Rockwell Automation Reports First Quarter 2022 Results
Rockwell Automation reported record quarterly orders of $2.5 billion, reflecting over 40% year-over-year growth. Sales for Q1 fiscal 2022 reached $1.857 billion, up 18.7% year-over-year, with an organic sales increase of 16.8%. The company reaffirmed its fiscal 2022 sales growth guidance of 16%-19% and adjusted EPS guidance to $10.01-$10.61. Notably, diluted EPS was $2.05, a decrease from $5.06 in Q1 2021, mainly due to lower fair value gains from investments. Pre-tax margin fell to 15.2% from 44.8% last year, impacting net income.
- Record quarterly orders of $2.5 billion, increasing over 40% year-over-year.
- Sales rose 18.7% year-over-year, reflecting strong demand across all business segments.
- Total ARR grew over 50% with recent Plex acquisition.
- Reaffirms fiscal 2022 sales growth guidance of 16%-19% and EPS guidance of $10.01-$10.61.
- Diluted EPS decreased to $2.05 from $5.06 a year prior, largely due to lower fair value gains.
- Pre-tax margin dropped to 15.2% from 44.8%, negatively impacted by higher planned spending and price/cost issues.
- Cash flow from operating activities was negative at $(12) million, compared to $347 million in Q1 2021.
-
Record quarterly orders of
$2.5 billion 40% year over year -
Reported sales up
18.7% year over year; organic sales up16.8% -
Acquisitions contributed
2.6% to reported sales growth -
Total ARR up over
50% with recent Plex acquisition; Organic ARR up double digits -
Q1 Diluted EPS of
$2.05 $2.14 -
Reaffirms fiscal 2022 reported sales growth guidance of
16% -19% ; organic sales growth of14% -17% -
Updates fiscal 2022 Diluted EPS guidance from
$9.91 $10.51 $10.01 $10.61 -
Reaffirms fiscal 2022 Adjusted EPS guidance of
$10.50 $11.10
"Rockwell had an excellent start to fiscal 2022, with first quarter sales up
Fiscal 2022 Q1 Financial Results
Fiscal 2022 first quarter sales were
Fiscal 2022 first quarter net income attributable to
Pre-tax margin was
Total segment operating earnings were
Cash flow generated by operating activities in the first quarter of fiscal 2022 was
Fiscal Year 2022 Outlook
The table below provides guidance for sales growth and earnings per share for fiscal 2022. Our guidance reflects strong demand as well as record backlog. Supply chain challenges remain dynamic, and our projections assume gradual improvement over the course of the year.
Guidance |
|
Prior Guidance |
|
Reported sales growth |
|
|
|
Organic sales growth |
|
|
|
Inorganic sales growth |
~ |
|
~ |
Currency translation |
~ |
|
~ |
Diluted EPS1 |
|
|
|
Adjusted EPS |
|
|
|
1Updated to include changes in purchase accounting amortization and the Q1 impact of the change in fair value of our investments, primarily PTC. |
"We expect very strong growth this year, with total sales up
Following is a discussion of first quarter results for our business segments.
Intelligent Devices
Intelligent Devices first quarter fiscal 2022 sales were
Software & Control
Software & Control first quarter fiscal 2022 sales were
Lifecycle Services
Lifecycle Services first quarter fiscal 2022 sales were
Supplemental Information
Corporate and Other - Fiscal 2022 first quarter corporate and other expense was
Purchase Accounting Depreciation and Amortization - Fiscal 2022 first quarter purchase accounting depreciation and amortization expense was
Tax - On a GAAP basis, the effective tax rate in the first quarter of fiscal 2022 was
Share Repurchases - During the first quarter of fiscal 2022, the Company repurchased approximately 0.2 million shares of its common stock at a cost of
ROIC - Return on invested capital was
Non-GAAP Measures - Organic sales, total segment operating earnings, total segment operating margin, Adjusted Income, Adjusted EPS, Adjusted Effective Tax Rate, free cash flow, free cash flow conversion, and return on invested capital are non-GAAP measures that are reconciled to GAAP measures in the attachments to this release.
