falsedesktopROK2020-12-31000102447821000005{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Large Accelerated Filer\t☑\tAccelerated Filer\t☐\nNon-accelerated Filer\t☐\tSmaller Reporting Company\t☐\n\t\tEmerging Growth Company\t☐\n", "q10k_tbl_1": "\tPage No.\nPART I. FINANCIAL INFORMATION\t\nItem 1. Consolidated Financial Statements:\t\nConsolidated Balance Sheet\t4\nConsolidated Statement of Operations\t5\nConsolidated Statement of Comprehensive Income\t6\nConsolidated Statement of Cash Flows\t7\nConsolidated Statement of Shareowners' Equity\t8\nNotes to Consolidated Financial Statements\t9\nReport of Independent Registered Public Accounting Firm\t25\nItem 2. Management's Discussion and Analysis of Financial Condition and Results of Operations\t26\nItem 3. Quantitative and Qualitative Disclosures About Market Risk\t41\nItem 4. Controls and Procedures\t41\nPART II. OTHER INFORMATION\t\nItem 1. Legal Proceedings\t42\nItem 1A. Risk Factors\t42\nItem 2. Unregistered Sales of Equity Securities and Use of Proceeds\t43\nItem 6. Exhibits\t44\nSignatures\t45\n", "q10k_tbl_2": "\tDecember 31 2020\tSeptember 30 2020\nASSETS\t\t\nCurrent assets:\t\t\nCash and cash equivalents\t730.4\t704.6\nReceivables\t1379.0\t1249.1\nInventories\t640.6\t584.0\nOther current assets\t182.1\t148.1\nTotal current assets\t2932.1\t2685.8\nProperty net of accumulated depreciation of $1719.9 and $1674.9 respectively\t567.7\t574.4\nOperating lease right-of-use assets\t341.4\t342.9\nGoodwill\t1902.2\t1650.3\nOther intangible assets net\t540.3\t479.3\nDeferred income taxes\t351.5\t415.6\nLong-term investments\t1345.9\t953.5\nOther assets\t189.9\t162.9\nTotal\t8171.0\t7264.7\nLIABILITIES AND SHAREOWNERS' EQUITY\t\t\nCurrent liabilities:\t\t\nShort-term debt\t150.5\t24.6\nAccounts payable\t721.1\t687.8\nCompensation and benefits\t211.0\t197.0\nContract liabilities\t383.6\t325.3\nCustomer returns rebates and incentives\t212.0\t199.6\nOther current liabilities\t510.4\t376.5\nTotal current liabilities\t2188.6\t1810.8\nLong-term debt\t1980.3\t1974.7\nRetirement benefits\t1287.2\t1284.0\nOperating lease liabilities\t268.2\t274.7\nOther liabilities\t572.9\t573.7\nCommitments and contingent liabilities (Note 13)\t\t\nShareowners' equity:\t\t\nCommon stock ($1.00 par value shares issued: 181.4)\t181.4\t181.4\nAdditional paid-in capital\t1856.3\t1830.7\nRetained earnings\t7608.8\t7139.8\nAccumulated other comprehensive loss\t(1527.3)\t(1614.2)\nCommon stock in treasury at cost (shares held: 65.2 and 65.2 respectively)\t(6561.6)\t(6509.9)\nShareowners' equity attributable to Rockwell Automation Inc.\t1557.6\t1027.8\nNoncontrolling interests\t316.2\t319.0\nTotal shareowners' equity\t1873.8\t1346.8\nTotal\t8171.0\t7264.7\n", "q10k_tbl_3": "\tThree Months Ended December 31\t\n\t2020\t2019\t\t\t\t\t\t\nSales\t\t\t\t\t\t\t\t\nProducts and solutions\t1394.2\t1508.9\t\t\t\t\t\t\nServices\t171.1\t175.6\t\t\t\t\t\t\n\t1565.3\t1684.5\t\t\t\t\t\t\nCost of sales\t\t\t\t\t\t\t\t\nProducts and solutions\t(806.5)\t(866.0)\t\t\t\t\t\t\nServices\t(112.3)\t(115.6)\t\t\t\t\t\t\n\t(918.8)\t(981.6)\t\t\t\t\t\t\nGross profit\t646.5\t702.9\t\t\t\t\t\t\nSelling general and administrative expenses\t(374.6)\t(403.2)\t\t\t\t\t\t\nChange in fair value of investments\t390.4\t71.0\t\t\t\t\t\t\nOther income (expense) (Note 11)\t61.0\t(9.7)\t\t\t\t\t\t\nInterest expense\t(22.6)\t(26.4)\t\t\t\t\t\t\nIncome before income taxes\t700.7\t334.6\t\t\t\t\t\t\nIncome tax provision (Note 14)\t(110.3)\t(19.2)\t\t\t\t\t\t\nNet income\t590.4\t315.4\t\t\t\t\t\t\nNet (loss) income attributable to noncontrolling interests\t(2.9)\t4.7\t\t\t\t\t\t\nNet income attributable to Rockwell Automation Inc.\t593.3\t310.7\t\t\t\t\t\t\nEarnings per share:\t\t\t\t\t\t\t\t\nBasic\t5.11\t2.68\t\t\t\t\t\t\nDiluted\t5.06\t2.66\t\t\t\t\t\t\nWeighted average outstanding shares:\t\t\t\t\t\t\t\t\nBasic\t116.1\t115.7\t\t\t\t\t\t\nDiluted\t117.1\t116.6\t\t\t\t\t\t\n", "q10k_tbl_4": "\tThree Months Ended December 31\t\n\t2020\t2019\t\t\t\t\t\t\nNet income\t590.4\t315.4\t\t\t\t\t\t\nOther comprehensive income (loss) net of tax:\t\t\t\t\t\t\t\t\nPension and other postretirement benefit plan adjustments (net of tax (expense) of ($8.2) and ($7.9))\t27.6\t27.4\t\t\t\t\t\t\nCurrency translation adjustments\t69.2\t22.1\t\t\t\t\t\t\nNet change in unrealized gains and losses on cash flow hedges (net of tax benefit of $3.7 and $1.1)\t(9.8)\t(2.5)\t\t\t\t\t\t\nOther comprehensive income\t87.0\t47.0\t\t\t\t\t\t\nComprehensive income\t677.4\t362.4\t\t\t\t\t\t\nComprehensive (loss) income attributable to noncontrolling interests\t(2.8)\t5.0\t\t\t\t\t\t\nComprehensive income attributable to Rockwell Automation Inc.\t680.2\t357.4\t\t\t\t\t\t\n", "q10k_tbl_5": "\tThree Months Ended December 31\t\n\t2020\t2019\nOperating activities:\t\t\nNet income\t590.4\t315.4\nAdjustments to arrive at cash provided by operating activities:\t\t\nDepreciation\t29.9\t30.2\nAmortization of intangible assets\t14.1\t11.7\nChange in fair value of investments\t(390.4)\t(71.0)\nShare-based compensation expense\t11.5\t11.5\nRetirement benefit expense\t30.0\t31.8\nPension contributions\t(8.8)\t(7.1)\nNet loss on disposition of property\t0.1\t0\nChanges in assets and liabilities excluding effects of acquisitions and foreign currency adjustments:\t\t\nReceivables\t(85.5)\t(85.0)\nInventories\t(40.3)\t1.7\nAccounts payable\t20.9\t(0.4)\nContract liabilities\t51.4\t37.3\nCompensation and benefits\t7.3\t(38.6)\nIncome taxes\t72.8\t(17.3)\nOther assets and