Document and Entity Information
Document and Entity Information | 6 Months Ended |
Mar. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | ROCKWELL AUTOMATION INC. |
Entity Central Index Key | 1,024,478 |
Current Fiscal Year End Date | --09-30 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2018 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 125,580,404 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheet (Unaudited) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 1,433.9 | $ 1,410.9 |
Short-term investments | 613.4 | 1,124.6 |
Receivables | 1,163.1 | 1,135.5 |
Inventories | 570.4 | 558.7 |
Other current assets | 160.1 | 191 |
Total current assets | 3,940.9 | 4,420.7 |
Property, net of accumulated depreciation of $1,577.8 and $1,511.9, respectively | 557.2 | 583.9 |
Goodwill | 1,104.3 | 1,077.7 |
Other intangible assets, net | 230.9 | 238 |
Deferred income taxes | 332.5 | 443.6 |
Other assets | 347.8 | 397.8 |
Total | 6,513.6 | 7,161.7 |
Current liabilities: | ||
Short-term debt | 308.5 | 350.4 |
Current portion of long-term debt | 0 | 250 |
Accounts payable | 630 | 623.2 |
Compensation and benefits | 206.6 | 272.6 |
Advance payments from customers and deferred revenue | 286.4 | 240.6 |
Customer returns, rebates and incentives | 194.3 | 188.8 |
Other current liabilities | 252 | 220.2 |
Total current liabilities | 1,877.8 | 2,145.8 |
Long-term debt | 1,229.8 | 1,243.4 |
Retirement benefits | 873.6 | 892.5 |
Other liabilities | 585.2 | 216.4 |
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 | 1,659.6 | 1,638 |
Retained earnings | 5,880.9 | 6,103.4 |
Accumulated other comprehensive loss | (1,081.5) | (1,179.2) |
Common stock in treasury, at cost (shares held: 55.8 and 53.0, respectively) | (4,693.2) | (4,080) |
Total shareowners’ equity | 1,947.2 | 2,663.6 |
Total | $ 6,513.6 | $ 7,161.7 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) - USD ($) shares in Millions, $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 1,577.8 | $ 1,511.9 |
Common stock, par value per share | $ 1 | $ 1 |
Common stock, shares issued | 181.4 | 181.4 |
Treasury stock, shares | 55.8 | 53 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Sales | ||||
Products and solutions | $ 1,470.5 | $ 1,384.4 | $ 2,883 | $ 2,714.6 |
Services | 180.7 | 169.9 | 354.8 | 330 |
Total sales | 1,651.2 | 1,554.3 | 3,237.8 | 3,044.6 |
Cost of sales | ||||
Products and solutions | (838.8) | (787.2) | (1,622) | (1,534.3) |
Services | (111.6) | (110.6) | (217.9) | (211.5) |
Total cost of sales | (950.4) | (897.8) | (1,839.9) | (1,745.8) |
Gross profit | 700.8 | 656.5 | 1,397.9 | 1,298.8 |
Selling, general and administrative expenses | (389.2) | (409.2) | (778.5) | (779.2) |
Other income | 5.3 | 1.9 | 15.3 | 5.9 |
Interest expense | (17.3) | (18.9) | (37.3) | (37.6) |
Income before income taxes | 299.6 | 230.3 | 597.4 | 487.9 |
Income tax provision | (72.2) | (40.8) | (606.4) | (83.7) |
Net income (loss) | $ 227.4 | $ 189.5 | $ (9) | $ 404.2 |
Earnings (loss) per share: | ||||
Basic (in usd per share) | $ 1.79 | $ 1.47 | $ (0.07) | $ 3.14 |
Diluted (in usd per share) | 1.77 | 1.45 | (0.07) | 3.11 |
Cash dividends per share (in usd per share) | $ 0.835 | $ 0.76 | $ 1.67 | $ 1.52 |
Weighted average outstanding shares: | ||||
Basic (in shares) | 126.9 | 128.7 | 127.6 | 128.5 |
Diluted (in shares) | 128.5 | 130.3 | 127.6 | 130 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Comprehensive (Loss) Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 227.4 | $ 189.5 | $ (9) | $ 404.2 |
Other comprehensive income, net of tax: | ||||
Pension and other postretirement benefit plan adjustments (net of tax expense of $7.4, $12.4, $14.8 and $25.0) | 20.2 | 23.8 | 40.4 | 48.3 |
Currency translation adjustments | 76.5 | 60.8 | 60.4 | (25.4) |
Net change in unrealized gains and losses on cash flow hedges (net of tax (benefit) expense of ($0.3), ($0.7), ($0.6) and $3.3) | (1) | (3.6) | (0.5) | 8 |
Net change in unrealized gains and losses on available-for-sale investments (net of tax benefit of $0.3, $0.0, $0.6 and $0.0) | (1.5) | (0.1) | (2.6) | (0.1) |
Other comprehensive income | 94.2 | 80.9 | 97.7 | 30.8 |
Comprehensive income | $ 321.6 | $ 270.4 | $ 88.7 | $ 435 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Pension and other postretirement benefit plan adjustments tax expense | $ 7.4 | $ 12.4 | $ 14.8 | $ 25 |
Net change in unrealized gains and losses on cash flow hedges tax expense (benefit) | (0.3) | (0.7) | (0.6) | 3.3 |
Net change in unrealized gains and losses on available-for-sale investments net of tax benefit | $ 0.3 | $ 0 | $ 0.6 | $ 0 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating activities: | ||
Net income (loss) | $ (9) | $ 404.2 |
Adjustments to arrive at cash provided by operating activities: | ||
Depreciation | 68.5 | 65.4 |
Amortization of intangible assets | 14.3 | 15.6 |
Share-based compensation expense | 18.8 | 20.2 |
Retirement benefit expense | 56.7 | 86.1 |
Pension contributions | (23.5) | (28.5) |
Net loss on disposition of property | 0 | 0.1 |
Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments: | ||
Receivables | (9.8) | (16.4) |
Inventories | (7.9) | (16.6) |
Accounts payable | 7.2 | 20 |
Advance payments from customers and deferred revenue | 42.8 | 33.2 |
Compensation and benefits | (67.7) | 51.2 |
Income taxes | 508.6 | (7.7) |
Other assets and liabilities | (4.9) | (15) |
Cash provided by operating activities | 594.1 | 611.8 |
Investing activities: | ||
Capital expenditures | (56.2) | (67.4) |
Acquisition of businesses, net of cash acquired | (9.9) | (1.1) |
Purchases of investments | (276.6) | (721.6) |
Proceeds from maturities of investments | 690.3 | 422.1 |
Proceeds from sale of investments | 155.3 | 6.1 |
Proceeds from sale of property | 0.4 | 0.4 |
Cash provided by (used for) investing activities | 503.3 | (361.5) |
Financing activities: | ||
Net repayment of short-term debt | (41.9) | (75.1) |
Repayment of long-term debt | (250) | 0 |
Cash dividends | (213.5) | (195.5) |
Purchases of treasury stock | (661.7) | (185) |
Proceeds from the exercise of stock options | 61.9 | 136.9 |
Other financing activities | 1.8 | 0 |
Cash used for financing activities | (1,103.4) | (318.7) |
Effect of exchange rate changes on cash | 29 | (17.2) |
Increase (decrease) in cash and cash equivalents | 23 | (85.6) |
Cash and cash equivalents at beginning of period | 1,410.9 | 1,526.4 |
Cash and cash equivalents at end of period | $ 1,433.9 | $ 1,440.8 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 6 Months Ended |
Mar. 31, 2018 | |
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, 2017 . The results of operations for the three and six -month periods ended March 31, 2018 , 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 $23.1 million at March 31, 2018 , and $24.9 million at September 30, 2017 . In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $7.5 million at March 31, 2018 , and $11.9 million at September 30, 2017 . Earnings Per Share The following table reconciles basic and diluted earnings (loss) per share (EPS) amounts (in millions, except per share amounts): Three Months Ended Six Months Ended 2018 2017 2018 2017 Net income (loss) $ 227.4 $ 189.5 $ (9.0 ) $ 404.2 Less: Allocation to participating securities (0.2 ) (0.2 ) — (0.4 ) Net income (loss) available to common shareowners $ 227.2 $ 189.3 $ (9.0 ) $ 403.8 Basic weighted average outstanding shares 126.9 128.7 127.6 128.5 Effect of dilutive securities Stock options 1.4 1.3 — 1.3 Performance shares 0.2 0.3 — 0.2 Diluted weighted average outstanding shares 128.5 130.3 127.6 130.0 Earnings (loss) per share: Basic $ 1.79 $ 1.47 $ (0.07 ) $ 3.14 Diluted $ 1.77 $ 1.45 $ (0.07 ) $ 3.11 For the six months ended March 31, 2018 , 2.6 million potential common shares related to share-based compensation awards were excluded from the diluted EPS calculation because we recorded a net loss from continuing operations. Of these shares, 1.7 million would have been included in the calculation had we recorded net income from continuing operations in the six months ended March 31, 2018 . For