ROCKWELL AUTOMATION INC
For the period ended Mar 31, 2024. Filed May 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 7, 2024
ROK$375.86-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-31; filed 2024-01-31.
0001024478-24-000008
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0001024478-24-000052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 136 previous paragraphs and 130 current paragraphs.
92 unchanged; 28 reworded; 10 added; 16 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Outlook
Current report
To adjust our cost structure in line with lower than expected orders and revenue this fiscal year, we intend to implement actions, including restructuring, in the second half of 2024. We are anticipating savings of approximately $100 million from lower headcount and discretionary spend, which is partially offset by estimated restructuring costs of about $60 million.
Current report
Our supply chain has largely recovered to pre-pandemic lead times and service levels to our customers. We continue to closely manage our end-to-end supply chain, from sourcing to production to customer delivery, with a continued focus on building resilience across the end-to-end supply chain.
Current report
Total segment operating earnings decreased 16.5 percent and 14.2 percent in the three and six months ended March 31, 2024, respectively, primarily due to lower sales volume, partially offset by lower incentive compensation.
Current report
The effective tax rate for the six months ended March 31, 2024, was 16.1 percent compared to 17.8 percent for the six months ended March 31, 2023. Our adjusted effective tax rate for the six months ended March 31, 2024, was 16.2 percent compared to 17.3 percent for the six months ended March 31, 2023. The decrease in both the effective tax rate and the adjusted effective tax rate was primarily due to higher discrete tax benefits in the current year.
Current report
Net income attributable to Rockwell Automation was $481.4 million or $4.17 per share in the six months ended March 31, 2024, compared to $684.3 million or $5.90 per share in the six months ended March 31, 2023. The decreases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to lower pre-tax margin. Pre-tax margin was 13.6 percent in the six months ended March 31, 2024, compared to 19.2 percent in the same period last year. The decrease in pre-tax margin was primarily due to mark-to-market gains recognized in the prior year related to our previous investment in PTC and lower sales, partially offset by lower non-operating pension expense. Adjusted EPS was $4.54 in the six months ended March 31, 2024, down 17.2 percent compared to $5.48 in the six months ended March 31, 2023, primarily due to lower segment operating margin. Total segment operating margin in the six months ended March 31, 2024, was 18.2 percent compared to 20.8 percent in the same period a year ago, primarily due to lower sales volume and higher investment spend, partially offset by lower incentive compensation.
Current report
Intelligent Devices segment operating earnings decreased 22.2 percent year over year in the three months ended March 31, 2024. Segment operating margin decreased to 16.5 percent in the three months ended March 31, 2024, from 20.2 percent in the same period a year ago, primarily due to lower sales volume and unfavorable mix, partially offset by lower incentive compensation.
Current report
Intelligent Devices segment operating earnings decreased 25.2 percent year over year in the six months ended March 31, 2024. Segment operating margin decreased to 16.4 percent in the six months ended March 31, 2024, from 21.2 percent in the same period a year ago, primarily due to lower sales volume and supply chain utilization, partially offset by lower incentive compensation.
Current report
Software & Control sales decreased 23.1 percent and 10.7 percent year over year in the three and six months ended March 31, 2024, respectively. Organic sales decreased 23.2 percent and 11.4 percent year over year in the three and six months ended March 31, 2024, respectively. Currency translation increased sales by 0.1 percentage points and 0.7 percentage points year over year in the three and six months ended March 31, 2024, respectively. For the three months ended March 31, 2024, reported sales decreased in all regions, except for Latin America, and organic sales decreased in all regions. For the six months ended March 31, 2024, reported and organic sales decreased in all regions, except for Latin America.
Current report
Lifecycle Services sales increased 14.0 percent and 12.3 percent year over year in the three and six months ended March 31, 2024, respectively. Organic sales increased 12.4 percent and 10.3 percent year over year in the three and six months ended March 31, 2024, respectively. Currency translation increased sales by 0.5 percentage points year over year in the six months ended March 31, 2024. Acquisitions increased sales by 1.6 and 1.5 percentage points year over year in the three and six months ended March 31, 2024, respectively. For the three and six months ended March 31, 2024, reported sales increased in all regions, and organic sales increased in all regions, except for Asia Pacific.
