ROCKWELL AUTOMATION, INC. |
|||||||||
SALES AND EARNINGS INFORMATION |
|||||||||
(in millions, except per share amounts and percentages) |
|||||||||
|
|
|
Three Months Ended December 31, |
||||||
|
|
|
|
2022 |
|
|
|
2021 |
|
Sales |
|
|
|
|
|
||||
Intelligent Devices (a) |
|
|
$ |
936.2 |
|
|
$ |
900.3 |
|
Software & Control (b) |
|
|
|
573.3 |
|
|
|
513.9 |
|
Lifecycle Services (c) |
|
|
|
471.5 |
|
|
|
443.1 |
|
Total sales (d) |
|
|
$ |
1,981.0 |
|
|
$ |
1,857.3 |
|
Segment operating earnings |
|
|
|
|
|
||||
Intelligent Devices (e) |
|
|
$ |
209.4 |
|
|
$ |
213.0 |
|
Software & Control (f) |
|
|
|
167.3 |
|
|
|
117.6 |
|
Lifecycle Services (g) |
|
|
|
24.3 |
|
|
|
24.5 |
|
Total segment operating earnings (1) (h) |
|
|
|
401.0 |
|
|
|
355.1 |
|
Purchase accounting depreciation and amortization |
|
|
|
(26.0 |
) |
|
|
(26.1 |
) |
Corporate and other |
|
|
|
(27.3 |
) |
|
|
(29.4 |
) |
Non-operating pension and postretirement benefit credit |
|
|
|
12.4 |
|
|
|
4.4 |
|
Change in fair value of investments |
|
|
|
140.6 |
|
|
|
7.6 |
|
Interest expense, net |
|
|
|
(32.8 |
) |
|
|
(29.1 |
) |
Income before income taxes (i) |
|
|
|
467.9 |
|
|
|
282.5 |
|
Income tax provision |
|
|
|
(89.2 |
) |
|
|
(43.6 |
) |
Net income |
|
|
|
378.7 |
|
|
|
238.9 |
|
Net loss attributable to noncontrolling interests |
|
|
|
(5.3 |
) |
|
|
(2.6 |
) |
Net income attributable to Rockwell Automation, Inc. |
|
|
$ |
384.0 |
|
|
$ |
241.5 |
|
|
|
|
|
|
|
||||
Diluted EPS |
|
|
$ |
3.31 |
|
|
$ |
2.05 |
|
|
|
|
|
|
|
||||
Adjusted EPS (2) |
|
|
$ |
2.46 |
|
|
$ |
2.14 |
|
|
|
|
|
|
|
||||
Diluted weighted average outstanding shares |
|
|
|
115.5 |
|
|
|
117.3 |
|
|
|
|
|
|
|
||||
Segment operating margin |
|
|
|
|
|
||||
Intelligent Devices (e/a) |
|
|
|
22.4 |
% |
|
|
23.7 |
% |
Software & Control (f/b) |
|
|
|
29.2 |
% |
|
|
22.9 |
% |
Lifecycle Services (g/c) |
|
|
|
5.2 |
% |
|
|
5.5 |
% |
Total segment operating margin (1) (h/d) |
|
|
|
20.2 |
% |
|
|
19.1 |
% |
Pre-tax margin (i/d) |
|
|
|
23.6 |
% |
|
|
15.2 |
% |
(1) |
Total segment operating earnings and total segment operating margin are non-GAAP financial measures. We exclude purchase accounting depreciation and amortization, corporate and other, non-operating pension and postretirement benefit credit, change in fair value of investments, interest expense, net, and income tax provision because we do not consider these items to be directly related to the operating performance of our segments. We believe total segment operating earnings and total segment operating margin are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating segments. Our measures of total segment operating earnings and total segment operating margin may be different from measures used by other companies. |
|
(2) |
Adjusted EPS is a non-GAAP earnings measure that excludes purchase accounting depreciation and amortization, non-operating pension and postretirement benefit credit, change in fair value of investments, and net loss attributable to noncontrolling interests, including their respective tax effects. See "Other Supplemental Information - Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate" section for more information regarding non-operating pension and postretirement benefit credit and a reconciliation to GAAP measures. |
