcome was probable or reasonably possible. Historically, claims that have been made under the indemnification agreements have not had a material impact on our business, financial condition or results of operations; however, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our business, financial condition or results of operations in a particular period. |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At the end of each interim period, we estimate a base effective tax rate that we expect for the full fiscal year based on our most recent forecast of pre-tax income, permanent book and tax differences and global tax planning strategies. We use this base rate to provide for income taxes on a year-to-date basis, excluding the effect of significant unusual items and items that are reported net of their related tax effects in the period in which they occur. The effective tax rate was 16.7 percent in the three months ended December 31, 2016 , compared to 21.7 percent in the three months ended December 31, 2015 . 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. In the three months ended December 31, 2016 we also realized a benefit from discrete tax items. In the three months ended December 31, 2015 our effective tax rate was favorably impacted by the retroactive and permanent extension of the U.S. federal research and development tax credit. The amount of gross unrecognized tax benefits was $37.4 million and $32.4 million at December 31, 2016 and September 30, 2016 , respectively, of which the entire amount would reduce our effective tax rate if recognized. Accrued interest and penalties related to unrecognized tax benefits were $5.3 million and $5.2 million at December 31, 2016 and September 30, 2016 , respectively. We recognize interest and penalties related to unrecognized tax benefits in the income tax provision. We believe it is reasonably possible that the amount of gross unrecognized tax benefits could be reduced by up to $15.4 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 $7.8 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 2014 and are no longer subject to state, local and foreign income tax examinations for years before 2003 . |
Business Segment Information
Business Segment Information | 3 Months Ended |
Dec. 31, 2016 | |
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 2016 2015 Sales Architecture & Software $ 696.4 $ 642.9 Control Products & Solutions 793.9 783.7 Total $ 1,490.3 $ 1,426.6 Segment operating earnings Architecture & Software $ 208.6 $ 176.2 Control Products & Solutions 108.0 119.7 Total 316.6 295.9 Purchase accounting depreciation and amortization (5.6 ) (4.7 ) General corporate – net (14.9 ) (18.0 ) Non-operating pension costs (19.8 ) (18.9 ) Interest expense (18.7 ) (17.4 ) Income before income taxes $ 257.6 $ 236.9 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. |
Rocky Flats Settlement
Rocky Flats Settlement | 3 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters and Contingencies | Rocky Flats Settlement From 1975 to 1989, Rockwell International Corporation (RIC) operated the Rocky Flats facility in Colorado for the U.S. Department of Energy (DoE). In 1990, a class of landowners near Rocky Flats sued RIC and Dow Chemical, another former operator of the facility. In May 2016, the parties agreed to settle this case and the DoE authorized the settlement. Under the settlement agreement, which is subject to court approval, we and Dow Chemical agreed to pay $375.0 million in the aggregate to resolve the claims. Under RIC’s contract with the DoE and federal law, RIC is entitled to indemnification by the DoE for its portion of the settlement amount, which is $243.75 million . When RIC was acquired by Boeing in 1996, we agreed to indemnify Boeing for RIC’s liabilities related to Rocky Flats and received the benefits of RIC’s corresponding indemnity rights against the DoE. Pursuant to the settlement agreement, in fiscal 2016, RIC paid an initial amount of $1.25 million to the plaintiff class escrow fund. In January, 2017, the DoE fulfilled its indemnification obligation by paying $243.75 million , and the full amounts of RIC's obligation under the settlement agreement has now been transferred to the plaintiff class escrow account. As a result, we will not be required to make any payment under the settlement agreement. At December 31, 2016 , the remaining liability of $242.5 million and an indemnification receivable of $243.75 million are included within other current liabilities and other current assets, respectively, in the Condensed Consolidated Balance Sheet. |
