Delaware | 1-12383 | 25-1797617 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit Number | Description | |
99 | Press Release of Registrant dated July 26, 2017. |
ROCKWELL AUTOMATION, INC. | |||
(Registrant) | |||
By | /S/ REBECCA W. HOUSE | ||
Rebecca W. House | |||
Senior Vice President, General Counsel and Secretary |
Exhibit Number | Description | |
99 | Press Release of Registrant dated July 26, 2017. |
Contact | Keith Lester Media Relations Rockwell Automation 414.382.4871 | Steve Etzel Investor Relations Rockwell Automation 414.382.8510 |
• | Reported sales up 8.5 percent year over year; organic sales up 8.2 percent |
• | Diluted EPS of $1.67; Adjusted EPS of $1.76 |
• | Increasing fiscal 2017 EPS guidance: Diluted EPS $6.21 - $6.41; Adjusted EPS $6.60 - $6.80 |
Sales Growth Guidance | EPS Guidance | |||||
Reported sales growth | ~ 7% | Diluted EPS | $6.21 - $6.41 | |||
Organic sales growth | ~ 6% | Adjusted EPS | $6.60 - $6.80 | |||
Currency translation | ~ (0.5)% | |||||
Acquisitions | ~ 1.5% |
• | macroeconomic factors, including global and regional business conditions, the availability and cost of capital, commodity prices, the cyclical nature of our customers’ capital spending, sovereign debt concerns and currency exchange rates; |
• | laws, regulations and governmental policies affecting our activities in the countries where we do business; |
• | the successful development of advanced technologies and demand for and market acceptance of new and existing products; |
• | the availability, effectiveness and security of our information technology systems; |
• | competitive products, solutions and services and pricing pressures, and our ability to provide high quality products, solutions and services; |
• | a disruption of our business due to natural disasters, pandemics, acts of war, strikes, terrorism, social unrest or other causes; |
• | our ability to manage and mitigate the risk related to security vulnerabilities and breaches of our products, solutions and services; |
• | intellectual property infringement claims by others and the ability to protect our intellectual property; |
• | the uncertainty of claims by taxing authorities in the various jurisdictions where we do business; |
• | our ability to attract and retain qualified personnel; |
• | our ability to manage costs related to employee retirement and health care benefits; |
• | the uncertainties of litigation, including liabilities related to the safety and security of the products, solutions and services we sell; |
• | our ability to manage and mitigate the risks associated with our solutions and services businesses; |
• | a disruption to our distribution channels; |
• | the availability and price of components and materials; |
• | the successful integration and management of acquired businesses; |
• | the successful execution of our cost productivity initiatives; and |
• | other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission (SEC) filings. |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Sales | ||||||||||||||||
Architecture & Software (a) | $ | 731.9 | $ | 666.4 | $ | 2,147.3 | $ | 1,938.8 | ||||||||
Control Products & Solutions (b) | 867.3 | 807.6 | 2,496.5 | 2,402.1 | ||||||||||||
Total sales (c) | $ | 1,599.2 | $ | 1,474.0 | $ | 4,643.8 | $ | 4,340.9 | ||||||||
Segment operating earnings | ||||||||||||||||
Architecture & Software (d) | $ | 204.3 | $ | 184.2 | $ | 603.5 | $ | 515.0 | ||||||||
Control Products & Solutions (e) | 132.7 | 126.8 | 346.1 | 369.4 | ||||||||||||
Total segment operating earnings1 (f) | 337.0 | 311.0 | 949.6 | 884.4 | ||||||||||||