Removed paragraphs (16)
Previous report
Supply Chain
Previous report
We have a global supply chain, including a network of suppliers and distribution and manufacturing facilities, that play a critical role in serving our channel partners and customers. Recent supply chain challenges have resulted in and could continue to result in:
Previous report
•difficulty in procuring or inability to procure components and materials necessary for our products, solutions, and services;
Previous report
•increased costs for commodities and components; and
Previous report
•delays in delivering, or an inability to deliver, our products, solutions, and services.
Previous report
We are continuing to see improvement in our supply chain environment and are closely managing our end-to-end supply chain, from sourcing to production to customer delivery, with a particular focus on all critical and at-risk suppliers and supplier locations globally. Actions we have taken include:
Previous report
•extending order visibility to our supply base to ensure we are appropriately planning for extended component lead times;
Previous report
•securing longer-term supply agreements with critical partners;
Previous report
•re-engineering of existing products to increase component supply resiliency;
Previous report
•investing in capacity, including redundant manufacturing lines and additional electronic assembly equipment;
Previous report
•qualification of additional suppliers to diversify our supplier base; and
Previous report
•adapting logistics to secure additional capacity.
Previous report
We believe these actions are enabling us to normalize our product lead times and better serve our customers.
Previous report
Total segment operating earnings decreased 11.3 percent in the three months ended December 31, 2023, primarily due to higher investment spend and lower supply chain utilization.
Previous report
Intelligent Devices sales decreased 1.0 percent year over year in the three months ended December 31, 2023. Organic sales decreased 4.5 percent year over year, the effects of currency translation increased sales by 1.2 percentage points year over year, and acquisitions increased sales by 2.3 percentage points year over year in the three months ended December 31, 2023. For the three months ended December 31, 2023, reported and organic sales decreased in all regions, except for North America.
Previous report
Software & Control sales increased 5.3 percent year over year in the three months ended December 31, 2023. Organic sales increased 4.0 percent year over year and the effects of currency translation increased sales by 1.3 percentage points year over year in the three months ended December 31, 2023. For the three months ended December 31, 2023, all regions experienced reported and organic sales growth.
Reworded paragraphs (28)
Previous wording
•laws, regulations, and governmental policies affecting our activities in the countries where we do business, including those related to tariffs, taxation, trade controls (including sanctions placed on Russia), cybersecurity, and climate change;
Current wording
•laws, regulations, and governmental policies affecting our activities in the countries where we do business, including those related to tariffs, taxation, trade controls, cybersecurity, and climate change;
Previous wording
•add 1% growth from acquisitions annually; and
Current wording
•add an average of 1% growth from acquisitions over time; and
Previous wording
In the first quarter of 2024, sales in the U.S. accounted for over half of our total sales. The various indicators we use to gauge the direction and momentum of our served U.S. markets include:
Current wording
In the second quarter of 2024, sales in the U.S. accounted for over half of our total sales. The various indicators we use to gauge the direction and momentum of our served U.S. markets include:
Previous wording
The table below depicts trends in these indicators since the quarter ended September 2022. These figures are as of January 31, 2024, and are subject to revision by the issuing organizations. The IP index declined in the first quarter of fiscal 2024 versus the fourth quarter of fiscal 2023. Manufacturing PMI results remained soft in the first quarter of 2024.
Current wording
The table below depicts trends in these indicators since the quarter ended September 2022. These figures are as of May 7, 2024, and are subject to revision by the issuing organizations. The IP index increased in the second quarter of 2024 versus the first quarter of 2024 and the fourth quarter of 2023. Manufacturing PMI results improved to above 50 in the second quarter of 2024 for the first time since the fourth quarter of 2022.
