filings.toolsItem 1. Financial Statements
105K characters. Original on sec.gov · Markdown
Item 1. Financial Statements
ROCKWELL AUTOMATION, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in millions, except per share amounts)
| March 31, 2026 | September 30, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 423 | $ | 468 | |||||||
| Receivables | 1,883 | 1,931 | |||||||||
| Inventories | 1,225 | 1,247 | |||||||||
| Other current assets | 307 | 265 | |||||||||
| Current assets held for sale | 247 | — | |||||||||
| Total current assets | 4,085 | 3,911 | |||||||||
| Property, net of accumulated depreciation of $2,039 and $1,997, respectively | 836 | 797 | |||||||||
| Operating lease right-of-use assets | 357 | 403 | |||||||||
| Goodwill | 3,838 | 3,839 | |||||||||
| Other intangible assets, net | 744 | 864 | |||||||||
| Deferred income taxes | 576 | 596 | |||||||||
| Other assets | 820 | 809 | |||||||||
| Total | $ | 11,256 | $ | 11,219 | |||||||
| LIABILITIES AND SHAREOWNERS’ EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Short-term debt | $ | 1,116 | $ | 608 | |||||||
| Current portion of long-term debt | 2 | 2 | |||||||||
| Accounts payable | 833 | 930 | |||||||||
| Compensation and benefits | 350 | 432 | |||||||||
| Contract liabilities | 662 | 621 | |||||||||
| Customer returns, rebates and incentives | 330 | 347 | |||||||||
| Other current liabilities | 378 | 505 | |||||||||
| Current liabilities related to assets held for sale | 74 | — | |||||||||
| Total current liabilities | 3,745 | 3,445 | |||||||||
| Long-term debt | 2,571 | 2,614 | |||||||||
| Retirement benefits | 403 | 406 | |||||||||
| Operating lease liabilities | 279 | 329 | |||||||||
| Other liabilities | 682 | 714 | |||||||||
| Commitments and contingent liabilities (Note 12) | |||||||||||
| Shareowners’ equity | |||||||||||
| Common stock ($1.00 par value, shares issued: 141.4) | 141 | 141 | |||||||||
| Additional paid-in capital | 2,331 | 2,283 | |||||||||
| Retained earnings | 5,768 | 5,422 | |||||||||
| Accumulated other comprehensive loss | (639) | (657) | |||||||||
| Common stock in treasury, at cost (shares held: 30.1 and 29.0, respectively) | (4,079) | (3,535) | |||||||||
| Shareowners’ equity attributable to Rockwell Automation, Inc. | 3,522 | 3,654 | |||||||||
| Noncontrolling interests | 54 | 57 | |||||||||
| Total shareowners’ equity | 3,576 | 3,711 | |||||||||
| Total | $ | 11,256 | $ | 11,219 |
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(in millions, except per share amounts)
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Sales | |||||||||||||||||||||||
| Products and solutions | $ | 2,003 | $ | 1,765 | $ | 3,870 | $ | 3,404 | |||||||||||||||
| Services | 236 | 236 | 474 | 478 | |||||||||||||||||||
| 2,239 | 2,001 | 4,344 | 3,882 | ||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Products and solutions | (987) | (899) | (1,952) | (1,772) | |||||||||||||||||||
| Services | (127) | (130) | (251) | (260) | |||||||||||||||||||
| (1,114) | (1,029) | (2,203) | (2,032) | ||||||||||||||||||||
| Gross profit | 1,125 | 972 | 2,141 | 1,850 | |||||||||||||||||||
| Selling, general and administrative expenses | (478) | (469) | (956) | (945) | |||||||||||||||||||
| Engineering and development | (180) | (162) | (352) | (318) | |||||||||||||||||||
| Change in fair value of investments | — | (3) | — | (3) | |||||||||||||||||||
| Other income (Note 10) | 9 | — | 17 | 6 | |||||||||||||||||||
| Interest expense | (36) | (39) | (68) | (78) | |||||||||||||||||||
| Income before income taxes | 440 | 299 | 782 | 512 | |||||||||||||||||||
| Income tax provision (Note 14) | (89) | (51) | (129) | (86) | |||||||||||||||||||
| Net income | 351 | 248 | 653 | 426 | |||||||||||||||||||
| Net income (loss) attributable to noncontrolling interests | 1 | (4) | (2) | (10) | |||||||||||||||||||
| Net income attributable to Rockwell Automation, Inc. | $ | 350 | $ | 252 | $ | 655 | $ | 436 | |||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | 3.11 | $ | 2.22 | $ | 5.82 | $ | 3.84 | |||||||||||||||
| Diluted | $ | 3.10 | $ | 2.22 | $ | 5.79 | $ | 3.83 | |||||||||||||||
| Weighted average outstanding shares: | |||||||||||||||||||||||
| Basic | 112.1 | 112.9 | 112.2 | 113.0 | |||||||||||||||||||
| Diluted | 112.6 | 113.3 | 112.7 | 113.4 |
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
(in millions)
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income | $ | 351 | $ | 248 | $ | 653 | $ | 426 | |||||||||||||||
| Other comprehensive income (loss) | |||||||||||||||||||||||
| Pension and other postretirement benefit plan adjustments (net of tax expense of $1, $1, $2, and $3) | 4 | 6 | 7 | 11 | |||||||||||||||||||
| Currency translation adjustments | (25) | 43 | 2 | (87) | |||||||||||||||||||
| Net change in cash flow hedges (net of tax (expense) benefit of $(2), $5, $(3), and $(6)) | 5 | (11) | 8 | 14 | |||||||||||||||||||
| Other comprehensive (loss) income | (16) | 38 | 17 | (62) | |||||||||||||||||||
| Comprehensive income | 335 | 286 | 670 | 364 | |||||||||||||||||||
| Comprehensive loss attributable to noncontrolling interests | — | (5) | (3) | (11) | |||||||||||||||||||
| Comprehensive income attributable to Rockwell Automation, Inc. | $ | 335 | $ | 291 | $ | 673 | $ | 375 |
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(in millions)
| Six Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating activities: | |||||||||||
| Net income | $ | 653 | $ | 426 | |||||||
| Adjustments to arrive at cash provided by operating activities | |||||||||||
| Depreciation | 91 | 83 | |||||||||
| Amortization of intangible assets | 67 | 76 | |||||||||
| Change in fair value of investments | — | 3 | |||||||||
| Share-based compensation expense | 45 | 44 | |||||||||
| Retirement benefit expense | 13 | 21 | |||||||||
| Net loss on disposition of property | — | 1 | |||||||||
| Pension contributions | (3) | (6) | |||||||||
| Changes in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments | |||||||||||
| Receivables | (26) | (51) | |||||||||
| Inventories | (28) | 95 | |||||||||
| Accounts payable | (59) | (62) | |||||||||
| Contract liabilities | 45 | 70 | |||||||||
| Compensation and benefits | (73) | 31 | |||||||||
| Income taxes | (82) | (119) | |||||||||
| Other assets and liabilities | (89) | (49) | |||||||||
| Cash provided by operating activities | 554 | 563 | |||||||||
| Investing activities: | |||||||||||
| Capital expenditures | (109) | (99) | |||||||||
| Purchases of investments | (10) | (13) | |||||||||
| Other investing activities | — | (10) | |||||||||
| Cash used for investing activities | (119) | (122) | |||||||||
| Financing activities: | |||||||||||
| Net issuance of commercial paper | 503 | 339 | |||||||||
| Issuance of short-term debt | 33 | — | |||||||||
| Repayment of short-term debt | (70) | 6 | |||||||||
| Repayment of long-term debt | — | (300) | |||||||||
| Payment of capital lease obligations | (62) | — | |||||||||
| Cash dividends | (309) | (297) | |||||||||
| Purchases of treasury stock | (599) | (232) | |||||||||
| Proceeds from the exercise of stock options | 69 | 48 | |||||||||
| Other financing activities | (1) | (9) | |||||||||
| Cash used for financing activities | (436) | (445) | |||||||||
| Effect of exchange rate changes on cash | 3 | (17) | |||||||||
| Increase (decrease) in cash, cash equivalents, and cash included in assets held for sale | 2 | (21) | |||||||||
| Cash and cash equivalents at beginning of period | 468 | 471 | |||||||||