each of the three and six months ended March 31, 2018 , 0.9 million shares related to share-based compensation awards were excluded from the diluted EPS calculation because they were antidilutive. For each of the three and six months ended March 31, 2017 , 1.0 million shares related to share-based compensation awards were excluded from the diluted EPS calculation because they were antidilutive. Non-Cash Investing and Financing Activities Capital expenditures of $14.0 million and $17.6 million were accrued within accounts payable and other current liabilities at March 31, 2018 and 2017 , respectively. At March 31, 2018 and 2017 , there were $12.3 million and $7.0 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 2017, the FASB issued a new standard regarding the presentation of net periodic pension and postretirement benefit costs. This standard requires the service cost component to be reported in the income statement in the same line item as other compensation costs arising from services rendered by the related employees during the period. The other components of net periodic benefit cost are required to be presented separately from the service cost component in either a separate line item or within another appropriate line item with disclosure of where those costs are recorded. This standard also requires that only the service cost component is eligible for capitalization, when applicable. This standard is effective for us for reporting periods starting October 1, 2018. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements and related disclosures. 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 standard is effective for us for reporting periods beginning October 1, 2019. We are currently evaluating the impact the adoption of this standard 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 under the modified retrospective method in the first quarter of fiscal 2019, with the cumulative effect of initially applying the guidance recognized in retained earnings at the adoption date. We have established a project plan and a cross-functional implementation team to adopt the new revenue standard. We are in the process of identifying and implementing necessary changes to accounting policies, processes, controls and systems to enable compliance with this new standard. We continue to evaluate the impact the adoption of this standard will have on our consolidated financial statements and related disclosures. Although we do not expect the effect of changes to our accounting for revenue and contract costs to be significant, we do expect the impacts will include changes to the timing of revenue currently recognized under the completed contract method, changes to the timing of revenue from software licenses bundled with services, and the capitalization of certain contract costs. We do expect an increase in 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 also expect changes to our processes, controls and systems to enable compliance with this new standard. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Mar. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation We recognized $10.2 million and $18.8 million of pre-tax share-based compensation expense during the three and six months ended March 31, 2018 , respectively. We recognized $9.5 million and $20.2 million of pre-tax share-based compensation expense during the three and six months ended March 31, 2017 , 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): Six Months Ended March 31, 2018 2017 Grants Wtd. Avg. Share Fair Value Grants Wtd. Avg. Share Fair Value Stock options 856 $ 35.51 983 $ 25.39 Performance shares 40 219.04 42 174.37 Restricted stock and restricted stock units 34 192.50 46 135.84 Unrestricted stock 7 183.76 8 128.35 |
Inventories
Inventories | 6 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of (in millions): March 31, September 30, Finished goods $ 221.0 $ 218.7 Work in process 185.9 168.0 Raw materials 163.5 172.0 Inventories $ 570.4 $ 558.7 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Mar. 31, 2018 | |
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 six months ended March 31, 2018 , are (in millions): Architecture & Software Control Products & Solutions Total Balance as of September 30, 2017 $ 417.2 $ 660.5 $ 1,077.7 Acquisition of business 6.8 — 6.8 Translation 5.0 14.8 19.8 Balance as of March 31, 2018 $ 429.0 $ 675.3 $ 1,104.3 Other intangible assets consist of (in millions): March 31, 2018 Carrying Amount Accumulated Amortization Net Amortized intangible assets: Computer software products $ 197.7 $ 119.1 $ 78.6 Customer relationships 118.0 67.2 50.8 Technology 109.0 62.7 46.3 Trademarks 33.8 23.9 9.9 Other 12.0 10.4 1.6 Total amortized intangible assets 470.5 283.3 187.2 Allen-Bradley ® trademark not subject to amortization 43.7 — 43.7 Total $ 514.2 $ 283.3 $ 230.9 September 30, 2017 Carrying Amount Accumulated Amortization Net Amortized intangible assets: Computer software products $ 194.8 $ 113.2 $ 81.6 Customer relationships 114.5 61.5 53.0 Technology 104.8 57.9 46.9 Trademarks 32.3 21.1 11.2 Other 11.4 9.8 1.6 Total amortized intangible assets 457.8 263.5 194.3 Allen-Bradley ® trademark not subject to amortization 43.7 — 43.7 Total $ 501.5 $ 263.5 $ 238.0 Estimated amortization expense is $27.9 million in 2018 , $24.9 million in 2019 , $21.9 million in 2020 , $21.1 million in 2021 and $19.1 million in 2022 . We performed our annual evaluation of 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 2018 and concluded that these assets are not impaired. |
Short-term Debt
Short-term Debt | 6 Months Ended |
Mar. 31, 2018 | |
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 $308.0 million and $350.0 million at March 31, 2018 , and September 30, 2017 , respectively. The weighted average interest rate of the commercial paper outstanding was 2.00 percent and 1.26 percent at March 31, 2018 , and September 30, 2017 , respectively. In December 2017, we repaid our $250.0 million 5.65% notes which were classified as the current portion of long-term debt at September 30, 2017 . |
Other Current Liabilities
Other Current Liabilities | 6 Months Ended |
Mar. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities consist of (in millions): March 31, September 30, Unrealized losses on foreign exchange contracts $ 36.6 $ 31.3 Product warranty obligations 32.2 28.5 Taxes other than income taxes 48.6 42.7 Accrued interest 12.3 16.9 Income taxes payable 63.7 32.6 Other 58.6 68.2 Other current liabilities $ 252.0 $ 220.2 |
Product Warranty Obligations
Product Warranty Obligations | 6 Months Ended |
Mar. 31, 2018 | |
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 are (in millions): Six Months Ended 2018 2017 Balance at beginning of period $ 28.5 $ 28.0 Accruals for warranties issued during the current period 12.9 12.5 Adjustments to pre-existing warranties 2.7 (1.7 ) Settlements of warranty claims (11.9 ) (12.2 ) Balance at end of period $ 32.2 $ 26.6 |
Investments
Investments | 6 Months Ended |
Mar. 31, 2018 | |
Investments [Abstract] | |