Basis of Presentation and Acc21
Basis of Presentation and Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Receivables | Receivables Receivables are stated net of an allowance for doubtful accounts of $22.6 million at December 31, 2016 and $24.5 million at September 30, 2016 . In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $8.0 million at December 31, 2016 and $7.9 million at September 30, 2016 . |
Recent accounting pronouncements | Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (FASB) issued a new standard on share-based compensation. This requirement is effective for us no later than October 1, 2017; however, we elected to adopt earlier as of October 1, 2016. This standard requires entities to record the excess income tax benefit or deficiency from share-based compensation within the income tax provision rather than within additional paid-in capital. The standard also requires this benefit or deficiency to be classified as an operating cash flow rather than as a financing cash flow. The requirement to record the benefit or deficiency within the income tax provision is effective on a prospective basis. We have elected to adopt the cash flow presentation requirement on a prospective basis. Our adoption of these and all other requirements under the new standard had no material impact on our financial statements. In February 2016, the FASB issued a new standard on accounting for leases that requires lessees to recognize right-of-use assets and lease liabilities for most leases, among other changes to existing lease accounting guidance. The new standard also requires additional qualitative and quantitative disclosures about leasing activities. This guidance is effective for us for reporting periods beginning October 1, 2019. We are currently evaluating the impact the adoption of this guidance will have on our consolidated financial statements and related disclosures. In May 2014, the FASB issued a new standard on revenue recognition related to contracts with customers. This standard supersedes nearly all existing revenue recognition guidance and involves a five-step principles-based approach to recognizing revenue. The underlying principle is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. 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. We will adopt this new standard in the first quarter of fiscal 2019 and have established a cross-functional implementation team to adopt the new standard. We continue to evaluate 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. |
Income taxes | At the end of each interim period, we estimate a base effective tax rate that we expect for the full fiscal year based on our most recent forecast of pre-tax income, permanent book and tax differences and global tax planning strategies. We use this base rate to provide for income taxes on a year-to-date basis, excluding the effect of significant unusual items and items that are reported net of their related tax effects in the period in which they occur. |
Basis of Presentation and Acc22
Basis of Presentation and Accounting Policies (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
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 2016 2015 Net income $ 214.7 $ 185.5 Less: Allocation to participating securities (0.2 ) (0.2 ) Net income available to common shareowners $ 214.5 $ 185.3 Basic weighted average outstanding shares 128.3 131.8 Effect of dilutive securities Stock options 1.2 0.8 Performance shares 0.2 — Diluted weighted average outstanding shares 129.7 132.6 Earnings per share: Basic $ 1.67 $ 1.41 Diluted $ 1.65 $ 1.40 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
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): Three Months Ended December 31, 2016 2015 Grants Wtd. Avg. Share Fair Value Grants Wtd. Avg. Share Fair Value Stock options 943 $ 25.27 1,122 $ 21.20 Performance shares 42 174.37 96 87.64 Restricted stock and restricted stock units 41 135.17 56 103.90 Unrestricted stock 6 120.57 6 100.36 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consist of (in millions): December 31, September 30, Finished goods $ 227.7 $ 215.8 Work in process 159.3 158.0 Raw materials 154.7 152.8 Inventories $ 541.7 $ 526.6 |
Goodwill and Other Intangible25
