Document and Entity Information

6 Months Ended

Mar. 31, 2017

Document and Entity Information [Abstract]

Entity Registrant Name

ROCKWELL AUTOMATION INC.

Entity Central Index Key

0001024478

Document Type

10-Q

Document Period End Date

Mar. 31, 2017

Amendment Flag

false

Document Fiscal Year Focus

2017

Document Fiscal Period Focus

Q2

Current Fiscal Year End Date

--09-30

Entity Filer Category

Large Accelerated Filer

Entity Common Stock, Shares Outstanding

128,835,404

Condensed Consolidated Balance Sheet (Unaudited) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2017

Sep. 30, 2016

Current assets:

Cash and cash equivalents

$ 1,440.8

$ 1,526.4

Short-term investments

1,092.7

902.8

Receivables

1,082.6

1,079.0

Inventories

543.2

526.6

Other current assets

158.1

150.2

Total current assets

4,317.4

4,185.0

Property, net of accumulated depreciation of $1,443.2 and $1,404.5, respectively

567.2

578.3

Goodwill

1,063.3

1,073.9

Other intangible assets, net

239.2

255.3

Deferred income taxes

634.0

633.9

Other assets

243.9

374.8

Total

7,065.0

7,101.2

Current liabilities:

Short-term Debt

373.4

448.6

Current portion of long-term debt

250.0

0

Accounts payable

564.6

543.1

Compensation and benefits

196.0

145.6

Advance payments from customers and deferred revenue

247.1

214.5

Customer returns, rebates and incentives

179.4

176.5

Other current liabilities

214.9

447.6

Total current liabilities

2,025.4

1,975.9

Long-term debt

1,240.0

1,516.3

Retirement benefits

1,402.6

1,430.2

Other liabilities

199.2

188.7

Commitments and contingent liabilities (Note 11)

Shareowners' equity:

Common stock ($1.00 par value, shares issued: 181.4)

181.4

Additional paid-in capital

1,615.4

1,588.2

Retained earnings

5,877.1

5,668.4

Accumulated other comprehensive loss

(1,508.0)

(1,538.8)

Common stock in treasury, at cost (shares held: March 31, 2017, 52.6; September 30, 2016, 52.9)

(3,968.1)

(3,909.1)

Total shareowners' equity

2,197.8

1,990.1

Total

$ 7,065.0

$ 7,101.2

Condensed Consolidated Balance Sheet (Unaudited) (Parenthetical) (USD $)

In Millions, except Per Share data, unless otherwise specified

Mar. 31, 2017

Sep. 30, 2016

Statement of Financial Position [Abstract]

Accumulated depreciation

$ 1,443.2

$ 1,404.5

Common stock, par value per share

$ 1.00

Common stock, shares issued

181.4

Treasury stock, shares

52.6

52.9

Condensed Consolidated Statement of Operations (Unaudited) (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2016

Sales

Products and solutions

$ 1,384.4

$ 1,283.0

$ 2,714.6

$ 2,554.3

Services

169.9

157.3

330.0

312.6

Total sales

1,554.3

1,440.3

3,044.6

2,866.9

Cost of sales

Products and solutions

(787.2)

(738.3)

(1,534.3)

(1,446.9)

Services

(110.6)

(107.9)

(211.5)

(213.2)

Total cost of sales

(897.8)

(846.2)

(1,745.8)

(1,660.1)

Gross profit

656.5

594.1

1,298.8

1,206.8

Selling, general and administrative expenses

(409.2)

(358.7)

(779.2)

(718.6)

Other income (expense)

1.9

(0.8)

5.9

0.7

Interest expense

(18.9)

(17.6)

(37.6)

(35.0)

Income before income taxes

230.3

217.0

487.9

453.9

Income tax provision

(40.8)

(49.0)

(83.7)

(100.4)

Net income

$ 189.5

$ 168.0

$ 404.2

$ 353.5

Basic earnings per share:

Basic

$ 1.47

$ 1.29

$ 3.14

$ 2.69

Diluted earnings per share:

Diluted

$ 1.45

$ 1.28

$ 3.11

$ 2.68

Cash dividends per share

$ 0.76

$ 0.725

$ 1.52

$ 1.45

Weighted average outstanding shares:

Basic

128.7

130.5

128.5

131.2

Diluted

130.3

131.3

130.0

132.0

Condensed Consolidated Statement of Comprehensive Income (Unaudited) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2016

Comprehensive income

Net income

$ 189.5

$ 168.0

$ 404.2

$ 353.5

Other comprehensive income (loss), net of tax:

Pension and other postretirement benefit plan adjustments (net of tax expense of $12.4, $9.8, $25.0, $19.6)

23.8

18.4

48.3

36.8

Currency translation adjustments

60.8

7.4

(25.4)

(17.0)

Net change in unrealized gains and losses on cash flow hedges (net of tax (benefit) expense of ($0.7), ($4.3), $3.3, and ($4.1))

(3.6)

(12.5)

8.0

(10.9)

Net change in unrealized gains and losses on available-for-sale investments

(0.1)

0

(0.1)

0

Other comprehensive income (loss)

80.9

13.3

30.8

8.9

Comprehensive income

$ 270.4

$ 181.3

$ 435.0

$ 362.4

Condensed Consolidated Statement of Comprehensive Income (Unaudited) (Parenthetical) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2016

Other Comprehensive Income (Loss), Tax, Parenthetical Disclosures [Abstract]

Tax expense from pension and other postretirement benefit plan adjustments

$ 12.4

$ 9.8

$ 25.0

$ 19.6

Tax expense from net change in unrealized gains and losses on cash flow hedges

$ (0.7)

$ (4.3)

$ 3.3

$ (4.1)

Condensed Consolidated Statement of Cash Flows (Unaudited) (USD $)

In Millions, unless otherwise specified

6 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Operating activities:

Net income

$ 404.2

$ 353.5

Adjustments to arrive at cash provided by operating activities:

Depreciation

65.4

71.7

Amortization of intangible assets

15.6

14.7

Share-based compensation expense

20.2

20.6

Retirement benefit expense

86.1

78.2

Pension contributions

(28.5)

(21.2)

Net loss on disposition of property

0.1

0.5

Excess income tax benefit from share-based compensation

0

(1.2)

Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments:

Receivables

(16.4)

13.5

Inventories

(16.6)

(33.8)

Accounts payable

20.0

3.3

Advance payments from customers and deferred revenue

33.2

26.5

Compensation and benefits

51.2

(73.7)

Income taxes

(7.7)

(58.0)

Other assets and liabilities

(15.0)

4.7

Cash provided by operating activities

611.8

399.3

Investing activities:

Capital expenditures

(67.4)

(52.6)

Acquisition of businesses, net of cash acquired

(1.1)

(21.1)

Purchases of investments

721.6

590.6

Proceeds from maturities of investments

422.1

397.6

Proceeds from sale of investments

6.1

0

Proceeds from sale of property

0.4

0.2

Cash used for investing activities

(361.5)

(266.5)

Financing activities:

Net (repayment) issuance of short-term debt

(75.1)

277.6

Cash dividends

(195.5)

(190.4)

Purchases of treasury stock

(185.0)

(257.4)

Proceeds from the exercise of stock options

136.9

12.8

Excess income tax benefit from share-based compensation

0

1.2

Cash used for financing activities

(318.7)

(156.2)

Effect of exchange rate changes on cash

(17.2)

(7.6)

Decrease in cash and cash equivalents

(85.6)

(31.0)

Cash and cash equivalents at beginning of period

1,526.4

1,427.3

Cash and cash equivalents at end of period

$ 1,440.8

$ 1,396.3

Basis of Presentation and Accounting Policies

In the opinion of management of Rockwell Automation, Inc. ("Rockwell Automation" or "the Company"), 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, 2016. The results of operations for the three and six-month periods ended March 31, 2017, 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.