Previous wording
Inflation in the U.S. has also had an impact on our input costs and pricing. We used the Producer Price Index (PPI), published by the Bureau of Labor Statistics, which measures the average change over time in the selling prices received by domestic producers for their output. PPI growth has remained in the low single digits during the first quarter, consistent with most of 2023. Producer prices remain elevated, however, year over year increases continued to decelerate following last years' surge in prices.
Current wording
Inflation in the U.S. has also had an impact on our input costs and pricing. The Producer Price Index (PPI), published by the Bureau of Labor Statistics, measures the average change over time in the selling prices received by domestic producers for their output. PPI growth has remained in the low single digits during the second quarter, consistent with the first quarter of 2024 and most of 2023. Producer prices continue to remain elevated.
Previous wording
In the first quarter of 2024, sales to customers outside the U.S. accounted for less than half of our total sales. These customers include both indigenous companies and multinational companies with a global presence. In addition to the global factors previously mentioned in the Overview section, international demand, particularly in emerging markets, has historically been driven by the strength of the industrial economy in each region, investments in infrastructure, and expanding consumer markets. We use changes in key countries' gross domestic product (GDP), IP, and PMI as indicators of the growth opportunities in each region where we do business. Industrial output was mostly higher outside the U.S. in the first quarter of fiscal 2024 versus the fourth quarter of 2023. Manufacturing PMI readings were mostly lower and many countries continue to report readings below 50.
Current wording
In the second quarter of 2024, sales to customers outside the U.S. accounted for less than half of our total sales. These customers include both indigenous companies and multinational companies with a global presence. In addition to the global factors previously mentioned in the Overview section, international demand, particularly in emerging markets, has historically been driven by the strength of the industrial economy in each region, investments in infrastructure, and expanding consumer markets. We use changes in key countries' gross domestic product (GDP), IP, and PMI as indicators of the growth opportunities in each region where we do business. Industrial output was mostly higher outside the U.S. in the first and second quarter of 2024 versus the fourth quarter of 2023. Manufacturing PMI readings improved in many countries.
Previous wording
(2)Total segment operating earnings and total segment operating margin are non-GAAP financial measures. We exclude purchase accounting depreciation and amortization, corporate and other, non-operating pension and postretirement benefit credit, change in fair value of investments, interest expense, net, and income tax provision because we do not consider these items to be directly related to the operating performance of our segments. We believe total segment operating earnings and total segment operating margin are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating segments. Our measures of total segment operating earnings and total segment operating margin may be different from measures used by other companies.
Current wording
(2)Total segment operating earnings and total segment operating margin are non-GAAP financial measures. We exclude purchase accounting depreciation and amortization, corporate and other, non-operating pension and postretirement benefit credit (cost), change in fair value of investments, interest expense, net, and income tax provision because we do not consider these items to be directly related to the operating performance of our segments. We believe total segment operating earnings and total segment operating margin are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating segments. Our measures of total segment operating earnings and total segment operating margin may be different from measures used by other companies.
Previous wording
Three Months Ended December 31, 2023, Compared to Three Months Ended December 31, 2022
Current wording
Three and Six Months Ended March 31, 2024, Compared to Three and Six Months Ended March 31, 2023
Previous wording
Sales increased 3.6 percent year over year in the three months ended December 31, 2023. Organic sales increased 1.0 percent, currency translation increased sales by 1.2 percentage points, and acquisitions increased sales by 1.4 percentage points year over year in the three months ended December 31, 2023. Pricing increased total company sales by approximately 3 percentage points, realized in the Intelligent Devices and Software & Control segments. Volume decreased total company sales by approximately 2 percentage points.
Current wording
Sales decreased 6.6 percent and 1.8 percent year over year in the three and six months ended March 31, 2024, respectively. Organic sales decreased 8.1 percent and 3.9 percent year over year in the three and six months ended March 31, 2024, respectively. Currency translation increased sales by 0.1 percentage points and 0.7 percentage points year over year in the three and six months ended March 31, 2024, respectively. Acquisitions increased sales by 1.4 percentage points year over year in both the three and six months ended March 31, 2024. Pricing increased total company sales by approximately 1.5 percentage points and 2.0 percentage points year over year in the three and six months ended March 31, 2024, respectively, realized in the Intelligent Devices and Software & Control segments. Volume decreased total company sales by approximately 9.5 percentage points and 6.0 percentage points year over year in the three and six months ended March 31, 2024, respectively.