| Cash, cash equivalents, and cash included in assets held for sale at end of period | $ | 470 | $ | 450 | |||||||
| Cash included in assets held for sale | (47) | — | |||||||||
| Total cash and cash equivalents at the end of the period | $ | 423 | $ | 450 |
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENT OF SHAREOWNERS’ EQUITY
(Unaudited)
(in millions, except per share amounts)
| Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Common stock in treasury, at cost | Total attributable to Rockwell Automation, Inc. | Noncontrolling interests | Total shareowners' equity | |||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | 141 | $ | 2,296 | $ | 5,571 | $ | (624) | $ | (3,638) | $ | 3,746 | $ | 54 | $ | 3,800 | ||||||||||||||||||||||||||||||||||
| Net income | — | — | 350 | — | — | 350 | 1 | 351 | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (15) | — | (15) | (1) | (16) | ||||||||||||||||||||||||||||||||||||||||||
| Common stock issued (including share-based compensation impact) | — | 35 | — | — | 17 | 52 | — | 52 | ||||||||||||||||||||||||||||||||||||||||||
| Share repurchases | — | — | — | — | (458) | (458) | — | (458) | ||||||||||||||||||||||||||||||||||||||||||
| Cash dividends declared (1) | — | — | (153) | — | — | (153) | — | (153) | ||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | 141 | $ | 2,331 | $ | 5,768 | $ | (639) | $ | (4,079) | $ | 3,522 | $ | 54 | $ | 3,576 |
| Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Common stock in treasury, at cost | Total attributable to Rockwell Automation, Inc. | Noncontrolling interests | Total shareowners' equity | |||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | 141 | $ | 2,200 | $ | 5,181 | $ | (872) | $ | (3,265) | $ | 3,385 | $ | 171 | $ | 3,556 | ||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | 252 | — | — | 252 | (4) | 248 | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | 39 | — | 39 | (1) | 38 | ||||||||||||||||||||||||||||||||||||||||||
| Common stock issued (including share-based compensation impact) | — | 28 | — | — | 13 | 41 | — | 41 | ||||||||||||||||||||||||||||||||||||||||||
| Share repurchases | — | — | — | — | (130) | (130) | — | (130) | ||||||||||||||||||||||||||||||||||||||||||
| Cash dividends declared (1) | — | — | (148) | — | — | (148) | — | (148) | ||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | 141 | $ | 2,228 | $ | 5,285 | $ | (833) | $ | (3,382) | $ | 3,439 | $ | 166 | $ | 3,605 |
(1) Cash dividends were $1.38 per share and $1.31 per share in the three months ended March 31, 2026 and 2025, respectively.
CONSOLIDATED STATEMENT OF SHAREOWNERS’ EQUITY
(Unaudited)
(in millions, except per share amounts)
| Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Common stock in treasury, at cost | Total attributable to Rockwell Automation, Inc. | Noncontrolling interests | Total shareowners' equity | |||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | 141 | $ | 2,283 | $ | 5,422 | $ | (657) | $ | (3,535) | $ | 3,654 | $ | 57 | $ | 3,711 | ||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | 655 | — | — | 655 | (2) | 653 | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | 18 | — | 18 | (1) | 17 | ||||||||||||||||||||||||||||||||||||||||||
| Common stock issued (including share-based compensation impact) | — | 48 | — | — | 65 | 113 | — | 113 | ||||||||||||||||||||||||||||||||||||||||||
| Share repurchases | — | — | — | — | (609) | (609) | — | (609) | ||||||||||||||||||||||||||||||||||||||||||
| Retirement of treasury shares | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Cash dividends declared (1) | — | — | (309) | — | — | (309) | — | (309) | ||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | 141 | $ | 2,331 | $ | 5,768 | $ | (639) | $ | (4,079) | $ | 3,522 | $ | 54 | $ | 3,576 |
| Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Common stock in treasury, at cost | Total attributable to Rockwell Automation, Inc. | Noncontrolling interests | Total shareowners' equity | |||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | 181 | $ | 2,188 | $ | 9,635 | $ | (772) | $ | (7,734) | $ | 3,498 | $ | 177 | $ | 3,675 | ||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | 436 | — | — | 436 | (10) | 426 | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (61) | — | (61) | (1) | (62) | ||||||||||||||||||||||||||||||||||||||||||
| Common stock issued (including share-based compensation impact) | — | 40 | — | — | 52 | 92 | — | 92 | ||||||||||||||||||||||||||||||||||||||||||
| Share repurchases | — | — | — | — | (229) | (229) | — | (229) | ||||||||||||||||||||||||||||||||||||||||||
| Retirement of treasury shares | (40) | — | (4,489) | — | 4,529 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Cash dividends declared (1) | — | — | (297) | — | — | (297) | — | (297) | ||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | 141 | $ | 2,228 | $ | 5,285 | $ | (833) | $ | (3,382) | $ | 3,439 | $ | 166 | $ | 3,605 |
(1) Cash dividends were $2.76 per share and $2.62 per share in the six months ended March 31, 2026 and 2025, respectively.
See Notes to Consolidated Financial Statements.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation and Accounting Policies
In the opinion of management of Rockwell Automation, Inc. (Rockwell Automation or the Company), the unaudited Consolidated Financial Statements contain all adjustments necessary to present fairly the financial position, results of operations, and cash flows for the periods presented and, except as otherwise indicated, such adjustments consist only of those of a normal, recurring nature. These statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended September 30, 2025. The results of operations for the three and six months ended March 31, 2026, are not necessarily indicative of the results for the full year. All date references to years and quarters herein refer to our fiscal year and fiscal quarter, unless otherwise stated.
During the quarter ended September 30, 2025, we reviewed our classification of expenses in the Statement of Operations. We have elected to separately report Engineering and development costs, formerly classified as Cost of sales. Engineering and development costs include research and development (R&D) and other engineering activities including routine enhancements or improvements to existing products, production lines, manufacturing processes and other ongoing operations that are not directly related to revenue generating customer contracts. Cost of sales now includes material, labor and overhead costs directly attributable to (i) specific units of inventory produced, (ii) the delivery of specific services, or (iii) the fulfillment of current customer contracts.
Certain prior-year amounts in the Consolidated Statement of Operations have been reclassified to Engineering and development to conform to the current-year presentation, which we believe enhances transparency and provides a clearer view of overall business performance. This revised presentation also aligns more closely with the reporting practices of our industry peers, facilitating improved comparability for stakeholders. These reclassifications had no impact on net income, earnings per share, cash flows, segment operating earnings, or the financial position of the Company. For the three and six months ended March 31, 2025, the reclassifications resulted in a decrease to Cost of sales in the amount of $162 million and $318 million, respectively.