Cash and Cash Equivalents

Cash and cash equivalents include time deposits, certificates of deposit, and other fixed income securities with original maturities of three months or less at the time of purchase.

Short-term Investments

Short-term investments include time deposits, certificates of deposit and other fixed income securities with original maturities longer than three months at the time of purchase and less than one year from period end. All investments meeting the definition of a security are accounted for as available-for-sale and stated at fair value. All other investments are stated at cost, which approximates fair value.

Receivables

Receivables are stated net of an allowance for doubtful accounts of $24.4 million at March 31, 2017, and $24.5 million at September 30, 2016. In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $10.8 million at March 31, 2017, and $7.9 million at September 30, 2016.

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,
	2017			2016			2017			2016
Net income	$	189.5		$	168.0		$	404.2		$	353.5
Less: Allocation to participating securities	(0.2		)	(0.2		)	(0.4		)	(0.4		)
Net income available to common shareowners	$	189.3		$	167.8		$	403.8		$	353.1
Basic weighted average outstanding shares	128.7			130.5			128.5			131.2
Effect of dilutive securities
Stock options	1.3			0.8			1.3			0.8
Performance shares	0.3			—			0.2			—
Diluted weighted average outstanding shares	130.3			131.3			130.0			132.0
Earnings per share:
Basic	$	1.47		$	1.29		$	3.14		$	2.69
Diluted	$	1.45		$	1.28		$	3.11		$	2.68

For each of the three and six months ended March 31, 2017, share-based compensation awards for 1.0 million shares were excluded from the diluted EPS calculation because they were antidilutive. For each of the three and six months ended March 31, 2016, share-based compensation awards for 2.9 million shares were excluded from the diluted EPS calculation because they were antidilutive.

Non-Cash Investing and Financing Activities

Capital expenditures of $17.6 million and $13.8 million were accrued within accounts payable and other current liabilities at March 31, 2017 and 2016, respectively. At March 31, 2017 and 2016, there were $7.0 million and $3.4 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 Condensed Consolidated Statement of Cash Flows.

Recent Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board (FASB) issued a new standard on share-based compensation. This requirement is effective for us no later than October 1, 2017; however, we elected to adopt earlier as of October 1, 2016. This standard requires entities to record the excess income tax benefit or deficiency from share-based compensation within the income tax provision rather than within additional paid-in capital. This change reduced our income tax provision by $16.8 million and $20.2 million in the three and six months ended March 31, 2017, respectively. The standard also requires this benefit or deficiency to be classified as an operating cash flow rather than as a financing cash flow. The requirement to record the benefit or deficiency within the income tax provision is effective on a prospective basis. We have elected to adopt the cash flow presentation requirement on a prospective basis. Our adoption of all other requirements under the new standard had no material impact on our financial statements.

In February 2016, the 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. This standard is effective for us for reporting periods beginning October 1, 2019. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements and related disclosures.

In May 2014, the FASB issued a new standard on revenue recognition related to contracts with customers. This standard supersedes nearly all existing revenue recognition guidance and involves a five-step principles-based approach to recognizing revenue. The underlying principle is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The new standard will also require additional qualitative and quantitative disclosures about contracts with customers, significant judgments made in applying the revenue guidance, and assets recognized from the costs to obtain or fulfill a contract. We will adopt this new standard in the first quarter of fiscal 2019 and have established a project plan and a cross-functional implementation team to adopt the new standard. We are in the process of identifying necessary changes to accounting policies, processes, controls and systems to enable compliance with this new standard. We continue to evaluate the impact the adoption of this standard will have on our consolidated financial statements and related disclosures.

Share-Based Compensation

We recognized $9.5 million and $20.2 million of pre-tax share-based compensation expense during the three and six months ended March 31, 2017, respectively. We recognized $9.8 million and $20.6 million of pre-tax share-based compensation expense during the three and six months ended March 31, 2016, 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):



	Six Months Ended March 31,
	2017			2016
	Grants	Wtd. Avg. Share Fair Value		Grants	Wtd. Avg. Share Fair Value
Stock options	983	$	25.39	1,134	$	21.19
Performance shares	42	174.37		96	87.64
Restricted stock and restricted stock units	46	135.84		57	103.67
Unrestricted stock	8	128.35		9	97.73

Inventories

Inventories consist of (in millions):



	March 31, 2017		September 30, 2016
Finished goods	$	215.1	$	215.8
Work in process	172.6		158.0
Raw materials	155.5		152.8
Inventories	$	543.2	$	526.6

Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill for the six months ended March 31, 2017, are (in millions):



	Architecture & Software			Control Products & Solutions			Total
Balance as of September 30, 2016	$	414.5		$	659.4		$	1,073.9
Acquisition of business	—			0.5			0.5
Translation	(2.4		)	(8.7		)	(11.1		)
Balance as of March 31, 2017	$	412.1		$	651.2		$	1,063.3

Other intangible assets consist of (in millions):



	March 31, 2017
	Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets:
Computer software products	$	182.4	$	108.2	$	74.2
Customer relationships	111.3		55.0		56.3
Technology	103.2		52.4		50.8
Trademarks	30.8		18.3		12.5
Other	10.6		8.9		1.7
Total amortized intangible assets	438.3		242.8		195.5
Allen-Bradley^® trademark not subject to amortization	43.7		—		43.7
Total	$	482.0	$	242.8	$	239.2



	September 30, 2016
	Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets:
Computer software products	$	182.4	$	103.4	$	79.0
Customer relationships	112.6		51.9		60.7
Technology	103.9		48.5		55.4
Trademarks	31.4		17.0		14.4
Other	11.0		8.9		2.1
Total amortized intangible assets	441.3		229.7		211.6
Allen-Bradley^® trademark not subject to amortization	43.7		—		43.7
Total	$	485.0	$	229.7	$	255.3

Estimated amortization expense is $29.8 million in 2017, $25.0 million in 2018, $21.8 million in 2019, $19.1 million in 2020 and $18.4 million in 2021.

We performed the annual evaluation of our goodwill and indefinite life intangible assets for impairment as required by accounting principles generally accepted in the United States (U.S. GAAP) during the second quarter of 2017 and concluded that these assets are not impaired.

Short-term Debt

Our short-term debt obligations primarily consist of commercial paper borrowings. Commercial paper borrowings outstanding were $373.0 million and $448.6 million at March 31, 2017, and September 30, 2016, respectively. The weighted average interest rate of the commercial paper outstanding was 1.04 percent and 0.57 percent at March 31, 2017, and September 30, 2016, respectively.

The current portion of long-term debt consists of our $250.0 million 5.65% notes due in December 2017. These notes were included within long-term debt at September 30, 2016, but are included within current liabilities at March 31, 2017, as they are due within the next twelve months.

At March 31, 2017, and September 30, 2016, our total borrowing capacity under our unsecured revolving credit facility expiring in March 2020 was $1.0 billion. We did not borrow against this credit facility during the three months ended March 31, 2017, or the twelve months ended September 30, 2016. In December 2016, we amended the financial covenant under this credit facility. The previous financial covenant, which limited our debt-to-total-capital ratio to 60 percent, was replaced with a minimum EBITDA-to-interest ratio of 3.0 to 1.0. The EBITDA-to-interest ratio is defined in the amendment as the ratio of consolidated EBITDA (as defined in the amendment) for the preceding four quarters to consolidated interest expense for the same period.