Investments | Investments We invest in certificates of deposit, time deposits, commercial paper and other fixed income securities. All investments meeting the U.S. GAAP definition of a security were classified as available-for-sale as of March 31, 2018 , and September 30, 2017 . Unrealized gains and losses on available-for-sale investments are included in our Condensed Consolidated Balance Sheet as a component of accumulated other comprehensive loss, net of any deferred taxes. Realized gains and losses are included in net income. Our investments consist of (in millions): March 31, September 30, Certificates of deposit and time deposits $ 539.9 $ 1,005.3 Commercial paper 4.5 20.3 Corporate debt securities 168.1 199.4 Government securities 78.5 116.8 Asset-backed securities 35.3 45.8 Total $ 826.3 $ 1,387.6 Pre-tax gross unrealized gains and losses on available-for-sale investments were not material as of March 31, 2018 . Pre-tax gross realized gains and losses on available-for-sale investments were not material for the three and six months ended March 31, 2018 . At March 31, 2018 , there were no outstanding purchases of investments recorded in accounts payable. We evaluated all investments for which the fair value was less than amortized cost for impairment on an individual security basis at March 31, 2018 . This assessment included consideration of our intent and ability to hold the security and the credit risks specific to each security. We determined that the declines in fair value of these investments were not other than temporary as of March 31, 2018 , and accordingly we did not recognize any impairment charges in net income. The table below summarizes the contractual maturities of our investments as of March 31, 2018 (in millions). Actual maturities may differ from the contractual maturities below as borrowers may have the right to prepay certain obligations. Fair Value Less than one year $ 613.4 Due in one to five years 212.9 Total $ 826.3 Classification of our investments as current or noncurrent is based on the nature of the investment and when the investment is reasonably expected to be realized. These investments were included in the following line items within the Condensed Consolidated Balance Sheet (in millions): March 31, September 30, Short-term investments $ 613.4 $ 1,124.6 Other assets 212.9 263.0 Total $ 826.3 $ 1,387.6 8 . Investments (continued) Fair Value of Investments 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 available-for-sale investments at fair value in the Condensed Consolidated Balance Sheet. The valuation methodologies used for our investments measured at fair value are described as follows. Certificates of deposit and time deposits — These investments are stated at cost, which approximates fair value. Commercial paper — These investments are stated at amortized cost, which approximates fair value. Corporate debt securities — Valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks. Government securities — Valued at the most recent closing price on the active market on which the individual securities are traded or, absent an active market, utilizing observable inputs such as closing prices in less frequently traded markets. Asset-backed securities — Valued using a discounted cash flow approach that maximizes observable inputs, such as current yields of benchmark instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. We did not hold any Level 3 investments or have any transfers between levels of fair value measurements during the periods presented. 8 . Investments (continued) Fair values of our investments were (in millions): March 31, 2018 Level 1 Level 2 Level 3 Total Certificates of deposit and time deposits $ — $ 539.9 $ — $ 539.9 Commercial paper — 4.5 — 4.5 Corporate debt securities — 168.1 — 168.1 Government securities 68.4 10.1 — 78.5 Asset-backed securities — 35.3 — 35.3 Total $ 68.4 $ 757.9 $ — $ 826.3 September 30, 2017 Level 1 Level 2 Level 3 Total Certificates of deposit and time deposits $ — $ 1,005.3 $ — $ 1,005.3 Commercial paper — 20.3 — 20.3 Corporate debt securities — 199.4 — 199.4 Government securities 98.9 17.9 — 116.8 Asset-backed securities — 45.8 — 45.8 Total $ 98.9 $ 1,288.7 $ — $ 1,387.6 |
Retirement Benefits
Retirement Benefits | 6 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Retirement Benefits | Retirement Benefits The components of net periodic benefit cost are (in millions): Pension Benefits Three Months Ended Six Months Ended 2018 2017 2018 2017 Service cost $ 22.4 $ 24.2 $ 44.6 $ 48.3 Interest cost 39.0 37.8 77.8 75.6 Expected return on plan assets (61.5 ) (56.2 ) (122.7 ) (112.4 ) Amortization: Prior service cost (credit) 0.1 (1.1 ) 0.3 (1.9 ) Net actuarial loss 28.4 38.2 56.7 76.2 Settlements — — — 0.2 Net periodic benefit cost $ 28.4 $ 42.9 $ 56.7 $ 86.0 Other Postretirement Benefits Three Months Ended Six Months Ended 2018 2017 2018 2017 Service cost $ 0.3 $ 0.4 $ 0.6 $ 0.7 Interest cost 0.6 0.7 1.2 1.3 Amortization: Prior service credit (1.4 ) (1.5 ) (2.7 ) (3.0 ) Net actuarial loss 0.5 0.6 0.9 1.1 Net periodic benefit cost $ — $ 0.2 $ — $ 0.1 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component were (in millions): Three Months Ended March 31, 2018 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 Net unrealized gains (losses) on available-for-sale investments, net of tax Total accumulated other comprehensive loss, net of tax Balance as of December 31, 2017 $ (906.8 ) $ (253.8 ) $ (13.9 ) $ (1.2 ) $ (1,175.7 ) Other comprehensive income (loss) before reclassifications — 76.5 (6.0 ) (1.5 ) 69.0 Amounts reclassified from accumulated other comprehensive loss 20.2 — 5.0 — 25.2 Other comprehensive income (loss) 20.2 76.5 (1.0 ) (1.5 ) 94.2 Balance as of March 31, 2018 $ (886.6 ) $ (177.3 ) $ (14.9 ) $ (2.7 ) $ (1,081.5 ) Six Months Ended March 31, 2018 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 Net unrealized gains (losses) on available-for-sale investments, net of tax Total accumulated other comprehensive loss, net of tax Balance as of September 30, 2017 $ (927.0 ) $ (237.7 ) $ (14.4 ) $ (0.1 ) $ (1,179.2 ) Other comprehensive income (loss) before reclassifications — 60.4 (9.4 ) (2.6 ) 48.4 Amounts reclassified from accumulated other comprehensive loss 40.4 — 8.9 — 49.3 Other comprehensive income (loss) 40.4 60.4 (0.5 ) (2.6 ) 97.7 Balance as of March 31, 2018 $ (886.6 ) $ (177.3 ) $ (14.9 ) $ (2.7 ) $ (1,081.5 ) 10 . Accumulated Other Comprehensive Loss (continued) Changes in accumulated other comprehensive loss by component were (in millions): Three Months Ended March 31, 2017 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 Net unrealized gains (losses) on available-for-sale investments, net of tax Total accumulated other comprehensive loss, net of tax Balance as of December 31, 2016 $ (1,215.3 ) $ (381.1 ) $ 7.5 $ — $ (1,588.9 ) Other comprehensive income (loss) before reclassifications — 60.8 (2.3 ) (0.1 ) 58.4 Amounts reclassified from accumulated other comprehensive loss 23.8 — (1.3 ) — 22.5 Other comprehensive income (loss) 23.8 60.8 (3.6 ) (0.1 ) 80.9 Balance as of March 31, 2017 $ (1,191.5 ) $ (320.3 ) $ 3.9 $ (0.1 ) $ (1,508.0 ) Six Months Ended March 31, 2017 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 Net unrealized gains (losses) on available-for-sale investments, 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 (25.4 ) 9.5 (0.1 ) (15.3 ) Amounts reclassified from accumulated other comprehensive loss 47.6 — (1.5 ) — 46.1 Other comprehensive income (loss) 48.3 (25.4 ) 8.0 (0.1 ) 30.8 Balance as of March 31, 2017 $ (1,191.5 ) $ (320.3 ) $ 3.9 $ (0.1 ) $ (1,508.0 ) 10 . 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 Six Months Ended Affected Line in the Condensed Consolidated Statement of Operations 2018 2017 2018 2017 Pension and other postretirement benefit plan adjustments: Amortization of prior service credit $ (1.3 ) $ (2.6 ) $ (2.4 ) $ (4.9 ) (a) Amortization of net actuarial loss 28.9 38.8 57.6 77.3 (a) Settlements — — — 0.2 (a) 27.6 36.2 55.2 72.6 Income before income taxes (7.4 ) (12.4 ) (14.8 ) (25.0 ) Income tax provision $ 20.2 $ 23.8 $ 40.4 $ 47.6 Net income Net unrealized losses (gains) on cash flow hedges: Forward exchange contracts $ (0.8 ) $ 1.0 $ (1.3 ) $ 1.5 Sales Forward exchange contracts 8.4 (2.6 ) 14.3 (3.6 ) Cost of sales Forward exchange contracts (0.8 ) 0.3 (1.0 ) 0.6 Selling, general and administrative expenses 6.8 (1.3 ) 12.0 (1.5 ) Income before income taxes (1.8 ) — (3.1 ) — Income tax provision $ 5.0 $ (1.3 ) $ 8.9 $ (1.5 ) Net income Total reclassifications $ 25.2 $ 22.5 $ 49.3 $ 46.1 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 9 for further information. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Mar. 31, 2018 | |
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. 11 . 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 March 31, 2018 , 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 | 6 Months Ended |
Mar. 31, 2018 | |
