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Rockwell Automation Reports Fourth Quarter and Full Year 2008 Results


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MILWAUKEE, WI. November 10, 2008: Rockwell Automation, Inc. today reported fiscal 2008 fourth quarter revenue of $1,484.3 million, up 8 percent compared to $1,370.5 million in 2007. Foreign currency translation contributed 2 percentage points and acquisitions contributed 1 percentage point to the growth rate.

Fiscal 2008 fourth quarter income from continuing operations was $125.6 million or $0.87 per share. Income from continuing operations for the fourth quarter, excluding special charges of $46.7 million ($30.4 million after tax, or $0.21 per share), was $156.0 million or $1.08 per share. Earnings per share from continuing operations for the fourth quarter of 2007 were $1.07. Segment operating earnings were $269.1 million, down 2 percent compared to $275.2 million in 2007.

Fourth quarter 2008 free cash flow from continuing operations was $197.2 million. Return on invested capital for 2008 was 24.0 percent.

Full Year 2008

Sales for the full year were $5,697.8 million, up 14 percent compared to $5,003.9 million in fiscal 2007. Foreign currency translation contributed 5 percentage points and acquisitions contributed 3 percentage points to the growth rate. Full year 2008 income from continuing operations was $577.6 million or $3.90 per share. Income from continuing operations for the year, excluding special charges of $46.7 million ($30.4 million after tax, or $0.21 per share), was $608.0 million or $4.11 per share. Earnings per share from continuing operations excluding special charges for 2007 were $3.70. Segment operating earnings for fiscal 2008 were $1,025.2 million, up 4 percent compared to $984.7 million in 2007. Full year 2008 free cash flow from continuing operations was $458.3 million.

Free cash flow, income from continuing operations excluding special charges, and return on invested capital are non-GAAP measures that are defined in the attachments to this release under “Other Supplemental Information”.

Commenting on the results, Keith D. Nosbusch, chairman and chief executive officer, said, “Our strong performance in the quarter again demonstrated our ability to execute on our growth and performance strategy and capped another very good year. In 2008, we delivered 9 percent revenue growth excluding currency, increased EPS from continuing operations excluding special charges by 11 percent and maintained ROIC at 24 percent in a challenging environment. Our business in emerging markets accelerated and we reached our goal of generating 50 percent of revenues outside the U.S. We achieved greater penetration in process industries and strong growth in our solutions businesses, demonstrating the on-going diversification of our revenue base. These results are a credit to the focus and hard work of our employees and partners around the world.”

Following is a discussion of fourth quarter results for each of the segments.

Architecture & Software

Architecture & Software fourth quarter sales were $617.1 million, an increase of 8 percent compared to $569.5 million in the fourth quarter of 2007. Foreign currency translation and acquisitions each contributed 2 percentage points to the growth rate. Segment operating earnings were $141.6 million compared to $145.3 million in the fourth quarter of 2007. Architecture & Software segment operating margin was 22.9 percent in the fourth quarter of 2008 compared to 25.5 percent in 2007.

Control Products & Solutions

Control Products & Solutions fourth quarter sales were $867.2 million, an increase of 8 percent compared to sales of $801.0 million in the fourth quarter of 2007. Foreign currency translation contributed 2 percentage points to the growth rate. Segment operating earnings were $127.5 million compared to $129.9 million in the fourth quarter of 2007. Control Products & Solutions segment operating margin was 14.7 percent in the fourth quarter of 2008 compared to 16.2 percent in 2007.

General Corporate – Net

Fourth quarter general corporate net expense was $24.5 million compared to $22.2 million in the fourth quarter of 2007. General corporate net expense for the full year was $77.2 million compared to $72.8 million in 2007.

Income Taxes

The effective tax rate for the fourth quarter of 2008 was 28.9 percent (30.2 percent excluding the impact of special charges) compared to 29.2 percent in 2007. The effective tax rate for the full year was 28.6 percent (28.9 percent excluding the impact of special charges) compared to 27.8 percent in 2007.

Share Repurchase

During the quarter, the Company repurchased 2.5 million shares at a cost of $103.5 million. The Company had $671.2 million available at September 30, 2008 under its existing $1.0 billion share repurchase authorization.

Fiscal 2009 Outlook

A conference call to discuss our fiscal 2008 financial results and outlook for fiscal 2009 will take place at 8:30 A.M. Eastern Time on November 11. The call and related financial charts will be webcast and accessible via ROCKWELL.