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill for the three months ended December 31, 2016 are (in millions): Architecture & Software Control Products & Solutions Total Balance as of September 30, 2016 $ 414.5 $ 659.4 $ 1,073.9 Acquisition of business — 0.5 0.5 Translation (4.6 ) (17.6 ) (22.2 ) Balance as of December 31, 2016 $ 409.9 $ 642.3 $ 1,052.2 |
Schedule of Finite Lived and Indefinite Lived Intangible Assets by Major Class | Other intangible assets consist of (in millions): December 31, 2016 Carrying Amount Accumulated Amortization Net Amortized intangible assets: Computer software products $ 182.4 $ 105.9 $ 76.5 Customer relationships 109.6 51.7 57.9 Technology 102.7 49.7 53.0 Trademarks 30.3 17.0 13.3 Other 10.3 8.5 1.8 Total amortized intangible assets 435.3 232.8 202.5 Allen-Bradley ® trademark not subject to amortization 43.7 — 43.7 Total $ 479.0 $ 232.8 $ 246.2 September 30, 2016 Carrying Amount Accumulated Amortization Net Amortized intangible assets: Computer software products $ 182.4 $ 103.4 $ 79.0 Customer relationships 112.6 51.9 60.7 Technology 103.9 48.5 55.4 Trademarks 31.4 17.0 14.4 Other 11.0 8.9 2.1 Total amortized intangible assets 441.3 229.7 211.6 Allen-Bradley ® trademark not subject to amortization 43.7 — 43.7 Total $ 485.0 $ 229.7 $ 255.3 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other current liabilities consist of (in millions): December 31, September 30, Unrealized losses on foreign exchange contracts $ 15.4 $ 15.6 Product warranty obligations 27.2 28.0 Taxes other than income taxes 45.2 43.1 Accrued interest 16.2 16.9 Income taxes payable 60.5 28.6 Rocky Flats settlement (Note 13) 242.5 242.5 Other 64.5 72.9 Other current liabilities $ 471.5 $ 447.6 |
Product Warranty Obligations (T
Product Warranty Obligations (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | Changes in product warranty obligations for the three months ended December 31, 2016 and 2015 are (in millions): Three Months Ended 2016 2015 Balance at beginning of period $ 28.0 $ 27.9 Accruals for warranties issued during the current period 6.1 6.4 Adjustments to pre-existing warranties (0.3 ) (0.5 ) Settlements of warranty claims (6.6 ) (6.2 ) Balance at end of period $ 27.2 $ 27.6 |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Net Benefit Costs | The components of net periodic benefit cost (income) are (in millions): Pension Benefits Three Months Ended 2016 2015 Service cost $ 24.1 $ 22.1 Interest cost 37.8 42.5 Expected return on plan assets (56.2 ) (54.7 ) Amortization: Prior service credit (0.8 ) (0.7 ) Net actuarial loss 38.0 31.1 Settlements 0.2 — Net periodic benefit cost $ 43.1 $ 40.3 Other Postretirement Benefits Three Months Ended 2016 2015 Service cost $ 0.3 $ 0.3 Interest cost 0.6 0.8 Amortization: Prior service credit (1.5 ) (2.8 ) Net actuarial loss 0.5 0.6 Net periodic benefit income $ (0.1 ) $ (1.1 ) |
Accumulated Other Comprehensi29
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive loss by component were (in millions): Three Months Ended December 31, 2016 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, 2016 $ (1,239.8 ) $ (294.9 ) $ (4.1 ) $ (1,538.8 ) Other comprehensive income (loss) before reclassifications 0.7 (86.2 ) 11.8 (73.7 ) Amounts reclassified from accumulated other comprehensive loss 23.8 — (0.2 ) 23.6 Other comprehensive income (loss) 24.5 (86.2 ) 11.6 (50.1 ) Balance as of December 31, 2016 $ (1,215.3 ) $ (381.1 ) $ 7.5 $ (1,588.9 ) Three Months Ended December 31, 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, 2015 $ (1,097.1 ) $ (252.4 ) $ 14.9 $ (1,334.6 ) Other comprehensive (loss) income before reclassifications — (24.4 ) 6.5 (17.9 ) Amounts reclassified from accumulated other comprehensive loss 18.4 — (4.9 ) 13.5 Other comprehensive income (loss) 18.4 (24.4 ) 1.6 (4.4 ) Balance as of December 31, 2015 $ (1,078.7 ) $ (276.8 ) $ 16.5 $ (1,339.0 ) |
Reclassification out of Accumulated Other Comprehensive Income | The reclassifications out of accumulated other comprehensive loss to the Condensed Consolidated Statement of Operations were (in millions): Three Months Ended Affected Line in the Condensed Consolidated Statement of Operations 2016 2015 Pension and other postretirement benefit plan adjustments: Amortization of prior service credit $ (2.3 ) $ (3.5 ) (a) Amortization of net actuarial loss 38.5 31.7 (a) Settlements 0.2 — (a) 36.4 28.2 Income before income taxes (12.6 ) (9.8 ) Income tax provision $ 23.8 $ 18.4 Net income Net unrealized losses (gains) on cash flow hedges: Forward exchange contracts $ 0.5 $ 2.5 Sales Forward exchange contracts (1.0 ) (8.8 ) Cost of sales Forward exchange contracts 0.3 — Selling, general and administrative expenses (0.2 ) (6.3 ) Income before income taxes — 1.4 Income tax provision $ (0.2 ) $ (4.9 ) Net income Total reclassifications $ 23.6 $ 13.5 Net income (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 cost (income). See Note 8 for further information. |