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. Our base rate reflects a change in the U.S. federal statutory rate from 35 percent to 21 percent resulting from the enactment of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) on December 22, 2017. The rate change was effective for us at the beginning of our fiscal year, using a blended rate for the annual period. As a result, the blended statutory tax rate for our fiscal year 2018 is 24.53 percent . The effective tax rate was 24.1 percent and 101.5 percent in the three and six months ended March 31, 2018 , respectively, compared to 17.7 percent and 17.2 percent in the three and six months ended March 31, 2017 , respectively. The effective tax rate was lower than the U.S. statutory rate of 24.53 percent in the three months ended March 31, 2018 primarily because we benefited from lower non-U.S. tax rates, partially offset by provisional tax charges ( $11.5 million or 3.8 percent ) resulting from the Tax Act which are discussed below. The effective rate was higher than the U.S. statutory rate of 24.53 percent in the six months ended March 31, 2018 due to provisional tax charges ( $491.2 million or 81.8 percent ) resulting from the Tax Act. The effective tax rate was lower than the U.S. statutory rate of 35 percent in the three and six months ended March 31, 2017, primarily because we benefited from lower non-U.S. tax rates, and we also realized a benefit from discrete tax items. Provisional Amounts The Tax Act requires us to revalue our existing U.S. deferred tax balance to reflect the lower statutory tax rate and pay a one-time tax on earnings of certain foreign subsidiaries that were previously deferred from U.S. tax ("transition tax"). At March 31, 2018, we have not completed our accounting for the tax effects of the Tax Act; however, we have made reasonable estimates of its effects on our existing U.S. deferred tax balance and the transition tax and recorded provisional amounts which are included as a component of income tax expense from continuing operations, as discussed in more detail below. We revalued our U.S. deferred tax assets and liabilities based on the rate at which they are expected to reverse in the future, which is either 24.53 percent for reversals in 2018 or 21 percent for reversals in 2019 and subsequent years. However, we are still analyzing certain aspects of the Tax Act and refining our calculations, which could potentially affect the valuation of these balances or potentially give rise to new deferred tax amounts. We have recorded a provisional amount of $94.2 million in the six months ended March 31, 2018, of which the entire amount was recorded in the three months ended December 31, 2017. The Tax Act requires the transition tax to be computed based on our total post-1986 earnings and profits (“E&P”) at December 31, 2017, that were previously deferred from U.S. income tax. As a result, we are required to make reasonable estimates given our September 30 fiscal year. We have recorded provisional amounts of $11.5 million and $397.0 million for the transition tax liability for all of our foreign subsidiaries in the three and six months ended March 31, 2018, respectively. At March 31, 2018, we have recorded income taxes payable of $397.0 million related to the transition tax in the Condensed Consolidated Balance Sheet, of which $34.7 million is recorded within other current liabilities, and $362.3 million is recorded within other liabilities because that portion is payable greater than twelve months from March 31, 2018. 12 . Income Taxes (continued) The transition tax is applied to the balance of post-1986 E&P at rates of 15.5 percent for cash assets (as defined in the Tax Act) and 8 percent for non-cash assets measured at the higher of the balance at September 30, 2018 or the average of the ending balances at September 30, 2016, and September 30, 2017. Our reasonable estimates will change as a result of adjustments impacting E&P, and distributions and other transactions impacting cash. The Company anticipates that it will complete its accounting for the transition tax at December 31, 2018. These uncertainties form the basis for the Company’s provisional reporting based upon reasonable estimates at March 31, 2018. The Company has historically accounted for the earnings of its foreign subsidiaries as being indefinitely reinvested under ASC 740-30. As a result of the broad changes to the U.S. international tax system under the Tax Act, the Company will begin to account for substantially all of its non-U.S. subsidiaries as being immediately subject to tax other than in certain limited circumstances. The Company has provided for taxes on the balance of historic and current earnings that may be subject to foreign withholding and U.S. state taxes. For future distributions related to historic earnings, we recorded deferred tax liabilities of $59.8 million related to foreign withholding taxes, and deferred tax assets of $59.8 million related to foreign tax credits attributable to the foreign withholding taxes. These provisional amounts are presented net within deferred income tax assets in the Condensed Consolidated Balance Sheet as of March 31, 2018. We have not yet completed our assessment of whether a portion of these assets and liabilities should be presented as gross amounts. Unrecognized Tax Benefits The amount of gross unrecognized tax benefits was $28.2 million and $31.1 million at March 31, 2018 , and September 30, 2017 , respectively, of which the entire amount would reduce our effective tax rate if recognized. Accrued interest and penalties related to unrecognized tax benefits were $4.1 million and $4.0 million at March 31, 2018 , and September 30, 2017 , 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 $7.4 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 $8.5 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 | 6 Months Ended |
Mar. 31, 2018 | |
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 Six Months Ended 2018 2017 2018 2017 Sales Architecture & Software $ 768.4 $ 719.0 $ 1,515.3 $ 1,415.4 Control Products & Solutions 882.8 835.3 1,722.5 1,629.2 Total $ 1,651.2 $ 1,554.3 $ 3,237.8 $ 3,044.6 Segment operating earnings Architecture & Software $ 218.2 $ 190.6 $ 442.8 $ 399.2 Control Products & Solutions 126.9 105.4 257.8 213.4 Total 345.1 296.0 700.6 612.6 Purchase accounting depreciation and amortization (4.5 ) (5.6 ) (8.9 ) (11.2 ) General corporate – net (17.8 ) (21.4 ) (34.0 ) (36.3 ) Non-operating pension costs (5.9 ) (19.8 ) (11.8 ) (39.6 ) Costs related to unsolicited Emerson proposals — — (11.2 ) — Interest expense (17.3 ) (18.9 ) (37.3 ) (37.6 ) Income before income taxes $ 299.6 $ 230.3 $ 597.4 $ 487.9 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 corporate initiatives, gains and losses from the disposition of businesses and purchase accounting depreciation and amortization. We incurred $11.2 million of third-party advisory fees in connection with our evaluation of unsolicited Emerson acquisition proposals in the first quarter of 2018. 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) | 6 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Receivables | Receivables Receivables are stated net of an allowance for doubtful accounts of $23.1 million at March 31, 2018 , and $24.9 million at September 30, 2017 . In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $7.5 million at March 31, 2018 , and $11.9 million at September 30, 2017 . |