liabilities\t43.1\t10.9\nCash provided by operating activities\t346.5\t231.1\nInvesting activities:\t\t\nCapital expenditures\t(27.1)\t(37.0)\nAcquisition of businesses net of cash acquired\t(283.1)\t(238.5)\nPurchases of investments\t0\t(1.0)\nProceeds from maturities of investments\t0\t5.4\nProceeds from sale of investments\t0\t37.9\nProceeds from sale of property\t0.1\t0.2\nCash used for investing activities\t(310.1)\t(233.0)\nFinancing activities:\t\t\nNet issuance of short-term debt\t125.9\t23.5\nCash dividends\t(124.3)\t(117.9)\nPurchases of treasury stock\t(83.5)\t(106.0)\nProceeds from the exercise of stock options\t48.9\t104.8\nOther financing activities\t(4.2)\t0\nCash used for financing activities\t(37.2)\t(95.6)\nEffect of exchange rate changes on cash\t26.6\t5.3\nIncrease (decrease) in cash cash equivalents and restricted cash\t25.8\t(92.2)\nCash cash equivalents and restricted cash at beginning of period\t730.4\t1018.4\nCash cash equivalents and restricted cash at end of period\t756.2\t926.2\nComponents of cash cash equivalents and restricted cash\t\t\nCash and cash equivalents\t730.4\t926.2\nRestricted cash noncurrent (Other assets)\t25.8\t0\nTotal cash cash equivalents and restricted cash\t756.2\t926.2\n", "q10k_tbl_6": "\tCommon stock\tAdditional paid-in capital\tRetained earnings\tAccumulated other comprehensive loss\tCommon stock in treasury at cost\tTotal attributable to Rockwell Automation Inc.\tNoncontrolling interests\tTotal shareowners' equity\nBalance at September 30 2020\t181.4\t1830.7\t7139.8\t(1614.2)\t(6509.9)\t1027.8\t319.0\t1346.8\nNet income (loss)\t0\t0\t593.3\t0\t0\t593.3\t(2.9)\t590.4\nOther comprehensive income (loss)\t0\t0\t0\t86.9\t0\t86.9\t0.1\t87.0\nCommon stock issued (including share-based compensation impact)\t0\t25.6\t0\t0\t36.0\t61.6\t0\t61.6\nShare repurchases\t0\t0\t0\t0\t(87.7)\t(87.7)\t0\t(87.7)\nCash dividends declared (1)\t0\t0\t(124.3)\t0\t0\t(124.3)\t0\t(124.3)\nBalance at December 31 2020\t181.4\t1856.3\t7608.8\t(1527.3)\t(6561.6)\t1557.6\t316.2\t1873.8\n", "q10k_tbl_7": "\tCommon stock\tAdditional paid-in capital\tRetained earnings\tAccumulated other comprehensive loss\tCommon stock in treasury at cost\tTotal attributable to Rockwell Automation Inc.\tNoncontrolling interests\tTotal shareowners' equity\nBalance at September 30 2019\t181.4\t1709.1\t6440.2\t(1488.0)\t(6438.5)\t404.2\t0\t404.2\nNet income\t0\t0\t310.7\t0\t0\t310.7\t4.7\t315.4\nOther comprehensive income (loss)\t0\t0\t0\t46.7\t0\t46.7\t0.3\t47.0\nCommon stock issued (including share-based compensation impact)\t0\t16.3\t0\t0\t101.1\t117.4\t0\t117.4\nShare repurchases\t0\t0\t0\t0\t(100.2)\t(100.2)\t0\t(100.2)\nCash dividends declared (1)\t0\t0\t(117.9)\t0\t0\t(117.9)\t0\t(117.9)\nAdoption of accounting standards\t0\t0\t149.0\t(146.8)\t0\t2.2\t0\t2.2\nChange in noncontrolling interest\t0\t50.1\t0\t3.8\t0\t53.9\t314.5\t368.4\nBalance at December 31 2019\t181.4\t1775.5\t6782.0\t(1584.3)\t(6437.6)\t717.0\t319.5\t1036.5\n", "q10k_tbl_8": "\tThree Months Ended December 31\t\n\t2020\t2019\t\t\t\t\t\t\nNet income attributable to Rockwell Automation\t593.3\t310.7\t\t\t\t\t\t\nLess: Allocation to participating securities\t(0.7)\t(0.3)\t\t\t\t\t\t\nNet income available to common shareowners\t592.6\t310.4\t\t\t\t\t\t\nBasic weighted average outstanding shares\t116.1\t115.7\t\t\t\t\t\t\nEffect of dilutive securities\t\t\t\t\t\t\t\t\nStock options\t0.9\t0.9\t\t\t\t\t\t\nPerformance shares\t0.1\t0\t\t\t\t\t\t\nDiluted weighted average outstanding shares\t117.1\t116.6\t\t\t\t\t\t\nEarnings per share:\t\t\t\t\t\t\t\t\nBasic\t5.11\t2.68\t\t\t\t\t\t\nDiluted\t5.06\t2.66\t\t\t\t\t\t\n", "q10k_tbl_9": "\tThree Months Ended December 31 2020\t\t\t\n\tIntelligent Devices\tSoftware & Control\tLifecycle Services\tTotal\t\t\t\t\t\t\t\t\t\t\t\t\nNorth America\t449.3\t266.4\t196.6\t912.3\t\t\t\t\t\t\t\t\t\t\t\t\nEurope Middle East and Africa (EMEA)\t130.3\t84.8\t105.6\t320.7\t\t\t\t\t\t\t\t\t\t\t\t\nAsia Pacific\t91.8\t62.6\t67.5\t221.9\t\t\t\t\t\t\t\t\t\t\t\t\nLatin America\t50.3\t27.2\t32.9\t110.4\t\t\t\t\t\t\t\t\t\t\t\t\nTotal Company Sales\t721.7\t441.0\t402.6\t1565.3\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_10": "\tThree Months Ended December 31 2019\t\t\t\n\tIntelligent Devices\tSoftware & Control\tLifecycle Services\tTotal\t\t\t\t\t\t\t\t\t\t\t\t\nNorth America\t486.7\t279.8\t240.4\t1006.9\t\t\t\t\t\t\t\t\t\t\t\t\nEurope Middle East and Africa (EMEA)\t127.8\t74.1\t108.2\t310.1\t\t\t\t\t\t\t\t\t\t\t\t\nAsia Pacific\t97.4\t67.0\t65.2\t229.6\t\t\t\t\t\t\t\t\t\t\t\t\nLatin America\t64.7\t31.6\t41.6\t137.9\t\t\t\t\t\t\t\t\t\t\t\t\nTotal Company Sales\t776.6\t452.5\t455.4\t1684.5\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_11": "\tDecember 31 2020\tDecember 31 2019\nBalance as of beginning of fiscal year\t325.3\t275.6\nBalance as of end of period\t383.6\t319.2\n", "q10k_tbl_12": "\tThree Months Ended December 31\t\t\t\n\t2020\t\t2019\t\n\tGrants\tWtd. Avg. Share Fair Value\tGrants\tWtd. Avg. Share Fair Value\nStock options\t195\t55.47\t953\t35.86\nPerformance shares\t44\t298.10\t37\t265.04\nRestricted stock and restricted stock units\t126\t245.07\t45\t193.70\nUnrestricted stock\t4\t221.90\t5\t162.29\n", "q10k_tbl_13": "\tDecember 31 2020\tSeptember 30 2020\nFinished goods\t276.8\t243.0\nWork in process\t165.4\t159.1\nRaw materials\t198.4\t181.9\nInventories\t640.6\t584.0\n", "q10k_tbl_14": "\tPurchase Price Allocation\nAccounts receivable\t6.2\nAll other assets\t1.7\nGoodwill\t221.8\nIntangible