ROCKWELL AUTOMATION, INC. |
||||||||
CONDENSED STATEMENT OF OPERATIONS INFORMATION |
||||||||
(in millions, except percentages) |
||||||||
|
|
Three Months Ended December 31, |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
Sales (a) |
|
$ |
1,981.0 |
|
|
$ |
1,857.3 |
|
Cost of sales |
|
|
(1,167.4 |
) |
|
|
(1,108.2 |
) |
Gross profit (b) |
|
|
813.6 |
|
|
|
749.1 |
|
Selling, general and administrative expenses (c) |
|
|
(469.5 |
) |
|
|
(447.5 |
) |
Change in fair value of investments (1) |
|
|
140.6 |
|
|
|
7.6 |
|
Other income |
|
|
17.3 |
|
|
|
2.9 |
|
Interest expense |
|
|
(34.1 |
) |
|
|
(29.6 |
) |
Income before income taxes |
|
|
467.9 |
|
|
|
282.5 |
|
Income tax provision |
|
|
(89.2 |
) |
|
|
(43.6 |
) |
Net income |
|
|
378.7 |
|
|
|
238.9 |
|
Net loss attributable to noncontrolling interests |
|
|
(5.3 |
) |
|
|
(2.6 |
) |
Net income attributable to Rockwell Automation, Inc. |
|
$ |
384.0 |
|
|
$ |
241.5 |
|
|
|
|
|
|
||||
|
|
|
|
|
||||
Gross profit as percent of sales (b/a) |
|
|
41.1 |
% |
|
|
40.3 |
% |
SG&A as percent of sales (c/a) |
|
|
23.7 |
% |
|
|
24.1 |
% |
(1) |
Primarily relates to the change in fair value of investment in PTC. |
ROCKWELL AUTOMATION, INC. |
||||||
CONDENSED BALANCE SHEET INFORMATION |
||||||
(in millions) |
||||||
|
|
December 31, |
|
September 30, |
||
Assets |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
460.0 |
|
$ |
490.7 |
Receivables |
|
|
1,839.4 |
|
|
1,736.7 |
Inventories |
|
|
1,270.5 |
|
|
1,054.2 |
Property, net |
|
|
623.4 |
|
|
586.5 |
Operating lease right-of-use assets |
|
|
319.5 |
|
|
321.0 |
Goodwill and intangibles |
|
|
4,558.7 |
|
|
4,426.0 |
Long-term investments |
|
|
1,057.6 |
|
|
1,056.0 |
Other assets |
|
|
1,020.7 |
|
|
1,087.6 |
Total |
|
$ |
11,149.8 |
|
$ |
10,758.7 |
Liabilities and Shareowners’ Equity |
|
|
|
|
||
Short-term debt |
|
$ |
1,156.7 |
|
$ |
968.4 |
Accounts payable |
|
|
1,034.5 |
|
|
1,028.0 |
Long-term debt |
|
|
2,866.9 |
|
|
2,867.8 |
Operating lease liabilities |
|
|
260.3 |
|
|
263.5 |
Other liabilities |
|
|
2,630.8 |
|
|
2,614.3 |
Shareowners' equity attributable to Rockwell Automation, Inc. |
|
|
2,914.8 |
|
|
2,725.6 |
Noncontrolling interests |
|
|
285.8 |
|
|
291.1 |
Total |
|
$ |
11,149.8 |
|
$ |
10,758.7 |
ROCKWELL AUTOMATION, INC. |
||||||||
CONDENSED CASH FLOW INFORMATION |
||||||||
(in millions) |
||||||||
|
|
Three Months Ended December 31, |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
Operating activities: |
|
|
|
|
||||
Net income |
|
$ |
378.7 |
|
|
$ |
238.9 |
|
Depreciation and amortization |
|
|
57.8 |
|
|
|
58.9 |
|
Change in fair value of investments (1) |
|
|
(140.6 |
) |
|
|
(7.6 |
) |
Retirement benefits (income) expense |
|
|
(1.7 |
) |
|
|
16.2 |
|
Pension contributions |
|
|
(7.0 |
) |
|
|
(7.5 |
) |
Receivables/inventories/payables |
|
|
(237.7 |
) |
|
|
(185.7 |
) |
Contract liabilities |
|
|
52.7 |
|
|
|
27.1 |
|
Compensation and benefits |
|
|
(40.2 |
) |
|
|
(135.3 |
) |