Recent accounting pronouncements | Recent Accounting Pronouncements In March 2017, the FASB issued a new standard regarding the presentation of net periodic pension and postretirement benefit costs. This standard requires the service cost component to be reported in the income statement in the same line item as other compensation costs arising from services rendered by the related employees during the period. The other components of net periodic benefit cost are required to be presented separately from the service cost component in either a separate line item or within another appropriate line item with disclosure of where those costs are recorded. This standard also requires that only the service cost component is eligible for capitalization, when applicable. This standard is effective for us for reporting periods starting October 1, 2018. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements and related disclosures. 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 standard is effective for us for reporting periods beginning October 1, 2019. We are currently evaluating the impact the adoption of this standard 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 under the modified retrospective method in the first quarter of fiscal 2019, with the cumulative effect of initially applying the guidance recognized in retained earnings at the adoption date. We have established a project plan and a cross-functional implementation team to adopt the new revenue standard. We are in the process of identifying and implementing necessary changes to accounting policies, processes, controls and systems to enable compliance with this new standard. We continue to evaluate the impact the adoption of this standard will have on our consolidated financial statements and related disclosures. Although we do not expect the effect of changes to our accounting for revenue and contract costs to be significant, we do expect the impacts will include changes to the timing of revenue currently recognized under the completed contract method, changes to the timing of revenue from software licenses bundled with services, and the capitalization of certain contract costs. We do expect an increase in 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 also expect changes to our processes, controls and systems to enable compliance with this new standard. |
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. |
Investments | We invest in certificates of deposit, time deposits, commercial paper and other fixed income securities. All investments meeting the U.S. GAAP definition of a security were classified as available-for-sale as of March 31, 2018 , and September 30, 2017 . Unrealized gains and losses on available-for-sale investments are included in our Condensed Consolidated Balance Sheet as a component of accumulated other comprehensive loss, net of any deferred taxes. Realized gains and losses are included in net income. |
Fair Value of Financial Instruments | Fair Value of Investments 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 available-for-sale investments at fair value in the Condensed Consolidated Balance Sheet. The valuation methodologies used for our investments measured at fair value are described as follows. Certificates of deposit and time deposits — These investments are stated at cost, which approximates fair value. Commercial paper — These investments are stated at amortized cost, which approximates fair value. Corporate debt securities — Valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks. Government securities — Valued at the most recent closing price on the active market on which the individual securities are traded or, absent an active market, utilizing observable inputs such as closing prices in less frequently traded markets. Asset-backed securities — Valued using a discounted cash flow approach that maximizes observable inputs, such as current yields of benchmark instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. We did not hold any Level 3 investments or have any transfers between levels of fair value measurements during the periods presented. |
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) | 6 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reconciles basic and diluted earnings (loss) per share (EPS) amounts (in millions, except per share amounts): Three Months Ended Six Months Ended 2018 2017 2018 2017 Net income (loss) $ 227.4 $ 189.5 $ (9.0 ) $ 404.2 Less: Allocation to participating securities (0.2 ) (0.2 ) — (0.4 ) Net income (loss) available to common shareowners $ 227.2 $ 189.3 $ (9.0 ) $ 403.8 Basic weighted average outstanding shares 126.9 128.7 127.6 128.5 Effect of dilutive securities Stock options 1.4 1.3 — 1.3 Performance shares 0.2 0.3 — 0.2 Diluted weighted average outstanding shares 128.5 130.3 127.6 130.0 Earnings (loss) per share: Basic $ 1.79 $ 1.47 $ (0.07 ) $ 3.14 Diluted $ 1.77 $ 1.45 $ (0.07 ) $ 3.11 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
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): Six Months Ended March 31, 2018 2017 Grants Wtd. Avg. Share Fair Value Grants Wtd. Avg. Share Fair Value Stock options 856 $ 35.51 983 $ 25.39 Performance shares 40 219.04 42 174.37 Restricted stock and restricted stock units 34 192.50 46 135.84 Unrestricted stock 7 183.76 8 128.35 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories consist of (in millions): March 31, September 30, Finished goods $ 221.0 $ 218.7 Work in process 185.9 168.0 Raw materials 163.5 172.0 Inventories $ 570.4 $ 558.7 |
Goodwill and Other Intangible25
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying amount of goodwill for the six months ended March 31, 2018 , are (in millions): Architecture & Software Control Products & Solutions Total Balance as of September 30, 2017 $ 417.2 $ 660.5 $ 1,077.7 Acquisition of business 6.8 — 6.8 Translation 5.0 14.8 19.8 Balance as of March 31, 2018 $ 429.0 $ 675.3 $ 1,104.3 |
Schedule of Finite Lived and Indefinite Lived Intangible Assets by Major Class | Other intangible assets consist of (in millions): March 31, 2018 Carrying Amount Accumulated Amortization Net Amortized intangible assets: Computer software products $ 197.7 $ 119.1 $ 78.6 Customer relationships 118.0 67.2 50.8 Technology 109.0 62.7 46.3 Trademarks 33.8 23.9 9.9 Other 12.0 10.4 1.6 Total amortized intangible assets 470.5 283.3 187.2 Allen-Bradley ® trademark not subject to amortization 43.7 — 43.7 Total $ 514.2 $ 283.3 $ 230.9 September 30, 2017 Carrying Amount Accumulated Amortization Net Amortized intangible assets: Computer software products $ 194.8 $ 113.2 $ 81.6 Customer relationships 114.5 61.5 53.0 Technology 104.8 57.9 46.9 Trademarks 32.3 21.1 11.2 Other 11.4 9.8 1.6 Total amortized intangible assets 457.8 263.5 194.3 Allen-Bradley ® trademark not subject to amortization 43.7 — 43.7 Total $ 501.5 $ 263.5 $ 238.0 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | Other current liabilities consist of (in millions): March 31, September 30, Unrealized losses on foreign exchange contracts $ 36.6 $ 31.3 Product warranty obligations 32.2 28.5 Taxes other than income taxes 48.6 42.7 Accrued interest 12.3 16.9 Income taxes payable 63.7 32.6 Other 58.6 68.2 Other current liabilities $ 252.0 $ 220.2 |
Product Warranty Obligations (T
Product Warranty Obligations (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Product Warranty Liability | Changes in product warranty obligations are (in millions): Six Months Ended 2018 2017 Balance at beginning of period $ 28.5 $ 28.0 Accruals for warranties issued during the current period 12.9 12.5 Adjustments to pre-existing warranties 2.7 (1.7 ) Settlements of warranty claims (11.9 ) (12.2 ) Balance at end of period $ 32.2 $ 26.6 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Investments [Abstract] | |
Investment | Our investments consist of (in millions): March 31, September 30, Certificates of deposit and time deposits $ 539.9 $ 1,005.3 Commercial paper 4.5 20.3 Corporate debt securities 168.1 199.4 Government securities 78.5 116.8 Asset-backed securities 35.3 45.8 Total $ 826.3 $ 1,387.6 |
Investments Classified by Contractual Maturity Date | The table below summarizes the contractual maturities of our investments as of March 31, 2018 (in millions). Actual maturities may differ from the contractual maturities below as borrowers may have the right to prepay certain obligations. Fair Value Less than one year $ 613.4 Due in one to five years 212.9 Total $ 826.3 |
Fair Value, by Balance Sheet Grouping | Classification of our investments as current or noncurrent is based on the nature of the investment and when the investment is reasonably expected to be realized. These investments were included in the following line items within the Condensed Consolidated Balance Sheet (in millions): March 31, September 30, Short-term investments $ 613.4 $ 1,124.6 Other assets 212.9 263.0 Total $ 826.3 $ 1,387.6 |