Business Segment Information (T
Business Segment Information (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
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 2016 2015 Sales Architecture & Software $ 696.4 $ 642.9 Control Products & Solutions 793.9 783.7 Total $ 1,490.3 $ 1,426.6 Segment operating earnings Architecture & Software $ 208.6 $ 176.2 Control Products & Solutions 108.0 119.7 Total 316.6 295.9 Purchase accounting depreciation and amortization (5.6 ) (4.7 ) General corporate – net (14.9 ) (18.0 ) Non-operating pension costs (19.8 ) (18.9 ) Interest expense (18.7 ) (17.4 ) Income before income taxes $ 257.6 $ 236.9 |
Basis of Presentation and Acc31
Basis of Presentation and Accounting Policies (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciled Basic and Diluted EPS | ||
Net income | $ 214.7 | $ 185.5 |
Less: Allocation to participating securities | (0.2) | (0.2) |
Net income available to common shareowners | $ 214.5 | $ 185.3 |
Basic weighted average outstanding shares | 128.3 | 131.8 |
Effect of dilutive securities | ||
Stock options | 1.2 | 0.8 |
Performance shares | 0.2 | 0 |
Diluted weighted average outstanding shares | 129.7 | 132.6 |
Basic earnings per share: | ||
Basic | $ 1.67 | $ 1.41 |
Diluted earnings per share: | ||
Diluted | $ 1.65 | $ 1.40 |
Basis of Presentation and Acc32
Basis of Presentation and Accounting Policies (Details Textual) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | |||
Allowance for doubtful accounts | $ 22.6 | $ 24.5 | |
Allowance for certain customer returns, rebates and incentives | $ 8 | $ 7.9 | |
Antidilutive share-based compensation awards | 1 | 2.9 | |
Capital expenditures in accounts payable or other current liabilities at period end | $ 12.9 | $ 3.4 | |
Outstanding purchase of common stock recorded in accounts payable | $ 4.5 | $ 6.9 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-Based Compensation (Textual) [Abstract] | ||
Pre-tax share-based compensation expense | $ 10.7 | $ 10.8 |
Stock options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants | 943 | 1,122 |
Wtd. Avg. Share Fair Value | $ 25.27 | $ 21.20 |
Performance shares [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants | 42 | 96 |
Wtd. Avg. Share Fair Value | $ 174.37 | $ 87.64 |
Restricted stock and restricted stock units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants | 41 | 56 |
Wtd. Avg. Share Fair Value | $ 135.17 | $ 103.90 |
Unrestricted stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grants | 6 | 6 |
Wtd. Avg. Share Fair Value | $ 120.57 | $ 100.36 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Sep. 30, 2016 |
Inventories | ||
Finished goods | $ 227.7 | $ 215.8 |
Work in process | 159.3 | 158 |
Raw materials | 154.7 | 152.8 |
Inventories | $ 541.7 | $ 526.6 |
Goodwill and Other Intangible35
Goodwill and Other Intangible Assets (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2016USD ($) | |
Goodwill | |
Balance as of September 30, 2016 | $ 1,073.9 |
Acquisition of business | 0.5 |
Translation | (22.2) |
Balance as of December 31, 2016 | 1,052.2 |
Architecture & Software [Member] | |
Goodwill | |
Balance as of September 30, 2016 | 414.5 |
Acquisition of business | 0 |
Translation | (4.6) |
Balance as of December 31, 2016 | 409.9 |
Control Products & Solutions [Member] | |
Goodwill | |
Balance as of September 30, 2016 | 659.4 |
Acquisition of business | 0.5 |
Translation | (17.6) |
Balance as of December 31, 2016 | $ 642.3 |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Millions | Dec. 31, 2016 | Sep. 30, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Total, carrying amount | $ 479 | $ 485 |
Total, net | 246.2 | 255.3 |
Other intangible assets | ||
Amortized intangible assets, carrying amount | 435.3 | 441.3 |
Amortized intangible assets, accumulated amortization | 232.8 | 229.7 |
Amortized intangible assets, net | 202.5 | 211.6 |
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||
Estimated amortization expense in 2017 | 29.6 | |
Estimated amortization expense in 2018 | 24.9 | |
Estimated amortization expense in 2019 | 21.7 | |