Income taxes |
|
|
73.1 |
|
|
|
(37.6 |
) |
Other operating activities |
|
|
(68.8 |
) |
|
|
20.6 |
|
Cash provided by (used for) operating activities |
|
|
66.3 |
|
|
|
(12.0 |
) |
Investing activities: |
|
|
|
|
||||
Capital expenditures |
|
|
(24.2 |
) |
|
|
(37.1 |
) |
Acquisition of businesses, net of cash acquired |
|
|
(133.8 |
) |
|
|
(10.5 |
) |
Purchases of investments |
|
|
— |
|
|
|
(1.5 |
) |
Proceeds from sale of investments |
|
|
144.8 |
|
|
|
— |
|
Other investing activities |
|
|
(5.1 |
) |
|
|
0.4 |
|
Cash used for investing activities |
|
|
(18.3 |
) |
|
|
(48.7 |
) |
Financing activities: |
|
|
|
|
||||
Net issuance of short-term debt |
|
|
206.9 |
|
|
|
99.0 |
|
Repayment of debt |
|
|
(18.8 |
) |
|
|
— |
|
Cash dividends |
|
|
(135.9 |
) |
|
|
(130.1 |
) |
Purchases of treasury stock |
|
|
(156.8 |
) |
|
|
(49.8 |
) |
Proceeds from the exercise of stock options |
|
|
13.4 |
|
|
|
31.8 |
|
Other financing activities |
|
|
(14.1 |
) |
|
|
(2.9 |
) |
Cash used for financing activities |
|
|
(105.3 |
) |
|
|
(52.0 |
) |
Effect of exchange rate changes on cash |
|
|
18.0 |
|
|
|
(9.5 |
) |
Decrease in cash, cash equivalents, and restricted cash (2) |
|
$ |
(39.3 |
) |
|
$ |
(122.2 |
) |
(1) |
Primarily relates to the change in fair value of investment in PTC. |
|
(2) |
Cash, cash equivalents, and restricted cash at December 31, 2022, includes restricted cash of $8.6 million recorded in Other assets in the Condensed Balance Sheet. Cash, cash equivalents, and restricted cash at December 31, 2021, includes restricted cash of $17.2 million recorded in Other assets in the Condensed Balance Sheet. |
ROCKWELL AUTOMATION, INC.
OTHER SUPPLEMENTAL INFORMATION
(in millions, except percentages)
Organic Sales
We translate sales of subsidiaries operating outside of the United States using exchange rates effective during the respective period. Therefore, changes in currency exchange rates affect our reported sales. Sales by acquired businesses also affect our reported sales. We believe that organic sales, defined as sales excluding the effects of acquisitions and changes in currency exchange rates, which is a non-GAAP financial measure, provides useful information to investors because it reflects regional and operating segment performance from the activities of our businesses without the effect of acquisitions and changes in currency exchange rates. We use organic sales as one measure to monitor and evaluate our regional and operating segment performance. When we acquire businesses, we exclude sales in the current period for which there are no comparable sales in the prior period. We determine the effect of changes in currency exchange rates by translating the respective period’s sales using the same currency exchange rates that were in effect during the prior year. When we divest a business, we exclude sales in the prior period for which there are no comparable sales in the current period. Organic sales growth is calculated by comparing organic sales to reported sales in the prior year, excluding divestitures. We attribute sales to the geographic regions based on the country of destination.