Assets and Related Liabilities Held for Sale
During the fourth quarter of fiscal 2025, as a result of the historical financial performance of the Sensia joint venture not achieving expectations, a strategic review by the partners resulted in a decision to pursue a dissolution. The decision by the joint venture partners was a triggering event that resulted in goodwill and intangible assets pre-tax, non-cash impairment charges of $161 million and $63 million, respectively, during the quarter ended September 30, 2025.
The joint venture partners signed a separation agreement in December 2025, including a plan for distribution of joint venture assets and related terms and conditions. The disposal group met the criteria to be classified as held for sale under ASC 360-10-45 in the first quarter ended December 31, 2025. The assets and liabilities of the disposal group have been separately presented on the Consolidated Balance Sheet as Current assets held for sale and Current liabilities related to assets held for sale at March 31, 2026. Based on the planned distribution of assets and terms and conditions of the separation agreement, the carrying value of the disposal group approximates fair value less cost to sell at March 31, 2026. The transaction closed on April 1, 2026.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
The following table summarizes the major classes of assets and liabilities classified as held for sale as of March 31, 2026:
| March 31, 2026 | |||||
| Cash and Cash equivalents | $ | 47 | |||
| Receivables | 72 | ||||
| Inventories | 54 | ||||
| Other current assets | 5 | ||||
| Property, net | 5 | ||||
| Operating lease right-of-use assets | 8 | ||||
| Other intangible assets, net | 56 | ||||
| Assets held for sale | $ | 247 | |||
| Accounts payable | 25 | ||||
| Compensation and benefits | 9 | ||||
| Contract liabilities | 20 | ||||
| Other current liabilities | 6 | ||||
| Operating lease liabilities | 6 | ||||
| Other liabilities | 8 | ||||
| Liabilities related to assets held for sale | $ | 74 |
Receivables
We record an allowance for doubtful accounts based on customer-specific analysis and general matters such as current assessments of past due balances and economic conditions. Receivables are recorded net of an allowance for doubtful accounts of $18 million at March 31, 2026, and $21 million at September 30, 2025. The changes to our allowance for doubtful accounts during the three and six months ended March 31, 2026 and 2025, were not material and primarily consisted of current-period provisions, write-offs charged against the allowance, recoveries collected, and foreign currency translation.
Earnings Per Share
The following table reconciles basic and diluted earnings per share (EPS) amounts (in millions, except per share amounts):
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income attributable to Rockwell Automation, Inc. | $ | 350 | $ | 252 | $ | 655 | $ | 436 | |||||||||||||||
| Less: Allocation to participating securities | (1) | (1) | (2) | (2) | |||||||||||||||||||
| Net income available to common shareowners | $ | 349 | $ | 251 | $ | 653 | $ | 434 | |||||||||||||||
| Basic weighted average outstanding shares | 112.1 | 112.9 | 112.2 | 113.0 | |||||||||||||||||||
| Effect of dilutive securities | |||||||||||||||||||||||
| Stock options | 0.5 | 0.4 | 0.5 | 0.4 | |||||||||||||||||||
| Performance shares | — | — | — | — | |||||||||||||||||||
| Diluted weighted average outstanding shares | 112.6 | 113.3 | 112.7 | 113.4 | |||||||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | 3.11 | $ | 2.22 | $ | 5.82 | $ | 3.84 | |||||||||||||||
| Diluted | $ | 3.10 | $ | 2.22 | $ | 5.79 | $ | 3.83 |
For the three and six months ended March 31, 2026, there were 0.2 million and 0.6 million shares, respectively, related to share-based compensation awards that were excluded from the diluted EPS calculation because they were antidilutive. For the three and six months ended March 31, 2025, there were 0.6 million and 1.3 million shares, respectively, related to share-based compensation awards that were excluded from the diluted EPS calculation because they were antidilutive.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Non-Cash Investing and Financing Activities
Capital expenditures of $30 million and $19 million were accrued within Accounts payable and Other current liabilities at March 31, 2026 and 2025, respectively. Outstanding common stock share repurchases of $12 million and $3 million that did not settle until the next quarter were accrued within Accounts payable at March 31, 2026 and 2025, respectively. These non-cash investing and financing activities have been excluded from cash used for capital expenditures and treasury stock purchases in the Consolidated Statement of Cash Flows.
Supplier Financing Arrangements
The Company maintains agreements with third-party financial institutions that offer voluntary supply chain financing (SCF) programs to suppliers. The SCF programs enable suppliers, at their sole discretion, to sell their receivables to third-party financial institutions in order to receive payment on receivables earlier than the negotiated commercial terms between suppliers and the Company. Supplier sale of receivables to third-party financial institutions is on terms negotiated between the supplier and the respective third-party financial institution. The Company agrees on commercial terms for the goods and services procured from suppliers, including prices, quantities, and payment terms, regardless of whether the supplier elects to participate in the SCF programs. A supplier’s voluntary participation in the SCF programs has no bearing on the Company's payment terms and the Company has no economic interest in a supplier’s decision to participate in the SCF programs. The Company agrees to pay participating third-party financial institutions the stated amount of confirmed invoices from suppliers on the original maturity dates of the invoices.
Amounts outstanding related to SCF programs are included in Accounts payable in the Consolidated Balance Sheet and in changes in Accounts payable on the Consolidated Statement of Cash Flows. The impact of these programs is not material to the Company's overall liquidity.
The rollforward of our outstanding obligations under the SCF programs is as follows (in millions):
| March 31, 2026 | March 31, 2025 | ||||||||||
| Beginning Balance | $ | 62 | $ | 68 | |||||||
| Invoices confirmed during the period | 59 | 49 | |||||||||
| Payments made during the period | (57) | (61) | |||||||||
| Ending Balance | $ | 64 | $ | 56 |
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Goodwill
We perform our annual evaluation of goodwill and indefinite life intangible assets for impairment as required under accounting principles generally accepted in the United States (U.S. GAAP) during the second quarter of each year, or more frequently if events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Any excess in carrying value over the estimated fair value is charged to results of operations. For our annual evaluation of goodwill, we may perform a qualitative test to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount in order to determine whether it is necessary to perform a quantitative goodwill impairment test. Our reporting units for goodwill evaluation consist of the Intelligent Devices segment, the Software & Control segment, and the Lifecycle Services segment.
When performing the quantitative goodwill impairment test, we determine the fair value of each reporting unit under a combination of an income approach derived from discounted cash flows and a market multiples approach using selected comparable public companies. Significant assumptions used in the income approach include: management’s forecasted cash flows, including estimated future revenue growth rates and margins, discount rates, and terminal value. Forecasts of future revenue growth and margins are based on management’s best estimates. Discount rates are determined using a weighted average cost of capital adjusted for risk factors specific to the reporting unit, with comparison to market and industry data. The terminal value is estimated following common methodology of calculating the present value of estimated perpetual cash flow beyond the last projected period assuming constant discount and long-term growth rates. Significant assumptions used in the market multiples approach include selection of the comparable public companies and calculation of the appropriate market multiples.
Recently Issued Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, which requires expanded annual disclosures to the income tax rate reconciliation and the amount of income taxes paid. We will expand our disclosures in our 2026 Annual Report on Form 10-K when the standard becomes effective for us.
In November 2024, the FASB issued ASU 2024-03, which requires disclosure of certain expense amounts comprising Cost of sales and Selling, general and administrative expenses, as well as a qualitative description of the remaining expense amounts. In January 2025, the FASB issued ASU 2025-01, which clarified the effective date of this standard. We will expand our disclosures in our 2028 Annual Report on Form 10-K when the standard becomes effective for us.