Previous wording
The table below presents our sales, attributed to the geographic regions based upon country of destination, and the percentage change from the same period a year ago (in millions, except percentages). Asia Pacific was negatively impacted by the results of China, which experienced a high teens decrease in reported and organic sales.
Current wording
The tables below present our sales, attributed to the geographic regions based upon country of destination, and the percentage change from the same period a year ago (in millions, except percentages):
Previous wording
Corporate and other expenses were $40.0 million in the three months ended December 31, 2023, compared to $27.3 million in the three months ended December 31, 2022. The increase includes the year over year impact of costs associated with the acquisition of Clearpath and mark-to-market adjustments related to our deferred and non-qualified compensation plans.
Current wording
Corporate and other expenses were $28.2 million and $68.2 million in the three and six months ended March 31, 2024, respectively, compared to $29.2 million and $56.5 million in the three and six months ended March 31, 2023, respectively. The increase in expense in the six months ended March 31, 2024, includes the year over year impact of costs associated with the acquisition of Clearpath.
Previous wording
Income before income taxes was $259.6 million in the three months ended December 31, 2023, compared to $467.9 million in the three months ended December 31, 2022. The decrease was primarily due to the mark-to-market gains recognized in the first quarter of the prior year related to our previous investment in PTC and lower segment operating earnings.
Current wording
Income before income taxes was $310.4 million and $570.0 million in the three and six months ended March 31, 2024, respectively, compared to $351.4 million and $819.3 million in the three and six months ended March 31, 2023, respectively. The decrease in the three months ended March 31, 2024, was primarily due to lower segment operating earnings and the mark-to-market gains recognized in the second quarter of the prior year related to our previous investment in PTC, partially offset by the positive impact from lower non-operating pension expenses. The decrease in the six months ended March 31, 2024, was primarily due to the mark-to-market gains recognized in the first and second quarter of the prior year related to our previous investment in PTC and lower segment operating earnings, partially offset by the positive impact from lower non-operating pension expenses.
Previous wording
The effective tax rate for the three months ended December 31, 2023, was 18.1 percent compared to 19.1 percent for the three months ended December 31, 2022. The decrease in the effective tax rate was primarily due to tax effects in the prior year related to our previous investment in PTC. Our adjusted effective tax rate for the three months ended December 31, 2023, was 17.9 percent compared to 17.1 percent for the three months ended December 31, 2022. The increase in the adjusted effective tax rate was primarily due to the geographical mix of pre-tax income.
Current wording
The effective tax rate for the three months ended March 31, 2024, was 14.5 percent compared to 16.1 percent for the three months ended March 31, 2023. Our adjusted effective tax rate for the three months ended March 31, 2024, was 14.8 percent compared to 17.4 percent for the three months ended March 31, 2023. The decrease in both the effective tax rate and the adjusted effective tax rate was primarily due to higher discrete tax benefits in the current year.
Previous wording
2024 first quarter Net income attributable to Rockwell Automation was $215.2 million or $1.86 per share, compared to $384.0 million or $3.31 per share in the first quarter of 2023. The decreases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to lower pre-tax margin. Pre-tax margin was 12.7 percent in the first quarter of 2024 compared to 23.6 percent in the same period last year. The decrease in pre-tax margin was primarily due to mark-to market gains recognized in the first quarter of the prior year related to our previous investment in PTC and lower segment operating earnings. 2024 first quarter adjusted EPS was $2.04, down 17.1 percent compared to $2.46 in the first quarter of 2023, primarily due to lower segment operating margin. Total segment operating margin in the first quarter of 2024 was 17.3 percent compared to 20.2 percent a year ago, primarily due to higher investment spend and lower supply chain utilization.