Organic ARR - Annual recurring revenue (ARR) is a key metric that enables measurement of progress in growing our recurring revenue business. It represents the annual contract value of all active recurring revenue contracts at any point in time. Recurring revenue is defined as a revenue stream that is contractual, typically for a period of 12 months or more, and has a high probability of renewal. The Probability of renewal is based on historical renewal experience of the individual revenue streams, or management best estimates if historical renewal experience is not available. Organic ARR growth is calculated as the dollar change in ARR, adjusted to exclude the effects of currency translation and acquisitions, divided by ARR as of the prior period. The effects of currency translation are excluded by calculating Organic ARR on a constant currency basis. When we acquire businesses, we exclude the effect of ARR in current period for which there was no comparable ARR in the prior period. Organic ARR growth is also used as a financial measure of performance for our annual incentive compensation. Because ARR is based on annual contract value, it does not represent revenue recognized during a particular reporting period or revenue to be recognized in future reporting periods and is not intended to be a substitute for revenue, contract liabilities, or backlog.
Conference Call
A conference call to discuss the quarterly results will be held at
Interested parties can access the conference call by dialing the following numbers: (888) 330-2022 in the
Both the presentation materials and a replay of the call will be available on the Investor Relations section of the
This news release contains statements (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Words such as “believe”, “estimate”, “project”, “plan”, “expect”, “anticipate”, “will”, “intend” and other similar expressions may identify forward-looking statements. Actual results may differ materially from those projected as a result of certain risks and uncertainties, many of which are beyond our control, including but not limited to:
- the severity and duration of disruptions to our business due to pandemics, including the COVID-19 pandemic, natural disasters (including those as a result of climate change), acts of war, strikes, terrorism, social unrest or other causes, including the impacts of the COVID-19 pandemic and efforts to manage it on the global economy, liquidity and financial markets, demand for our hardware and software products, solutions and services, our supply chain, our work force, our liquidity, and the value of the assets we own;
- the availability and price of components and materials;
- macroeconomic factors, including inflation, global and regional business conditions (including adverse impacts in certain markets, such as Oil & Gas), commodity prices, the cyclical nature of our customers’ capital spending, sovereign debt concerns, and currency exchange rates;
- the availability and cost of capital;
- our ability to attract, develop, and retain qualified personnel;
- the successful integration and management of strategic transactions and achievement of the expected benefits of these transactions;
- laws, regulations, and governmental policies affecting our activities in the countries where we do business, including those related to tariffs, taxation, trade controls, and climate change;
- the availability, effectiveness, and security of our information technology systems;
- our ability to manage and mitigate the risk related to security vulnerabilities and breaches of our hardware and software products, solutions and services;
- the successful development of advanced technologies and demand for and market acceptance of new and existing hardware and software products;
- our ability to manage and mitigate the risks associated with our solutions and services businesses;
- the successful execution of our cost productivity initiatives;
- competitive hardware and software products, solutions and services and pricing pressures, and our ability to provide high quality products, solutions and services;
- disruptions to our distribution channels or the failure of distributors to develop and maintain capabilities to sell our products;
- intellectual property infringement claims by others and the ability to protect our intellectual property;
- the uncertainty of claims by taxing authorities in the various jurisdictions where we do business;
- the uncertainties of litigation, including liabilities related to the safety and security of the hardware and software products, solutions and services we sell;
- risks associated with our investment in common stock of PTC Inc., including the potential for volatility in our reported quarterly earnings associated with changes in the market value of such stock;
- our ability to manage costs related to employee retirement and health care benefits; and
-
other risks and uncertainties, including but not limited to those detailed from time to time in our
Securities and Exchange Commission (SEC) filings.