assets\t72.1\nTotal assets acquired\t301.8\nLess: Liabilities assumed\t(10.5)\nLess: Deferred income taxes\t(4.1)\nNet assets acquired\t287.2\n\tPurchase Consideration\nTotal purchase consideration net of cash acquired\t287.2\n", "q10k_tbl_15": "\tArchitecture & Software\tControl Products & Solutions\tIntelligent Devices\tSoftware & Control\tLifecycle Services\tTotal\nBalance as of September 30 2020\t609.4\t1040.9\t0\t0\t0\t1650.3\nReallocation due to change in Segments\t(609.4)\t(1040.9)\t535.1\t497.3\t617.9\t0\nAcquisition of businesses\t0\t0\t0\t209.4\t12.4\t221.8\nTranslation\t0\t0\t10.5\t9.3\t10.3\t30.1\nBalance as of December 31 2020\t0\t0\t545.6\t716.0\t640.6\t1902.2\n", "q10k_tbl_16": "\tDecember 31 2020\t\t\n\tCarrying Amount\tAccumulated Amortization\tNet\nAmortized intangible assets:\t\t\t\nComputer software products\t192.7\t141.6\t51.1\nCustomer relationships\t369.4\t102.0\t267.4\nTechnology\t223.5\t89.3\t134.2\nTrademarks\t76.7\t33.8\t42.9\nOther\t15.5\t14.5\t1.0\nTotal amortized intangible assets\t877.8\t381.2\t496.6\nAllen-Bradley® trademark not subject to amortization\t43.7\t0\t43.7\nTotal\t921.5\t381.2\t540.3\n", "q10k_tbl_17": "\tSeptember 30 2020\t\t\n\tCarrying Amount\tAccumulated Amortization\tNet\nAmortized intangible assets:\t\t\t\nComputer software products\t192.7\t139.0\t53.7\nCustomer relationships\t351.3\t92.5\t258.8\nTechnology\t165.8\t84.0\t81.8\nTrademarks\t71.7\t31.3\t40.4\nOther\t14.4\t13.5\t0.9\nTotal amortized intangible assets\t795.9\t360.3\t435.6\nAllen-Bradley® trademark not subject to amortization\t43.7\t0\t43.7\nTotal\t839.6\t360.3\t479.3\n", "q10k_tbl_18": "\tDecember 31 2020\tSeptember 30 2020\nUnrealized losses on foreign exchange contracts\t60.0\t24.3\nProduct warranty obligations\t19.7\t20.8\nTaxes other than income taxes\t93.9\t58.5\nAccrued interest\t29.8\t14.9\nIncome taxes payable\t111.4\t79.8\nOperating lease liabilities\t94.0\t89.7\nOther\t101.6\t88.5\nOther current liabilities\t510.4\t376.5\n", "q10k_tbl_19": "\tDecember 31 2020\tSeptember 30 2020\nFixed income securities\t0.7\t0.6\nEquity securities\t1265.7\t875.3\nOther\t80.2\t78.2\nTotal investments\t1346.6\t954.1\nLess: Short-term investments(1)\t(0.7)\t(0.6)\nLong-term investments\t1345.9\t953.5\n", "q10k_tbl_20": "\tPension Benefits\t\n\tThree Months Ended December 31\t\t\t\t\t\t\t\n\t2020\t2019\t\t\t\t\t\t\t\t\t\t\t\t\nService cost\t22.7\t22.8\t\t\t\t\t\t\t\t\t\t\t\t\nInterest cost\t31.3\t34.2\t\t\t\t\t\t\t\t\t\t\t\t\nExpected return on plan assets\t(60.4)\t(61.2)\t\t\t\t\t\t\t\t\t\t\t\t\nAmortization:\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nPrior service cost\t0.4\t0.2\t\t\t\t\t\t\t\t\t\t\t\t\nNet actuarial loss\t36.7\t36.8\t\t\t\t\t\t\t\t\t\t\t\t\nSettlements\t(0.2)\t(0.7)\t\t\t\t\t\t\t\t\t\t\t\t\nNet periodic benefit cost\t30.5\t32.1\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_21": "\tOther Postretirement Benefits\t\n\tThree Months Ended December 31\t\t\t\t\t\t\t\n\t2020\t2019\t\t\t\t\t\t\t\t\t\t\t\t\nService cost\t0.3\t0.3\t\t\t\t\t\t\t\t\t\t\t\t\nInterest cost\t0.3\t0.4\t\t\t\t\t\t\t\t\t\t\t\t\nAmortization:\t\t\t\t\t\t\t\t\t\t\t\t\t\t\nPrior service credit\t(1.4)\t(1.4)\t\t\t\t\t\t\t\t\t\t\t\t\nNet actuarial loss\t0.3\t0.4\t\t\t\t\t\t\t\t\t\t\t\t\nNet periodic benefit credit\t(0.5)\t(0.3)\t\t\t\t\t\t\t\t\t\t\t\t\n", "q10k_tbl_22": "\tThree Months Ended December 31\t\n\t2020\t2019\nInterest income\t0.3\t2.4\nRoyalty income\t2.1\t2.5\nLegacy product liability and environmental charges\t(4.6)\t(2.7)\nNon-operating pension and postretirement benefit cost\t(7.0)\t(8.7)\nLegal settlement (Note 13)\t70.0\t0\nOther\t0.2\t(3.2)\nOther income (expense)\t61.0\t(9.7)\n", "q10k_tbl_23": "Three Months Ended December 31 2020\t\t\t\t\n\tPension and other postretirement benefit plan adjustments net of tax\tAccumulated currency translation adjustments net of tax\tNet unrealized gains (losses) on cash flow hedges net of tax\tTotal accumulated other comprehensive loss net of tax\nBalance as of September 30 2020\t(1271.2)\t(311.5)\t(31.5)\t(1614.2)\nOther comprehensive income (loss) before reclassifications\t0\t69.1\t(12.9)\t56.2\nAmounts reclassified from accumulated other comprehensive loss\t27.6\t0\t3.1\t30.7\nOther comprehensive income (loss)\t27.6\t69.1\t(9.8)\t86.9\nBalance as of December 31 2020\t(1243.6)\t(242.4)\t(41.3)\t(1527.3)\n", "q10k_tbl_24": "Three Months Ended December 31 2019\t\t\t\t\n\tPension and other postretirement benefit plan adjustments net of tax\tAccumulated currency translation adjustments net of tax\tNet unrealized gains (losses) on cash flow hedges net of tax\tTotal accumulated other comprehensive loss net of tax\nBalance as of September 30 2019\t(1133.7)\t(341.3)\t(13.0)\t(1488.0)\nOther comprehensive income (loss) before reclassifications\t0\t21.8\t0.9\t22.7\nAmounts reclassified from accumulated other comprehensive loss\t27.4\t0\t(3.4)\t24.0\nOther comprehensive income (loss)\t27.4\t21.8\t(2.5)\t46.7\nAdoption of accounting standard/other\t(146.8)\t3.8\t0\t(143.0)\nBalance as of December 31 2019\t(1253.1)\t(315.7)\t(15.5)\t(1584.3)\n", "q10k_tbl_25": "\tThree Months Ended December 31\t\tAffected Line in the Consolidated Statement of Operations\n\t2020\t2019\t\t\t\t\nPension and other postretirement benefit plan adjustments(1):\t\t\nAmortization of prior service credit\t(1.0)\t(1.2)\t\t\t\t\tOther income (expense)\t\t\nAmortization of net actuarial loss\t37.0\t37.2\t\t\t\t\tOther income (expense)\t\t\nSettlements\t(0.2)\t(0.7)\t\t\t\t\tOther