Rockwell Automation Reports Third Quarter Results

-- Diluted earnings per share from continuing operations of $0.68

-- Revenue up 11 percent; 9 percent excluding currency translation

-- Free cash flow $158 million in the quarter; $380 million year-to-date

-- 2005 full year EPS now expected to be $2.60-$2.65 on 10-11 percent revenue growth

Rockwell Automation, Inc. (NYSE:ROK), a leading global provider ofindustrial automation power, control and information solutions, todayreported fiscal 2005 third quarter income from continuing operationsof $127.3 million ($0.68 per share) compared to $125.5 million ($0.66per share) in 2004. Results in 2004 included separately reported taxbenefits of $34.5 million or $0.18 per share. Excluding these taxbenefits earnings per share increased 42 percent.

Sales for the third quarter were $1,264.7 million, up 11 percentcompared to $1,135.0 million in the third quarter of 2004. Currencytranslation accounted for two percentage points of the growth. Segmentoperating earnings in the third quarter were $221.2 million, up 32percent compared to $167.1 million in the third quarter of 2004.

Keith Nosbusch, chairman and chief executive officer, commentingon the quarter, said, "Our businesses again produced solid results ina gradually expanding global industrial economy, particularly in theAmericas. These results validate the sustained investment we aremaking in our product portfolio and solutions delivery capabilities.Diversifying our customer base, expanding our served market andbroadening our geographic footprint allow us to continue to outperformour underlying markets."

Outlook

The company is refining its 2005 full year guidance to reflect thestrong performance through the first nine months of the year. Thecompany now expects organic revenue growth between 10 and 11 percent,excluding currency translation. EPS from continuing operations for thefull year is now expected to be $2.60 to $2.65. This range excludesthe separately reported tax benefits and the beneficial insurancesettlements recorded in the second quarter.

Commenting on the outlook Nosbusch said, "Our current outlookanticipates gradual sequential growth across most end markets throughthe remainder of this year and into 2006. This momentum, combined withour relentless focus on productivity and cost discipline, gives meconfidence that 2006 will be another good year for RockwellAutomation."

Following is a discussion of third quarter results for eachbusiness.

Control Systems

Control Systems third quarter sales were $1,035.4 million, anincrease of 11 percent compared to $933.3 million in the third quarterof 2004. Three percentage points of the growth was due to the effectof currency translation. Non-U.S. sales increased 8 percent, excludingthe effect of currency translation. Strong growth in Latin America,Canada and the Asia-Pacific region, was partially offset by a slightdecline in Europe.

Growth in the quarter was paced by particularly strong performancein our drives and motor control businesses. Our Logix integratedarchitecture platform and related product offerings grew by 20percent. Segment operating earnings were $188.6 million, an increaseof 31 percent compared to $143.8 million in the third quarter of 2004.Earnings increased due to higher volume, productivity efforts andprice, partially offset by inflation. Control Systems return on saleswas 18.2 percent in the third quarter of 2005 compared to 15.4 percentin 2004.

Power Systems

Power Systems third quarter sales were $229.3 million, an increaseof 14 percent versus the 2004 third quarter results of $201.7 million.Segment operating earnings increased 40 percent to $32.6 million,compared to $23.3 million in the third quarter of 2004. The increasein earnings was driven by higher volume, an improved price/costenvironment, and productivity. Power Systems return on sales was 14.2percent in the third quarter of 2005 compared to 11.6 percent in 2004.

Cash Flow

Free cash flow for the third quarter of 2005 was $157.7 millioncompared to $63.5 million in 2004. Results for the third quarter of2004 included a $75 million voluntary contribution to the company'spension plan trust.

(We define free cash flow, a non-GAAP measure, as cash flows fromoperating activities reduced by capital expenditures.)

A conference call to discuss our financial results will take placeat 9 AM Central Time (10 AM Eastern Time) on Wednesday, July 27, 2005.The call will be webcast and accessible via the Rockwell Automationwebsite (www.rockwellautomation.com).