Purchase accounting depreciation and amortization | (5.6 | ) | (4.7 | ) | (16.8 | ) | (13.9 | ) | ||||||||
General corporate—net | (16.5 | ) | (17.0 | ) | (52.8 | ) | (54.5 | ) | ||||||||
Non-operating pension costs | (19.8 | ) | (18.9 | ) | (59.4 | ) | (56.7 | ) | ||||||||
Interest expense | (19.1 | ) | (18.1 | ) | (56.7 | ) | (53.1 | ) | ||||||||
Income before income taxes (g) | 276.0 | 252.3 | 763.9 | 706.2 | ||||||||||||
Income tax provision | (59.1 | ) | (61.3 | ) | (142.8 | ) | (161.7 | ) | ||||||||
Net income | $ | 216.9 | $ | 191.0 | $ | 621.1 | $ | 544.5 | ||||||||
Diluted EPS | $ | 1.67 | $ | 1.46 | $ | 4.77 | $ | 4.13 | ||||||||
Adjusted EPS2 | $ | 1.76 | $ | 1.55 | $ | 5.06 | $ | 4.41 | ||||||||
Average diluted shares | 129.9 | 130.8 | 130.0 | 131.6 | ||||||||||||
Segment operating margin | ||||||||||||||||
Architecture & Software (d/a) | 27.9 | % | 27.6 | % | 28.1 | % | 26.6 | % | ||||||||
Control Products & Solutions (e/b) | 15.3 | % | 15.7 | % | 13.9 | % | 15.4 | % | ||||||||
Total segment operating margin1 (f/c) | 21.1 | % | 21.1 | % | 20.4 | % | 20.4 | % | ||||||||
Pre-tax margin (g/c) | 17.3 | % | 17.1 | % | 16.4 | % | 16.3 | % |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Sales | $ | 1,599.2 | $ | 1,474.0 | $ | 4,643.8 | $ | 4,340.9 | ||||||||
Cost of sales | (921.5 | ) | (857.2 | ) | (2,667.3 | ) | (2,517.3 | ) | ||||||||
Gross profit | 677.7 | 616.8 | 1,976.5 | 1,823.6 | ||||||||||||
Selling, general and administrative expenses | (386.8 | ) | (346.7 | ) | (1,166.0 | ) | (1,065.3 | ) | ||||||||
Other income | 4.2 | 0.3 | 10.1 | 1.0 | ||||||||||||
Interest expense | (19.1 | ) | (18.1 | ) | (56.7 | ) | (53.1 | ) | ||||||||
Income before income taxes | 276.0 | 252.3 | 763.9 | 706.2 | ||||||||||||
Income tax provision | (59.1 | ) | (61.3 | ) | (142.8 | ) | (161.7 | ) | ||||||||
Net income | $ | 216.9 | $ | 191.0 | $ | 621.1 | $ | 544.5 |
June 30, 2017 | September 30, 2016 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 1,549.4 | $ | 1,526.4 | ||||
Short-term investments | 1,065.2 | 902.8 | ||||||
Receivables | 1,111.9 | 1,079.0 | ||||||
Inventories | 585.5 | 526.6 | ||||||
Property, net | 568.8 | 578.3 | ||||||
Goodwill and intangibles | 1,301.6 | 1,329.2 | ||||||
Other assets | 1,033.1 | 1,158.9 | ||||||
Total | $ | 7,215.5 | $ | 7,101.2 | ||||
Liabilities and Shareowners’ Equity | ||||||||
Short-term debt | $ | 598.4 | $ | 448.6 | ||||
Accounts payable | 610.1 | 543.1 | ||||||
Long-term debt | 1,243.8 | 1,516.3 | ||||||
Other liabilities | 2,585.2 | 2,603.1 | ||||||
Shareowners’ equity | 2,178.0 | 1,990.1 | ||||||
Total | $ | 7,215.5 | $ | 7,101.2 |
Nine Months Ended June 30, | ||||||||
2017 | 2016 | |||||||
Operating activities: | ||||||||
Income from continuing operations | $ | 621.1 | $ | 544.5 | ||||
Depreciation and amortization | 124.0 | 129.2 | ||||||
Retirement benefits expense | 129.2 | 117.5 | ||||||
Pension contributions | (40.8 | ) | (31.8 | ) | ||||
Receivables/inventories/payables | (26.0 | ) | 22.1 | |||||
Advance payments from customers and deferred revenue | 30.1 | 13.8 | ||||||
Compensation and benefits | 105.7 | (81.1 | ) | |||||
Income taxes | (22.4 | ) | (54.8 | ) | ||||
Other | 6.2 | 15.9 | ||||||
Cash provided by operating activities | 927.1 | 675.3 | ||||||
Investing activities: | ||||||||
Capital expenditures | (97.5 | ) | (79.4 | ) | ||||
Acquisition of businesses, net of cash acquired | (1.1 | ) | (21.2 | ) | ||||
Purchases of investments | (916.8 | ) | (801.5 | ) | ||||
Proceeds from maturities and sales of investments | 650.9 | 596.2 | ||||||
Proceeds from sale of property | 0.8 | 0.4 | ||||||