income (expense)\t\t\n\t35.8\t35.3\t\t\t\t\tIncome before income taxes\t\t\n\t(8.2)\t(7.9)\t\t\t\t\tIncome tax provision\t\t\n\t27.6\t27.4\t\t\t\t\tNet income attributable to Rockwell Automation\t\t\nNet unrealized losses (gains) on cash flow hedges:\t\t\nForward exchange contracts\t(0.5)\t(0.1)\t\t\t\t\tSales\t\t\nForward exchange contracts\t4.7\t(5.0)\t\t\t\t\tCost of sales\t\t\nForward exchange contracts\t(0.4)\t0.1\t\t\t\t\tSelling general and administrative expenses\t\t\nTreasury locks related to 2019 debt issuance\t0.5\t0.5\t\t\t\t\tInterest expense\t\t\n\t4.3\t(4.5)\t\t\t\t\tIncome before income taxes\t\t\n\t(1.2)\t1.1\t\t\t\t\tIncome tax provision\t\t\n\t3.1\t(3.4)\t\t\t\t\tNet income attributable to Rockwell Automation\t\t\nTotal reclassifications\t30.7\t24.0\t\t\t\t\tNet income attributable to Rockwell Automation\t\t\n", "q10k_tbl_26": "\tThree Months Ended December 31\t\n\t2020\t2019\t\t\t\t\t\t\nSales\t\t\t\t\t\t\t\t\nIntelligent Devices\t721.7\t776.6\t\t\t\t\t\t\nSoftware & Control\t441.0\t452.5\t\t\t\t\t\t\nLifecycle Services\t402.6\t455.4\t\t\t\t\t\t\nTotal\t1565.3\t1684.5\t\t\t\t\t\t\nSegment operating earnings\t\t\t\t\t\t\t\t\nIntelligent Devices\t140.2\t160.6\t\t\t\t\t\t\nSoftware & Control\t133.1\t140.4\t\t\t\t\t\t\nLifecycle Services\t36.0\t38.1\t\t\t\t\t\t\nTotal\t309.3\t339.1\t\t\t\t\t\t\nPurchase accounting depreciation and amortization\t(11.7)\t(10.0)\t\t\t\t\t\t\nCorporate and other\t(28.0)\t(32.8)\t\t\t\t\t\t\nNon-operating pension and postretirement benefit cost\t(7.0)\t(8.7)\t\t\t\t\t\t\nGain on investments\t390.4\t71.0\t\t\t\t\t\t\nLegal Settlement\t70.0\t0\t\t\t\t\t\t\nInterest (expense) income - net\t(22.3)\t(24.0)\t\t\t\t\t\t\nIncome before income taxes\t700.7\t334.6\t\t\t\t\t\t\n", "q10k_tbl_27": "\tDecember 31 2020\tSeptember 30 2020\nIdentifiable assets:\t\t\nIntelligent Devices\t1679.5\t1585.0\nSoftware & Control\t1441.3\t1072.7\nLifecycle Services\t1902.8\t1915.0\nCorporate\t3147.4\t2692.0\nTotal\t8171.0\t7264.7\n", "q10k_tbl_28": "\tIP Index\tPMI\nFiscal 2021 quarter ended:\t\t\nDecember 2020\t104.5\t60.7\nFiscal 2020 quarter ended:\t\t\nSeptember 2020\t102.4\t55.4\nJune 2020\t93.7\t52.6\nMarch 2020\t107.7\t49.1\nDecember 2019\t109.6\t47.8\nFiscal 2019 quarter ended:\t\t\nSeptember 2019\t109.5\t48.2\n", "q10k_tbl_29": "Sales Growth Guidance\t\tEPS Guidance\t\nReported sales growth\t8.5% - 11.5%\tDiluted EPS\t11.07 - $11.47\nOrganic sales growth1\t4.5% - 7.5%\tAdjusted EPS1\t8.70 - $9.10\nInorganic sales growth\t~1.5%\t\t\nCurrency translation\t~2.5%\t\t\n", "q10k_tbl_30": "\tThree Months Ended December 31\t\n\t2020\t2019\t\t\t\t\t\t\nSales\t\t\t\t\t\t\t\t\nIntelligent Devices (a)\t721.7\t776.6\t\t\t\t\t\t\nSoftware & Control (b)\t441.0\t452.5\t\t\t\t\t\t\nLifecycle Services (c)\t402.6\t455.4\t\t\t\t\t\t\nTotal sales (d)\t1565.3\t1684.5\t\t\t\t\t\t\nSegment operating earnings(1)\t\t\t\t\t\t\t\t\nIntelligent Devices (e)\t140.2\t160.6\t\t\t\t\t\t\nSoftware & Control (f)\t133.1\t140.4\t\t\t\t\t\t\nLifecycle Services (g)\t36.0\t38.1\t\t\t\t\t\t\nTotal segment operating earnings(2) (h)\t309.3\t339.1\t\t\t\t\t\t\nPurchase accounting depreciation and amortization\t(11.7)\t(10.0)\t\t\t\t\t\t\nCorporate and other\t(28.0)\t(32.8)\t\t\t\t\t\t\nNon-operating pension and postretirement benefit cost\t(7.0)\t(8.7)\t\t\t\t\t\t\nGain on investments\t390.4\t71.0\t\t\t\t\t\t\nLegal settlement\t70.0\t0\t\t\t\t\t\t\nInterest (expense) income net\t(22.3)\t(24.0)\t\t\t\t\t\t\nIncome before income taxes (i)\t700.7\t334.6\t\t\t\t\t\t\nIncome tax provision\t(110.3)\t(19.2)\t\t\t\t\t\t\nNet income\t590.4\t315.4\t\t\t\t\t\t\nNet (loss) income attributable to noncontrolling interests\t(2.9)\t4.70\t\t\t\t\t\t\nNet income attributable to Rockwell Automation\t593.3\t310.7\t\t\t\t\t\t\nDiluted EPS\t5.06\t2.66\t\t\t\t\t\t\nAdjusted EPS(3)\t2.38\t2.15\t\t\t\t\t\t\nDiluted weighted average outstanding shares\t117.1\t116.6\t\t\t\t\t\t\nTotal segment operating margin(2) (h/d)\t19.8%\t20.1%\t\t\t\t\t\t\nPre-tax margin (i/d)\t44.8%\t19.9%\t\t\t\t\t\t\nIntelligent Devices segment operating margin (e/a)\t19.4%\t20.7%\t\t\t\t\t\t\nSoftware & Control segment operating margin (f/b)\t30.2%\t31.0%\t\t\t\t\t\t\nLifecycle Services segment operating margin (g/c)\t8.9%\t8.4%\t\t\t\t\t\t\n", "q10k_tbl_31": "\t\tChange vs.\tChange in Organic Sales(1) vs.\n\tThree Months Ended December 31 2020\tThree Months Ended December 31 2019\tThree Months Ended December 31 2019\nNorth America\t912.3\t(9.4)%\t(10.6)%\nEMEA\t320.7\t3.4%\t(7.8)%\nAsia Pacific\t221.9\t(3.4)%\t(7.1)%\nLatin America\t110.4\t(19.9)%\t(11.5)%\nTotal Sales\t1565.3\t(7.1)%\t(9.7)%\n", "q10k_tbl_32": "\tThree Months Ended December 31\t\n\t2020\t2019\t\t\t\t\t\t\nPurchase accounting depreciation and amortization\t\t\t\t\t\t\t\t\nIntelligent Devices\t0.7\t0.7\t\t\t\t\t\t\nSoftware & Control\t2.7\t1.2\t\t\t\t\t\t\nLifecycle Services\t8.0\t7.8\t\t\t\t\t\t\nNon-operating pension and postretirement benefit cost\t\t\t\t\t\t\t\t\nIntelligent Devices\t1.2\t1.7\t\t\t\t\t\t\nSoftware & Control\t1.2\t1.7\t\t\t\t\t\t\nLifecycle Services\t1.5\t2.2\t\t\t\t\t\t\n", "q10k_tbl_33": "\tThree Months Ended December 31\t\n\t2020\t2019\t\t\t\t\t\t\nNet income attributable to Rockwell Automation\t593.3\t310.7\t\t\t\t\t\t\nNon-operating pension and postretirement benefit cost\t7.0\t8.7\t\t\t\t\t\t\nTax effect of non-operating pension and postretirement benefit cost\t(2.0)\t(2.4)\t\t\t\t\t\t\nChange in fair value of investments1\t(390.4)\t(71.0)\t\t\t\t\t\t\nTax effect of