Other Current Liabilities

Other current liabilities consist of (in millions):



	March 31, 2017		September 30, 2016
Unrealized losses on foreign exchange contracts	$	16.1	$	15.6
Product warranty obligations	26.6		28.0
Taxes other than income taxes	44.0		43.1
Accrued interest	16.9		16.9
Income taxes payable	49.6		28.6
Rocky Flats settlement (Note 14)	—		242.5
Other	61.7		72.9
Other current liabilities	$	214.9	$	447.6

Product Warranty Obligations

We record a liability for product warranty obligations at the time of sale to a customer based upon historical warranty experience. Most of our products are covered under a warranty period that runs for twelve months from either the date of sale or installation. We also record a liability for specific warranty matters when they become probable and reasonably estimable.

Changes in product warranty obligations for the six months ended March 31, 2017 and 2016 are (in millions):



	Six Months Ended March 31,
	2017			2016
Balance at beginning of period	$	28.0		$	27.9
Accruals for warranties issued during the current period	12.5			12.6
Adjustments to pre-existing warranties	(1.7		)	0.1
Settlements of warranty claims	(12.2		)	(12.5		)
Balance at end of period	$	26.6		$	28.1

Investments

8. Investments

We invest in certificates of deposit, time deposits, commercial paper and other fixed income securities. All investments meeting the U.S. GAAP definition of a security were classified as available-for-sale as of March 31, 2017, and September 30, 2016. Unrealized gains and losses on available-for-sale investments are included in our Condensed Consolidated Balance Sheet as a component of accumulated other comprehensive income, net of any deferred taxes. Realized gains and losses are included in net income.

Our investments consist of (in millions):



	March 31, 2017		September 30, 2016
Certificates of deposit and time deposits	$	999.4	$	902.8
Commercial paper	14.2		—
Corporate debt securities	76.3		—
Government securities	114.2		—
Total	$	1,204.1	$	902.8

Pre-tax gross unrealized gains and losses on available-for-sale investments were not material at March 31, 2017. Pre-tax gross realized gains and losses on available-for-sale investments were not material for the three and six months ended March 31, 2017 and 2016. At March 31, 2017, there were $12.4 million of outstanding purchases of investments recorded in accounts payable that did not settle until April 2017.

We evaluated all investments for which the fair value was less than amortized cost for impairment on an individual security basis at March 31, 2017. This assessment included consideration of our intent and ability to hold the security and the credit risks specific to each security. We determined that the declines in fair value of these investments were not other than temporary as of March 31, 2017, and accordingly we did not recognize any impairment charges in net income.

The table below summarizes the contractual maturities of our investments as of March 31, 2017 (in millions). Actual maturities may differ from the contractual maturities below as borrowers may have the right to prepay certain obligations.



	Fair Value
Less than one year	$	1,092.7
Due in one to three years	111.4
Total	$	1,204.1

Classification of our investments as current or noncurrent is based on the nature of the investment and when the investment is reasonably expected to be realized. These investments were included in the following line items within the Condensed Consolidated Balance Sheet (in millions):



	March 31, 2017		September 30, 2016
Short-term investments	$	1,092.7	$	902.8
Other assets	111.4		—
Total	$	1,204.1	$	902.8

8. Investments (continued)

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.

We recognize all available-for-sale investments at fair value in the Condensed Consolidated Balance Sheet. The valuation methodologies used for our investments measured at fair value are described as follows.

Certificates of deposit and time deposits — These investments are stated at cost, which approximates fair value.

Commercial paper — These investments are stated at amortized cost, which approximates fair value.

Government securities — Valued at the most recent closing price on the active market on which the individual securities are traded or, absent an active market, utilizing observable inputs such as closing prices in less frequently traded markets.

Corporate debt securities — Valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.

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 hold any Level 3 investments or have any transfers between levels of fair value measurements during the periods presented.

Fair values of our investments were (in millions):



	March 31, 2017
	Level 1		Level 2		Level 3		Total
Certificates of deposit and time deposits	$	—	$	999.4	$	—	$	999.4
Commercial paper	—		14.2		—		14.2
Corporate debt securities	—		76.3		—		76.3
Government securities	96.8		17.4		—		114.2
Total	$	96.8	$	1,107.3	$	—	$	1,204.1



	September 30, 2016
	Level 1		Level 2		Level 3		Total
Certificates of deposit and time deposits	$	—	$	902.8	$	—	$	902.8
Commercial paper	—		—		—		—
Corporate debt securities	—		—		—		—
Government securities	—		—		—		—
Total	$	—	$	902.8	$	—	$	902.8

Retirement Benefits

The components of net periodic benefit cost (income) are (in millions):



	Pension Benefits
	Three Months Ended March 31,						Six Months Ended March 31,
	2017			2016			2017			2016
Service cost	$	24.2		$	21.8		$	48.3		$	43.9
Interest cost	37.8			42.2			75.6			84.7
Expected return on plan assets	(56.2		)	(54.4		)	(112.4		)	(109.1		)
Amortization:
Prior service credit	(1.1		)	(0.7		)	(1.9		)	(1.4		)
Net actuarial loss	38.2			31.1			76.2			62.2
Settlements	—			—			0.2			—
Net periodic benefit cost	$	42.9		$	40.0		$	86.0		$	80.3



	Other Postretirement Benefits
	Three Months Ended March 31,						Six Months Ended March 31,
	2017			2016			2017			2016
Service cost	$	0.4		$	0.3		$	0.7		$	0.6
Interest cost	0.7			0.9			1.3			1.7
Amortization:
Prior service credit	(1.5		)	(2.9		)	(3.0		)	(5.7		)
Net actuarial loss	0.6			0.7			1.1			1.3
Net periodic benefit cost (income)	$	0.2		$	(1.0	)	$	0.1		$	(2.1	)

Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component for the three and six months ended March 31, 2017, were (in millions):



Three Months Ended March 31, 2017
	Pension and other postretirement benefit plan adjustments, net of tax			Accumulated currency translation adjustments, net of tax			Net unrealized gains (losses) on cash flow hedges, net of tax			Net unrealized gains (losses) on available-for-sale investments, net of tax			Total accumulated other comprehensive loss, net of tax
Balance as of December 31, 2016	$	(1,215.3	)	$	(381.1	)	$	7.5		$	—		$	(1,588.9	)
Other comprehensive income (loss) before reclassifications	—			60.8			(2.3		)	(0.1		)	58.4
Amounts reclassified from accumulated other comprehensive loss	23.8			—			(1.3		)	—			22.5
Other comprehensive income (loss)	23.8			60.8			(3.6		)	(0.1		)	80.9
Balance as of March 31, 2017	$	(1,191.5	)	$	(320.3	)	$	3.9		$	(0.1	)	$	(1,508.0	)

Six Months Ended March 31, 2017
	Pension and other postretirement benefit plan adjustments, net of tax			Accumulated currency translation adjustments, net of tax			Net unrealized gains (losses) on cash flow hedges, net of tax			Net unrealized gains (losses) on available-for-sale investments, net of tax			Total accumulated other comprehensive loss, net of tax
Balance as of September 30, 2016	$	(1,239.8	)	$	(294.9	)	$	(4.1	)	$	—		$	(1,538.8	)
Other comprehensive income (loss) before reclassifications	0.7			(25.4		)	9.5			(0.1		)	(15.3		)
Amounts reclassified from accumulated other comprehensive loss	47.6			—			(1.5		)	—			46.1
Other comprehensive income (loss)	48.3			(25.4		)	8.0			(0.1		)	30.8
Balance as of March 31, 2017	$	(1,191.5	)	$	(320.3	)	$	3.9		$	(0.1	)	$	(1,508.0	)

10. Accumulated Other Comprehensive Loss (continued)

Changes in accumulated other comprehensive loss by component for the three and six months ended March 31, 2016, were (in millions):