In September 2025, the FASB issued ASU 2025-06, which modernizes the internal-use software guidance in Subtopic 350-40 by removing software development considerations, and clarifies the threshold applied to begin capitalizing costs. We are evaluating and quantifying the impact from this standard, which will be effective for us in fiscal 2029.
We do not expect any other recently issued accounting pronouncements to have a material impact on our Consolidated Financial Statements and related disclosures.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
2. Revenue Recognition
Substantially all of our revenue is from contracts with customers. We recognize revenue as promised products are transferred to, or services are performed for, customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those products and services. Our offerings consist of industrial automation and information products, solutions, and services.
Our products include hardware, software, and configured-to-order products. Our solutions include custom-engineered systems and software. Our services include customer technical support and repair, asset management and optimization consulting, and training. Also included in our services is a portion of revenue related to spare parts that are managed within our services offering.
Our operations are comprised of the Intelligent Devices segment, the Software & Control segment, and the Lifecycle Services segment. Revenue from the Intelligent Devices segment is predominantly comprised of product sales, which are recognized at a point in time. Revenue from the Software & Control segment is comprised of product sales, which are recognized at a point in time, and software products, which may be recognized over time if certain criteria are met. Revenue from the Lifecycle Services segment is predominantly comprised of solutions and services, which are primarily recognized over time. See Note 15 for more information.
In most countries, we sell primarily through independent distributors in conjunction with our direct sales force. We sell large systems and service offerings principally through our direct sales force, though opportunities are sometimes identified through distributors.
Unfulfilled Performance Obligations
As of March 31, 2026, we expect to recognize approximately $1,362 million of revenue in future periods from unfulfilled performance obligations from existing contracts with customers. We expect to recognize revenue of approximately $803 million from our remaining performance obligations over the next 12 months with the remaining balance recognized thereafter.
We have applied the practical expedient to exclude the value of remaining performance obligations for (i) contracts with an original term of one year or less and (ii) contracts for which we recognize revenue in proportion to the amount we have the right to invoice for services performed. The amounts above also do not include the impact of contract renewal options that are unexercised as of March 31, 2026.
Disaggregation of Revenue
The following tables present our revenue disaggregation by geographic region for our three operating segments (in millions). We attribute sales to the geographic regions based on the country of destination.
| Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||
| North America | Europe, Middle East, and Africa | Asia Pacific | Latin America | Total | ||||||||||||||||||||||||||||
| Intelligent Devices | $ | 672 | $ | 175 | $ | 92 | $ | 69 | $ | 1,008 | ||||||||||||||||||||||
| Software & Control | 464 | 109 | 71 | 40 | 684 | |||||||||||||||||||||||||||
| Lifecycle Services | 276 | 146 | 94 | 31 | 547 | |||||||||||||||||||||||||||
| Total Company Sales | $ | 1,412 | $ | 430 | $ | 257 | $ | 140 | $ | 2,239 |
| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||
| North America | Europe, Middle East, and Africa | Asia Pacific | Latin America | Total | ||||||||||||||||||||||||||||
| Intelligent Devices | $ | 600 | $ | 151 | $ | 86 | $ | 59 | $ | 896 | ||||||||||||||||||||||
| Software & Control | 403 | 78 | 52 | 35 | 568 | |||||||||||||||||||||||||||
| Lifecycle Services | 285 | 129 | 89 | 34 | 537 | |||||||||||||||||||||||||||
| Total Company Sales | $ | 1,288 | $ | 358 | $ | 227 | $ | 128 | $ | 2,001 |
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
| Six Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||
| North America | Europe, Middle East, and Africa | Asia Pacific | Latin America | Total | ||||||||||||||||||||||||||||
| Intelligent Devices | $ | 1,322 | $ | 316 | $ | 188 | $ | 135 | $ | 1,961 | ||||||||||||||||||||||
| Software & Control | 894 | 200 | 137 | 82 | 1,313 | |||||||||||||||||||||||||||
| Lifecycle Services | 535 | 286 | 187 | 62 | 1,070 | |||||||||||||||||||||||||||
| Total Company Sales | $ | 2,751 | $ | 802 | $ | 512 | $ | 279 | $ | 4,344 |
| Six Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||
| North America | Europe, Middle East, and Africa | Asia Pacific | Latin America | Total | ||||||||||||||||||||||||||||
| Intelligent Devices | $ | 1,119 | $ | 286 | $ | 172 | $ | 125 | $ | 1,702 | ||||||||||||||||||||||
| Software & Control | 768 | 151 | 107 | 71 | 1,097 | |||||||||||||||||||||||||||
| Lifecycle Services | 551 | 253 | 199 | 80 | 1,083 | |||||||||||||||||||||||||||
| Total Company Sales | $ | 2,438 | $ | 690 | $ | 478 | $ | 276 | $ | 3,882 |
Contract Liabilities
Contract liabilities primarily relate to consideration received in advance of performance under the contract.
Below is a summary of our Contract liabilities balance, the portion not expected to be recognized within twelve months is included within Other liabilities in the Consolidated Balance Sheet (in millions):
| March 31, 2026 | March 31, 2025 | ||||||||||
| Balance as of beginning of year | $ | 695 | $ | 653 | |||||||
| Balance as of end of period | 720 | 714 |
The most significant changes in our Contract liabilities balance during both the six months ended March 31, 2026 and 2025, were due to amounts billed during the period, partially offset by revenue recognized on amounts billed during the period and revenue recognized that was included in the Contract liabilities balance at the beginning of the period.
In the six months ended March 31, 2026, we recognized revenue of approximately $395 million that was included in the Contract liabilities balance at September 30, 2025. In the six months ended March 31, 2025, we recognized revenue of approximately $506 million that was included in the Contract liabilities balance at September 30, 2024. We did not have a material amount of revenue recognized in the six months ended March 31, 2026 and 2025, from performance obligations satisfied or partially satisfied in previous periods.