the change in fair value of investments1\t64.2\t0\t\t\t\t\t\t\nPurchase accounting depreciation and amortization attributable to Rockwell Automation\t8.7\t7.0\t\t\t\t\t\t\nTax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation\t(2.1)\t(1.6)\t\t\t\t\t\t\nAdjusted Income\t278.7\t251.4\t\t\t\t\t\t\nDiluted EPS\t5.06\t2.66\t\t\t\t\t\t\nNon-operating pension and postretirement benefit cost\t0.06\t0.08\t\t\t\t\t\t\nTax effect of non-operating pension and postretirement benefit cost\t(0.02)\t(0.02)\t\t\t\t\t\t\nChange in fair value of investments1\t(3.33)\t(0.61)\t\t\t\t\t\t\nTax effect of the change in fair value of investments1\t0.55\t0\t\t\t\t\t\t\nPurchase accounting depreciation and amortization attributable to Rockwell Automation\t0.08\t0.06\t\t\t\t\t\t\nTax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation\t(0.02)\t(0.02)\t\t\t\t\t\t\nAdjusted EPS\t2.38\t2.15\t\t\t\t\t\t\nEffective tax rate\t15.8%\t5.7%\t\t\t\t\t\t\nTax effect of non-operating pension and postretirement benefit cost\t0.1%\t0.6%\t\t\t\t\t\t\nTax effect of the change in fair value of investments1\t(0.7)%\t1.6%\t\t\t\t\t\t\nTax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation\t0.2%\t0.4%\t\t\t\t\t\t\nAdjusted Effective Tax Rate\t15.4%\t8.3%\t\t\t\t\t\t\n", "q10k_tbl_34": "\tFiscal 2021 Guidance\nDiluted EPS\t11.07 - $11.47\nNon-operating pension and postretirement benefit cost\t0.23\nTax effect of non-operating pension and postretirement benefit cost\t(0.07)\nChange in fair value of investments1\t(3.33)\nTax effect of change in fair value of investments1\t0.55\nPurchase accounting depreciation and amortization attributable to Rockwell Automation\t0.33\nTax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation\t(0.08)\nAdjusted EPS2\t8.70 - $9.10\nEffective tax rate\t~ 14.1%\nTax effect of non-operating pension and postretirement benefit cost\t~ 0.2%\nTax effect of change in fair value of investments1\t~ (0.7)%\nTax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation\t~ 0.4%\nAdjusted Effective Tax Rate\t~ 14.0%\n", "q10k_tbl_35": "\tThree Months Ended December 31\t\n\t2020\t2019\nCash provided by (used for):\t\t\nOperating activities\t346.5\t231.1\nInvesting activities\t(310.1)\t(233.0)\nFinancing activities\t(37.2)\t(95.6)\nEffect of exchange rate changes on cash\t26.6\t5.3\nIncrease (decrease) in cash cash equivalents and restricted cash\t25.8\t(92.2)\n", "q10k_tbl_36": "\tThree Months Ended December 31\t\n\t2020\t2019\nCash provided by operating activities\t346.5\t231.1\nCapital expenditures\t(27.1)\t(37.0)\nFree cash flow\t319.4\t194.1\n", "q10k_tbl_37": "\tThree Months Ended December 31 2020\t\t\tThree Months Ended December 31 2019\n\tSales\tEffect of Acquisitions\tEffect of Changes in Currency\t\t\t\t\tOrganic Sales\t\t\t\t\t\tSales\t\t\nNorth America\t912.3\t(11.1)\t(1.3)\t\t\t\t\t899.9\t\t\t\t\t\t1006.9\t\t\nEMEA\t320.7\t(18.5)\t(16.4)\t\t\t\t\t285.8\t\t\t\t\t\t310.1\t\t\nAsia Pacific\t221.9\t(0.3)\t(8.4)\t\t\t\t\t213.2\t\t\t\t\t\t229.6\t\t\nLatin America\t110.4\t0\t11.7\t\t\t\t\t122.1\t\t\t\t\t\t137.9\t\t\nTotal Company Sales\t1565.3\t(29.9)\t(14.4)\t\t\t\t\t1521.0\t\t\t\t\t\t1684.5\t\t\n", "q10k_tbl_38": "\tThree Months Ended December 31 2020\t\t\tThree Months Ended December 31 2019\n\tSales\tEffect of Acquisitions\tEffect of Changes in Currency\t\t\t\t\tOrganic Sales\t\t\t\t\t\tSales\t\t\nIntelligent Devices\t721.7\t0\t(6.4)\t\t\t\t\t715.3\t\t\t\t\t\t776.6\t\t\nSoftware & Control\t441.0\t(12.0)\t(4.5)\t\t\t\t\t424.5\t\t\t\t\t\t452.5\t\t\nLifecycle Services\t402.6\t(17.9)\t(3.5)\t\t\t\t\t381.2\t\t\t\t\t\t455.4\t\t\nTotal Company Sales\t1565.3\t(29.9)\t(14.4)\t\t\t\t\t1521.0\t\t\t\t\t\t1684.5\t\t\n", "q10k_tbl_39": "Period\tTotal Number of Shares Purchased(1)\tAverage Price Paid Per Share(2)\tTotal Number of Shares Purchased as Part of Publicly Announced Plans or Programs\tMaximum Approx. Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(3)\nOctober 1 - 31 2020\t46115\t238.47\t46115\t842691304\nNovember 1 - 30 2020\t123471\t247.20\t123471\t812169732\nDecember 1 - 31 2020\t186424\t247.80\t186424\t765973291\nTotal\t356010\t246.38\t356010\t\n", "q10k_tbl_40": "Exhibit 10.1*\t0\tForm of Stock Option Agreement for U.S. Employees under the Company's 2020 Long-Term Incentives Plan for options awarded to executive officers of the Company after December 9 2020.\nExhibit 10.2*\t0\tForm of Restricted Stock Unit Agreement for U.S. Employees under the Company's 2020 Long-Term Incentives Plan for restricted stock units awarded to executive officers of the Company after December 9 2020.\nExhibit 10.3*\t0\tForm of Performance Share Agreement for U.S. Employees under the Company's 2020 Long-Term Incentives Plan for performance shares awarded to executive officers of the Company after December 9 2020.\nExhibit 15\t0\tLetter of Deloitte & Touche LLP regarding Unaudited Financial Information.\nExhibit 31.1\t0\tCertification of Periodic Report by the Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.\nExhibit 31.2\t0\tCertification of Periodic Report by the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934.\nExhibit 32.1\t0\tCertification of Periodic Report by the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\nExhibit 32.2\t0\tCertification of Periodic Report by the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\nExhibit 101\t0\tInteractive Data Files.\n\t*\tManagement contract or compensatory plan or arrangement\n"}{"bs": "q10k_tbl_2", "is": "q10k_tbl_3", "cf": "q10k_tbl_5"}None