Three Months Ended March 31, 2016
	Pension and other postretirement benefit plan adjustments, net of tax			Accumulated currency translation adjustments, net of tax			Net unrealized gains (losses) on cash flow hedges, net of tax			Net unrealized gains (losses) on available-for-sale investments, net of tax		Total accumulated other comprehensive loss, net of tax
Balance as of December 31, 2015	$	(1,078.7	)	$	(276.8	)	$	16.5		$	—	$	(1,339.0	)
Other comprehensive income (loss) before reclassifications	—			7.4			(5.8		)	—		1.6
Amounts reclassified from accumulated other comprehensive loss	18.4			—			(6.7		)	—		11.7
Other comprehensive income (loss)	18.4			7.4			(12.5		)	—		13.3
Balance as of March 31, 2016	$	(1,060.3	)	$	(269.4	)	$	4.0		$	—	$	(1,325.7	)

Six Months Ended March 31, 2016
	Pension and other postretirement benefit plan adjustments, net of tax			Accumulated currency translation adjustments, net of tax			Net unrealized gains (losses) on cash flow hedges, net of tax			Net unrealized gains (losses) on available-for-sale investments, net of tax		Total accumulated other comprehensive loss, net of tax
Balance as of September 30, 2015	$	(1,097.1	)	$	(252.4	)	$	14.9		$	—	$	(1,334.6	)
Other comprehensive (loss) income before reclassifications	—			(17.0		)	0.7			—		(16.3		)
Amounts reclassified from accumulated other comprehensive loss	36.8			—			(11.6		)	—		25.2
Other comprehensive income (loss)	36.8			(17.0		)	(10.9		)	—		8.9
Balance as of March 31, 2016	$	(1,060.3	)	$	(269.4	)	$	4.0		$	—	$	(1,325.7	)

10. Accumulated Other Comprehensive Loss (continued)

The reclassifications out of accumulated other comprehensive loss to the Condensed Consolidated Statement of Operations were (in millions):



	Three Months Ended March 31,						Six Months Ended March 31,						Affected Line in the Condensed Consolidated Statement of Operations
	2017			2016			2017			2016
Pension and other postretirement benefit plan adjustments:
Amortization of prior service credit	$	(2.6	)	$	(3.6	)	$	(4.9	)	$	(7.1	)	(a)
Amortization of net actuarial loss	38.8			31.8			77.3			63.5			(a)
Settlements	—			—			0.2			—			(a)
	36.2			28.2			72.6			56.4			Income before income taxes
	(12.4		)	(9.8		)	(25.0		)	(19.6		)	Income tax provision
	$	23.8		$	18.4		$	47.6		$	36.8		Net income

Net unrealized losses (gains) on cash flow hedges:
Forward exchange contracts	$	1.0		$	1.6		$	1.5		$	4.1		Sales
Forward exchange contracts	(2.6		)	(10.2		)	(3.6		)	(19.0		)	Cost of sales
Forward exchange contracts	0.3			—			0.6			—			Selling, general and administrative expenses
	(1.3		)	(8.6		)	(1.5		)	(14.9		)	Income before income taxes
	—			1.9			—			3.3			Income tax provision
	$	(1.3	)	$	(6.7	)	$	(1.5	)	$	(11.6	)	Net income

Total reclassifications	$	22.5		$	11.7		$	46.1		$	25.2		Net income

(a) Reclassified from accumulated other comprehensive loss into cost of sales and selling, general and administrative expenses. These components are included in the computation of net periodic benefit cost (income). See Note 9 for further information.

Commitments and Contingent Liabilities

Various lawsuits, claims and proceedings have been or may be instituted or asserted against us relating to the conduct of our business, including those pertaining to product liability, environmental, safety and health, intellectual property, employment and contract matters. Although the outcome of litigation cannot be predicted with certainty and some lawsuits, claims or proceedings may be disposed of unfavorably to us, we believe the disposition of matters that are pending or have been asserted will not have a material effect on our business, financial condition or results of operations.

We (including our subsidiaries) have been named as a defendant in lawsuits alleging personal injury as a result of exposure to asbestos that was used in certain components of our products many years ago. Currently there are a few thousand claimants in lawsuits that name us as defendants, together with hundreds of other companies. In some cases, the claims involve products from divested businesses, and we are indemnified for most of the costs. However, we have agreed to defend and indemnify asbestos claims associated with products manufactured or sold by our former Dodge mechanical and Reliance Electric motors and motor repair services businesses prior to their divestiture by us, which occurred on January 31, 2007. We are also responsible for half of the costs and liabilities associated with asbestos cases against the former Rockwell International Corporation’s divested measurement and flow control business. But in all cases, for those claimants who do show that they worked with our products or products of divested businesses for which we are responsible, we nevertheless believe we have meritorious defenses, in substantial part due to the integrity of the products, the encapsulated nature of any asbestos-containing components, and the lack of any impairing medical condition on the part of many claimants. We defend those cases vigorously. Historically, we have been dismissed from the vast majority of these claims with no payment to claimants.

We have maintained insurance coverage that we believe covers indemnity and defense costs, over and above self-insured retentions, for claims arising from our former Allen-Bradley subsidiary. Our insurance carrier entered into a cost share agreement with us to pay the substantial majority of future defense and indemnity costs for Allen-Bradley asbestos claims. We believe that this arrangement will continue to provide coverage for Allen-Bradley asbestos claims throughout the remaining life of the asbestos liability.

We also have rights to historic insurance policies that provide indemnity and defense costs, over and above self-insured retentions, for claims arising out of certain asbestos liabilities relating to the divested measurement and flow control business. We initiated litigation against several insurers to pursue coverage for these claims, subject to each carrier's policy limits, and the case is now pending in Los Angeles County Superior Court. In September 2016, we entered into settlement agreements with certain insurance company defendants, and we continue to pursue our claims against the remaining defendants. We believe these settlement agreements will continue to provide partial coverage for these asbestos claims throughout the remaining life of asbestos liability.

The uncertainties of asbestos claim litigation make it difficult to predict accurately the ultimate outcome of asbestos claims. That uncertainty is increased by the possibility of adverse rulings or new legislation affecting asbestos claim litigation or the settlement process. Subject to these uncertainties and based on our experience defending asbestos claims, we do not believe these lawsuits will have a material effect on our business, financial condition or results of operations.

We have, from time to time, divested certain of our businesses. In connection with these divestitures, certain lawsuits, claims and proceedings may be instituted or asserted against us related to the period that we owned the businesses, either because we agreed to retain certain liabilities related to these periods or because such liabilities fall upon us by operation of law. In some instances, the divested business has assumed the liabilities; however, it is possible that we might be responsible for satisfying those liabilities if the divested business is unable to do so.

In connection with the spin-offs of our former automotive business, semiconductor systems business and avionics and communications business, the spun-off companies have agreed to indemnify us for substantially all contingent liabilities related to the respective businesses, including environmental and intellectual property matters.

In conjunction with the sale of our Dodge mechanical and Reliance Electric motors and motor repair services businesses, we agreed to indemnify Baldor Electric Company for costs and damages related to certain legal, legacy environmental and asbestos matters of these businesses arising before January 31, 2007, for which the maximum exposure would be capped at the amount received for the sale.

11. Commitments and Contingent Liabilities (continued)

In many countries we provide a limited intellectual property indemnity as part of our terms and conditions of sale. We also at times provide limited intellectual property indemnities in other contracts with third parties, such as contracts concerning the development and manufacture of our products. As of March 31, 2017, we were not aware of any material indemnification claims where an unfavorable outcome was probable or reasonably possible. Historically, claims that have been made under the indemnification agreements have not had a material impact on our business, financial condition or results of operations; however, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our business, financial condition or results of operations in a particular period.