Current wording
2024 second quarter Net income attributable to Rockwell Automation was $266.2 million or $2.31 per share, compared to $300.3 million or $2.59 per share in the second quarter of 2023. The decreases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to lower pre-tax margin. Pre-tax margin was 14.6 percent in the second quarter of 2024 compared to 15.4 percent in the same period last year. The decrease in pre-tax margin was primarily due to lower sales and mark-to-market gains recognized in the prior year related to our previous investment in PTC, partially offset by lower non-operating pension expense. 2024 second quarter adjusted EPS was $2.50, down 16.9 percent compared to $3.01 in the second quarter of 2023, primarily due to lower segment operating margin. Total segment operating margin in the second quarter of 2024 was 19.0 percent compared to 21.3 percent a year ago, primarily due to lower sales volume, partially offset by lower incentive compensation.
Previous wording
Lifecycle Services sales increased 10.5 percent year over year in the three months ended December 31, 2023. Organic sales increased 8.1 percent year over year, the effects of currency translation increased sales by 1.0 percentage point year over year, and acquisitions increased sales by 1.4 percentage points year over year in the three months ended December 31, 2023. For the three months ended December 31, 2023, all regions experienced reported sales growth. Organic sales increased in North America and Latin America, but decreased in Europe, Middle East, and Africa and Asia Pacific in the three months ended December 31, 2023.
Current wording
Intelligent Devices sales decreased 4.9 percent and 3.0 percent year over year in the three and six months ended March 31, 2024, respectively. Organic sales decreased 7.4 percent and 6.0 percent year over year in the three and six months ended March 31, 2024, respectively. Currency translation increased sales by 0.2 percentage points and 0.7 percentage points year over year, in the three and six months ended March 31, 2024. Acquisitions increased sales by 2.3 percentage points year over year in both the three and six months ended March 31, 2024, respectively. For the three months ended March 31, 2024, reported and organic sales increased in North America and Latin America, but decreased in Europe, Middle East, and Africa and Asia Pacific. For the six months ended March 31, 2024, reported and organic sales decreased in all regions, except for North America.
Previous wording
Software & Control segment operating earnings decreased 9.7 percent year over year in the three months ended December 31, 2023. Segment operating margin decreased to 25.0 percent in the three months ended December 31, 2023, from 29.2 percent in the same period a year ago, primarily due to timing of prior-year investment spend and lower supply chain utilization, partially offset by positive impact of price realization exceeding input costs.
Current wording
Software & Control segment operating earnings decreased 41.3 percent year over year in the three months ended March 31, 2024. Segment operating margin decreased to 25.7 percent in the three months ended March 31, 2024, from 33.6 percent in the same period a year ago, primarily due to lower sales volume, partially offset by lower incentive compensation, the positive impact of price realization exceeding input costs, and favorable mix.
Previous wording
Intelligent Devices segment operating earnings decreased 28.3 percent year over year in the three months ended December 31, 2023. Segment operating margin decreased to 16.2 percent in the three months ended December 31, 2023, from 22.4 percent in the same period a year ago, primarily due to lower sales volume, timing of prior-year investment spend, and the impact of acquisitions, partially offset by positive impact of price realization exceeding input costs.
Current wording
Software & Control segment operating earnings decreased 28.6 percent year over year in the six months ended March 31, 2024. Segment operating margin decreased to 25.3 percent in the six months ended March 31, 2024, from 31.7 percent in the same period a year ago, primarily due to lower sales volume and higher investment spend, partially offset by the positive impact of price realization exceeding input costs, lower incentive compensation, and favorable mix.
Previous wording
Lifecycle Services segment operating earnings increased 123.5 percent year over year in the three months ended December 31, 2023. Segment operating margin increased to 10.4 percent in the three months ended December 31, 2023, from 5.2 percent in the same period a year ago, primarily due to higher sales volume, lower incentive compensation, and higher margins in Sensia.