Fair Value Measurements, Recurring and Nonrecurring | Fair values of our investments were (in millions): March 31, 2018 Level 1 Level 2 Level 3 Total Certificates of deposit and time deposits $ — $ 539.9 $ — $ 539.9 Commercial paper — 4.5 — 4.5 Corporate debt securities — 168.1 — 168.1 Government securities 68.4 10.1 — 78.5 Asset-backed securities — 35.3 — 35.3 Total $ 68.4 $ 757.9 $ — $ 826.3 September 30, 2017 Level 1 Level 2 Level 3 Total Certificates of deposit and time deposits $ — $ 1,005.3 $ — $ 1,005.3 Commercial paper — 20.3 — 20.3 Corporate debt securities — 199.4 — 199.4 Government securities 98.9 17.9 — 116.8 Asset-backed securities — 45.8 — 45.8 Total $ 98.9 $ 1,288.7 $ — $ 1,387.6 |
Retirement Benefits (Tables)
Retirement Benefits (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | The components of net periodic benefit cost are (in millions): Pension Benefits Three Months Ended Six Months Ended 2018 2017 2018 2017 Service cost $ 22.4 $ 24.2 $ 44.6 $ 48.3 Interest cost 39.0 37.8 77.8 75.6 Expected return on plan assets (61.5 ) (56.2 ) (122.7 ) (112.4 ) Amortization: Prior service cost (credit) 0.1 (1.1 ) 0.3 (1.9 ) Net actuarial loss 28.4 38.2 56.7 76.2 Settlements — — — 0.2 Net periodic benefit cost $ 28.4 $ 42.9 $ 56.7 $ 86.0 Other Postretirement Benefits Three Months Ended Six Months Ended 2018 2017 2018 2017 Service cost $ 0.3 $ 0.4 $ 0.6 $ 0.7 Interest cost 0.6 0.7 1.2 1.3 Amortization: Prior service credit (1.4 ) (1.5 ) (2.7 ) (3.0 ) Net actuarial loss 0.5 0.6 0.9 1.1 Net periodic benefit cost $ — $ 0.2 $ — $ 0.1 |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive loss by component were (in millions): Three Months Ended March 31, 2018 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 Net unrealized gains (losses) on available-for-sale investments, net of tax Total accumulated other comprehensive loss, net of tax Balance as of December 31, 2017 $ (906.8 ) $ (253.8 ) $ (13.9 ) $ (1.2 ) $ (1,175.7 ) Other comprehensive income (loss) before reclassifications — 76.5 (6.0 ) (1.5 ) 69.0 Amounts reclassified from accumulated other comprehensive loss 20.2 — 5.0 — 25.2 Other comprehensive income (loss) 20.2 76.5 (1.0 ) (1.5 ) 94.2 Balance as of March 31, 2018 $ (886.6 ) $ (177.3 ) $ (14.9 ) $ (2.7 ) $ (1,081.5 ) Six Months Ended March 31, 2018 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 Net unrealized gains (losses) on available-for-sale investments, net of tax Total accumulated other comprehensive loss, net of tax Balance as of September 30, 2017 $ (927.0 ) $ (237.7 ) $ (14.4 ) $ (0.1 ) $ (1,179.2 ) Other comprehensive income (loss) before reclassifications — 60.4 (9.4 ) (2.6 ) 48.4 Amounts reclassified from accumulated other comprehensive loss 40.4 — 8.9 — 49.3 Other comprehensive income (loss) 40.4 60.4 (0.5 ) (2.6 ) 97.7 Balance as of March 31, 2018 $ (886.6 ) $ (177.3 ) $ (14.9 ) $ (2.7 ) $ (1,081.5 ) 10 . Accumulated Other Comprehensive Loss (continued) Changes in accumulated other comprehensive loss by component were (in millions): Three Months Ended March 31, 2017 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 Net unrealized gains (losses) on available-for-sale investments, net of tax Total accumulated other comprehensive loss, net of tax Balance as of December 31, 2016 $ (1,215.3 ) $ (381.1 ) $ 7.5 $ — $ (1,588.9 ) Other comprehensive income (loss) before reclassifications — 60.8 (2.3 ) (0.1 ) 58.4 Amounts reclassified from accumulated other comprehensive loss 23.8 — (1.3 ) — 22.5 Other comprehensive income (loss) 23.8 60.8 (3.6 ) (0.1 ) 80.9 Balance as of March 31, 2017 $ (1,191.5 ) $ (320.3 ) $ 3.9 $ (0.1 ) $ (1,508.0 ) Six Months Ended March 31, 2017 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 Net unrealized gains (losses) on available-for-sale investments, 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 (25.4 ) 9.5 (0.1 ) (15.3 ) Amounts reclassified from accumulated other comprehensive loss 47.6 — (1.5 ) — 46.1 Other comprehensive income (loss) 48.3 (25.4 ) 8.0 (0.1 ) 30.8 Balance as of March 31, 2017 $ (1,191.5 ) $ (320.3 ) $ 3.9 $ (0.1 ) $ (1,508.0 ) |
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 Six Months Ended Affected Line in the Condensed Consolidated Statement of Operations 2018 2017 2018 2017 Pension and other postretirement benefit plan adjustments: Amortization of prior service credit $ (1.3 ) $ (2.6 ) $ (2.4 ) $ (4.9 ) (a) Amortization of net actuarial loss 28.9 38.8 57.6 77.3 (a) Settlements — — — 0.2 (a) 27.6 36.2 55.2 72.6 Income before income taxes (7.4 ) (12.4 ) (14.8 ) (25.0 ) Income tax provision $ 20.2 $ 23.8 $ 40.4 $ 47.6 Net income Net unrealized losses (gains) on cash flow hedges: Forward exchange contracts $ (0.8 ) $ 1.0 $ (1.3 ) $ 1.5 Sales Forward exchange contracts 8.4 (2.6 ) 14.3 (3.6 ) Cost of sales Forward exchange contracts (0.8 ) 0.3 (1.0 ) 0.6 Selling, general and administrative expenses 6.8 (1.3 ) 12.0 (1.5 ) Income before income taxes (1.8 ) — (3.1 ) — Income tax provision $ 5.0 $ (1.3 ) $ 8.9 $ (1.5 ) Net income Total reclassifications $ 25.2 $ 22.5 $ 49.3 $ 46.1 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 9 for further information. |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Mar. 31, 2018 | |
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 Six Months Ended 2018 2017 2018 2017 Sales Architecture & Software $ 768.4 $ 719.0 $ 1,515.3 $ 1,415.4 Control Products & Solutions 882.8 835.3 1,722.5 1,629.2 Total $ 1,651.2 $ 1,554.3 $ 3,237.8 $ 3,044.6 Segment operating earnings Architecture & Software $ 218.2 $ 190.6 $ 442.8 $ 399.2 Control Products & Solutions 126.9 105.4 257.8 213.4 Total 345.1 296.0 700.6 612.6 Purchase accounting depreciation and amortization (4.5 ) (5.6 ) (8.9 ) (11.2 ) General corporate – net (17.8 ) (21.4 ) (34.0 ) (36.3 ) Non-operating pension costs (5.9 ) (19.8 ) (11.8 ) (39.6 ) Costs related to unsolicited Emerson proposals — — (11.2 ) — Interest expense (17.3 ) (18.9 ) (37.3 ) (37.6 ) Income before income taxes $ 299.6 $ 230.3 $ 597.4 $ 487.9 |
Basis of Presentation and Acc32
Basis of Presentation and Accounting Policies - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | |||||
Allowance for doubtful accounts | $ 23.1 | $ 23.1 | $ 24.9 | ||
Allowance for certain customer returns, rebates and incentives | $ 7.5 | $ 7.5 | $ 11.9 | ||
Common shares excluded from computation of earnings per share amount (in shares) | 2.6 | ||||
Common shares included in computation of earnings per share if net income from continuing operations, amount (in shares) | 1.7 | ||||
Antidilutive share-based compensation awards (in shares) | 0.9 | 1 | 0.9 | 1 | |
Capital expenditures in accounts payable or other current liabilities at period end | $ 14 | $ 17.6 | |||
Outstanding purchase of common stock recorded in accounts payable | $ 12.3 | $ 7 |
Basis of Presentation and Acc33
Basis of Presentation and Accounting Policies - Reconciliation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Reconciled Basic and Diluted EPS | ||||
Net income (loss) | $ 227.4 | $ 189.5 | $ (9) | $ 404.2 |
Less: Allocation to participating securities | (0.2) | (0.2) | 0 | (0.4) |
Net income (loss) available to common shareowners | $ 227.2 | $ 189.3 | $ (9) | $ 403.8 |
Basic weighted average outstanding shares (in shares) | 126.9 | 128.7 | 127.6 | 128.5 |
Effect of dilutive securities | ||||
Stock options (in shares) | 1.4 | 1.3 | 0 | 1.3 |
Performance shares (in shares) | 0.2 | 0.3 | 0 | 0.2 |
Diluted weighted average outstanding shares (in shares) | 128.5 | 130.3 | 127.6 | 130 |
Earnings (loss) per share: | ||||
Basic (in usd per share) | $ 1.79 | $ 1.47 | $ (0.07) | $ 3.14 |
Diluted (in usd per share) | $ 1.77 | $ 1.45 | $ (0.07) | $ 3.11 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Share-Based Compensation (Textual) [Abstract] | ||||
Pre-tax share-based compensation expense | $ 10.2 | $ 9.5 | $ 18.8 | $ 20.2 |
Stock options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants ( in usd per share) | 856 | 983 | ||
Wtd. Avg. Share Fair Value ( in usd per share) | $ 35.51 | $ 25.39 | ||