Income Taxes

At the end of each interim period, we estimate a base effective tax rate that we expect for the full fiscal year based on our most recent forecast of pre-tax income, permanent book and tax differences and global tax planning strategies. We use this base rate to provide for income taxes on a year-to-date basis, excluding the effect of significant unusual items and items that are reported net of their related tax effects in the period in which they occur.

The effective tax rate was 17.7 percent and 17.2 percent in the three and six months ended March 31, 2017, respectively, compared to 22.6 percent and 22.1 percent in the three and six months ended March 31, 2016. The effective tax rate was lower than the U.S. statutory rate of 35 percent in each period primarily because we benefited from lower non-U.S. tax rates. In the three and six months ended March 31, 2017, we also realized benefits from discrete tax items. In the three months ended March 31, 2016, we also realized a benefit from a discrete tax item. In the six months ended March 31, 2016, our effective tax rate was favorably impacted by this discrete tax item and the retroactive and permanent extension of the U.S. federal research and development tax credit during the first quarter of 2016.

The amount of gross unrecognized tax benefits was $41.6 million and $32.4 million at March 31, 2017, and September 30, 2016, respectively, of which the entire amount would reduce our effective tax rate if recognized.

Accrued interest and penalties related to unrecognized tax benefits were $5.7 million and $5.2 million at March 31, 2017, and September 30, 2016, respectively. We recognize interest and penalties related to unrecognized tax benefits in the income tax provision.

We believe it is reasonably possible that the amount of gross unrecognized tax benefits could be reduced by up to $20.1 million in the next 12 months as a result of the resolution of tax matters in various global jurisdictions and the lapses of statutes of limitations. If all of the unrecognized tax benefits were recognized, the net reduction to our income tax provision, including the recognition of interest and penalties and offsetting tax assets, could be up to $5.8 million.

We conduct business globally and are routinely audited by the various tax jurisdictions in which we operate. We are no longer subject to U.S. federal income tax examinations for years before 2014 and are no longer subject to state, local and foreign income tax examinations for years before 2003.

Business Segment Information

The following tables reflect the sales and operating results of our reportable segments (in millions):



	Three Months Ended March 31,						Six Months Ended March 31,
	2017			2016			2017			2016
Sales
Architecture & Software	$	719.0		$	629.5		$	1,415.4		$	1,272.4
Control Products & Solutions	835.3			810.8			1,629.2			1,594.5
Total	$	1,554.3		$	1,440.3		$	3,044.6		$	2,866.9
Segment operating earnings
Architecture & Software	$	190.6		$	154.6		$	399.2		$	330.8
Control Products & Solutions	105.4			122.9			213.4			242.6
Total	296.0			277.5			612.6			573.4
Purchase accounting depreciation and amortization	(5.6		)	(4.5		)	(11.2		)	(9.2		)
General corporate – net	(21.4		)	(19.5		)	(36.3		)	(37.5		)
Non-operating pension costs	(19.8		)	(18.9		)	(39.6		)	(37.8		)
Interest expense	(18.9		)	(17.6		)	(37.6		)	(35.0		)
Income before income taxes	$	230.3		$	217.0		$	487.9		$	453.9

Among other considerations, we evaluate performance and allocate resources based upon segment operating earnings before income taxes, interest expense, costs related to corporate offices, non-operating pension costs, certain nonrecurring corporate initiatives, gains and losses from the disposition of businesses and purchase accounting depreciation and amortization. Depending on the product, intersegment sales within a single legal entity are either at cost or cost plus a mark-up, which does not necessarily represent a market price. Sales between legal entities are at an appropriate transfer price. We allocate costs related to shared segment operating activities to the segments using a methodology consistent with the expected benefit.

Rocky Flats Settlement

Legal Matters and Contingencies

Rocky Flats Settlement

From 1975 to 1989, Rockwell International Corporation (RIC) operated the Rocky Flats facility in Colorado for the U.S. Department of Energy (DoE). In 1990, a class of landowners near Rocky Flats sued RIC and Dow Chemical, another former operator of the facility. In May 2016, the parties agreed to settle this case and the DoE authorized the settlement. Under the court approved settlement agreement, we and Dow Chemical agreed to pay $375.0 million in the aggregate to resolve the claims. Under RIC’s contract with the DoE and federal law, RIC was entitled to indemnification by the DoE for its portion of the settlement amount, which was $243.75 million. When RIC was acquired by Boeing in 1996, we agreed to indemnify Boeing for RIC’s liabilities related to Rocky Flats and received the benefits of RIC’s corresponding indemnity rights against the DoE. Pursuant to the settlement agreement, in fiscal 2016, RIC paid an initial amount of $1.25 million to the plaintiff class escrow fund. In January 2017, the DoE fulfilled its indemnification obligation by paying $243.75 million, and the full amount of RIC's obligation under the settlement agreement has now been transferred to the plaintiff class escrow account. As a result, we were not required to make any payment under the settlement agreement.

Basis of Presentation and Accounting Policies (Policies)

Receivables

Receivables are stated net of an allowance for doubtful accounts of $24.4 million at March 31, 2017, and $24.5 million at September 30, 2016. In addition, receivables are stated net of an allowance for certain customer returns, rebates and incentives of $10.8 million at March 31, 2017, and $7.9 million at September 30, 2016.

Recent accounting pronouncements

Recent Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board (FASB) issued a new standard on share-based compensation. This requirement is effective for us no later than October 1, 2017; however, we elected to adopt earlier as of October 1, 2016. This standard requires entities to record the excess income tax benefit or deficiency from share-based compensation within the income tax provision rather than within additional paid-in capital. This change reduced our income tax provision by $16.8 million and $20.2 million in the three and six months ended March 31, 2017, respectively. The standard also requires this benefit or deficiency to be classified as an operating cash flow rather than as a financing cash flow. The requirement to record the benefit or deficiency within the income tax provision is effective on a prospective basis. We have elected to adopt the cash flow presentation requirement on a prospective basis. Our adoption of all other requirements under the new standard had no material impact on our financial statements.

In February 2016, the 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. This standard is effective for us for reporting periods beginning October 1, 2019. We are currently evaluating the impact the adoption of this standard will have on our consolidated financial statements and related disclosures.

In May 2014, the FASB issued a new standard on revenue recognition related to contracts with customers. This standard supersedes nearly all existing revenue recognition guidance and involves a five-step principles-based approach to recognizing revenue. The underlying principle is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. The new standard will also require additional qualitative and quantitative disclosures about contracts with customers, significant judgments made in applying the revenue guidance, and assets recognized from the costs to obtain or fulfill a contract. We will adopt this new standard in the first quarter of fiscal 2019 and have established a project plan and a cross-functional implementation team to adopt the new standard. We are in the process of identifying necessary changes to accounting policies, processes, controls and systems to enable compliance with this new standard. We continue to evaluate the impact the adoption of this standard will have on our consolidated financial statements and related disclosures.

Product warranty obligations

We record a liability for product warranty obligations at the time of sale to a customer based upon historical warranty experience. Most of our products are covered under a warranty period that runs for twelve months from either the date of sale or installation. We also record a liability for specific warranty matters when they become probable and reasonably estimable.

Investments

We invest in certificates of deposit, time deposits, commercial paper and other fixed income securities. All investments meeting the U.S. GAAP definition of a security were classified as available-for-sale as of March 31, 2017, and September 30, 2016. Unrealized gains and losses on available-for-sale investments are included in our Condensed Consolidated Balance Sheet as a component of accumulated other comprehensive income, net of any deferred taxes. Realized gains and losses are included in net income.