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 2020
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _______ to _______
Commission file number 1-12383
_________________________________________
Rockwell Automation, Inc.
(Exact name of registrant as specified in its charter)
_________________________________________
Delaware
25-1797617
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
1201 South Second Street
Milwaukee,
Wisconsin
53204
(Address of principal executive offices)
(Zip Code)
+1 (414) 382-2000
Registrant’s telephone number, including area code
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
_________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock ($1.00 par value)
ROK
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer
☑
Accelerated Filer
☐
Non-accelerated Filer
☐
Smaller Reporting Company
☐
Emerging Growth Company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
116,155,081 shares of registrant’s Common Stock were outstanding on December 31, 2020.
In the opinion of management of Rockwell Automation, Inc. ("Rockwell Automation" or "the Company"), the unaudited Consolidated Financial Statements contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the periods presented and, except as otherwise indicated, such adjustments consist only of those of a normal, recurring nature. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, 2020. The results of operations for the three-month period ended December 31, 2020, are not necessarily indicative of the results for the full year. All date references to years and quarters herein refer to our fiscal year and fiscal quarter unless otherwise stated.
Receivables
We record an allowance for doubtful accounts based on customer-specific analysis and general matters such as current assessments of past due balances, historic writeoff experience, and economic conditions and expected changes in market conditions. Receivables are stated net of an allowance for doubtful accounts of $14.4 million at December 31, 2020, and $15.2 million at September 30, 2020. In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $9.4 million at December 31, 2020, and $8.1 million at September 30, 2020. The changes to our allowance for doubtful accounts during the three months ended December 31, 2020, were not material and primarily consisted of current-period provisions, writeoffs charged against the allowance, recoveries collected, and foreign currency translation.
Earnings Per Share
The following table reconciles basic and diluted earnings per share (EPS) amounts (in millions, except per share amounts):
Three Months Ended December 31,
2020
2019
Net income attributable to Rockwell Automation
$
593.3
$
310.7
Less: Allocation to participating securities
(0.7)
(0.3)
Net income available to common shareowners
$
592.6
$
310.4
Basic weighted average outstanding shares
116.1
115.7
Effect of dilutive securities
Stock options
0.9
0.9
Performance shares
0.1
—
Diluted weighted average outstanding shares
117.1
116.6
Earnings per share:
Basic
$
5.11
$
2.68
Diluted
$
5.06
$
2.66
For the three months ended December 31, 2020, there were 0.2 million shares related to share-based compensation awards that were excluded from the diluted EPS calculation because they were antidilutive. For the three months ended December 31, 2019, 2.4 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 $21.5 million and $10.9 million were accrued within accounts payable and other current liabilities at December 31, 2020 and 2019, respectively. At December 31, 2020 and 2019, there were $4.2 million and $3.5 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 Consolidated Statement of Cash Flows.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Goodwill
We perform our annual evaluation of goodwill and indefinite life intangible assets for impairment as required under accounting principles generally accepted in the United States (U.S. GAAP) during the second quarter of each year, or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Any excess in carrying value over the estimated fair value is charged to results of operations. For our annual evaluation of goodwill, we may perform a qualitative test to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount in order to determine whether it is necessary to perform a quantitative goodwill impairment test. When performing the quantitative goodwill impairment test, we determine the fair value of each reporting unit under a combination of an income approach derived from discounted cash flows and a market multiples approach using selected comparable public companies. Significant assumptions used in the income approach include: management’s forecasted cash flows, including estimated future revenue growth rates and margins, discount rates, and terminal value. Forecasted future revenue growth rates and margins are based on management’s best estimate about current and future conditions. Discount rates are determined using a weighted average cost of capital adjusted for risk factors specific to the reporting unit, with comparison to market and industry data. The terminal value is estimated following common methodology of calculating the present value of estimated perpetual cash flow beyond the last projected period assuming constant discount and long-term growth rates. Significant assumptions used in the market multiples approach include selection of the comparable public companies and calculation of the appropriate market multiples.