Performance shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants ( in shares) | 40 | 42 | ||
Wtd. Avg. Share Fair Value (in shares) | $ 219.04 | $ 174.37 | ||
Restricted stock and restricted stock units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants ( in shares) | 34 | 46 | ||
Wtd. Avg. Share Fair Value (in shares) | $ 192.50 | $ 135.84 | ||
Unrestricted stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Grants ( in shares) | 7 | 8 | ||
Wtd. Avg. Share Fair Value (in shares) | $ 183.76 | $ 128.35 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Inventories | ||
Finished goods | $ 221 | $ 218.7 |
Work in process | 185.9 | 168 |
Raw materials | 163.5 | 172 |
Inventories | $ 570.4 | $ 558.7 |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets - Changes in Carrying Amount of Goodwill (Details) $ in Millions | 6 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill | |
Balance at beginning of period | $ 1,077.7 |
Acquisition of business | 6.8 |
Translation | 19.8 |
Balance at end of period | 1,104.3 |
Architecture & Software [Member] | |
Goodwill | |
Balance at beginning of period | 417.2 |
Acquisition of business | 6.8 |
Translation | 5 |
Balance at end of period | 429 |
Control Products & Solutions [Member] | |
Goodwill | |
Balance at beginning of period | 660.5 |
Acquisition of business | 0 |
Translation | 14.8 |
Balance at end of period | $ 675.3 |
Goodwill and Other Intangible37
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Other intangible assets | ||
Amortized intangible assets, carrying amount | $ 470.5 | $ 457.8 |
Amortized intangible assets, accumulated amortization | 283.3 | 263.5 |
Amortized intangible assets, net | 187.2 | 194.3 |
Total, carrying amount | 514.2 | 501.5 |
Total, net | 230.9 | 238 |
Goodwill and Other Intangible Assets (Textual) [Abstract] | ||
Estimated amortization expense in 2018 | 27.9 | |
Estimated amortization expense in 2019 | 24.9 | |
Estimated amortization expense in 2020 | 21.9 | |
Estimated amortization expense in 2021 | 21.1 | |
Estimated amortization expense in 2022 | 19.1 | |
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 | 197.7 | 194.8 |
Amortized intangible assets, accumulated amortization | 119.1 | 113.2 |
Amortized intangible assets, net | 78.6 | 81.6 |
Customer relationships [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 118 | 114.5 |
Amortized intangible assets, accumulated amortization | 67.2 | 61.5 |
Amortized intangible assets, net | 50.8 | 53 |
Technology [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 109 | 104.8 |
Amortized intangible assets, accumulated amortization | 62.7 | 57.9 |
Amortized intangible assets, net | 46.3 | 46.9 |
Trademarks [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 33.8 | 32.3 |
Amortized intangible assets, accumulated amortization | 23.9 | 21.1 |
Amortized intangible assets, net | 9.9 | 11.2 |
Other [Member] | ||
Other intangible assets | ||
Amortized intangible assets, carrying amount | 12 | 11.4 |
Amortized intangible assets, accumulated amortization | 10.4 | 9.8 |
Amortized intangible assets, net | $ 1.6 | $ 1.6 |
Short-term Debt - Narrative (De
Short-term Debt - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Short-term Debt [Abstract] | ||
Commercial paper borrowings outstanding | $ 308 | $ 350 |
Weighted average interest rate of commercial paper outstanding | 2.00% | 1.26% |
Current portion of long-term debt | $ 0 | $ 250 |
Stated interest rate percentage | 5.65% |
Other Current Liabilities - Sch
Other Current Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 |
Other current liabilities | ||||
Unrealized losses on foreign exchange contracts | $ 36.6 | $ 31.3 | ||
Product warranty obligations | 32.2 | 28.5 | $ 26.6 | $ 28 |
Taxes other than income taxes | 48.6 | 42.7 | ||
Accrued interest | 12.3 | 16.9 | ||
Income taxes payable | 63.7 | 32.6 | ||
Other | 58.6 | 68.2 | ||
Other current liabilities | $ 252 | $ 220.2 |
Product Warranty Obligations -
Product Warranty Obligations - Schedule of Changes in Product Warranty Obligations (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Changes in product warranty obligations | ||
Balance at beginning of period | $ 28.5 | $ 28 |
Accruals for warranties issued during the current period | 12.9 | 12.5 |
Adjustments to pre-existing warranties | 2.7 | (1.7) |
Settlements of warranty claims | (11.9) | (12.2) |
Balance at end of period | $ 32.2 | $ 26.6 |
Investments - Schedule of Inves
Investments - Schedule of Investments (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Investment [Line Items] | ||
Total | $ 826.3 | $ 1,387.6 |
Certificates of deposit and time deposits [Member] | ||
Investment [Line Items] | ||
Total | 539.9 | 1,005.3 |
Commercial paper [Member] | ||
Investment [Line Items] | ||
Total | 4.5 | 20.3 |
Corporate debt securities [Member] | ||
Investment [Line Items] | ||
Total | 168.1 | 199.4 |
Government securities [Member] | ||
Investment [Line Items] | ||
Total | 78.5 | 116.8 |
Asset-backed Securities [Member] | ||
Investment [Line Items] | ||
Total | $ 35.3 | $ 45.8 |
Investments - Contractual Matur
Investments - Contractual Maturities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Investments [Abstract] | ||
Less than one year | $ 613.4 | |
Due in one to five years | 212.9 | |
Total | $ 826.3 | $ 1,387.6 |
Investments - Investments Inclu
Investments - Investments Included Within Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | $ 826.3 | $ 1,387.6 |
Short-term Investments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | 613.4 | 1,124.6 |
Other Assets [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total | $ 212.9 | $ 263 |
Investments - Fair Values of In
Investments - Fair Values of Investments (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Sep. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 826.3 | $ 1,387.6 |
Certificates of deposit and time deposits [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 539.9 | 1,005.3 |
Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 4.5 | 20.3 |
Corporate debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 168.1 | 199.4 |
Government securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 78.5 | 116.8 |
Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 35.3 | 45.8 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 68.4 | 98.9 |
Fair Value, Inputs, Level 1 [Member] | Certificates of deposit and time deposits [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Corporate debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Government securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 68.4 | 98.9 |
Fair Value, Inputs, Level 1 [Member] | Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 757.9 | 1,288.7 |
Fair Value, Inputs, Level 2 [Member] | Certificates of deposit and time deposits [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 539.9 | 1,005.3 |
Fair Value, Inputs, Level 2 [Member] | Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 4.5 | 20.3 |
Fair Value, Inputs, Level 2 [Member] | Corporate debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 168.1 | 199.4 |
Fair Value, Inputs, Level 2 [Member] | Government securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 10.1 | 17.9 |
Fair Value, Inputs, Level 2 [Member] | Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 35.3 | 45.8 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Certificates of deposit and time deposits [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Commercial paper [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Corporate debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Government securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 | $ 0 |
Retirement Benefits - Component
Retirement Benefits - Components of Net Periodic Benefit Cost (Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Pension Benefits [Member] | ||||
Components of net periodic benefit cost (income) | ||||
Service cost | $ 22.4 | $ 24.2 | $ 44.6 | $ 48.3 |
Interest cost | 39 | 37.8 | 77.8 | 75.6 |
Expected return on plan assets | (61.5) | (56.2) | (122.7) | (112.4) |