Fair Value of Financial Instruments

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.

We recognize all available-for-sale investments at fair value in the Condensed Consolidated Balance Sheet. The valuation methodologies used for our investments measured at fair value are described as follows.

Certificates of deposit and time deposits — These investments are stated at cost, which approximates fair value.

Commercial paper — These investments are stated at amortized cost, which approximates fair value.

Government securities — Valued at the most recent closing price on the active market on which the individual securities are traded or, absent an active market, utilizing observable inputs such as closing prices in less frequently traded markets.

Corporate debt securities — Valued at either the yields currently available on comparable securities of issuers with similar credit ratings or valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.

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 hold any Level 3 investments or have any transfers between levels of fair value measurements during the periods presented.

Income taxes

At the end of each interim period, we estimate a base effective tax rate that we expect for the full fiscal year based on our most recent forecast of pre-tax income, permanent book and tax differences and global tax planning strategies. We use this base rate to provide for income taxes on a year-to-date basis, excluding the effect of significant unusual items and items that are reported net of their related tax effects in the period in which they occur.

Basis of Presentation and Accounting Policies (Tables)

Schedule of Earnings Per Share, Basic and Diluted

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,
	2017			2016			2017			2016
Net income	$	189.5		$	168.0		$	404.2		$	353.5
Less: Allocation to participating securities	(0.2		)	(0.2		)	(0.4		)	(0.4		)
Net income available to common shareowners	$	189.3		$	167.8		$	403.8		$	353.1
Basic weighted average outstanding shares	128.7			130.5			128.5			131.2
Effect of dilutive securities
Stock options	1.3			0.8			1.3			0.8
Performance shares	0.3			—			0.2			—
Diluted weighted average outstanding shares	130.3			131.3			130.0			132.0
Earnings per share:
Basic	$	1.47		$	1.29		$	3.14		$	2.69
Diluted	$	1.45		$	1.28		$	3.11		$	2.68

Share-Based Compensation (Tables)

Schedule of Share-based Compensation, Activity

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):



	Six Months Ended March 31,
	2017			2016
	Grants	Wtd. Avg. Share Fair Value		Grants	Wtd. Avg. Share Fair Value
Stock options	983	$	25.39	1,134	$	21.19
Performance shares	42	174.37		96	87.64
Restricted stock and restricted stock units	46	135.84		57	103.67
Unrestricted stock	8	128.35		9	97.73

Inventories (Tables)

Schedule of Inventory, Current

Inventories consist of (in millions):



	March 31, 2017		September 30, 2016
Finished goods	$	215.1	$	215.8
Work in process	172.6		158.0
Raw materials	155.5		152.8
Inventories	$	543.2	$	526.6

Goodwill and Other Intangible Assets (Tables)

Schedule of Goodwill

Changes in the carrying amount of goodwill for the six months ended March 31, 2017, are (in millions):



	Architecture & Software			Control Products & Solutions			Total
Balance as of September 30, 2016	$	414.5		$	659.4		$	1,073.9
Acquisition of business	—			0.5			0.5
Translation	(2.4		)	(8.7		)	(11.1		)
Balance as of March 31, 2017	$	412.1		$	651.2		$	1,063.3

Schedule of Finite Lived and Indefinite Lived Intangible Assets by Major Class

Other intangible assets consist of (in millions):



	March 31, 2017
	Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets:
Computer software products	$	182.4	$	108.2	$	74.2
Customer relationships	111.3		55.0		56.3
Technology	103.2		52.4		50.8
Trademarks	30.8		18.3		12.5
Other	10.6		8.9		1.7
Total amortized intangible assets	438.3		242.8		195.5
Allen-Bradley^® trademark not subject to amortization	43.7		—		43.7
Total	$	482.0	$	242.8	$	239.2



	September 30, 2016
	Carrying Amount		Accumulated Amortization		Net
Amortized intangible assets:
Computer software products	$	182.4	$	103.4	$	79.0
Customer relationships	112.6		51.9		60.7
Technology	103.9		48.5		55.4
Trademarks	31.4		17.0		14.4
Other	11.0		8.9		2.1
Total amortized intangible assets	441.3		229.7		211.6
Allen-Bradley^® trademark not subject to amortization	43.7		—		43.7
Total	$	485.0	$	229.7	$	255.3

Other Current Liabilities (Tables)

Other Current Liabilities

Other current liabilities consist of (in millions):



	March 31, 2017		September 30, 2016
Unrealized losses on foreign exchange contracts	$	16.1	$	15.6
Product warranty obligations	26.6		28.0
Taxes other than income taxes	44.0		43.1
Accrued interest	16.9		16.9
Income taxes payable	49.6		28.6
Rocky Flats settlement (Note 14)	—		242.5
Other	61.7		72.9
Other current liabilities	$	214.9	$	447.6

Product Warranty Obligations (Tables)

Schedule of Product Warranty Liability

Changes in product warranty obligations for the six months ended March 31, 2017 and 2016 are (in millions):



	Six Months Ended March 31,
	2017			2016
Balance at beginning of period	$	28.0		$	27.9
Accruals for warranties issued during the current period	12.5			12.6
Adjustments to pre-existing warranties	(1.7		)	0.1
Settlements of warranty claims	(12.2		)	(12.5		)
Balance at end of period	$	26.6		$	28.1

Investments (Tables)

Investment

Our investments consist of (in millions):



	March 31, 2017		September 30, 2016
Certificates of deposit and time deposits	$	999.4	$	902.8
Commercial paper	14.2		—
Corporate debt securities	76.3		—
Government securities	114.2		—
Total	$	1,204.1	$	902.8

Investments Classified by Contractual Maturity Date

The table below summarizes the contractual maturities of our investments as of March 31, 2017 (in millions). Actual maturities may differ from the contractual maturities below as borrowers may have the right to prepay certain obligations.



	Fair Value
Less than one year	$	1,092.7
Due in one to three years	111.4
Total	$	1,204.1

Fair Value, by Balance Sheet Grouping

Classification of our investments as current or noncurrent is based on the nature of the investment and when the investment is reasonably expected to be realized. These investments were included in the following line items within the Condensed Consolidated Balance Sheet (in millions):



	March 31, 2017		September 30, 2016
Short-term investments	$	1,092.7	$	902.8
Other assets	111.4		—
Total	$	1,204.1	$	902.8

Fair Value Measurements, Recurring and Nonrecurring

Fair values of our investments were (in millions):



	March 31, 2017
	Level 1		Level 2		Level 3		Total
Certificates of deposit and time deposits	$	—	$	999.4	$	—	$	999.4
Commercial paper	—		14.2		—		14.2
Corporate debt securities	—		76.3		—		76.3
Government securities	96.8		17.4		—		114.2
Total	$	96.8	$	1,107.3	$	—	$	1,204.1



	September 30, 2016
	Level 1		Level 2		Level 3		Total
Certificates of deposit and time deposits	$	—	$	902.8	$	—	$	902.8
Commercial paper	—		—		—		—
Corporate debt securities	—		—		—		—
Government securities	—		—		—		—
Total	$	—	$	902.8	$	—	$	902.8

Retirement Benefits (Tables)

Schedule of Net Benefit Costs

The components of net periodic benefit cost (income) are (in millions):



	Pension Benefits
	Three Months Ended March 31,						Six Months Ended March 31,
	2017			2016			2017			2016
Service cost	$	24.2		$	21.8		$	48.3		$	43.9
Interest cost	37.8			42.2			75.6			84.7
Expected return on plan assets	(56.2		)	(54.4		)	(112.4		)	(109.1		)
Amortization:
Prior service credit	(1.1		)	(0.7		)	(1.9		)	(1.4		)
Net actuarial loss	38.2			31.1			76.2			62.2
Settlements	—			—			0.2			—
Net periodic benefit cost	$	42.9		$	40.0		$	86.0		$	80.3