Current wording
Lifecycle Services segment operating earnings increased 247 percent and 190 percent year over year in the three and six months ended March 31, 2024, respectively. Segment operating margin increased to 16.6 percent and 13.7 percent in the three and six months ended March 31, 2024, respectively, from 5.5 percent and 5.3 percent, respectively, in the same period a year ago, primarily due to higher sales volume, lower incentive compensation, and higher margins in Sensia.
Previous wording
Purchase accounting depreciation and amortization and non-operating pension and postretirement benefit cost are not allocated to our operating segments because these costs are excluded from our measurement of each segment's operating performance for internal purposes. If we were to allocate these costs, we would attribute them to each of our segments as follows (in millions):
Current wording
Purchase accounting depreciation and amortization and non-operating pension and postretirement benefit (credit) cost are not allocated to our operating segments because these costs are excluded from our measurement of each segment's operating performance for internal purposes. If we were to allocate these costs, we would attribute them to each of our segments as follows (in millions):
Previous wording
Adjusted income, adjusted EPS, and adjusted effective tax rate are non-GAAP earnings measures that exclude non-operating pension and postretirement benefit credit, purchase accounting depreciation and amortization attributable to Rockwell Automation, change in fair value of investments, and Net loss attributable to noncontrolling interests, including their respective tax effects. Non-operating pension and postretirement benefit credit is defined as all components of our net periodic pension and postretirement benefit cost (credit) except for service cost. See Note 10 in the Consolidated Financial Statements for more information on our net periodic pension and postretirement benefit cost.
Current wording
Adjusted income, adjusted EPS, and adjusted effective tax rate are non-GAAP earnings measures that exclude non-operating pension and postretirement benefit (credit) cost, purchase accounting depreciation and amortization attributable to Rockwell Automation, change in fair value of investments, and Net loss attributable to noncontrolling interests, including their respective tax effects. Non-operating pension and postretirement benefit (credit) cost is defined as all components of our net periodic pension and postretirement benefit (credit) cost except for service cost. See Note 10 in the Consolidated Financial Statements for more information on our net periodic pension and postretirement benefit cost.
Previous wording
(1)Amount in the three months ended December 31, 2022 primarily relates to the change in fair value of previous investment in PTC.
Current wording
(1)Amounts in the three and six months ended March 31, 2023, primarily relate to the change in fair value of our previous investment in PTC.
Previous wording
Cash provided by operating activities was $32.6 million for the three months ended December 31, 2023, compared to $66.3 million for the three months ended December 31, 2022. Free cash flow was a net outflow of $35.3 million for the three months ended December 31, 2023, compared to a net inflow of $42.1 million for the three months ended December 31, 2022. The year over year decreases in cash provided by operating activities and free cash flow were primarily due to higher incentive compensation payments related to fiscal 2023 performance, lower pre-tax income, and higher tax payments in the first three months of 2023 compared to the first three months of 2022, partially offset by decreases in working capital.
Current wording
Cash provided by operating activities was $152.4 million for the six months ended March 31, 2024, compared to $253.4 million for the six months ended March 31, 2023. Free cash flow was $33.3 million for the six months ended March 31, 2024, compared to $197.7 million for the six months ended March 31, 2023. The year over year decreases in cash provided by operating activities and free cash flow were primarily due to lower pre-tax income, higher incentive compensation payments related to fiscal 2023 performance, and higher tax payments in the first six months of 2024 compared to the first six months of 2023, partially offset by decreases in working capital. Free cash flow for the six months ended March 31, 2024, also includes $63.4 million of higher capital expenditures. Taxes paid in the six months ended March 31, 2024, include $58.4 million of U.S transition tax under the Tax Act and $67.4 million for capital gains from the sale of PTC shares.
Previous wording
Our Short-term debt as of December 31, 2023, includes commercial paper borrowings of $407.0 million with a weighted average interest rate of 5.41 percent, and a weighted average maturity period of 13 days. We had no commercial paper borrowings as of September 30, 2023. In December 2022, Sensia entered into an unsecured $75.0 million line of credit. As of December 31, 2023, and September 30, 2023, included in Short-term debt was $70.0 million borrowed against the line of credit with an interest rate of 6.25 percent and 6.29 percent, respectively. Also included in Short-term debt as of December 31, 2023, and September 30, 2023, is $23.5 million of interest-bearing loans from SLB to Sensia, due December 31, 2024.