Amortization: | ||||
Prior service cost (credit) | 0.1 | (1.1) | 0.3 | (1.9) |
Net actuarial loss | 28.4 | 38.2 | 56.7 | 76.2 |
Settlements | 0 | 0 | 0 | 0.2 |
Net periodic benefit cost | 28.4 | 42.9 | 56.7 | 86 |
Other Postretirement Benefits [Member] | ||||
Components of net periodic benefit cost (income) | ||||
Service cost | 0.3 | 0.4 | 0.6 | 0.7 |
Interest cost | 0.6 | 0.7 | 1.2 | 1.3 |
Amortization: | ||||
Prior service cost (credit) | (1.4) | (1.5) | (2.7) | (3) |
Net actuarial loss | 0.5 | 0.6 | 0.9 | 1.1 |
Net periodic benefit cost | $ 0 | $ 0.2 | $ 0 | $ 0.1 |
Accumulated Other Comprehensi46
Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss by Component (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ 2,663.6 | |||
Other comprehensive income (loss) before reclassifications | $ 69 | $ 58.4 | 48.4 | $ (15.3) |
Amounts reclassified from accumulated other comprehensive loss | 25.2 | 22.5 | 49.3 | 46.1 |
Other comprehensive income (loss) | 94.2 | 80.9 | 97.7 | 30.8 |
Balance at end of period | 1,947.2 | 1,947.2 | ||
Pension and other postretirement benefit plan adjustments [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (906.8) | (1,215.3) | (927) | (1,239.8) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0.7 |
Amounts reclassified from accumulated other comprehensive loss | 20.2 | 23.8 | 40.4 | 47.6 |
Other comprehensive income (loss) | 20.2 | 23.8 | 40.4 | 48.3 |
Balance at end of period | (886.6) | (1,191.5) | (886.6) | (1,191.5) |
Accumulated currency translation adjustments [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (253.8) | (381.1) | (237.7) | (294.9) |
Other comprehensive income (loss) before reclassifications | 76.5 | 60.8 | 60.4 | (25.4) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | 76.5 | 60.8 | 60.4 | (25.4) |
Balance at end of period | (177.3) | (320.3) | (177.3) | (320.3) |
Net unrealized gains (losses) on cash flow hedges [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (13.9) | 7.5 | (14.4) | (4.1) |
Other comprehensive income (loss) before reclassifications | (6) | (2.3) | (9.4) | 9.5 |
Amounts reclassified from accumulated other comprehensive loss | 5 | (1.3) | 8.9 | (1.5) |
Other comprehensive income (loss) | (1) | (3.6) | (0.5) | 8 |
Balance at end of period | (14.9) | 3.9 | (14.9) | 3.9 |
Net unrealized gains (losses) on available-for-sale investments [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (1.2) | 0 | (0.1) | 0 |
Other comprehensive income (loss) before reclassifications | (1.5) | (0.1) | (2.6) | (0.1) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Other comprehensive income (loss) | (1.5) | (0.1) | (2.6) | (0.1) |
Balance at end of period | (2.7) | (0.1) | (2.7) | (0.1) |
AOCI Attributable to Parent [Member] | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (1,175.7) | (1,588.9) | (1,179.2) | (1,538.8) |
Balance at end of period | $ (1,081.5) | $ (1,508) | $ (1,081.5) | $ (1,508) |
Accumulated Other Comprehensi47
Accumulated Other Comprehensive Loss - Reclassifications out of Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | $ 299.6 | $ 230.3 | $ 597.4 | $ 487.9 |
Income tax provision | (72.2) | (40.8) | (606.4) | (83.7) |
Sales | (1,651.2) | (1,554.3) | (3,237.8) | (3,044.6) |
Cost of sales | (950.4) | (897.8) | (1,839.9) | (1,745.8) |
Selling, general and administrative expenses | (389.2) | (409.2) | (778.5) | (779.2) |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net income | 25.2 | 22.5 | 49.3 | 46.1 |
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 (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 27.6 | 36.2 | 55.2 | 72.6 |
Income tax provision | (7.4) | (12.4) | (14.8) | (25) |
Net income | 20.2 | 23.8 | 40.4 | 47.6 |
Amortization Of Prior Service Credit [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | (1.3) | (2.6) | (2.4) | (4.9) |
Amortization Of Net Actuarial Loss [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 28.9 | 38.8 | 57.6 | 77.3 |
Settlements [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 0 | 0 | 0 | 0.2 |
Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest [Member] | Reclassification out of Accumulated Other Comprehensive Loss [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 6.8 | (1.3) | 12 | (1.5) |
Income tax provision | (1.8) | 0 | (3.1) | 0 |
Net income | 5 | (1.3) | 8.9 | (1.5) |
Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest [Member] | Foreign Exchange Contracts [Member] | Reclassification out of Accumulated Other Comprehensive Loss [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Sales | 0.8 | (1) | 1.3 | (1.5) |
Cost of sales | 8.4 | (2.6) | 14.3 | (3.6) |
Selling, general and administrative expenses | $ (0.8) | $ 0.3 | $ (1) | $ 0.6 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Contingency [Line Items] | ||||||
U.S. statutory rate | 2453.00% | |||||
Effective income tax rate | 24.10% | 17.70% | 101.50% | 17.20% | ||
Effective income tax rate reconciliation, effect of tax cuts and jobs act of 2017, amount | $ 11.5 | $ 491.2 | ||||
Effective income tax rate reconciliation, effect of tax cuts and jobs act of 2017, percent | 3.80% | 81.80% | ||||
Tax adjustments, settlements, and unusual provisions | $ 94.2 | |||||
Effective income tax rate reconciliation, repatriation of foreign earnings, amount | $ 11.5 | 397 | ||||
Tax Cuts and Jobs Act of 2017, incomplete accounting, transition tax for accumulated foreign earnings, provisional liability | 397 | $ 397 | ||||
Transition tax percentage, cash assets | 15.50% | |||||
Transition tax assets, non-cash assets | 8.00% | |||||
Deferred tax liabilities, deferred expense | 59.8 | $ 59.8 | ||||
Deferred tax assets, deferred income | 59.8 | 59.8 | ||||
Gross unrecognized tax benefits | 28.2 | 28.2 | $ 31.1 | |||
Accrued interest and penalties related to unrecognized tax benefits | 4.1 | 4.1 | $ 4 | |||
Reasonably possible amount of reduction in gross unrecognized tax benefits for the next twelve months | 7.4 | 7.4 | ||||
Reasonably possible amount of net reduction to income tax provision if unrecognized tax benefits were recognized | 8.5 | $ 8.5 | ||||
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 | |||||
Scenario, Forecast [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
U.S. statutory rate | 24.53% | |||||
Other Current Liabilities [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Tax Cuts and Jobs Act of 2017, incomplete accounting, transition tax for accumulated foreign earnings, provisional liability | 34.7 | $ 34.7 | ||||
Other Liabilities [Member] | ||||||
Income Tax Contingency [Line Items] | ||||||
Tax Cuts and Jobs Act of 2017, incomplete accounting, transition tax for accumulated foreign earnings, provisional liability | $ 362.3 | $ 362.3 |
Business Segment Information -
Business Segment Information - Sales and Operating Results of Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Sales and operating results of reportable segments | |||||
Sales | $ 1,651.2 | $ 1,554.3 | $ 3,237.8 | $ 3,044.6 | |
Purchase accounting depreciation and amortization | (4.5) | (5.6) | (8.9) | (11.2) | |
General corporate – net | (17.8) | (21.4) | (34) | (36.3) | |
Non-operating pension costs | (5.9) | (19.8) | (11.8) | (39.6) | |
Costs related to unsolicited Emerson proposals | 0 | 0 | (11.2) | 0 | |
Interest expense | (17.3) | (18.9) | (37.3) | (37.6) | |
Income before income taxes | 299.6 | 230.3 | 597.4 | 487.9 | |
Third-party advisory fees | $ 11.2 | ||||
Operating Segments [Member] | |||||
Sales and operating results of reportable segments | |||||
Sales | 1,651.2 | 1,554.3 | 3,237.8 | 3,044.6 | |
Operating Income (Loss) | 345.1 | 296 | 700.6 | 612.6 | |
Architecture & Software [Member] | Operating Segments [Member] | |||||
Sales and operating results of reportable segments | |||||
Sales | 768.4 | 719 | 1,515.3 | 1,415.4 | |
Operating Income (Loss) | 218.2 | 190.6 | 442.8 | 399.2 | |
Control Products & Solutions [Member] | Operating Segments [Member] | |||||
Sales and operating results of reportable segments | |||||
Sales | 882.8 | 835.3 | 1,722.5 | 1,629.2 | |
Operating Income (Loss) | $ 126.9 | $ 105.4 | $ 257.8 | $ 213.4 |