This news release contains statements (including certainprojections and business trends) that may be accompanied by suchphrases as "believe", "estimate", "expect", "anticipate", "will","intend" and other similar expressions, that are "forward-lookingstatements" as defined in the Private Securities Litigation Reform Actof 1995. Actual results may differ materially from those projected asa result of certain risks and uncertainties, including but not limitedto, the following:

-- economic and political changes in global markets where we compete, such as currency exchange rates, inflation rates, recession, foreign ownership restrictions and other external factors we cannot control;

-- demand for and market acceptance of new and existing products;

-- levels of capital spending in industrial markets;

-- the availability and price of components and materials;

-- successful development of advanced technologies;

-- the availability, effectiveness and security of our information technology systems;

-- competitive product and pricing pressures;

-- disruption of our operations due to natural disasters, strikes, terrorism, or other causes;

-- intellectual property infringement claims by others and the ability to protect our intellectual property;

-- regulatory and legislative changes related to the reporting and funding of pension and health care obligations;

-- successfully addressing claims by taxing authorities resulting from cross-border global business operations;

-- the ability to attract and retain qualified personnel;

-- the uncertainties of litigation; and

-- other risks and uncertainties, including but not limited to those detailed from time to time in our Securities and Exchange Commission filings.

These forward-looking statements are made only as of the datehereof, and we undertake no obligation to update or revise theforward-looking statements, whether as a result of new information,future events or otherwise.

Rockwell Automation, Inc. (NYSE:ROK), is a leading global providerof industrial automation power, control and information solutions thathelp customers meet their manufacturing productivity objectives. Thecompany brings together leading brands in industrial automation forComplete Automation solutions, including Allen-Bradley(R) controls andservices, Dodge(R) mechanical power transmission products, Reliance(R)motors and drives, and Rockwell Software(R) factory managementsoftware. Headquartered in Milwaukee, Wisconsin, the company employsabout 22,000 people serving customers in more than 80 countries.

ROCKWELL AUTOMATION, INC.
SALES AND EARNINGS INFORMATION
(Unaudited)
(in millions, except per share amounts)

Three Months Ended Nine Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Sales
Control Systems $1,035.4 $933.3 $3,019.5 $2,659.1
Power Systems 229.3 201.7 648.5 545.8
--------- --------- --------- ---------
Total Sales $1,264.7 $1,135.0 $3,668.0 $3,204.9
========= ========= ========= =========

Segment Operating Earnings
Control Systems $188.6 $143.8 $565.4 $376.3
Power Systems 32.6 23.3 88.1 46.2
--------- --------- --------- ---------
Total Segment Operating
Earnings 221.2 167.1 653.5 422.5

Purchase accounting
depreciation and amortization (2.4) (6.8) (12.6) (20.5)
General corporate - net (15.9) (20.4) (55.2) (59.8)
Interest expense (11.7) (10.1) (34.3) (30.8)
--------- --------- --------- ---------

Income from continuing
operations before income taxes 191.2 129.8 551.4 311.4
Income tax provision
(see Note 1) (63.9) (4.3) (159.5) (53.9)
--------- --------- --------- ---------

Income from continuing
operations 127.3 125.5 391.9 257.5
Income from discontinued
operations (see Note 1) - 0.9 18.8 9.4
--------- --------- --------- ---------

Net income $127.3 $126.4 $410.7 $266.9
========= ========= ========= =========

Diluted Earnings Per Share:
Continuing operations $0.68 $0.66 $2.08 $1.34
Discontinued operations - - 0.10 0.05
--------- --------- --------- ---------

Net Income $0.68 $0.66 $2.18 $1.39
========= ========= ========= =========

Average Diluted Shares 186.4 190.5 188.2 191.7
========= ========= ========= =========

(1) See Supplemental Sales and Earnings Information for a summary of
separately reported tax items and the composition of Income from
discontinued operations.