	Other Postretirement Benefits
	Three Months Ended March 31,						Six Months Ended March 31,
	2017			2016			2017			2016
Service cost	$	0.4		$	0.3		$	0.7		$	0.6
Interest cost	0.7			0.9			1.3			1.7
Amortization:
Prior service credit	(1.5		)	(2.9		)	(3.0		)	(5.7		)
Net actuarial loss	0.6			0.7			1.1			1.3
Net periodic benefit cost (income)	$	0.2		$	(1.0	)	$	0.1		$	(2.1	)

Accumulated Other Comprehensive Loss (Tables)

Schedule of Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive loss by component for the three and six months ended March 31, 2017, were (in millions):



Three Months Ended March 31, 2017
	Pension and other postretirement benefit plan adjustments, net of tax			Accumulated currency translation adjustments, net of tax			Net unrealized gains (losses) on cash flow hedges, net of tax			Net unrealized gains (losses) on available-for-sale investments, net of tax			Total accumulated other comprehensive loss, net of tax
Balance as of December 31, 2016	$	(1,215.3	)	$	(381.1	)	$	7.5		$	—		$	(1,588.9	)
Other comprehensive income (loss) before reclassifications	—			60.8			(2.3		)	(0.1		)	58.4
Amounts reclassified from accumulated other comprehensive loss	23.8			—			(1.3		)	—			22.5
Other comprehensive income (loss)	23.8			60.8			(3.6		)	(0.1		)	80.9
Balance as of March 31, 2017	$	(1,191.5	)	$	(320.3	)	$	3.9		$	(0.1	)	$	(1,508.0	)

Six Months Ended March 31, 2017
	Pension and other postretirement benefit plan adjustments, net of tax			Accumulated currency translation adjustments, net of tax			Net unrealized gains (losses) on cash flow hedges, net of tax			Net unrealized gains (losses) on available-for-sale investments, net of tax			Total accumulated other comprehensive loss, net of tax
Balance as of September 30, 2016	$	(1,239.8	)	$	(294.9	)	$	(4.1	)	$	—		$	(1,538.8	)
Other comprehensive income (loss) before reclassifications	0.7			(25.4		)	9.5			(0.1		)	(15.3		)
Amounts reclassified from accumulated other comprehensive loss	47.6			—			(1.5		)	—			46.1
Other comprehensive income (loss)	48.3			(25.4		)	8.0			(0.1		)	30.8
Balance as of March 31, 2017	$	(1,191.5	)	$	(320.3	)	$	3.9		$	(0.1	)	$	(1,508.0	)

10. Accumulated Other Comprehensive Loss (continued)

Changes in accumulated other comprehensive loss by component for the three and six months ended March 31, 2016, were (in millions):



Three Months Ended March 31, 2016
	Pension and other postretirement benefit plan adjustments, net of tax			Accumulated currency translation adjustments, net of tax			Net unrealized gains (losses) on cash flow hedges, net of tax			Net unrealized gains (losses) on available-for-sale investments, net of tax		Total accumulated other comprehensive loss, net of tax
Balance as of December 31, 2015	$	(1,078.7	)	$	(276.8	)	$	16.5		$	—	$	(1,339.0	)
Other comprehensive income (loss) before reclassifications	—			7.4			(5.8		)	—		1.6
Amounts reclassified from accumulated other comprehensive loss	18.4			—			(6.7		)	—		11.7
Other comprehensive income (loss)	18.4			7.4			(12.5		)	—		13.3
Balance as of March 31, 2016	$	(1,060.3	)	$	(269.4	)	$	4.0		$	—	$	(1,325.7	)

Six Months Ended March 31, 2016
	Pension and other postretirement benefit plan adjustments, net of tax			Accumulated currency translation adjustments, net of tax			Net unrealized gains (losses) on cash flow hedges, net of tax			Net unrealized gains (losses) on available-for-sale investments, net of tax		Total accumulated other comprehensive loss, net of tax
Balance as of September 30, 2015	$	(1,097.1	)	$	(252.4	)	$	14.9		$	—	$	(1,334.6	)
Other comprehensive (loss) income before reclassifications	—			(17.0		)	0.7			—		(16.3		)
Amounts reclassified from accumulated other comprehensive loss	36.8			—			(11.6		)	—		25.2
Other comprehensive income (loss)	36.8			(17.0		)	(10.9		)	—		8.9
Balance as of March 31, 2016	$	(1,060.3	)	$	(269.4	)	$	4.0		$	—	$	(1,325.7	)

Reclassification out of Accumulated Other Comprehensive Income

The reclassifications out of accumulated other comprehensive loss to the Condensed Consolidated Statement of Operations were (in millions):



	Three Months Ended March 31,						Six Months Ended March 31,						Affected Line in the Condensed Consolidated Statement of Operations
	2017			2016			2017			2016
Pension and other postretirement benefit plan adjustments:
Amortization of prior service credit	$	(2.6	)	$	(3.6	)	$	(4.9	)	$	(7.1	)	(a)
Amortization of net actuarial loss	38.8			31.8			77.3			63.5			(a)
Settlements	—			—			0.2			—			(a)
	36.2			28.2			72.6			56.4			Income before income taxes
	(12.4		)	(9.8		)	(25.0		)	(19.6		)	Income tax provision
	$	23.8		$	18.4		$	47.6		$	36.8		Net income

Net unrealized losses (gains) on cash flow hedges:
Forward exchange contracts	$	1.0		$	1.6		$	1.5		$	4.1		Sales
Forward exchange contracts	(2.6		)	(10.2		)	(3.6		)	(19.0		)	Cost of sales
Forward exchange contracts	0.3			—			0.6			—			Selling, general and administrative expenses
	(1.3		)	(8.6		)	(1.5		)	(14.9		)	Income before income taxes
	—			1.9			—			3.3			Income tax provision
	$	(1.3	)	$	(6.7	)	$	(1.5	)	$	(11.6	)	Net income

Total reclassifications	$	22.5		$	11.7		$	46.1		$	25.2		Net income

(a) Reclassified from accumulated other comprehensive loss into cost of sales and selling, general and administrative expenses. These components are included in the computation of net periodic benefit cost (income). See Note 9 for further information.

Business Segment Information (Tables)

Schedule of Segment Reporting Information, by Segment

The following tables reflect the sales and operating results of our reportable segments (in millions):



	Three Months Ended March 31,						Six Months Ended March 31,
	2017			2016			2017			2016
Sales
Architecture & Software	$	719.0		$	629.5		$	1,415.4		$	1,272.4
Control Products & Solutions	835.3			810.8			1,629.2			1,594.5
Total	$	1,554.3		$	1,440.3		$	3,044.6		$	2,866.9
Segment operating earnings
Architecture & Software	$	190.6		$	154.6		$	399.2		$	330.8
Control Products & Solutions	105.4			122.9			213.4			242.6
Total	296.0			277.5			612.6			573.4
Purchase accounting depreciation and amortization	(5.6		)	(4.5		)	(11.2		)	(9.2		)
General corporate – net	(21.4		)	(19.5		)	(36.3		)	(37.5		)
Non-operating pension costs	(19.8		)	(18.9		)	(39.6		)	(37.8		)
Interest expense	(18.9		)	(17.6		)	(37.6		)	(35.0		)
Income before income taxes	$	230.3		$	217.0		$	487.9		$	453.9

Basis of Presentation and Accounting Policies (Details) (USD $)

