Basis of Presentation and Accounting Policies

In the opinion of management of Rockwell Automation, Inc. (the Company or Rockwell Automation), the unaudited Condensed Consolidated Financial Statements contain all adjustments necessary to present fairly the financial position, results of operations and cash flows for the periods presented and, except as otherwise indicated, such adjustments consist only of those of a normal recurring nature. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, 2013. The results of operations for the three and six month periods ended March 31, 2014 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 allowances for doubtful accounts of $22.9 million at March 31, 2014 and $22.5 million at September 30, 2013. In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $8.2 million at March 31, 2014 and $8.9 million at September 30, 2013.

Earnings Per Share

The following table reconciles basic and diluted earnings per share (EPS) amounts (in millions, except per share amounts):



	Three Months Ended March 31,						Six Months Ended March 31,
	2014			2013			2014			2013
Net income	$	180.3		$	175.9		$	378.4		$	337.3
Less: Allocation to participating securities	(0.2		)	(0.3		)	(0.5		)	(0.5		)
Net income available to common shareowners	$	180.1		$	175.6		$	377.9		$	336.8
Basic weighted average outstanding shares	138.5			140.0			138.5			139.6
Effect of dilutive securities
Stock options	1.5			1.6			1.5			1.6
Performance shares	0.2			0.2			0.2			0.2
Diluted weighted average outstanding shares	140.2			141.8			140.2			141.4
Earnings per share:
Basic	$	1.30		$	1.25		$	2.73		$	2.41
Diluted	$	1.28		$	1.24		$	2.70		$	2.38

For the three and six months ended March 31, 2014, share-based compensation awards for 0.9 million shares were excluded from the diluted EPS calculation because they were antidilutive. For the three and six months ended March 31, 2013, share-based compensation awards for 1.1 million and 1.7 million shares, respectively, were excluded from the diluted EPS calculation because they were antidilutive.