Current wording
Our Short-term debt as of March 31, 2024, includes commercial paper borrowings of $707.0 million with a weighted average interest rate of 5.38 percent, and a weighted average maturity period of 19 days. We had no commercial paper borrowings as of September 30, 2023. In December 2022, Sensia entered into an unsecured $75.0 million line of credit. As of March 31, 2024, and September 30, 2023, included in Short-term debt was $70.0 million borrowed against the line of credit with an interest rate of 6.21 percent and 6.29 percent, respectively. Also included in Short-term debt as of September 30, 2023, was $23.5 million of interest-bearing loans from Schlumberger (SLB) to Sensia. The loans were extended to April 15, 2025, and are included in Long-term debt as of March 31, 2024. On April 25, 2024, $18.8 million of new interest-bearing loans from SLB to Sensia were entered into and are due August 28, 2024.
Previous wording
We repurchased approximately 0.4 million shares of our common stock under our share repurchase program in the first three months of 2024. The total cost of these shares was $120.3 million, of which $1.1 million was recorded in Accounts payable at December 31, 2023, related to shares that did not settle until January 2024. At September 30, 2023, there were $1.1 million of outstanding common stock share repurchases recorded in Accounts payable. We repurchased approximately 0.6 million shares of our common stock under our share repurchase program in the first three months of 2023. The total cost of these shares was $156.0 million, of which $0.8 million was recorded in Accounts payable at December 31, 2022, related to shares that did not settle until January 2023. Our decision to repurchase shares in the remainder of 2024 will depend on business conditions, free cash flow generation, other cash requirements, and stock price. On May 2, 2022, the Board of Directors authorized us to expend an additional $1.0 billion to repurchase shares of our common stock. At December 31, 2023, we had approximately $820.0 million remaining for share repurchases under our existing board authorization. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, for additional information regarding share repurchases.
Current wording
We repurchased approximately 1.1 million shares of our common stock under our share repurchase program in the first six months of 2024. The total cost of these shares was $315.0 million, of which $2.4 million was recorded in Accounts payable at March 31, 2024, related to shares that did not settle until April 2024. At September 30, 2023, there were $1.1 million of outstanding common stock share repurchases recorded in Accounts payable. We repurchased approximately 0.8 million shares of our common stock under our share repurchase program in the first six months of 2023. The total cost of these shares was $194.4 million, of which $0.8 million was recorded in Accounts payable at March 31, 2023, related to shares that did not settle until April 2023. Our decision to repurchase shares in the remainder of 2024 will depend on business conditions, free cash flow generation, other cash requirements, and stock price. On May 2, 2022, the Board of Directors authorized us to expend an additional $1.0 billion to repurchase shares of our common stock. At March 31, 2024, we had approximately $625.3 million remaining for share repurchases under our existing board authorization. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, for additional information regarding share repurchases.
Previous wording
Separate short-term unsecured credit facilities of approximately $227.6 million at December 31, 2023, were available to non-U.S. subsidiaries, of which, approximately $33.2 million was committed under letters of credit. Borrowings under our non-U.S. credit facilities at December 31, 2023, and September 30, 2023, were not significant. We were in compliance with all covenants under our credit facilities at December 31, 2023, and September 30, 2023. There are no significant commitment fees or compensating balance requirements under our credit facilities.
Current wording
Separate short-term unsecured credit facilities of approximately $226.8 million at March 31, 2024, were available to non-U.S. subsidiaries, of which, approximately $34.0 million was committed under letters of credit. Borrowings under our non-U.S. credit facilities at March 31, 2024, and September 30, 2023, were not significant. We were in compliance with all covenants under our credit facilities at March 31, 2024, and September 30, 2023. There are no significant commitment fees or compensating balance requirements under our credit facilities.