Leases
We have operating leases primarily for real estate, vehicles, and equipment. We determine if a contract is, or contains, a lease at contract inception. A right-of-use (ROU) asset and a corresponding lease liability are recognized at commencement for contracts that are, or contain, a lease with an original term greater than 12 months. ROU assets represent our right to use an underlying asset during the lease term, including periods for which renewal options are reasonably certain to be exercised, and lease liabilities represent our obligation to make lease payments arising from the lease. Lease expense is recognized on a straight-line basis over the lease term for operating leases with an original term of 12 months or less.
Some leasing arrangements require variable payments that are dependent on usage or may vary for other reasons, such as payments for insurance and tax payments. A portion of our real estate leases is generally subject to annual changes based upon an index. The changes based upon the index are treated as variable lease payments. The variable portion of lease payments is not included in our ROU assets or lease liabilities and is expensed when incurred. We elected to not separate lease and nonlease components of contracts for all underlying asset classes. Accordingly, all expenses associated with a lease contract are accounted for as lease expenses.
Lease liabilities are recognized at the contract commencement date based on the present value of remaining lease payments over the lease term. To calculate the lease liabilities we use our incremental borrowing rate. We determine our incremental borrowing rate at the commencement date using our unsecured borrowing rate, adjusted for collateralization and lease term. For leases denominated in a currency other than the U.S. dollar, the collateralized borrowing rate in the foreign currency is determined using the U.S. dollar and foreign currency swap spread. Long-term lease liabilities are presented as operating lease liabilities and current lease liabilities are included in other current liabilities in the Consolidated Balance Sheet.
ROU assets are recognized at the contract commencement date at the value of the related lease liability, adjusted for any prepayments, lease incentives received and initial direct costs incurred. Operating lease ROU assets are presented as operating lease right-of-use assets in the Consolidated Balance Sheet.
Lease expenses for operating leases are recognized on a straight-line basis over the lease term and recorded in cost of sales and selling, general and administrative expenses in the Consolidated Statement of Operations.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Recently Adopted Accounting Pronouncements
In February 2016, the Financial Accounting Standards Board (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. We adopted the new standard using the modified retrospective transition method, which resulted in an immaterial cumulative-effect adjustment to the opening balance of retained earnings as of October 1, 2019, our adoption date. The amounts of lease right-of-use assets and corresponding lease liabilities recorded in the ConsolidatedBalance Sheet upon adoption were $316 million and $329 million, respectively. We have implemented necessary changes to accounting policies, processes, controls and systems to enable compliance with this new standard.
In February 2018, the FASB issued a new standard regarding the reporting of comprehensive loss, which gives entities the option to reclassify tax effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) stranded in accumulated other comprehensive loss into retained earnings. We adopted the new standard as of October 1, 2019, and elected to reclassify tax effects of $147 million from accumulated other comprehensive loss into retained earnings.
In June 2016, the FASB issued a new standard that requires companies to utilize a current expected credit losses impairment (CECL) model for certain financial assets, including trade and other receivables. The CECL model requires that estimated expected credit losses, including allowance for doubtful accounts, consider a broader range of information such as economic conditions and expected changes in market conditions. We adopted the new standard as of October 1, 2020. The adoption of this standard did not have a material impact on our Consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
2. Revenue Recognition
Nature of Products and Services
Substantially all of our revenue is from contracts with customers. We recognize revenue as promised products are transferred to, or services are performed for, customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those products and services. Our offerings consist of industrial automation and information products, solutions and services.
Our products include hardware, software, and configured-to-order products. Our solutions include custom-engineered systems and software. Our services include customer technical support and repair, asset management and optimization consulting, and training. Also included in our services is a portion of revenue related to spare parts that are managed within our services offering.
Our operations are comprised of the Intelligent Devices segment, Software & Control segment, and Lifecycle Services segment. Revenue from the Intelligent Devices and Software & Control segments is predominantly comprised of product sales which are recognized at a point in time. The Software & Control segment also contains revenue from software products which may be recognized over time if certain criteria are met. Revenue from the Lifecycle Services segment is predominantly comprised of solutions and services which are primarily recognized over time. See Note 16 for more information.
Unfulfilled Performance Obligations
As of December 31, 2020, we expect to recognize approximately $580 million of revenue in future periods from unfulfilled performance obligations from existing contracts with customers. We expect to recognize revenue of approximately $340 million from our remaining performance obligations over the next 12 months with the remaining balance recognized thereafter.
We have applied the practical expedient to exclude the value of remaining performance obligations for (i) contracts with an original term of one year or less and (ii) contracts for which we recognize revenue in proportion to the amount we have the right to invoice for services performed. The amounts above also do not include the impact of contract renewal options that are unexercised as of December 31, 2020.
Disaggregation of Revenue
The following tables present our revenue disaggregation by geographic region for our three operating segments (in millions). We attribute sales to the geographic regions based on the country of destination. Information for the three months ended December 31, 2019, has been recast to reflect our new operating segments. See Note 15 for further information on our change in operating segments.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Contract Balances
Contract liabilities primarily relate to consideration received in advance of performance under the contract. We do not have significant contract assets as of December 31, 2020.
Below is a summary of our contract liabilities balance:
December 31, 2020
December 31, 2019
Balance as of beginning of fiscal year
$
325.3
$
275.6
Balance as of end of period
383.6
319.2
The most significant changes in our contract liabilities balance during the three months ended December 31, 2020, were due to amounts billed, partially offset by revenue recognized that was included in the contract liabilities balance at the beginning of the period.
In the three months ended December 31, 2020, we recognized revenue of approximately $113.4 million that was included in the contract liabilities balance at September 30, 2020. We did not have a material amount of revenue recognized in the three months ended December 31, 2020, from performance obligations satisfied or partially satisfied in previous periods.
3. Share-Based Compensation
We recognized $11.5 million of pre-tax share-based compensation expense during each of the three months ended December 31, 2020, and 2019, 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):
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
5. Acquisitions
In October 2020, we acquired Oylo, a privately-held industrial cybersecurity services provider based in Barcelona, Spain. We assigned the full amount of goodwill related to this acquisition to our Lifecycle Services segment.