SALES AND EARNINGS INFORMATION (in millions, except per share amounts and percentages) |
||||||||
|
|
Three Months Ended
|
||||||
|
|
2021 |
|
2020 |
||||
Sales |
|
|
|
|
||||
Intelligent Devices (a) |
|
$ |
900.3 |
|
|
$ |
721.7 |
|
Software & Control (b) |
|
|
513.9 |
|
|
|
441.0 |
|
Lifecycle Services (c) |
|
|
443.1 |
|
|
|
402.6 |
|
Total sales (d) |
|
$ |
1,857.3 |
|
|
$ |
1,565.3 |
|
Segment operating earnings |
|
|
|
|
||||
Intelligent Devices (e) |
|
$ |
213.0 |
|
|
$ |
140.2 |
|
Software & Control (f) |
|
|
117.6 |
|
|
|
133.1 |
|
Lifecycle Services (g) |
|
|
24.5 |
|
|
|
36.0 |
|
Total segment operating earnings1 (h) |
|
|
355.1 |
|
|
|
309.3 |
|
Purchase accounting depreciation and amortization |
|
|
(26.1 |
) |
|
|
(11.7 |
) |
Corporate and other |
|
|
(29.4 |
) |
|
|
(28.0 |
) |
Non-operating pension and postretirement benefit credit (cost) |
|
|
4.4 |
|
|
|
(7.0 |
) |
Change in fair value of investments |
|
|
7.6 |
|
|
|
390.4 |
|
Legal settlement |
|
|
— |
|
|
|
70.0 |
|
Interest expense, net |
|
|
(29.1 |
) |
|
|
(22.3 |
) |
Income before income taxes (i) |
|
|
282.5 |
|
|
|
700.7 |
|
Income tax provision |
|
|
(43.6 |
) |
|
|
(110.3 |
) |
Net income |
|
|
238.9 |
|
|
|
590.4 |
|
Net loss attributable to noncontrolling interests |
|
|
(2.6 |
) |
|
|
(2.9 |
) |
Net income attributable to |
|
$ |
241.5 |
|
|
$ |
593.3 |
|
|
|
|
|
|
||||
Diluted EPS |
|
$ |
2.05 |
|
|
$ |
5.06 |
|
|
|
|
|
|
||||
Adjusted EPS2 |
|
$ |
2.14 |
|
|
$ |
2.38 |
|
|
|
|
|
|
||||
Average diluted shares for diluted EPS |
|
|
117.3 |
|
|
|
117.1 |
|
|
|
|
|
|
||||
Segment operating margin |
|
|
|
|
||||
Intelligent Devices (e/a) |
|
|
23.7 |
% |
|
|
19.4 |
% |
Software & Control (f/b) |
|
|
22.9 |
% |
|
|
30.2 |
% |
Lifecycle Services (g/c) |
|
|
5.5 |
% |
|
|
8.9 |
% |
Total segment operating margin1 (h/d) |
|
|
19.1 |
% |
|
|
19.8 |
% |
Pre-tax margin (i/d) |
|
|
15.2 |
% |
|
|
44.8 |
% |
1Total 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 (cost), change in fair value of investments, the |
|
2Adjusted EPS is a non-GAAP earnings measure that excludes non-operating pension and postretirement benefit credit (cost), purchase accounting depreciation and amortization, net loss attributable to noncontrolling interests, and change in fair value of investments, 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 (cost) and a reconciliation to GAAP measures. |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (in millions, except percentages) |
||||||||
|
|
Three Months Ended
|
||||||
|
|
2021 |
|
2020 |
||||
Sales (a) |
|
$ |
1,857.3 |
|
|
$ |
1,565.3 |
|
Cost of sales |
|
|
(1,108.2 |
) |
|
|
(918.8 |
) |
Gross profit (b) |
|
|
749.1 |
|
|
|
646.5 |
|
Selling, general and administrative expenses (c) |
|
|
(447.5 |
) |
|
|
(374.6 |
) |
Change in fair value of investments1 |
|
|
7.6 |
|
|
|
390.4 |
|
Other income |
|
|
2.9 |
|
|
|
61.0 |
|
Interest expense |
|
|
(29.6 |
) |
|
|
(22.6 |
) |
Income before income taxes |
|
|
282.5 |
|
|
|
700.7 |
|
Income tax provision |
|