ROCKWELL AUTOMATION, INC.
CONDENSED BALANCE SHEET
(Unaudited)
(in millions)

June 30, September 30,
2005 2004
------------- -------------
ASSETS
Cash and cash equivalents $468.8 $473.8
Short-term investments - -
Receivables, net 756.1 719.9
Inventories, net 595.0 574.3
Deferred income taxes 136.0 132.7
Other current assets 122.5 125.4
------------- -------------
Total current assets 2,078.4 2,026.1
Properties, net 771.1 804.5
Goodwill, net 809.8 811.1
Other intangible assets, net 317.1 323.8
Other assets 260.7 235.7
------------- -------------

Total $4,237.1 $4,201.2
============= =============

LIABILITIES AND SHAREOWNERS' EQUITY
Short-term debt $0.2 $0.2
Accounts payable 332.0 362.2
Compensation and benefits 157.9 202.3
Income taxes payable 49.0 8.3
Other current liabilities 385.3 290.6
------------- -------------
Total current liabilities 924.4 863.6
Long-term debt 751.8 757.7
Retirement benefits 508.9 505.6
Deferred income taxes 39.9 89.3
Other liabilities 120.4 124.0
Shareowners' equity 1,891.7 1,861.0
------------- -------------

Total $4,237.1 $4,201.2
============= =============



ROCKWELL AUTOMATION, INC.
CONDENSED CASH FLOW INFORMATION
(Unaudited)
(in millions)

Nine Months Ended
June 30,
---------------------------
2005 2004
------------- -------------
CONTINUING OPERATIONS:

OPERATING ACTIVITIES:
Income from continuing operations $391.9 $257.5
Adjustments to arrive at cash provided by
operating activities:
Depreciation 111.2 118.6
Amortization of intangible assets 16.0 19.9
Pension trust contributions (62.9) (144.2)
Retirement benefits expense 66.7 66.2
Net loss on disposition of property 2.0 1.2
Income tax benefit from the exercise of
stock options 59.3 26.3
Changes in assets and liabilities,
excluding effects of foreign currency
adjustments:
Receivables (15.0) (20.7)
Inventories (17.7) (23.4)
Accounts payable (30.8) 6.2
Compensation and benefits (44.4) 8.4
Income taxes 7.1 36.6
Other assets and liabilities (17.9) 2.0
------------- -------------

Cash provided by operating activities 465.5 354.6
------------- -------------

INVESTING ACTIVITIES:
Capital expenditures (85.7) (58.6)
Proceeds from sale of property 7.5 2.3
Other investing activities (0.7) 0.4
------------- -------------

Cash used for investing activities (78.9) (55.9)
------------- -------------

FINANCING ACTIVITIES:
Repayments of debt - (8.4)
Cash dividends (102.0) (92.1)
Purchases of treasury stock (390.3) (174.0)
Proceeds from the exercise of stock options 87.8 54.9
Other financing activities (1.2) (1.0)
------------- -------------

Cash used for financing activities (405.7) (220.6)
------------- -------------

Effect of exchange rate changes on cash (5.8) (2.7)
------------- -------------

Cash (used for) provided by continuing
operations (24.9) 75.4
Cash provided by discontinued operations 19.9 27.9
------------- -------------

(Decrease) Increase in cash and cash
equivalents $(5.0) $103.3
============= =============

FREE CASH FLOW:
Cash provided by operating activities $465.5 $354.6
Capital expenditures (85.7) (58.6)
------------- -------------
Free cash flow (see Note 1) $379.8 $296.0
============= =============

(1) Our definition of free cash flow, which is a non-GAAP internal
performance measurement, may be different from definitions used by
other companies.