Estimated amortization expense in 2020 | 19 | |
Estimated amortization expense in 2021 | 18.3 | |
Trademarks [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Allen-Bradley® trademark not subject to amortization | 43.7 | 43.7 |
Computer software products [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 182.4 | 182.4 |
Amortized intangible assets, accumulated amortization | 105.9 | 103.4 |
Amortized intangible assets, net | 76.5 | 79 |
Customer relationships [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 109.6 | 112.6 |
Amortized intangible assets, accumulated amortization | 51.7 | 51.9 |
Amortized intangible assets, net | 57.9 | 60.7 |
Technology [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 102.7 | 103.9 |
Amortized intangible assets, accumulated amortization | 49.7 | 48.5 |
Amortized intangible assets, net | 53 | 55.4 |
Trademarks [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 30.3 | 31.4 |
Amortized intangible assets, accumulated amortization | 17 | 17 |
Amortized intangible assets, net | 13.3 | 14.4 |
Other [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 10.3 | 11 |
Amortized intangible assets, accumulated amortization | 8.5 | 8.9 |
Amortized intangible assets, net | $ 1.8 | $ 2.1 |
Short-term Debt (Details)
Short-term Debt (Details) $ in Millions | 3 Months Ended | |
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | |
Short-term Debt [Abstract] | ||
Commercial paper borrowings outstanding | $ 408.1 | $ 448.6 |
Weighted average interest rate of commercial paper outstanding | 0.81% | 0.57% |
Current portion of long-term debt | $ 250 | $ 0 |
Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Borrowing capacity | $ 1,000 | |
Maximum [Member] | Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Maximum debt to total capital ratio required by debt covenants | 0.60 | |
Maximum ratio of EBITDA to interest expense under credit facility | 3 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Other current liabilities | ||||
Unrealized losses on foreign exchange contracts | $ 15.4 | $ 15.6 | ||
Product warranty obligations | 27.2 | 28 | $ 27.6 | $ 27.9 |
Taxes other than income taxes | 45.2 | 43.1 | ||
Accrued interest | 16.2 | 16.9 | ||
Income taxes payable | 60.5 | 28.6 | ||
Rocky Flats settlement (Note 13) | 242.5 | 242.5 | ||
Other | 64.5 | 72.9 | ||
Other current liabilities | $ 471.5 | $ 447.6 |
Product Warranty Obligations (D
Product Warranty Obligations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in product warranty obligations | ||
Balance at beginning of period | $ 28 | $ 27.9 |
Accruals for warranties issued during the current period | 6.1 | 6.4 |
Adjustments to pre-existing warranties | (0.3) | (0.5) |
Settlements of warranty claims | (6.6) | (6.2) |
Balance at end of period | $ 27.2 | $ 27.6 |
Retirement Benefits (Details)
Retirement Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Benefits [Member] | ||
Components of net periodic benefit cost (income) | ||
Service cost | $ 24.1 | $ 22.1 |
Interest cost | 37.8 | 42.5 |
Expected return on plan assets | (56.2) | (54.7) |
Amortization: | ||
Prior service credit | (0.8) | (0.7) |
Net actuarial loss | 38 | 31.1 |
Settlements | 0.2 | 0 |
Net periodic benefit cost (income) | 43.1 | 40.3 |
Other Postretirement Benefits [Member] | ||
Components of net periodic benefit cost (income) | ||
Service cost | 0.3 | 0.3 |
Interest cost | 0.6 | 0.8 |
Amortization: | ||
Prior service credit | (1.5) | (2.8) |
Net actuarial loss | 0.5 | 0.6 |
Net periodic benefit cost (income) | (0.1) | (1.1) |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||
Amortization: | ||
Settlements | $ 0.2 | $ 0 |
Accumulated Other Comprehensi41
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ (1,538.8) | $ (1,334.6) |
Other comprehensive (loss) income before reclassifications | (73.7) | (17.9) |
Amounts reclassified from accumulated other comprehensive loss | 23.6 | 13.5 |
Other comprehensive income (loss) | (50.1) | (4.4) |
Balance at end of period | (1,588.9) | (1,339) |
Pension and other postretirement benefit plan adjustments [Member] | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (1,239.8) | (1,097.1) |
Other comprehensive (loss) income before reclassifications | 0.7 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 23.8 | 18.4 |
Other comprehensive income (loss) | 24.5 | 18.4 |
Balance at end of period | (1,215.3) | (1,078.7) |
Accumulated currency translation adjustments [Member] | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (294.9) | (252.4) |