The following is a reconciliation of reported sales to organic sales for the three months ended December 31, 2022, compared to sales for the three months ended December 31, 2021:
|
|
Three Months Ended December 31, |
||||||||||||||
|
|
2022 |
|
2021 |
||||||||||||
|
|
Reported Sales |
|
Less: Effect of Acquisitions |
|
Effect of Changes in Currency |
|
Organic Sales |
|
Reported Sales |
||||||
North America |
|
$ |
1,178.9 |
|
$ |
1.2 |
|
$ |
(8.1 |
) |
|
$ |
1,185.8 |
|
$ |
1,100.7 |
EMEA |
|
|
372.8 |
|
|
11.7 |
|
|
(40.9 |
) |
|
|
402.0 |
|
|
354.7 |
Asia Pacific |
|
|
296.5 |
|
|
2.7 |
|
|
(29.7 |
) |
|
|
323.5 |
|
|
278.9 |
Latin America |
|
|
132.8 |
|
|
— |
|
|
2.1 |
|
|
|
130.7 |
|
|
123.0 |
Total |
|
$ |
1,981.0 |
|
$ |
15.6 |
|
$ |
(76.6 |
) |
|
$ |
2,042.0 |
|
$ |
1,857.3 |
The following is a reconciliation of reported sales to organic sales for our operating segments for the three months ended December 31, 2022, compared to sales for the three months ended December 31, 2021:
|
|
Three Months Ended December 31, |
||||||||||||||
|
|
2022 |
|
2021 |
||||||||||||
|
|
Reported Sales |
|
Less: Effect of Acquisitions |
|
Effect of Changes in Currency |
|
Organic Sales |
|
Reported Sales |
||||||
Intelligent Devices |
|
$ |
936.2 |
|
$ |
13.7 |
|
$ |
(37.6 |
) |
|
$ |
960.1 |
|
$ |
900.3 |
Software & Control |
|
|
573.3 |
|
|
— |
|
|
(20.2 |
) |
|
|
593.5 |
|
|
513.9 |
Lifecycle Services |
|
|
471.5 |
|
|
1.9 |
|
|
(18.8 |
) |
|
|
488.4 |
|
|
443.1 |
Total |
|
$ |
1,981.0 |
|
$ |
15.6 |
|
$ |
(76.6 |
) |
|
$ |
2,042.0 |
|
$ |
1,857.3 |
The following is a reconciliation of reported sales growth to organic sales growth for the three months ended December 31, 2022, compared to sales for the three months ended December 31, 2021:
|
|
Three Months Ended December 31, 2022 |
||||||
|
|
Reported Sales Growth |
|
Less: Effect of Acquisitions |
|
Effect of Changes in Currency |
|
Organic Sales Growth |
North America |
|
7.1 % |
|
0.1 % |
|
(0.7) % |
|
7.7 % |
EMEA |
|
5.1 % |
|
3.3 % |
|
(11.5) % |
|
13.3 % |
Asia Pacific |
|
6.3 % |
|
1.0 % |
|
(10.7) % |
|
16.0 % |
Latin America |
|
8.0 % |
|
— % |
|
1.7 % |
|
6.3 % |
Total |
|
6.7 % |
|
0.8 % |
|
(4.0) % |
|
9.9 % |
The following is a reconciliation of reported sales growth to organic sales growth for our operating segments for the three months ended December 31, 2022, compared to sales for the three months ended December 31, 2021:
|
|
Three Months Ended December 31, 2022 |
||||||
|
|
Reported Sales Growth |
|
Less: Effect of Acquisitions |
|
Effect of Changes in Currency |
|
Organic Sales Growth |
Intelligent Devices |
|
4.0 % |
|
1.5 % |
|
(4.1) % |
|
6.6 % |
Software & Control |
|
11.6 % |
|
— % |
|
(3.9) % |
|
15.5 % |
Lifecycle Services |
|
6.4 % |
|
0.4 % |
|
(4.2) % |
|
10.2 % |
Total |
|
6.7 % |
|
0.8 % |
|
(4.0) % |
|
9.9 % |
ROCKWELL AUTOMATION, INC.