|
(43.6 |
) |
|
|
(110.3 |
) |
Net income |
|
|
238.9 |
|
|
|
590.4 |
|
Net loss attributable to noncontrolling interests |
|
|
(2.6 |
) |
|
|
(2.9 |
) |
Net income attributable to |
|
$ |
241.5 |
|
|
$ |
593.3 |
|
|
|
|
|
|
||||
|
|
|
|
|
||||
Gross profit as percent of sales (b/a) |
|
|
40.3 |
% |
|
|
41.3 |
% |
SG&A as percent of sales (c/a) |
|
|
24.1 |
% |
|
|
23.9 |
% |
1Primarily relates to the change in fair value of investment in PTC. |
||||||||
CONDENSED BALANCE SHEET INFORMATION (in millions) |
||||||
|
|
|
|
|
||
Assets |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
540.0 |
|
$ |
662.2 |
Receivables |
|
|
1,487.4 |
|
|
1,424.5 |
Inventories |
|
|
868.9 |
|
|
798.1 |
Property, net |
|
|
584.1 |
|
|
581.9 |
Operating lease right-of-use assets |
|
|
370.7 |
|
|
377.7 |
|
|
|
4,616.4 |
|
|
4,647.7 |
Long-term investments |
|
|
1,369.8 |
|
|
1,363.5 |
Other assets |
|
|
906.0 |
|
|
846.0 |
Total |
|
$ |
10,743.3 |
|
$ |
10,701.6 |
Liabilities and Shareowners’ Equity |
|
|
|
|
||
Short-term debt |
|
$ |
605.9 |
|
$ |
509.7 |
Accounts payable |
|
|
851.3 |
|
|
889.8 |
Long-term debt |
|
|
3,469.1 |
|
|
3,464.6 |
Operating lease liabilities |
|
|
306.7 |
|
|
313.6 |
Other liabilities |
|
|
2,703.5 |
|
|
2,829.8 |
Shareowners' equity attributable to |
|
|
2,504.9 |
|
|
2,389.6 |
Noncontrolling interests |
|
|
301.9 |
|
|
304.5 |
Total |
|
$ |
10,743.3 |
|
$ |
10,701.6 |
CONDENSED CASH FLOW INFORMATION (in millions) |
||||||||
|
|
Three Months Ended
|
||||||
|
|
2021 |
|
2020 |
||||
Operating activities: |
|
|
|
|
||||
Net income |
|
$ |
238.9 |
|
|
$ |
590.4 |
|
Depreciation and amortization |
|
|
58.9 |
|
|
|
44.0 |
|
Change in fair value of investments1 |
|
|
(7.6 |
) |
|
|
(390.4 |
) |
Retirement benefits expense |
|
|
16.2 |
|
|
|
30.0 |
|
Pension contributions |
|
|
(7.5 |
) |
|
|
(8.8 |
) |
Receivables/inventories/payables |
|
|
(185.7 |
) |
|
|
(104.9 |
) |
Contract liabilities |
|
|
27.1 |
|
|
|
51.4 |
|
Compensation and benefits |
|
|
(135.3 |
) |
|
|
7.3 |
|
Income taxes |
|
|
(37.6 |
) |
|
|
72.8 |
|
Other |
|
|
20.6 |
|
|
|
54.7 |
|
Cash (used for) provided by operating activities |
|
|
(12.0 |
) |
|
|
346.5 |
|
Investing activities: |
|
|
|
|
||||
Capital expenditures |
|
|
(37.1 |
) |
|
|
(27.1 |
) |
Acquisition of businesses, net of cash acquired |
|
|
(10.5 |
) |
|
|
(283.1 |
) |
Purchases of investments |
|
|
(1.5 |
) |
|
|
— |
|
Proceeds from sale of property |
|
|
0.4 |
|
|
|
0.1 |
|
Cash used for investing activities |
|
|
(48.7 |
) |
|
|
(310.1 |
) |
Financing activities: |
|
|
|
|
||||
Net issuance of short-term debt |
|
|
99.0 |
|
|
|
125.9 |
|
Cash dividends |
|
|
(130.1 |
) |
|
|
(124.3 |
) |
Purchases of treasury stock |
|
|
(49.8 |
) |
|
|
(83.5 |
) |
Proceeds from the exercise of stock options |
|
|
31.8 |
|
|
|
48.9 |
|
Other financing activities |
|
|
(2.9 |
) |
|
|
(4.2 |
) |
Cash used for financing activities |
|
|
(52.0 |
) |
|
|
(37.2 |
) |
Effect of exchange rate changes on cash |
|
|
(9.5 |
) |
|
|
26.6 |
|