Cash used for investing activities | (363.7 | ) | (305.5 | ) | ||||
Financing activities: | ||||||||
Net (repayment) issuance of short-term debt | (100.2 | ) | 354.0 | |||||
Cash dividends | (293.2 | ) | (284.7 | ) | ||||
Purchases of treasury stock | (304.6 | ) | (374.1 | ) | ||||
Proceeds from the exercise of stock options | 160.3 | 28.0 | ||||||
Excess income tax benefit from share-based compensation | — | 2.4 | ||||||
Cash used for financing activities | (537.7 | ) | (274.4 | ) | ||||
Effect of exchange rate changes on cash | (2.7 | ) | (13.4 | ) | ||||
Increase in cash and cash equivalents | $ | 23.0 | $ | 82.0 |
Three Months Ended June 30, | ||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||
Sales | Effect of Changes in Currency | Sales Excluding Effect of Changes in Currency | Effect of Acquisitions | Organic Sales | Sales | |||||||||||||||||||
United States | $ | 881.0 | $ | 0.3 | $ | 881.3 | $ | (17.2 | ) | $ | 864.1 | $ | 799.6 | |||||||||||
Canada | 82.2 | 3.5 | 85.7 | — | 85.7 | 82.2 | ||||||||||||||||||
Europe, Middle East, Africa | 297.3 | 6.5 | 303.8 | (0.4 | ) | 303.4 | 303.7 | |||||||||||||||||
Asia Pacific | 226.3 | 3.0 | 229.3 | — | 229.3 | 188.3 | ||||||||||||||||||
Latin America | 112.4 | (0.3 | ) | 112.1 | — | 112.1 | 100.2 | |||||||||||||||||
Total | $ | 1,599.2 | $ | 13.0 | $ | 1,612.2 | $ | (17.6 | ) | $ | 1,594.6 | $ | 1,474.0 | |||||||||||
Nine Months Ended June 30, | ||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||
Sales | Effect of Changes in Currency | Sales Excluding Effect of Changes in Currency | Effect of Acquisitions | Organic Sales | Sales | |||||||||||||||||||
United States | $ | 2,569.8 | $ | 0.7 | $ | 2,570.5 | $ | (58.3 | ) | $ | 2,512.2 | $ | 2,391.7 | |||||||||||
Canada | 249.9 | 1.0 | 250.9 | (0.1 | ) | 250.8 | 237.1 | |||||||||||||||||
Europe, Middle East, Africa | 869.0 | 18.8 | 887.8 | (6.4 | ) | 881.4 | 852.5 | |||||||||||||||||
Asia Pacific | 630.4 | 7.9 | 638.3 | (2.4 | ) | 635.9 | 540.7 | |||||||||||||||||
Latin America | 324.7 | 9.4 | 334.1 | (0.1 | ) | 334.0 | 318.9 | |||||||||||||||||
Total | $ | 4,643.8 | $ | 37.8 | $ | 4,681.6 | $ | (67.3 | ) | $ | 4,614.3 | $ | 4,340.9 |
Three Months Ended June 30, | ||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||
Sales | Effect of Changes in Currency | Sales Excluding Effect of Changes in Currency | Effect of Acquisitions | Organic Sales | Sales | |||||||||||||||||||
Architecture & Software | $ | 731.9 | $ | 6.5 | $ | 738.4 | $ | (2.1 | ) | $ | 736.3 | $ | 666.4 | |||||||||||
Control Products & Solutions | 867.3 | 6.5 | 873.8 | (15.5 | ) | 858.3 | 807.6 | |||||||||||||||||
Total | $ | 1,599.2 | $ | 13.0 | $ | 1,612.2 | $ | (17.6 | ) | $ | 1,594.6 | $ | 1,474.0 | |||||||||||
Nine Months Ended June 30, | ||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||
Sales | Effect of Changes in Currency | Sales Excluding Effect of Changes in Currency | Effect of Acquisitions | Organic Sales | Sales | |||||||||||||||||||
Architecture & Software | $ | 2,147.3 | $ | 17.7 | $ | 2,165.0 | $ | (20.8 | ) | $ | 2,144.2 | $ | 1,938.8 | |||||||||||
Control Products & Solutions | 2,496.5 | 20.1 | 2,516.6 | (46.5 | ) | 2,470.1 | 2,402.1 | |||||||||||||||||
Total | $ | 4,643.8 | $ | 37.8 | $ | 4,681.6 | $ | (67.3 | ) | $ | 4,614.3 | $ | 4,340.9 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Service cost | $ | 24.2 | $ | 22.1 | $ | 72.5 | $ | 66.0 | |||||||
Amortization of prior service credit | (0.9 | ) | (0.7 | ) | (2.8 | ) | (2.1 | ) | |||||||
Operating pension costs | 23.3 | 21.4 | 69.7 | 63.9 | |||||||||||
Interest cost | 37.8 | 42.5 | 113.4 | 127.2 | |||||||||||