In December 2020, we acquired Fiix Inc., a privately-held, artificial intelligence enabled computerized maintenance management system (CMMS) company based in Toronto, Ontario, Canada. We assigned the full amount of goodwill related to this acquisition to our Software & Control segment.
We recorded assets acquired and liabilities assumed in connection with these acquisitions based on their estimated fair values as of the respective acquisition dates. The preliminary aggregate purchase price allocation for these acquisitions is as follows (in millions):
Purchase Price Allocation
Accounts receivable
$
6.2
All other assets
1.7
Goodwill
221.8
Intangible assets
72.1
Total assets acquired
301.8
Less: Liabilities assumed
(10.5)
Less: Deferred income taxes
(4.1)
Net assets acquired
$
287.2
Purchase Consideration
Total purchase consideration, net of cash acquired
$
287.2
Intangible assets identified include $72.1 million of customer relationships, technology, and trade names (approximately 11-year weighted average useful life). We assigned $12.4 million of goodwill to our Lifecycle Services segment and $209.4 million of goodwill to our Software & Control segment, which represents intangible assets that are not separable such as synergy effects. We do not expect the goodwill to be deductible for tax purposes.
The allocation of the purchase price to identifiable assets for these acquisitions are based on the preliminary valuations performed to determine the fair value of the net assets as of their respective acquisition dates. The measurement period for the valuation of net assets acquired ends as soon as information on the facts and circumstances that existed as of the acquisition dates becomes available, but not to exceed 12 months following the acquisition date. Adjustments in purchase price allocations may require a change in the amounts allocated to net assets acquired during the periods in which the adjustments are determined.
Total sales from these acquisitions included in our consolidated results for the three months ended December 31, 2020, and their impact on proforma sales and earnings for the three months ended December 31, 2019, were not material. Acquisition-related costs recorded as expenses for these acquisitions in the three months ended December 31, 2020, were not material.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
6. Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill for the three months ended December 31, 2020, are (in millions):
Architecture & Software
Control Products & Solutions
Intelligent Devices
Software & Control
Lifecycle Services
Total
Balance as of September 30, 2020
$
609.4
$
1,040.9
$
—
$
—
$
—
$
1,650.3
Reallocation due to change in Segments
(609.4)
(1,040.9)
535.1
497.3
617.9
—
Acquisition of businesses
—
—
—
209.4
12.4
221.8
Translation
—
—
10.5
9.3
10.3
30.1
Balance as of December 31, 2020
$
—
$
—
$
545.6
$
716.0
$
640.6
$
1,902.2
During the first quarter of fiscal 2021, we changed our organizational structure resulting in three operating segments: Intelligent Devices, Software & Control, and Lifecycle Services. This change also resulted in the identification of new reporting units. We reassigned our goodwill balances to reflect this new structure using the relative fair value allocation approach required under U.S. GAAP. Under this approach, the fair values of each of our new reporting units were compared to the total fair value of their prior respective reporting units immediately prior to the reorganization to arrive at the reassigned goodwill balances. We determined the reporting unit fair values using the same approach for quantitative goodwill impairment tests described in Note 1 to the Consolidated Financial Statements. We also tested goodwill at the affected reporting units for impairment prior to and subsequent to the reassignment of goodwill and concluded that goodwill was not impaired.
We perform our annual evaluation of goodwill and indefinite life intangible assets for impairment during the second quarter of each year, or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. We assessed the changes in events and circumstances subsequent to our annual test and concluded that no triggering events which would require interim quantitative testing occurred except as described above.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Other intangible assets consist of (in millions):
December 31, 2020
Carrying Amount
Accumulated Amortization
Net
Amortized intangible assets:
Computer software products
$
192.7
$
141.6
$
51.1
Customer relationships
369.4
102.0
267.4
Technology
223.5
89.3
134.2
Trademarks
76.7
33.8
42.9
Other
15.5
14.5
1.0
Total amortized intangible assets
877.8
381.2
496.6
Allen-Bradley® trademark not subject to amortization
43.7
—
43.7
Total
$
921.5
$
381.2
$
540.3
September 30, 2020
Carrying Amount
Accumulated Amortization
Net
Amortized intangible assets:
Computer software products
$
192.7
$
139.0
$
53.7
Customer relationships
351.3
92.5
258.8
Technology
165.8
84.0
81.8
Trademarks
71.7
31.3
40.4
Other
14.4
13.5
0.9
Total amortized intangible assets
795.9
360.3
435.6
Allen-Bradley® trademark not subject to amortization
43.7
—
43.7
Total
$
839.6
$
360.3
$
479.3
Estimated amortization expense is $59.5 million in 2021, $57.9 million in 2022, $56.6 million in 2023, $53.6 million in 2024, and $51.4 million in 2025.
7. Short-term Debt
Our short-term debt as of December 31, 2020, primarily consisted of $125.0 million of commercial paper borrowings and $23.5 million of interest-bearing loans from Schlumberger to Sensia which were originally due September 30, 2020, and are now due September 30, 2021. The weighted average interest rate of the commercial paper outstanding at December 31, 2020 was 0.22 percent. There were no commercial paper borrowings outstanding at September 30, 2020. The short-term loans from Schlumberger were entered into following formation of Sensia in fiscal 2020.
8. Other Current Liabilities
Other current liabilities consist of (in millions):
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
9. Investments
Our investments consist of (in millions):
December 31, 2020
September 30, 2020
Fixed income securities
$
0.7
$
0.6
Equity securities
1,265.7
875.3
Other
80.2
78.2
Total investments
1,346.6
954.1
Less: Short-term investments(1)
(0.7)
(0.6)
Long-term investments
$
1,345.9
$
953.5
(1) Short-term investments are included in other current assets in the Consolidated Balance Sheet.
Equity Securities
On July 19, 2018, we purchased 10,582,010 shares of PTC Inc. ("PTC") common stock (the "PTC Shares") in a private placement at a purchase price of $94.50 per share for an aggregate purchase price of approximately $1.0 billion (the "Purchase"). The PTC Shares are considered equity securities. For a period of approximately 3 years after the Purchase, we are subject to entity-specific transfer restrictions subject to certain exceptions. Since the first anniversary of the Purchase, the Company has had the ability to transfer, in the aggregate in any 90-day period, a number of PTC Shares equal to up to 1.0 percent of PTC's total outstanding shares of common stock as of the first day in such 90-day period, but no more than 2.0 percent of PTC's total outstanding shares of common stock in each of the second year and the third year after the Purchase.
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.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. We did not have any transfers between levels of fair value measurements during the period presented.
The PTC Shares are classified as level 1 in the fair value hierarchy and recognized at fair value in the Consolidated Balance Sheet using the most recent closing price of PTC common stock quoted on Nasdaq. At December 31, 2020, the fair value of the PTC Shares was $1,265.7 million, which was recorded in long-term investments in the Consolidated Balance Sheet. For the three months ended December 31, 2020, and 2019, we recorded gains of $390.4 million and $71.0 million related to the PTC Shares, respectively.