(Decrease) increase in cash, cash equivalents, and restricted cash2 |
|
$ |
(122.2 |
) |
|
$ |
25.8 |
|
1Primarily relates to the change in fair value of investment in PTC. |
2Cash, cash equivalents, and restricted cash at |
OTHER SUPPLEMENTAL INFORMATION
(in millions, except percentages)
Organic Sales
We translate sales of subsidiaries operating outside of
The following is a reconciliation of reported sales to organic sales for the three months ended
|
|
Three Months Ended |
|||||||||||||||
|
|
2021 |
|
2020 |
|||||||||||||
|
|
Sales |
|
Effect of
|
|
Effect of
|
|
Organic
|
|
Sales |
|||||||
|
|
$ |
1,100.7 |
|
$ |
(40.4 |
) |
|
$ |
(3.2 |
) |
|
$ |
1,057.1 |
|
$ |
912.3 |
EMEA |
|
|
354.7 |
|
|
— |
|
|
|
13.5 |
|
|
|
368.2 |
|
|
320.7 |
|
|
|
278.9 |
|
|
— |
|
|
|
(1.9 |
) |
|
|
277.0 |
|
|
221.9 |
|
|
|
123.0 |
|
|
— |
|
|
|
3.2 |
|
|
|
126.2 |
|
|
110.4 |
Total |
|
$ |
1,857.3 |
|
$ |
(40.4 |
) |
|
$ |
11.6 |
|
|
$ |
1,828.5 |
|
$ |
1,565.3 |
The following is a reconciliation of reported sales to organic sales for our operating segments for the three months ended
|
|
Three Months Ended |
||||||||||||||
|
|
2021 |
|
2020 |
||||||||||||
|
|
Sales |
|
Effect of
|
|
Effect of
|
|
Organic
|
|
Sales |
||||||
Intelligent Devices |
|
$ |
900.3 |
|
$ |
— |
|
|
$ |
6.0 |
|
$ |
906.3 |
|
$ |
721.7 |
Software & Control |
|
|
513.9 |
|
|
(38.9 |
) |
|
|
3.1 |
|
|
478.1 |
|
|
441.0 |
Lifecycle Services |
|
|
443.1 |
|
|
(1.5 |
) |
|
|
2.5 |
|
|
444.1 |
|
|
402.6 |
Total |
|
$ |
1,857.3 |
|
$ |
(40.4 |
) |
|
$ |
11.6 |
|
$ |
1,828.5 |
|
$ |
1,565.3 |
The following is a reconciliation of reported sales growth to organic sales growth for the three months ended
|
|
Three Months Ended |
||||||||||
|
|
Reported Sales
|
|
Effect of
|
|
Effect of
|
|
Organic Sales
|
||||
|
|
20.7 |
% |
|
4.4 |
% |
|
0.4 |
% |
|
15.9 |
% |
EMEA |
|
10.6 |
% |
|
— |
% |
|
(4.2 |
) % |
|
14.8 |
% |
|
|
25.7 |
% |
|
— |
% |
|
0.9 |
% |
|
24.8 |
% |
|
|
11.4 |
% |
|
— |
% |
|
(2.9 |
) % |
|
14.3 |
% |
Total |
|
18.7 |
% |
|
2.6 |
% |
|
(0.7 |
) % |
|
16.8 |
% |
The following is a reconciliation of reported sales growth to organic sales growth for our operating segments for the three months ended
|
|
Three Months Ended |
||||||||||
|
|
Reported Sales
|
|
Effect of
|
|
Effect of
|
|
Organic Sales
|
||||
Intelligent Devices |
|
24.7 |
% |
|
— |
% |
|
(0.9 |
) % |
|
25.6 |
% |
Software & Control |
|
16.5 |
% |
|
8.8 |
% |
|
(0.7 |
) % |
|
8.4 |
% |
Lifecycle Services |
|
10.1 |
% |
|
0.4 |
% |
|
(0.6 |
) % |
|
10.3 |
% |
Total |
|
18.7 |
% |
|
2.6 |
% |
|
(0.7 |
) % |
|
16.8 |
% |
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) cost, change in fair value of investments, purchase accounting depreciation and amortization attributable to
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
The following are the components of operating and non-operating pension and postretirement benefit (credit) cost (in millions):
|
Three Months Ended
|
||||||
|
2021 |
|
2020 |
||||
Service cost |
$ |
20.6 |
|
|
$ |
23.0 |