Previous wording
We use foreign currency forward exchange contracts to manage certain foreign currency risks. We enter into these contracts to hedge our exposure to foreign currency exchange rate variability in the expected future cash flows associated with certain third-party and intercompany transactions denominated in foreign currencies forecasted to occur within the next two years. We also may use these contracts to hedge portions of our net investments in certain non-U.S. subsidiaries against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. There were no open net investment hedges for the three months ended December 31, 2023, or September 30, 2023. In addition, we use foreign currency forward exchange contracts that are not designated as hedges to offset transaction gains or losses associated with some of our assets and liabilities resulting from intercompany loans or other transactions with third parties that are denominated in currencies other than our entities' functional currencies. Our foreign currency forward exchange contracts are usually denominated in currencies of major industrial countries. We diversify our foreign currency forward exchange contracts among counterparties to minimize exposure to any one of these entities.
Current wording
We use foreign currency forward exchange contracts to manage certain foreign currency risks. We enter into these contracts to hedge our exposure to foreign currency exchange rate variability in the expected future cash flows associated with certain third-party and intercompany transactions denominated in foreign currencies forecasted to occur within the next two years. We also may use these contracts to hedge portions of our net investments in certain non-U.S. subsidiaries against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S. dollar. There were no open net investment hedges for the six months ended March 31, 2024, or September 30, 2023. In addition, we use foreign currency forward exchange contracts that are not designated as hedges to offset transaction gains or losses associated with some of our assets and liabilities resulting from intercompany loans or other transactions with third parties that are denominated in currencies other than our entities' functional currencies. Our foreign currency forward exchange contracts are usually denominated in currencies of major industrial countries. We diversify our foreign currency forward exchange contracts among counterparties to minimize exposure to any one of these entities.
Previous wording
Net gains and losses related to derivative forward exchange contracts designated as cash flow hedges offset the related gains and losses on the hedged items during the periods in which the hedged items are recognized in earnings. During the three months ended December 31, 2023, we reclassified $8.5 million in pre-tax net gains related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. During the three months ended December 31, 2022, we reclassified $12.7 million in pre-tax net gains related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. As of December 31, 2023, we expect that approximately $11.1 million of pre-tax net unrealized losses on cash flow hedges will be reclassified into earnings during the next 12 months.
Current wording
Net gains and losses related to derivative forward exchange contracts designated as cash flow hedges offset the related gains and losses on the hedged items during the periods in which the hedged items are recognized in earnings. During the three and six months ended March 31, 2024, we reclassified $4.9 million and $13.4 million, respectively, in pre-tax net gains related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. During the three and six months ended March 31, 2023, we reclassified $7.7 million and $20.4 million in pre-tax net gains related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. As of March 31, 2024, we expect that approximately $3.8 million of pre-tax net unrealized gains on cash flow hedges will be reclassified into earnings during the next 12 months.
Previous wording
The key assumption requiring the use of judgement in the valuation of the $269.6 million technology asset was the obsolescence factor. The obsolescence factor of twelve years was calculated based on the depletion of existing technology using a variety of factors including research and development spend toward new product development and scheduled patent expiration. A two-year change in this assumption would result in a change of approximately $82 million in intangible assets. The key assumption requiring the use of judgement in the valuation of the $41.6 million trademark intangible asset was the weighted average royalty rate of 2.05 percent. This rate was based on royalty market data. A 100 basis point change in the royalty rate would result in a change of $20 million in intangible assets.
Current wording
The key assumption requiring the use of judgement in the valuation of the $269.9 million technology asset was the obsolescence factor. The obsolescence factor of twelve years was calculated based on the depletion of existing technology using a variety of factors including research and development spend toward new product development and scheduled patent expiration. A two-year change in this assumption would result in a change of approximately $82 million in intangible assets. The key assumption requiring the use of judgement in the valuation of the $41.6 million trademark intangible asset was the weighted average royalty rate of 2.05 percent. This rate was based on royalty market data. A 100 basis point change in the royalty rate would result in a change of $20 million in intangible assets.