ROCKWELL AUTOMATION, INC.
SUPPLEMENTAL SALES AND EARNINGS INFORMATION
(Unaudited)
(in millions, except per share amounts)

Three Months Ended Nine Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------

INCOME TAXES
------------

The income tax provision included the following separately reported
items:

Resolution of certain income
tax matters $- $34.5 $19.7 $34.5
Research and experimentation
credit refund claim - - - 4.3
--------- --------- --------- ---------
Total $- $34.5 $19.7 $38.8
========= ========= ========= =========

The following summarizes the amounts per diluted share for the tax
items above:

Resolution of certain income
tax matters $- $0.18 $0.10 $0.18
Research and experimentation
credit refund claim - - - 0.02
--------- --------- --------- ---------
Total $- $0.18 $0.10 $0.20
========= ========= ========= =========

INCOME EXCLUDING INCOME TAX BENEFITS
------------------------------------

The following is a reconciliation of income from continuing operations
(as reported) to income from continuing operations excluding
separately reported tax benefits:

Income from continuing
operations (as reported) $127.3 $125.5 $391.9 $257.5
Deduct: Separately reported tax
benefits - (34.5) (19.7) (38.8)
--------- --------- --------- ---------
Income from continuing
operations excluding tax
benefits $127.3 $91.0 $372.2 $218.7
========= ========= ========= =========

The following is a reconciliation of income from continuing operations
per diluted share (as reported) to income from continuing operations
per diluted share excluding separately reported tax benefits:

Income from continuing
operations per diluted share
(as reported) $0.68 $0.66 $2.08 $1.34
Deduct: Separately reported tax
benefits per diluted share - (0.18) (0.10) (0.20)
--------- --------- --------- ---------
Income from continuing
operations excluding tax
benefits $0.68 $0.48 $1.98 $1.14
========= ========= ========= =========

DISCONTINUED OPERATIONS
-----------------------

Income from discontinued operations included the following (all
amounts are after tax):

Resolution of certain U.S. and
state income tax matters $- $- $18.8 $-
Net income from the operations
of FirstPoint Contact - 0.9 - 4.8
Rocky Flats legal proceeding - - - 4.6
--------- --------- --------- ---------
Total $- $0.9 $18.8 $9.4
========= ========= ========= =========

The following summarizes the amounts per diluted share for the items
above:

Resolution of certain U.S. and
state income tax matters $- $- $0.10 $-
Net income from the operations
of FirstPoint Contact - - - 0.03
Rocky Flats legal proceeding - - - 0.02
--------- --------- --------- ---------
Total $- $- $0.10 $0.05
========= ========= ========= =========



ROCKWELL AUTOMATION, INC.
OTHER SUPPLEMENTAL INFORMATION
(Unaudited)
(in millions)

Income Excluding Income Tax Benefits
------------------------------------

Our press release contains information regarding income excluding
income tax benefits in 2005 and 2004, which is a non-GAAP financial
measure. Management believes that income excluding such income tax
benefits is useful to investors because the benefits are not
indicative of the magnitude of tax benefits the company may recognize
in the future. Management uses income excluding such income tax
benefits as one measure to monitor and evaluate the performance of the
company.

Free Cash Flow
--------------

Our press release contains information regarding free cash flow, which
is a non-GAAP financial measure. Our definition of free cash flow
takes into consideration capital investment required to maintain the
operations of our company and execute our strategy. Management
believes that 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, debt service,
dividends and share repurchases. Management uses free cash flow as one
measure to monitor and evaluate our performance.