|
Operating pension and postretirement benefit cost |
|
20.6 |
|
|
|
23.0 |
|
|
|
|
|
||||
Interest cost |
|
32.7 |
|
|
|
31.6 |
|
Expected return on plan assets |
|
(59.4 |
) |
|
|
(60.4 |
) |
Amortization of prior service credit |
|
(0.2 |
) |
|
|
(1.0 |
) |
Amortization of net actuarial loss |
|
22.5 |
|
|
|
37.0 |
|
Settlements |
|
— |
|
|
|
(0.2 |
) |
Non-operating pension and postretirement benefit (credit) cost |
|
(4.4 |
) |
|
|
7.0 |
|
|
|
|
|
||||
Net periodic pension and postretirement benefit cost |
$ |
16.2 |
|
|
$ |
30.0 |
|
The components of net periodic pension and postretirement benefit cost other than the service cost component are included in the line "Other income" in the Statement of Operations.
The following are reconciliations of net income attributable to
|
Three Months Ended
|
||||||
|
2021 |
|
2020 |
||||
Net Income attributable to |
$ |
241.5 |
|
|
$ |
593.3 |
|
Non-operating pension and postretirement benefit (credit) cost |
|
(4.4 |
) |
|
|
7.0 |
|
Tax effect of non-operating pension and postretirement benefit (credit) cost |
|
0.8 |
|
|
|
(2.0 |
) |
Change in fair value of investments (1) |
|
(7.6 |
) |
|
|
(390.4 |
) |
Tax effect of change in fair value of investments (1) |
|
3.5 |
|
|
|
64.2 |
|
Purchase accounting depreciation and amortization attributable to |
|
23.1 |
|
|
|
8.7 |
|
Tax effect of purchase accounting depreciation and amortization attributable to |
|
(5.6 |
) |
|
|
(2.1 |
) |
Adjusted Income |
$ |
251.3 |
|
|
$ |
278.7 |
|
|
|
|
|
||||
Diluted EPS |
$ |
2.05 |
|
|
$ |
5.06 |
|
Non-operating pension and postretirement benefit (credit) cost |
|
(0.04 |
) |
|
|
0.06 |
|
Tax effect of non-operating pension and postretirement benefit (credit) cost |
|
0.01 |
|
|
|
(0.02 |
) |
Change in fair value of investments (1) |
|
(0.06 |
) |
|
|
(3.33 |
) |
Tax effect of change in fair value of investments (1) |
|
0.03 |
|
|
|
0.55 |
|
Purchase accounting depreciation and amortization attributable to |
|
0.20 |
|
|
|
0.08 |
|
Tax effect of purchase accounting depreciation and amortization attributable to |
|
(0.05 |
) |
|
|
(0.02 |
) |
Adjusted EPS |
$ |
2.14 |
|
|
$ |
2.38 |
|
|
|
|
|
||||
Effective tax rate |
|
15.4 |
% |
|
|
15.8 |
% |
Tax effect of non-operating pension and postretirement benefit (credit) cost |
|
— |
% |
|
|
0.1 |
% |
Tax effect of change in fair value of investments (1) |
|
(0.9 |
) % |
|
|
(0.7 |
) % |
Tax effect of purchase accounting depreciation and amortization attributable to |
|
0.8 |
% |
|
|
0.2 |
% |
Adjusted Effective Tax Rate |
|
15.3 |
% |
|
|
15.4 |
% |
1Primarily relates to the change in fair value of investment in PTC. |
|||||||
|
|
Fiscal 2022 Guidance |
|
|
|
Diluted EPS1 |
|
|
Non-operating pension and postretirement benefit credit |
|
(0.08) |
Tax effect of non-operating pension and postretirement benefit credit |
|
0.01 |
Change in fair value of investments2 |
|
(0.06) |
Tax effect of change in fair value of investments2 |
|
0.03 |
Purchase accounting depreciation and amortization attributable to |
