Basis of Presentation and Accounting Policies

9 Months Ended

Jun. 30, 2023

Basis of Presentation and Accounting Policies

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, 2022. The results of operations for the three and nine months ended June 30, 2023, 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 and economic conditions. Receivables are recorded net of an allowance for doubtful accounts of $17.4 million at June 30, 2023, and $13.1 million at September 30, 2022. In addition, receivables are recorded net of an allowance for certain customer returns, rebates, and incentives of $14.6 million at June 30, 2023, and $13.9 million at September 30, 2022. The changes to our allowance for doubtful accounts during the three and nine months ended June 30, 2023 and 2022, were not material and primarily consisted of current-period provisions, write-offs 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 June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Net income attributable to Rockwell Automation, Inc.	$	400.2	$	297.9	$	1,084.5	$	593.3
Less: Allocation to participating securities	(1.7)		(1.0)		(4.6)		(1.9)
Net income available to common shareowners	$	398.5	$	296.9	$	1,079.9	$	591.4
Basic weighted average outstanding shares	114.8		116.0		114.8		116.1
Effect of dilutive securities
Stock options	0.7		0.5		0.7		0.8
Performance shares	0.1		—		0.1		—
Diluted weighted average outstanding shares	115.6		116.5		115.6		116.9
Earnings per share:


Basic	$	3.47	$	2.56	$	9.41	$	5.10



Diluted	$	3.45	$	2.55	$	9.34	$	5.06

For the three and nine months ended June 30, 2023, there were 0.4 million and 0.5 million shares, respectively, related to share-based compensation awards that were excluded from the diluted EPS calculation because they were antidilutive. For the three and nine months ended June 30, 2022, there were 0.6 million and 0.4 million shares, respectively, related to share-based compensation awards that were excluded from the diluted EPS calculation because they were antidilutive.

Non-Cash Investing and Financing Activities

Capital expenditures of $42.5 million and $15.5 million were accrued within Accounts payable and Other current liabilities at June 30, 2023 and 2022, respectively. At June 30, 2023 and 2022, respectively, there were $0.8 million and $8.8 million of outstanding common stock share repurchases recorded in Accounts payable that did not settle until the next 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.

Recently Adopted Accounting Pronouncements

In October 2021, the Financial Accounting Standards Board (FASB) issued a new standard that requires companies to apply Accounting Standards Codification (ASC) 606 to recognize and measure contract assets and contract liabilities in a business combination. We retroactively adopted the new standard as of October 1, 2021. The adoption of this standard did not have a material impact on our Consolidated Financial Statements.

Recently Issued Accounting Pronouncements

In September 2022, the FASB issued a new standard, which requires the buyer in a supplier finance program to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. We will expand our disclosures when we adopt this standard in the first quarter of 2024.

We do not expect any other recently issued accounting pronouncements to have a material impact on our Consolidated Financial Statements and related disclosures.