OTHER SUPPLEMENTAL INFORMATION
(in millions, except per share amounts and percentages)
Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate
Adjusted income, adjusted EPS, and adjusted effective tax rate are non-GAAP earnings measures that exclude non-operating pension and postretirement benefit credit, purchase accounting depreciation and amortization attributable to Rockwell Automation, change in fair value of investments, and Net loss attributable to noncontrolling interests, including their respective tax effects.
We believe that adjusted income, adjusted EPS, and adjusted effective tax rate provide useful information to our investors about our operating performance and allow management and investors to compare our operating performance period over period. Adjusted EPS is also used as a financial measure of performance for our annual incentive compensation. Our measures of adjusted income, adjusted EPS, and adjusted effective tax rate may be different from measures used by other companies. These non-GAAP measures should not be considered a substitute for Net income attributable to Rockwell Automation, diluted EPS, and effective tax rate.
The following are the components of operating and non-operating pension and postretirement benefit credit:
|
|
Three Months Ended December 31, |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
Service cost |
|
$ |
10.7 |
|
|
$ |
20.6 |
|
Operating pension and postretirement benefit cost |
|
|
10.7 |
|
|
|
20.6 |
|
|
|
|
|
|
||||
Interest cost |
|
|
39.8 |
|
|
|
32.7 |
|
Expected return on plan assets |
|
|
(51.3 |
) |
|
|
(59.4 |
) |
Amortization of prior service credit |
|
|
— |
|
|
|
(0.2 |
) |
Amortization of net actuarial (gain) loss |
|
|
(0.9 |
) |
|
|
22.5 |
|
Non-operating pension and postretirement benefit credit |
|
|
(12.4 |
) |
|
|
(4.4 |
) |
|
|
|
|
|
||||
Net periodic pension and postretirement benefit (credit) cost |
|
$ |
(1.7 |
) |
|
$ |
16.2 |
|
The components of net periodic pension and postretirement benefit (credit) cost other than the service cost component are included in Other income in the Condensed Statement of Operations.
The following are reconciliations of Net income attributable to Rockwell Automation, diluted EPS, and effective tax rate to adjusted income, adjusted EPS, and adjusted effective tax rate, respectively:
|
|
Three Months Ended December 31, |
||||||
|
|
|
2022 |
|
|
2021 |
||
Net income attributable to Rockwell Automation |
|
$ |
384.0 |
|
|
$ |
241.5 |
|
Non-operating pension and postretirement benefit credit |
|
|
(12.4 |
) |
|
|
(4.4 |
) |
Tax effect of non-operating pension and postretirement benefit credit |
|
|
2.8 |
|
|
|
0.8 |
|
Purchase accounting depreciation and amortization attributable to Rockwell Automation |
|
|
23.0 |
|
|
|
23.1 |
|
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation |
|
|
(5.6 |
) |
|
|
(5.6 |
) |
Change in fair value of investments (1) |
|
|
(140.6 |
) |
|
|
(7.6 |
) |
Tax effect of change in fair value of investments (1) |
|
|
34.1 |
|
|
|
3.5 |
|
Adjusted income |
|
$ |
285.3 |
|
|
$ |
251.3 |
|
|
|
|
|
|
||||
Diluted EPS |
|
$ |
3.31 |
|
|
$ |
2.05 |
|
Non-operating pension and postretirement benefit credit |
|
|
(0.10 |
) |
|
|