Expected return on plan assets | (56.2 | ) | (54.8 | ) | (168.6 | ) | (163.9 | ) | |||||||
Amortization of net actuarial loss | 38.2 | 31.2 | 114.4 | 93.4 | |||||||||||
Settlements | — | — | 0.2 | — | |||||||||||
Non-operating pension costs | 19.8 | 18.9 | 59.4 | 56.7 | |||||||||||
Net periodic pension cost | $ | 43.1 | $ | 40.3 | $ | 129.1 | $ | 120.6 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Income from continuing operations | $ | 216.9 | $ | 191.0 | $ | 621.1 | $ | 544.5 | |||||||
Non-operating pension costs | 19.8 | 18.9 | 59.4 | 56.7 | |||||||||||
Tax effect of non-operating pension costs | (7.2 | ) | (6.8 | ) | (21.7 | ) | (20.5 | ) | |||||||
Adjusted Income | $ | 229.5 | $ | 203.1 | $ | 658.8 | $ | 580.7 | |||||||
Diluted EPS from continuing operations | $ | 1.67 | $ | 1.46 | $ | 4.77 | $ | 4.13 | |||||||
Non-operating pension costs per diluted share | 0.15 | 0.14 | 0.46 | 0.43 | |||||||||||
Tax effect of non-operating pension costs per diluted share | (0.06 | ) | (0.05 | ) | (0.17 | ) | (0.15 | ) | |||||||
Adjusted EPS | $ | 1.76 | $ | 1.55 | $ | 5.06 | $ | 4.41 | |||||||
Effective tax rate | 21.4 | % | 24.3 | % | 18.7 | % | 22.9 | % | |||||||
Tax effect of non-operating pension costs | 1.0 | % | 0.8 | % | 1.3 | % | 1.0 | % | |||||||
Adjusted Effective Tax Rate | 22.4 | % | 25.1 | % | 20.0 | % | 23.9 | % |
Fiscal 2017 Guidance | Year Ended September 30, 2016 | ||||||
Diluted EPS from continuing operations | $6.21 - $6.41 | $ | 5.56 | ||||
Non-operating pension costs per diluted share | 0.61 | 0.58 | |||||
Tax effect of non-operating pension costs per diluted share | (0.22) | (0.21 | ) | ||||
Adjusted EPS | $6.60 - $6.80 | $ | 5.93 | ||||
Effective tax rate | ~ 20% | 22.6 | % | ||||
Tax effect of non-operating pension costs | ~ 1% | 1.0 | % | ||||
Adjusted Effective Tax Rate | ~ 21% | 23.6 | % |
Quarter Ended | ||||||||||||||||||||||||||||
Dec. 31, 2015 | Mar. 31, 2016 | Jun. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Mar. 31, 2017 | Jun. 30, 2017 | ||||||||||||||||||||||
Cash provided by continuing operating activities | $ | 184.8 | $ | 214.5 | $ | 276.0 | $ | 272.0 | $ | 310.8 | $ | 301.0 | $ | 315.3 | ||||||||||||||
Capital expenditures | (40.2 | ) | (12.4 | ) | (26.8 | ) | (37.5 | ) | (39.4 | ) | (28.0 | ) | (30.1 | ) | ||||||||||||||
Excess income tax benefit from share-based compensation | 0.7 | 0.5 | 1.2 | 0.9 | — | — | — | |||||||||||||||||||||
Free cash flow | $ | 145.3 | $ | 202.6 | $ | 250.4 | $ | 235.4 | $ | 271.4 | $ | 273.0 | $ | 285.2 |
Twelve Months Ended | ||||||||
June 30, | ||||||||
2017 | 2016 | |||||||
(a) Return | ||||||||
Income from continuing operations | $ | 806.3 | $ | 745.8 | ||||
Interest expense | 74.9 | 69.8 | ||||||
Income tax provision | 194.5 | 239.3 | ||||||
Purchase accounting depreciation and amortization | 21.3 | 19.1 | ||||||
Return | 1,097.0 | 1,074.0 | ||||||
(b) Average invested capital | ||||||||
Short-term debt | 536.6 | 158.5 | ||||||
Long-term debt | 1,352.6 | 1,504.2 | ||||||
Shareowners’ equity | 2,107.4 | 2,277.2 | ||||||
Accumulated amortization of goodwill and intangibles | 826.4 | 807.9 | ||||||
Cash and cash equivalents | (1,524.1 | ) | (1,469.9 | ) | ||||
Short-term and long-term investments | (1,018.9 | ) | (784.0 | ) | ||||
Average invested capital | 2,280.0 | 2,493.9 | ||||||
(c) Effective tax rate | ||||||||
Income tax provision | 194.5 | 239.3 | ||||||
Income from continuing operations before income taxes | $ | 1,000.8 | $ | 985.1 | ||||
Effective tax rate | 19.4 | % | 24.3 | % | ||||
(a) / (b) * (1-c) Return On Invested Capital | 38.8 | % | 32.6 | % |
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