3. Share-Based Compensation
We recognized $24 million and $45 million of pre-tax share-based compensation expense during the three and six months ended March 31, 2026, respectively. We recognized $21 million and $44 million of pre-tax share-based compensation expense during the three and six months ended March 31, 2025, respectively. Our annual grant of share-based compensation takes place during the first quarter of each year. The number of shares granted to employees and non-employee directors and the weighted average fair value per share during the periods presented were (in thousands, except per share amounts):
| Six Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Grants | Wtd. Avg. Share Fair Value | Grants | Wtd. Avg. Share Fair Value | ||||||||||||||||||||
| Stock options | 201 | $ | 117.15 | 190 | $ | 93.48 | |||||||||||||||||
| Performance shares | 51 | 591.67 | 58 | 387.72 | |||||||||||||||||||
| Restricted stock units | 165 | 400.12 | 89 | 295.84 | |||||||||||||||||||
| Unrestricted stock | 3 | 402.22 | 6 | 297.10 |
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
4. Inventories
Inventories consist of (in millions):
| March 31, 2026 | September 30, 2025 | ||||||||||
| Finished goods | $ | 462 | $ | 502 | |||||||
| Work in process | 355 | 331 | |||||||||
| Raw materials | 408 | 414 | |||||||||
| Inventories | $ | 1,225 | $ | 1,247 |
5. Goodwill and Other Intangible Assets
Changes in the carrying amount of Goodwill for the six months ended March 31, 2026, were (in millions):
| Intelligent Devices | Software & Control | Lifecycle Services | Total | ||||||||||||||||||||
| Balance as of September 30, 2025 | $ | 904 | $ | 2,440 | $ | 495 | $ | 3,839 | |||||||||||||||
| Translation | (1) | — | — | (1) | |||||||||||||||||||
| Balance as of March 31, 2026 | $ | 903 | $ | 2,440 | $ | 495 | $ | 3,838 | |||||||||||||||
| Gross carrying value of goodwill | $ | 903 | $ | 2,440 | $ | 814 | $ | 4,157 | |||||||||||||||
| Accumulated impairment losses | — | — | (319) | (319) | |||||||||||||||||||
| Goodwill | $ | 903 | $ | 2,440 | $ | 495 | $ | 3,838 |
We performed our annual evaluation of goodwill and indefinite life intangible assets for impairment as of the beginning of the second quarter of fiscal 2026 and concluded that these assets are not impaired. Refer to Note 1 for additional information on our annual impairment evaluation.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Other intangible assets consist of (in millions):
| March 31, 2026 | |||||||||||||||||
| Carrying Amount | Accumulated Amortization | Net | |||||||||||||||
| Amortized intangible assets | |||||||||||||||||
| Software products | $ | 110 | $ | (87) | $ | 23 | |||||||||||
| Customer relationships | 422 | (148) | 274 | ||||||||||||||
| Technology | 650 | (301) | 349 | ||||||||||||||
| Trademarks | 105 | (51) | 54 | ||||||||||||||
| Other | 3 | (3) | — | ||||||||||||||
| Total amortized intangible assets | 1,290 | (590) | 700 | ||||||||||||||
| Allen-Bradley® trademark not subject to amortization | 44 | — | 44 | ||||||||||||||
| Other intangible assets | $ | 1,334 | $ | (590) | $ | 744 |
| September 30, 2025 | |||||||||||||||||
| Carrying Amount | Accumulated Amortization | Net | |||||||||||||||
| Amortized intangible assets | |||||||||||||||||
| Software products | $ | 108 | $ | (83) | $ | 25 | |||||||||||
| Customer relationships | 569 | (232) | 337 | ||||||||||||||
| Technology | 698 | (304) | 394 | ||||||||||||||
| Trademarks | 131 | (67) | 64 | ||||||||||||||
| Other | 6 | (6) | — | ||||||||||||||
| Total amortized intangible assets | 1,512 | (692) | 820 | ||||||||||||||
| Allen-Bradley® trademark not subject to amortization | 44 | — | 44 | ||||||||||||||
| Other intangible assets | $ | 1,556 | $ | (692) | $ | 864 |
Estimated total amortization expense for all amortized intangible assets is $131 million in 2026, $122 million in 2027, $111 million in 2028, $73 million in 2029, and $71 million in 2030.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
6. Short-Term and Long-Term Debt
Our Short-term debt as of March 31, 2026, included commercial paper borrowings of $1,025 million, with a weighted average interest rate of 4.00 percent, and a weighted average maturity period of 28 days. Our Short-term debt as of September 30, 2025, included commercial paper borrowings of $522 million, with a weighted average interest rate of 4.24 percent, and a weighted average maturity period of 16 days.
In December 2022, Sensia entered into an unsecured $75 million line of credit. There were no borrowings outstanding under the line of credit as of December 31, 2025, as the credit line matured and closed and outstanding debt was settled with loans from the joint venture partners. As of September 30, 2025, included in Short-term debt was $70 million borrowed against the line of credit with an interest rate of 5.18 percent. Also included in Short-term debt as of March 31, 2026, were the following interest-bearing loans from Schlumberger (SLB) to Sensia: $42 million due October 15, 2026, $14 million due June 15, 2026, and $33 million due June 10, 2026. As of September 30, 2025, the $14 million and $42 million of interest-bearing loans were included in Short-term debt and Long-term debt, respectively. Pursuant to the separation agreement referenced in Note 1, all intercompany debt was settled by the joint venture partners upon dissolution.
In November 2025, we replaced our former $1.5 billion unsecured revolving credit facility with a new five-year $1.5 billion unsecured revolving credit facility, expiring in November 2030. This credit facility uses the secured overnight funding rate (SOFR) as the primary basis for determining interest payments. We can increase the aggregate amount of this credit facility by up to $750 million, subject to the consent of the banks in the credit facility. We did not borrow against this credit facility during the quarter ended March 31, 2026, or against our prior credit facility during the quarter ended September 30, 2025. The terms of this credit facility contain covenants under which we agree to maintain an EBITDA-to-interest ratio of at least 3.0 to 1.0. The EBITDA-to-interest ratio is defined in the credit facility as the ratio of consolidated EBITDA for the preceding four quarters to consolidated interest expense for the same period.
The following table presents the carrying amounts and estimated fair values of Long-term debt in the Consolidated Balance Sheet (in millions):
| March 31, 2026 | September 30, 2025 | |||||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||||||
| Current portion of long-term debt | $ | 2 | $ | 2 | $ | 2 | $ | 2 | ||||||||||||||||||
| Long-term debt | 2,571 | 2,258 | 2,614 | 2,350 |
We base the fair value of Long-term debt upon quoted market prices for the same or similar issues and therefore consider this a level 2 fair value measurement. The fair value of Long-term debt considers the terms of the debt excluding the impact of derivative and hedging activity. Refer to Note 8 for further information regarding levels in the fair value hierarchy. The carrying value of our Short-term debt approximates fair value.
7. Other Current Liabilities
Other current liabilities consist of (in millions):
| March 31, 2026 | September 30, 2025 | ||||||||||
| Unrealized losses on foreign exchange contracts | $ | 13 | $ | 20 | |||||||
| Product warranty obligations | 21 | 23 | |||||||||
| Taxes other than income taxes | 48 | 55 | |||||||||
| Legacy asbestos-related liabilities | 34 | 34 | |||||||||
| Accrued interest | 25 | 20 | |||||||||
| Income taxes payable | 83 | 163 | |||||||||
| Operating lease liabilities | 86 | 94 | |||||||||
| Other | 68 | 96 | |||||||||
| Other current liabilities | $ | 378 | $ | 505 |
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
8. Investments
Our investments consist of (in millions):
| March 31, 2026 | September 30, 2025 | |||||||||||||
| Equity securities (other) | 108 | 105 | ||||||||||||
| Other | 82 | 77 | ||||||||||||
| Long-term investments (1) | $ | 190 | $ | 182 |
(1) Long-term investments are included in Other assets in the Consolidated Balance Sheet.
Equity Securities
Equity securities (other) consist of various securities that do not have a readily determinable fair value, which we account for using the measurement alternative under U.S. GAAP. These securities are recorded at the investment cost, less impairment, plus or minus observable price changes (in orderly transactions) of an identical or similar investment of the same issuer in the Consolidated Balance Sheet. Observable price changes are classified as level 2 in the fair value hierarchy, as described below. The carrying values at both March 31, 2026, and September 30, 2025, include cumulative upward adjustments from observed price changes of $23 million. The carrying values at both March 31, 2026, and September 30, 2025, include cumulative downward adjustments from observed price changes and impairments of $10 million.
We record gains and losses on investments within the Other income line in the Consolidated Statement of Operations. There were no significant unrealized gains or losses on investments in the three and six months ended March 31, 2026. Total net unrealized losses on investments were $3 million in both the three and six months ended March 31, 2025.