(0.04 |
) |
Tax effect of non-operating pension and postretirement benefit credit |
|
|
0.02 |
|
|
|
0.01 |
|
Purchase accounting depreciation and amortization attributable to Rockwell Automation |
|
|
0.20 |
|
|
|
0.20 |
|
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation |
|
|
(0.05 |
) |
|
|
(0.05 |
) |
Change in fair value of investments (1) |
|
|
(1.22 |
) |
|
|
(0.06 |
) |
Tax effect of change in fair value of investments (1) |
|
|
0.30 |
|
|
|
0.03 |
|
Adjusted EPS |
|
$ |
2.46 |
|
|
$ |
2.14 |
|
|
|
|
|
|
||||
Effective tax rate |
|
|
19.1 |
% |
|
|
15.4 |
% |
Tax effect of non-operating pension and postretirement benefit credit |
|
|
(0.1 |
) % |
|
|
— |
% |
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation |
|
|
0.5 |
% |
|
|
0.8 |
% |
Tax effect of change in fair value of investments (1) |
|
|
(2.4 |
) % |
|
|
(0.9 |
) % |
Adjusted effective tax rate |
|
|
17.1 |
% |
|
|
15.3 |
% |
(1) |
Primarily relates to the change in fair value of investment in PTC. |
|
|
Fiscal 2023 Guidance |
|
|
|
Diluted EPS (1) |
|
$10.99 - $11.79 |
Non-operating pension and postretirement benefit cost |
|
0.04 |
Tax effect of non-operating pension and postretirement benefit cost |
|
(0.01) |
Purchase accounting depreciation and amortization attributable to Rockwell Automation |
|
0.79 |
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation |
|
(0.19) |
Change in fair value of investments (2) |
|
(1.22) |
Tax effect of change in fair value of investments (2) |
|
0.30 |
Adjusted EPS (1) |
|
$10.70 - $11.50 |
|
|
|
Effective tax rate |
|
~ 18.0% |
Tax effect of non-operating pension and postretirement benefit cost |
|
~ —% |
Tax effect of purchase accounting depreciation and amortization attributable to Rockwell Automation |
|
~ 0.5% |
Tax effect of change in fair value of investments (2) |
|
~ (0.5)% |
Adjusted effective tax rate |
|
~ 18.0% |
(1) |
Fiscal 2023 guidance based on adjusted income attributable to Rockwell, which includes an adjustment for Schlumberger's non-controlling interest in Sensia. |
|
(2) |
The actual year-to-date adjustments, which are based on PTC's share price at December 31, 2022, and year-to-date sales of PTC shares, are used for guidance, as estimates of these adjustments on a forward-looking basis are not available due to variability, complexity, and limited visibility of these items. |
Note: Guidance as of January 26, 2023
ROCKWELL AUTOMATION, INC.
OTHER SUPPLEMENTAL INFORMATION
(in millions, except percentages)
Free Cash Flow
Our definition of free cash flow, which is a non-GAAP financial measure, takes into consideration capital investments required to maintain the operations of our businesses and execute our strategy. In our opinion, free cash flow provides useful information to investors regarding our ability to generate cash from business operations that is available for acquisitions and other investments, service of debt principal, dividends, and share repurchases. We use free cash flow, as defined, as one measure to monitor and evaluate our performance, including as a financial measure for our annual incentive compensation. Our definition of free cash flow may be different from definitions used by other companies.