Other comprehensive (loss) income before reclassifications | (86.2) | (24.4) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Other comprehensive income (loss) | (86.2) | (24.4) |
Balance at end of period | (381.1) | (276.8) |
Net unrealized gains (losses) on cash flow hedges [Member] | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (4.1) | 14.9 |
Other comprehensive (loss) income before reclassifications | 11.8 | 6.5 |
Amounts reclassified from accumulated other comprehensive loss | (0.2) | (4.9) |
Other comprehensive income (loss) | 11.6 | 1.6 |
Balance at end of period | $ 7.5 | $ 16.5 |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive Loss (Details 1) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income before income taxes | $ 257.6 | $ 236.9 |
Income tax provision | (42.9) | (51.4) |
Net income | 214.7 | 185.5 |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net income | 23.6 | 13.5 |
Pension and other postretirement benefit plan adjustments [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amortization of prior service credit | (2.3) | (3.5) |
Amortization of net actuarial loss | 38.5 | 31.7 |
Settlements | 0.2 | 0 |
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] | ||
Income before income taxes | 36.4 | 28.2 |
Income tax provision | (12.6) | (9.8) |
Net income | 23.8 | 18.4 |
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] | ||
Income before income taxes | (0.2) | (6.3) |
Income tax provision | 0 | 1.4 |
Net income | (0.2) | (4.9) |
Net unrealized gains (losses) on cash flow hedges [Member] | Foreign Exchange Forward [Member] | Sales [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amounts reclassified from accumulated other comprehensive loss | 0.5 | 2.5 |
Net unrealized gains (losses) on cash flow hedges [Member] | Foreign Exchange Forward [Member] | Cost of sales [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amounts reclassified from accumulated other comprehensive loss | (1) | (8.8) |
Net unrealized gains (losses) on cash flow hedges [Member] | Foreign Exchange Forward [Member] | Selling, General and Administrative Expenses [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amounts reclassified from accumulated other comprehensive loss | $ 0.3 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 16.70% | 21.70% | |
U.S. statutory rate | 35.00% | 35.00% | |
Gross unrecognized tax benefits | $ 37.4 | $ 32.4 | |
Accrued interest and penalties related to unrecognized tax benefits | 5.3 | $ 5.2 | |
Reasonably possible amount of reduction in gross unrecognized tax benefits for the next twelve months | 15.4 | ||
Reasonably possible amount of net reduction to income tax provision if unrecognized tax benefits were recognized | $ 7.8 | ||
Earliest open year for income tax examinations, U.S. federal | 2,014 | ||
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 | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Sales and operating results of reportable segments | ||
Sales | $ 1,490.3 | $ 1,426.6 |
Income before income taxes | 257.6 | 236.9 |
Interest expense | (18.7) | (17.4) |
Operating Segments [Member] | ||
Sales and operating results of reportable segments | ||
Income before income taxes | 316.6 | 295.9 |
Segment Reconciling Items [Member] | ||
Sales and operating results of reportable segments | ||
Purchase accounting depreciation and amortization | (5.6) | (4.7) |
Non-operating pension costs | (19.8) | (18.9) |
Corporate, Non-Segment [Member] | ||
Sales and operating results of reportable segments | ||
General corporate - net | (14.9) | (18) |
Interest expense | (18.7) | (17.4) |
Architecture & Software [Member] | ||
Sales and operating results of reportable segments | ||
Sales | 696.4 | 642.9 |
Income before income taxes | 208.6 | 176.2 |
Control Products & Solutions [Member] | ||
Sales and operating results of reportable segments | ||
Sales | 793.9 | 783.7 |
Income before income taxes | $ 108 | $ 119.7 |
Rocky Flats Settlement (Details
Rocky Flats Settlement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2016 | |
Loss Contingencies [Line Items] | ||
Settlement liability, current | $ 242,500 | $ 242,500 |
Rocky Flats [Member] | ||
Loss Contingencies [Line Items] | ||
Settlement amount, in aggregate | 375,000 | |
Settlement amount, total Rockwell obligation | 243,750 | |
Settlement amount, payment made | 1,250 | |
Settlement amount receivable from U.S. Department of Energy | $ 243,750 |