U.S. GAAP defines fair value as the price that would be received for an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. U.S. GAAP also classifies the inputs used to measure fair value into the following hierarchy:
| Level 1: | Quoted prices in active markets for identical assets or liabilities. |
| Level 2: | Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. |
| Level 3: | Unobservable inputs for the asset or liability. |
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. We did not have any transfers between levels of fair value measurements during the periods presented.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
9. Retirement Benefits
The components of net periodic pension and postretirement benefit cost were (in millions):
| Pension Benefits | |||||||||||||||||||||||
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Service cost | $ | 9 | $ | 11 | $ | 18 | $ | 21 | |||||||||||||||
| Interest cost | 35 | 34 | 69 | 68 | |||||||||||||||||||
| Expected return on plan assets | (43) | (42) | (85) | (83) | |||||||||||||||||||
| Amortization of net actuarial loss | 4 | 7 | 8 | 13 | |||||||||||||||||||
| Net periodic pension benefit cost | $ | 5 | $ | 10 | $ | 10 | $ | 19 |
| Other Postretirement Benefits | |||||||||||||||||||||||
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Service cost | $ | 1 | $ | — | $ | 1 | $ | — | |||||||||||||||
| Interest cost | 1 | — | 1 | — | |||||||||||||||||||
| Amortization of net actuarial loss | — | 1 | 1 | 2 | |||||||||||||||||||
| Net periodic postretirement benefit cost | $ | 2 | $ | 1 | $ | 3 | $ | 2 |
The service cost component is included in Cost of sales, Selling, general and administrative expenses, and Engineering and development in the Consolidated Statement of Operations. All other components are included in Other income in the Consolidated Statement of Operations.
10. Other Income
The components of Other income were (in millions):
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Interest income | $ | 3 | $ | 2 | $ | 6 | $ | 6 | ||||||||||||||||||
| Royalty income | 4 | 3 | 7 | 6 | ||||||||||||||||||||||
| Net legacy asbestos and environmental charges | (1) | (6) | (2) | (9) | ||||||||||||||||||||||
| Non-operating pension and postretirement benefit credit | 3 | — | 6 | — | ||||||||||||||||||||||
| Fair value adjustments for earnout payments (1) | — | (5) | — | (5) | ||||||||||||||||||||||
| Other | — | 6 | — | 8 | ||||||||||||||||||||||
| Other income | $ | 9 | $ | — | $ | 17 | $ | 6 |
(1) Adjustment related to the Clearpath acquisition.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
11. Accumulated Other Comprehensive Loss
Common Stock
Changes in Accumulated other comprehensive loss attributable to Rockwell Automation by component for the following periods were (in millions):
| Three Months Ended March 31, 2026 | Pension and other postretirement benefit plan adjustments, net of tax | Accumulated currency translation adjustments, net of tax | Net unrealized losses on cash flow hedges, net of tax | Total accumulated other comprehensive loss, net of tax | |||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | (332) | $ | (254) | $ | (38) | $ | (624) | |||||||||||||||||||||
| Other comprehensive (loss) income before reclassifications | — | (24) | 2 | (22) | |||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | 4 | — | 3 | 7 | |||||||||||||||||||||||||
| Other comprehensive income (loss) | 4 | (24) | 5 | (15) | |||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | (328) | $ | (278) | $ | (33) | $ | (639) |
| Six Months Ended March 31, 2026 | Pension and other postretirement benefit plan adjustments, net of tax | Accumulated currency translation adjustments, net of tax | Net unrealized losses on cash flow hedges, net of tax | Total accumulated other comprehensive loss, net of tax | |||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | (335) | $ | (281) | $ | (41) | $ | (657) | |||||||||||||||||||||
| Other comprehensive income before reclassifications | — | 3 | 5 | 8 | |||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | 7 | — | 3 | 10 | |||||||||||||||||||||||||
| Other comprehensive income | 7 | 3 | 8 | 18 | |||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | (328) | $ | (278) | $ | (33) | $ | (639) | |||||||||||||||||||||
| Three Months Ended March 31, 2025 | Pension and other postretirement benefit plan adjustments, net of tax | Accumulated currency translation adjustments, net of tax | Net unrealized losses on cash flow hedges, net of tax | Total accumulated other comprehensive loss, net of tax | |||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | (426) | $ | (426) | $ | (20) | $ | (872) | |||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | — | 44 | (6) | 38 | |||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | 6 | — | (5) | 1 | |||||||||||||||||||||||||
| Other comprehensive income (loss) | 6 | 44 | (11) | 39 | |||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | (420) | $ | (382) | $ | (31) | $ | (833) |
| Six Months Ended March 31, 2025 | Pension and other postretirement benefit plan adjustments, net of tax | Accumulated currency translation adjustments, net of tax | Net unrealized losses on cash flow hedges, net of tax | Total accumulated other comprehensive loss, net of tax | |||||||||||||||||||||||||
| Balance as of September 30, 2024 | $ | (431) | $ | (296) | $ | (45) | $ | (772) | |||||||||||||||||||||
| Other comprehensive (loss) income before reclassifications | — | (86) | 19 | (67) | |||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | 11 | — | (5) | 6 | |||||||||||||||||||||||||
| Other comprehensive income (loss) | 11 | (86) | 14 | (61) | |||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | (420) | $ | (382) | $ | (31) | $ | (833) |
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
The reclassifications out of Accumulated other comprehensive loss in the Consolidated Statement of Operations were (in millions):
| Three Months Ended March 31, | Six Months Ended March 31, | Affected Line in the Consolidated Statement of Operations | |||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Pension and other postretirement benefit plan adjustments (1) | |||||||||||||||||||||||||||||
| Amortization of net actuarial loss | $ | 4 | $ | 8 | $ | 9 | $ | 15 | Other income | ||||||||||||||||||||
| 4 | 8 | 9 | 15 | Income before income taxes | |||||||||||||||||||||||||
| — | (2) | (2) | (4) | Income tax provision | |||||||||||||||||||||||||
| $ | 4 | $ | 6 | $ | 7 | $ | 11 | Net income attributable to Rockwell Automation, Inc. | |||||||||||||||||||||
| Net unrealized losses (gains) on cash flow hedges | |||||||||||||||||||||||||||||
| Forward exchange contracts | $ | — | $ | 1 | $ | — | $ | 2 | Sales | ||||||||||||||||||||
| Forward exchange contracts | 2 | (9) | 3 | (11) | Cost of sales | ||||||||||||||||||||||||
| Treasury locks related to 2019 and 2021 debt issuances | 1 | 1 | 1 | 2 | Interest expense | ||||||||||||||||||||||||
| 3 | (7) | 4 | (7) | Income before income taxes | |||||||||||||||||||||||||
| — | 2 | (1) | 2 | Income tax provision | |||||||||||||||||||||||||
| $ | 3 | $ | (5) | $ | 3 | $ | (5) | Net income attributable to Rockwell Automation, Inc. | |||||||||||||||||||||
| Total reclassifications | $ | 7 | $ | 1 | $ | 10 | $ | 6 | Net income attributable to Rockwell Automation, Inc. |
(1) These components are included in the computation of net periodic pension and postretirement benefit cost. See Note 9 for further information.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
12. Commitments and Contingencies
Various lawsuits, claims, and proceedings have been or may be instituted or asserted against us relating to the conduct of our business, including those pertaining to product liability, environmental, safety and health, intellectual property, employment, and contract matters. Although the outcome of litigation cannot be predicted with certainty and some lawsuits, claims, or proceedings may be disposed of unfavorably to us, we believe the disposition of matters that are pending or have been asserted will not have a material effect on our business, financial condition, or results of operations. The following outlines additional background for obligations associated with asbestos, divested businesses, intellectual property and contingencies related to tariffs.