The following table summarizes free cash flow by quarter:
|
Quarter Ended |
|||||||||||||||||||||||||||||||
|
|
Mar. 31, 2021 |
|
Jun 30, 2021 |
|
Sep. 30, 2021 (1) |
|
Dec. 31, 2021 |
|
Mar. 31, 2022 |
|
Jun. 30, 2022 |
|
Sep. 30, 2022 |
|
Dec. 31, 2022 |
||||||||||||||||
Cash provided by (used for) operating activities |
|
$ |
248.9 |
|
|
$ |
461.5 |
|
|
$ |
204.1 |
|
|
$ |
(12.0 |
) |
|
$ |
90.8 |
|
|
$ |
344.9 |
|
|
$ |
399.4 |
|
|
$ |
66.3 |
|
Capital expenditures |
|
|
(25.0 |
) |
|
|
(24.5 |
) |
|
|
(43.7 |
) |
|
|
(37.1 |
) |
|
|
(44.9 |
) |
|
|
(18.3 |
) |
|
|
(40.8 |
) |
|
|
(24.2 |
) |
Free cash flow |
|
$ |
223.9 |
|
|
$ |
437.0 |
|
|
$ |
160.4 |
|
|
$ |
(49.1 |
) |
|
$ |
45.9 |
|
|
$ |
326.6 |
|
|
$ |
358.6 |
|
|
$ |
42.1 |
|
(1) |
Includes a payment of $28 million pre-tax to settle hedges executed in connection with our issuance of $1.5 billion of long-term notes in the fourth quarter of fiscal 2021. |
The table below provides the calculation of free cash flow as a percentage of adjusted income ("free cash flow conversion") for the three months ended December 31, 2022 and 2021:
|
Quarter Ended |
||||||
|
Dec. 31, 2022 |
|
Dec. 31, 2021 |
||||
Free cash flow (a) |
$ |
42.1 |
|
|
$ |
(49.1 |
) |
Adjusted income (b) |
|
285.3 |
|
|
|
251.3 |
|
Free cash flow conversion (a/b) |
|
15 |
% |
|
|
(20 |
) % |
Return On Invested Capital
Our press release contains information regarding Return On Invested Capital (ROIC), which is a non-GAAP financial measure. We believe that ROIC is useful to investors as a measure of performance and of the effectiveness of the use of capital in our operations. We use ROIC as one measure to monitor and evaluate our performance. Our measure of ROIC may be different from that used by other companies. We define ROIC as the percentage resulting from the following calculation:
(a) Net income, before Interest expense, Income tax provision, and Purchase accounting depreciation and amortization, divided by;
(b) average invested capital for the year, calculated as a five quarter rolling average using the sum of Short-term debt, Long-term debt, Shareowners’ equity, and Accumulated amortization of goodwill and other intangible assets, minus Cash and cash equivalents, Short-term investments, and long-term investments (fixed income securities), multiplied by;
(c) one minus the effective tax rate for the period.
ROIC is calculated as follows (in millions, except percentages):
|
|
Twelve Months Ended |
||||||
|
|
December 31, |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
(a) Return |
|
|
|
|
||||
Net income |
|
$ |
1,058.9 |
|
|
$ |
992.8 |
|
Interest expense |
|
|
127.8 |
|
|
|
101.6 |
|
Income tax provision |
|
|
200.1 |
|
|
|
115.2 |
|
Purchase accounting depreciation and amortization |
|
|
103.8 |
|
|
|
69.5 |
|
Return |
|
$ |
1,490.6 |
|
|
$ |
1,279.1 |
|
(b) Average invested capital |
|
|
|
|
||||
Short-term debt |
|
$ |
794.7 |
|
|
$ |
263.3 |
|
Long-term debt |
|
|
3,226.7 |
|
|
|
2,573.9 |
|
Shareowners’ equity |
|
|
2,925.4 |
|
|
|
2,416.3 |
|
Accumulated amortization of goodwill and intangibles |
|
|
1,017.4 |
|
|
|
1,007.8 |
|
Cash and cash equivalents |
|
|
(483.3 |
) |
|
|
(697.7 |
) |
Short-term and long-term investments |
|
|
(7.6 |
) |
|
|
(0.6 |
) |
Average invested capital |
|
$ |
7,473.3 |
|
|
$ |
5,563.0 |
|
(c) Effective tax rate |
|
|
|
|
||||
Income tax provision |
|
|
200.1 |
|
|
|
115.2 |
|
Income before income taxes |
|
$ |
1,259.0 |
|
|
$ |
1,108.0 |
|
Effective tax rate |
|
|
15.9 |
% |
|
|
10.4 |
% |
(a) / (b) * (1-c) Return On Invested Capital |
|
|
16.8 |
% |
|
|
20.6 |
% |
Ed Moreland
Media Relations
Rockwell Automation
571.296.0391
Aijana Zellner
Investor Relations
Rockwell Automation
414.382.8510
Source: Rockwell Automation, Inc.