The following table summarizes free cash flow by quarter for our
company:

Quarter Ended
---------------------------------------
Dec. 31, March 31, June 30, Sept. 30,
2003 2004 2004 2004
--------- --------- --------- ---------

Cash provided by operating
activities $142.0 $126.9 $85.7 $242.3
Capital expenditures (16.0) (20.4) (22.2) (39.4)
--------- --------- --------- ---------
Free cash flow $126.0 $106.5 $63.5 $202.9
========= ========= ========= =========

Quarter Ended
---------------------------------------
Dec. 31, Mar. 31, June 30,
2004 2005 2005
--------- --------- ---------

Cash provided by operating
activities $102.3 $182.2 $181.0
Capital expenditures (11.9) (50.5) (23.3)
--------- --------- ---------
Free cash flow $90.4 $131.7 $157.7
========= ========= =========

Effect of Changes in Currency Exchange Rates on Sales
-----------------------------------------------------

Our press release contains information regarding the effect of changes
in currency exchange rates on sales, which is a non-GAAP measure.
Management believes this provides useful information to investors
because it reflects regional performance from our activities without
the effect of changes in currency rates. Management uses sales
excluding the effect of changes in currency exchange rates as one
measure to monitor and evaluate our regional performance.

The following is a reconciliation of reported sales to sales excluding
the effect of changes in currency exchange rates for the three and
nine months ended June 30, 2005 compared to sales for the three and
nine months ended June 30, 2004:

Three Months Ended June 30,
-------------------------------------------
2005 2004
-------------------------------- ----------
Sales
Excluding
Effect of Effect of
Changes in Changes in
Sales Currency Currency Sales
---------- ---------- ---------- ----------

United States $777.7 $- $777.7 $715.1
Canada 108.9 (8.7) 100.2 81.5
Europe, Middle East, Africa 205.9 (9.0) 196.9 200.2
Asia-Pacific 120.5 (6.3) 114.2 100.9
Latin America 51.7 (4.4) 47.3 37.3
---------- ---------- ---------- ----------
Total $1,264.7 $(28.4) $1,236.3 $1,135.0
========== ========== ========== ==========

Nine Months Ended June 30,
-------------------------------------------
2005 2004
-------------------------------- ----------
Sales
Excluding
Effect of Effect of
Changes in Changes in
Sales Currency Currency Sales
---------- ---------- ---------- ----------

United States $2,244.6 $- $2,244.6 $1,985.7
Canada 297.5 (22.5) 275.0 244.6
Europe, Middle East, Africa 622.3 (37.2) 585.1 573.3
Asia-Pacific 349.2 (14.8) 334.4 288.1
Latin America 154.4 (4.5) 149.9 113.2
---------- ---------- ---------- ----------
Total $3,668.0 $(79.0) $3,589.0 $3,204.9
========== ========== ========== ==========

The following is a reconciliation for the Control Systems segment of
reported sales to sales excluding the effect of changes in currency
exchange rates for the three and nine months ended June 30, 2005
compared to sales for the three and nine months ended June 30, 2004:

Three Months Ended June 30,
-------------------------------------------
2005 2004
-------------------------------- ----------
Sales
Excluding
Effect of Effect of
Changes in Changes in
Sales Currency Currency Sales
---------- ---------- ---------- ----------

United States $574.8 $- $574.8 $532.8
Canada 94.5 (7.8) 86.7 72.2
Europe, Middle East, Africa 204.2 (9.0) 195.2 197.1
Asia-Pacific 113.8 (6.3) 107.5 96.9
Latin America 48.1 (4.3) 43.8 34.3
---------- ---------- ---------- ----------
Total $1,035.4 $(27.4) $1,008.0 $933.3
========== ========== ========== ==========

Nine Months Ended June 30,
-------------------------------------------
2005 2004
-------------------------------- ----------
Sales
Excluding
Effect of Effect of
Changes in Changes in
Sales Currency Currency Sales
---------- ---------- ---------- ----------

United States $1,665.3 $- $1,665.3 $1,492.4
Canada 261.2 (20.0) 241.2 218.0
Europe, Middle East, Africa 616.1 (36.8) 579.3 562.5
Asia-Pacific 333.4 (14.8) 318.6 281.2
Latin America 143.5 (4.5) 139.0 105.0
---------- ---------- ---------- ----------
Total $3,019.5 $(76.1) $2,943.4 $2,659.1
========== ========== ========== ==========