We (including our subsidiaries) have been named as a defendant in lawsuits alleging personal injury as a result of exposure to asbestos that was used in certain components of our products many years ago, including products from divested businesses for which we have agreed to defend and indemnify claims. Currently there are lawsuits that name us as defendants, together with hundreds of other companies. But in all cases, for those claimants who do show that they worked with our products or products of divested businesses for which we are responsible, we nevertheless believe we have meritorious defenses, in substantial part due to the integrity of the products, the encapsulated nature of any asbestos-containing components, and the lack of any impairing medical condition caused by our products. We defend those cases vigorously. However, certain of our agreements relating to divested businesses do not provide us the ability to directly control management of those asbestos claims, and our ongoing reimbursement of outside counsel and other expenses relating to defense of such claims represent the vast majority of our annual asbestos net litigation spend. Historically, we have been dismissed from the vast majority of asbestos claims with no payment to claimants.
Additionally, we have maintained insurance coverage that includes indemnity and defense costs, over and above self-insured retentions, for many of these asbestos claims. We believe these arrangements will provide substantial coverage for future defense and indemnity costs for these claims for many years into the future. The uncertainties of claim litigation make it difficult to predict accurately the ultimate outcome. That uncertainty is increased by the possibility of adverse rulings or new legislation affecting claim litigation or the settlement process. Subject to these uncertainties and based on our experience defending these claims, we do not believe these lawsuits will have a material effect on our business, financial condition, or results of operations.
We have, from time to time, divested certain of our businesses. In connection with these divestitures, certain lawsuits, claims, and proceedings may be instituted or asserted against us related to the period that we owned the businesses, either because we agreed to retain certain liabilities related to these periods or because such liabilities fall upon us by operation of law. In some instances, the divested business has assumed the liabilities; however, it is possible that we might be responsible to satisfy those liabilities if the divested business is unable to do so. We do not believe these liabilities will have a material effect on our business, financial condition, or results of operations.
In many countries we provide a limited intellectual property indemnity as part of our terms and conditions of sale and at times in other contracts with third parties. As of March 31, 2026, we were not aware of any material indemnification claims that were probable or reasonably possible of an unfavorable outcome. Historically, claims that have been made under the indemnification agreements have not had a material impact on our business, financial condition, or results of operations; however, to the extent that valid indemnification claims arise in the future, future payments by us could be significant and could have a material adverse effect on our business, financial condition, or results of operations in a particular period.
As a result of a U.S. Supreme Court ruling issued in February 2026, the Company may be entitled to a refund of tariffs previously paid on imported products under the International Emergency Economic Powers Act (IEEPA). As of March 31, 2026, the Company has not recognized an asset related to the potential refund. The Company will continue to monitor developments and will recognize a refund when realizable in accordance with ASC 450, Contingencies.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
13. Restructuring Charges
In 2024, we recorded restructuring charges of $97 million ($73 million, net of tax or $0.64 per diluted share) related to actions in conjunction with an enterprise-wide comprehensive program to optimize cost structure and expand margins. The charges included $92 million for severance benefits and $5 million for strategic advisory services related to the targeted severance actions. During 2025, we reversed $5 million of accruals primarily due to attrition without payment of severance.
We expect the total cash expenditures associated with these restructuring actions to be $92 million. We paid $7 million and $17 million during the three and six months ended March 31, 2026, respectively. We paid $12 million and $26 million during the three and six months ended March 31, 2025, respectively. Accruals remaining under these restructuring actions were $10 million and $27 million at March 31, 2026, and September 30, 2025, respectively.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
14. Income Taxes
At the end of each interim period, we estimate a base effective tax rate that we expect for the full year based on our most recent forecast of pre-tax income, permanent book and tax differences, and global tax planning strategies. We use this base rate to provide for income taxes on a year-to-date basis, excluding the effect of significant unusual items and items that are reported net of their related tax effects in the period in which they occur.
The effective tax rates were 20.2 percent and 16.5 percent for the three and six months ended March 31, 2026, respectively, compared to 17.1 percent and 16.8 percent for the three and six months ended March 31, 2025, respectively. The increase in the effective tax rate for the three months ended March 31, 2026 was primarily due to the application of Base Erosion and Profit Shifting (BEPS) Pillar Two minimum tax rules in Singapore. The effective tax rate was lower than the U.S. statutory rate of 21 percent for the three and six months ended March 31, 2026, primarily due to higher discrete tax benefits, including a tax benefit related to the dissolution of the Sensia joint venture, in the first quarter, and excess income tax benefits on share-based compensation. The effective tax rate was lower than the U.S. statutory rate of 21 percent in the three and six months ended March 31, 2025, primarily due to the geographical mix of pre-tax income.
Our final payment of $97 million related to the U.S. transition tax under the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was paid in the second quarter of 2026. There is no longer a balance related to this in Other current liabilities in the Consolidated Balance Sheet as of March 31, 2026.
Unrecognized Tax Benefits
The amount of gross unrecognized tax benefits was $28 million at March 31, 2026, and $29 million at September 30, 2025, respectively, of which the entire amount would reduce our effective tax rate if recognized.
Accrued interest and penalties related to unrecognized tax benefits were $3 million at March 31, 2026 and $2 million at September 30, 2025. We recognize interest and penalties related to unrecognized tax benefits in the income tax provision.
We believe it is reasonably possible that the amount of gross unrecognized tax benefits could be reduced by up to $22 million in the next 12 months as a result of the resolution of tax matters in various global jurisdictions and the lapses of statutes of limitations. If all of the unrecognized tax benefits were recognized, the net reduction to our income tax provision, including the recognition of interest and penalties and offsetting tax assets, could be up to $23 million.
We conduct business globally and are routinely audited by the various tax jurisdictions in which we operate. We are no longer subject to U.S. federal income tax examinations for years before 2018, state and local income tax examinations for years before 2015, and foreign income tax examinations for years before 2008.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
15. Business Segment Information
Sales and operating results of our reportable segments were (in millions):
| Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||
| Intelligent Devices | Software & Control | Lifecycle Services | Total | |||||||||||||||||||||||
| Sales | $ | 1,008 | $ | 684 | $ | 547 | $ | 2,239 | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Segment cost of sales | (533) | (196) | (361) | |||||||||||||||||||||||
| Segment selling, general and administrative expenses | (198) | (154) | (89) | |||||||||||||||||||||||
| Segment engineering and development expenses | (66) | (98) | (16) | |||||||||||||||||||||||
| Other segment items (1) | — | 3 | (1) | |||||||||||||||||||||||
| Segment operating earnings | $ | 211 | $ | 239 | $ | 80 | $ | 530 | ||||||||||||||||||
| Amortization of acquisition-related intangible assets (2) | (29) | |||||||||||||||||||||||||
| Corporate and other | (26) | |||||||||||||||||||||||||
| Non-operating pension and postretirement benefit credit | 3 | |||||||||||||||||||||||||
| Net legacy asbestos and environmental charges | (1) | |||||||||||||||||||||||||
| Change in fair value of investments | — | |||||||||||||||||||||||||
| Cost associated with dissolution of Sensia | (4) | |||||||||||||||||||||||||
| Interest expense, net | (33) | |||||||||||||||||||||||||
| Income before income taxes | $ | 440 |
(1) Other segment items are primarily comprised of foreign currency adjustments for each segment.