|
0.78 |
Tax effect of purchase accounting depreciation and amortization attributable to |
|
(0.19) |
Adjusted EPS |
|
|
|
|
|
Effective tax rate |
|
~ |
Tax effect of non-operating pension and postretirement benefit credit |
|
~ —% |
Tax effect of change in fair value of investments2 |
|
~ —% |
Tax effect of purchase accounting depreciation and amortization attributable to |
|
~ |
Adjusted Effective Tax Rate |
|
~ |
1Fiscal 2022 guidance based on Adjusted Income attributable to Rockwell, which includes an adjustment for Schlumberger's non-controlling interest in |
2The actual year-to-date adjustments, which are based on PTC's share price at |
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 |
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash provided by (used for) operating activities |
|
$ |
217.4 |
|
|
$ |
346.2 |
|
|
$ |
325.8 |
|
|
$ |
346.5 |
|
|
$ |
248.9 |
|
|
$ |
461.5 |
|
|
$ |
204.1 |
|
|
$ |
(12.0 |
) |
Capital expenditures |
|
|
(19.6 |
) |
|
|
(35.3 |
) |
|
|
(22.0 |
) |
|
|
(27.1 |
) |
|
|
(25.0 |
) |
|
|
(24.5 |
) |
|
|
(43.7 |
) |
|
|
(37.1 |
) |
Free cash flow |
|
$ |
197.8 |
|
|
$ |
310.9 |
|
|
$ |
303.8 |
|
|
$ |
319.4 |
|
|
$ |
223.9 |
|
|
$ |
437.0 |
|
|
$ |
160.4 |
|
|
$ |
(49.1 |
) |
1Includes a discretionary pre-tax contribution of |
|
2Includes |
|
3Includes a payment of |
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
|
Quarter Ended |
||||||
|
|
|
|
||||
Free cash flow (a) |
$ |
319.4 |
|
|
$ |
(49.1 |
) |
Adjusted income (b) |
|
278.7 |
|
|
|
251.3 |
|
Free cash flow conversion (a) / (b) |
|
115 |
% |
|
|
(20 |
) % |
Our press release contains information regarding
(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, and short-term 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 |
||||||
|
|
|
||||||
|
|
2021 |
|
2020 |
||||
(a) Return |
|
|
|
|
||||
Net income |
|
$ |
992.8 |
|
|
$ |
1,298.2 |
|
Interest expense |
|
|
101.6 |
|
|
|
99.7 |
|
Income tax provision |
|
|
115.2 |
|
|
|
204.0 |
|
Purchase accounting depreciation and amortization |
|
|
69.5 |
|
|
|
43.1 |
|
Return |
|
|
1,279.1 |
|
|
|
1,645.0 |
|
(b) Average invested capital |
|
|
|
|
||||
Short-term debt |
|
|
263.3 |
|
|
|
200.8 |
|
Long-term debt |
|
|
2,573.9 |
|
|
|
1,970.5 |
|
Shareowners’ equity |
|
|
2,416.3 |
|
|
|
1,256.8 |
|
Accumulated amortization of goodwill and intangibles |
|
|
1,007.8 |
|
|
|
936.2 |
|
Cash and cash equivalents |
|
|
(697.7 |
) |
|
|
(782.6 |
) |
Short-term and long-term investments |
|
|
(0.6 |
) |
|
|
(0.6 |
) |
Average invested capital |
|
|
5,563.0 |
|
|
|
3,581.1 |
|
(c) Effective tax rate |
|
|
|
|
||||
Income tax provision |
|
|
115.2 |
|
|
|
204.0 |
|
Income before income taxes |
|
$ |
1,108.0 |
|
|
$ |
1,502.2 |
|
Effective tax rate |
|
|
10.4 |
% |
|
|
13.6 |
% |
(a) / (b) * (1-c) |
|
|
20.6 |
% |
|
|
39.7 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220127005312/en/
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Source:
FAQ
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