In Millions, except Per Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2016

Reconciled Basic and Diluted EPS

Net income

$ 189.5

$ 168.0

$ 404.2

$ 353.5

Less: Allocation to participating securities

(0.2)

(0.4)

Net income available to common shareowners

$ 189.3

$ 167.8

$ 403.8

$ 353.1

Basic weighted average outstanding shares

128.7

130.5

128.5

131.2

Effect of dilutive securities

Stock options

1.3

0.8

1.3

0.8

Performance shares

0.3

0

0.2

0

Diluted weighted average outstanding shares

130.3

131.3

130.0

132.0

Basic earnings per share:

Basic

$ 1.47

$ 1.29

$ 3.14

$ 2.69

Diluted earnings per share:

Diluted

$ 1.45

$ 1.28

$ 3.11

$ 2.68

Basis of Presentation and Accounting Policies (Details Textual) (USD $)

In Millions, unless otherwise specified

3 Months Ended

6 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2016

Sep. 30, 2016

Accounting Policies [Abstract]

Allowance for doubtful accounts

$ 24.4

$ 24.5

Allowance for certain customer returns, rebates and incentives

10.8

7.9

Antidilutive share-based compensation awards

1.0

2.9

1.0

2.9

Capital expenditures in accounts payable or other current liabilities at period end

17.6

13.8

Outstanding purchase of common stock recorded in accounts payable

7.0

3.4

Reduction in income tax provision from early adoption of new share-based compensation standard

$ 16.8

$ 20.2

Share-Based Compensation (Details) (USD $)

In Millions, except Share data in Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Mar. 31, 2017

Mar. 31, 2016

Share-Based Compensation (Textual) [Abstract]

Pre-tax share-based compensation expense

$ 9.5

$ 9.8

$ 20.2

$ 20.6

Stock options [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Grants

983

1,134

Wtd. Avg. Share Fair Value

$ 25.39

$ 21.19

Performance shares [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Grants

42

96

Wtd. Avg. Share Fair Value

$ 174.37

$ 87.64

Restricted stock and restricted stock units [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Grants

46

57

Wtd. Avg. Share Fair Value

$ 135.84

$ 103.67

Unrestricted stock [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Grants

8

9

Wtd. Avg. Share Fair Value

$ 128.35

$ 97.73

Inventories (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2017

Sep. 30, 2016

Inventories

Finished goods

$ 215.1

$ 215.8

Work in process

172.6

158.0

Raw materials

155.5

152.8

Inventories

$ 543.2

$ 526.6

Goodwill and Other Intangible Assets (Details) (USD $)

In Millions, unless otherwise specified

6 Months Ended

Mar. 31, 2017

Goodwill

Balance as of September 30, 2016

$ 1,073.9

Acquisition of business

0.5

Translation

(11.1)

Balance as of March 31, 2017

1,063.3

Architecture & Software [Member]

Goodwill

Balance as of September 30, 2016

414.5

Acquisition of business

0

Translation

(2.4)

Balance as of March 31, 2017

412.1

Control Products & Solutions [Member]

Goodwill

Balance as of September 30, 2016

659.4

Acquisition of business

0.5

Translation

(8.7)

Balance as of March 31, 2017

$ 651.2

Goodwill and Other Intangible Assets (Details 1) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2017

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Total, carrying amount

$ 482.0

$ 485.0

Total, net

239.2

255.3

Other intangible assets

Amortized intangible assets, carrying amount

438.3

441.3

Amortized intangible assets, accumulated amortization

242.8

229.7

Amortized intangible assets, net

195.5

211.6

Goodwill and Other Intangible Assets (Textual) [Abstract]

Estimated amortization expense in 2017

29.8

Estimated amortization expense in 2018

25.0

Estimated amortization expense in 2019

21.8

Estimated amortization expense in 2020

19.1

Estimated amortization expense in 2021

18.4

Computer software products [Member]

Other intangible assets

Amortized intangible assets, carrying amount

182.4

Amortized intangible assets, accumulated amortization

108.2

103.4

Amortized intangible assets, net

74.2

79.0

Customer relationships [Member]

Other intangible assets

Amortized intangible assets, carrying amount

111.3

112.6

Amortized intangible assets, accumulated amortization

55.0

51.9

Amortized intangible assets, net

56.3

60.7

Technology [Member]

Other intangible assets

Amortized intangible assets, carrying amount

103.2

103.9

Amortized intangible assets, accumulated amortization

52.4

48.5

Amortized intangible assets, net

50.8

55.4

Trademarks [Member]

Other intangible assets

Amortized intangible assets, carrying amount

30.8

31.4

Amortized intangible assets, accumulated amortization

18.3

17.0

Amortized intangible assets, net

12.5

14.4

Other [Member]

Other intangible assets

Amortized intangible assets, carrying amount

10.6

11.0

Amortized intangible assets, accumulated amortization

8.9

Amortized intangible assets, net

1.7

2.1

Trademarks [Member]

Indefinite-lived Intangible Assets [Line Items]

Allen-Bradley® trademark not subject to amortization

$ 43.7

Short-term Debt (Details) (USD $)

6 Months Ended

Mar. 31, 2017

Sep. 30, 2016

Short-term Debt [Abstract]

Commercial paper borrowings outstanding

$ 373,000,000

$ 448,600,000

Weighted average interest rate of commercial paper outstanding

1.04%

0.57%

Current portion of long-term debt

250,000,000

0

Line of Credit [Member]

Line of Credit Facility [Line Items]

Borrowing capacity

$ 1,000,000,000

Maximum [Member] |
Line of Credit [Member]

Line of Credit Facility [Line Items]

Maximum debt to total capital ratio required by debt covenants

0.60

Maximum ratio of EBITDA to interest expense under credit facility

3.0

Other Current Liabilities (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2017

Sep. 30, 2016

Mar. 31, 2016

Sep. 30, 2015

Other current liabilities

Unrealized losses on foreign exchange contracts

$ 16.1

$ 15.6

Product warranty obligations

26.6

28.0

28.1

27.9

Taxes other than income taxes

44.0

43.1

Accrued interest

16.9

Income taxes payable

49.6

28.6

Rocky Flats settlement (Note 14)

0

242.5

Other

61.7

72.9

Other current liabilities

$ 214.9

$ 447.6

Product Warranty Obligations (Details) (USD $)

In Millions, unless otherwise specified

6 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Changes in product warranty obligations

Balance at beginning of period

$ 28.0

$ 27.9

Accruals for warranties issued during the current period

12.5

12.6

Adjustments to pre-existing warranties

(1.7)

0.1

Settlements of warranty claims

(12.2)

(12.5)

Balance at end of period

$ 26.6

$ 28.1

Investments (Details) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2017

Sep. 30, 2016

Investment [Line Items]

Total

$ 1,204.1

$ 902.8

Purchases of investments, amount outstanding

12.4

Certificates of deposit and time deposits [Member]

Investment [Line Items]

Total

999.4

902.8

Commercial paper [Member]

Investment [Line Items]

Total

14.2

0

Corporate debt securities [Member]

Investment [Line Items]

Total

76.3

0

Government securities [Member]

Investment [Line Items]

Total

$ 114.2

$ 0

Investments (Details 1) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2017

Sep. 30, 2016

Investments [Abstract]

Less than one year

$ 1,092.7

Due in one to three years

111.4

Total

$ 1,204.1

$ 902.8

Investments (Details 2) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2017

Sep. 30, 2016

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Total

$ 1,204.1

$ 902.8

Short-term Investments [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Total

1,092.7

902.8

Other Assets [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Total

$ 111.4

$ 0

Investments (Details 3) (USD $)

In Millions, unless otherwise specified

Mar. 31, 2017

Sep. 30, 2016