(2) Amortization of acquisition-related intangibles excludes amortization of internally developed and capitalized intangible assets.
| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||
| Intelligent Devices | Software & Control | Lifecycle Services | Total | |||||||||||||||||||||||
| Sales | $ | 896 | $ | 568 | $ | 537 | $ | 2,001 | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Segment cost of sales | (482) | (160) | (352) | |||||||||||||||||||||||
| Segment selling, general and administrative expenses | (188) | (147) | (96) | |||||||||||||||||||||||
| Segment engineering and development expenses | (65) | (88) | (11) | |||||||||||||||||||||||
| Other segment items (1) | (2) | (2) | — | |||||||||||||||||||||||
| Segment operating earnings | $ | 159 | $ | 171 | $ | 78 | 408 | |||||||||||||||||||
| Amortization of acquisition-related intangible assets (2) | (36) | |||||||||||||||||||||||||
| Corporate and other | (27) | |||||||||||||||||||||||||
| Non-operating pension and postretirement benefit credit | — | |||||||||||||||||||||||||
| Net legacy asbestos and environmental charges (2) | (6) | |||||||||||||||||||||||||
| Change in fair value of investments | (3) | |||||||||||||||||||||||||
| Cost associated with dissolution of Sensia | — | |||||||||||||||||||||||||
| Interest expense, net | (37) | |||||||||||||||||||||||||
| Income before income taxes | $ | 299 |
(1) Other segment items are primarily comprised of foreign currency adjustments for each segment.
(2) Amortization of acquisition-related intangibles excludes amortization of internally developed and capitalized intangible assets.
(3) Legacy asbestos and environmental charges were previously included in Corporate and other. Three months ended March 31, 2025 has been recast to conform with current year presentation.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
| Six Months Ended March 31, 2026 | ||||||||||||||||||||||||||
| Intelligent Devices | Software & Control | Lifecycle Services | Total | |||||||||||||||||||||||
| Sales | $ | 1,961 | $ | 1,313 | $ | 1,070 | $ | 4,344 | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Segment cost of sales | (1,065) | (383) | (705) | |||||||||||||||||||||||
| Segment selling, general and administrative expenses | (390) | (306) | (182) | |||||||||||||||||||||||
| Segment engineering and development expenses | (129) | (193) | (30) | |||||||||||||||||||||||
| Other segment items (1) | (1) | 4 | 1 | |||||||||||||||||||||||
| Segment operating earnings | $ | 376 | $ | 435 | $ | 154 | 965 | |||||||||||||||||||
| Amortization of acquisition-related intangible assets (2) | (61) | |||||||||||||||||||||||||
| Corporate and other | (56) | |||||||||||||||||||||||||
| Non-operating pension and postretirement benefit credit | 6 | |||||||||||||||||||||||||
| Net legacy asbestos and environmental charges | (2) | |||||||||||||||||||||||||
| Change in fair value of investments | — | |||||||||||||||||||||||||
| Cost associated with dissolution of Sensia | (8) | |||||||||||||||||||||||||
| Interest expense, net | (62) | |||||||||||||||||||||||||
| Income before income taxes | $ | 782 |
(1) Other segment items are primarily comprised of foreign currency adjustments for each segment.
(2) Amortization of acquisition-related intangibles excludes amortization of internally developed and capitalized intangible assets.
| Six Months Ended March 31, 2025 | ||||||||||||||||||||||||||
| Intelligent Devices | Software & Control | Lifecycle Services | Total | |||||||||||||||||||||||
| Sales | $ | 1,702 | $ | 1,097 | $ | 1,083 | $ | 3,882 | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
| Segment cost of sales | (921) | (320) | (720) | |||||||||||||||||||||||
| Segment selling, general and administrative expenses | (371) | (298) | (195) | |||||||||||||||||||||||
| Segment engineering and development expenses | (126) | (171) | (23) | |||||||||||||||||||||||
| Other segment items (1) | (5) | (4) | 1 | |||||||||||||||||||||||
| Segment operating earnings | $ | 279 | $ | 304 | $ | 146 | 729 | |||||||||||||||||||
| Amortization of acquisition-related intangible assets (2) | (71) | |||||||||||||||||||||||||
| Corporate and other | (62) | |||||||||||||||||||||||||
| Non-operating pension and postretirement benefit credit | — | |||||||||||||||||||||||||
| Net legacy asbestos and environmental charges (3) | (9) | |||||||||||||||||||||||||
| Change in fair value of investments | (3) | |||||||||||||||||||||||||
| Cost associated with dissolution of Sensia | — | |||||||||||||||||||||||||
| Interest expense, net | (72) | |||||||||||||||||||||||||
| Income before income taxes | $ | 512 |
(1) Other segment items are primarily comprised of foreign currency adjustments for each segment.
(2) Amortization of acquisition-related intangibles excludes amortization of internally developed and capitalized intangible assets.
(3) Legacy asbestos and environmental charges were previously included in Corporate and other. Six months ended March 31, 2025 has been recast to conform with current year presentation.
ROCKWELL AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
Among other considerations, we evaluate segment performance and allocate resources based upon segment operating earnings before amortization of acquisition-related intangible assets, corporate and other, non-operating pension and postretirement benefit credit, net legacy asbestos and environmental charges, cost associated with dissolution of Sensia, change in fair value of investments, restructuring charges aligned with enterprise-wide strategic initiatives, and interest expense, net. Our chief operating decision maker (CODM), our Chief Executive Officer, uses segment operating earnings as the key performance metric to regularly monitor performance compared to prior periods, annual operating plan, and forecasts and to make decisions. The Company does not report total assets or capital expenditures by segment for internal reporting purposes as our CODM does not assess performance, make strategic decisions, or allocate resources based on assets.
Depending on the product, intersegment sales within a single legal entity are either at cost or cost plus a mark-up, which does not necessarily represent a market price. Sales between legal entities are at an appropriate transfer price. Segment selling, general and administrative expenses represent costs directly managed by the segments and allocated to the segments. We allocate costs related to shared segment operating activities to the segments consistent with the methodology used by management to assess segment performance.
We conduct a significant portion of our business activities outside the United States. We attribute sales to the geographic regions based on the country of destination. Sales in North America include $1,304 million and $2,541 million related to the U.S. for the three and six months ended March 31, 2026, respectively, and $1,190 million and $2,242 million for the three and six months ended March 31, 2025, respectively. Refer to Note 2 for disaggregation of revenue by segment and region.
In most countries, we sell primarily through independent distributors in conjunction with our direct sales force. We sell large systems and service offerings principally through our direct sales force, though opportunities are sometimes identified through distributors. Sales to our two largest distributors, which are attributable to all three segments, were approximately 20 percent of our total sales for the three and six months ended March 31, 2026 and 2025.
The following table summarizes the provision for depreciation and amortization for each of the reportable segments and Corporate (in millions):
| Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Intelligent Devices | $ | 20 | $ | 14 | $ | 37 | $ | 32 | ||||||||||||||||||
| Software & Control | 19 | 19 | 39 | 33 | ||||||||||||||||||||||
| Lifecycle Services | 10 | 11 | 19 | 21 | ||||||||||||||||||||||
| Corporate | 1 | 1 | 2 | 2 | ||||||||||||||||||||||
| Total | 50 | 45 | 97 | 88 | ||||||||||||||||||||||
| Amortization of acquisition-related intangible assets (1) | 29 | 36 | 61 | 71 | ||||||||||||||||||||||
| Total | $ | 79 | $ | 81 | $ | 158 | $ | 159 |
(1) Amortization of acquisition-related intangibles excludes amortization of internally developed and capitalized intangible assets.
Depreciation expense has been allocated to segment operating earnings based on the expected benefit to be realized by each segment.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareowners of
Rockwell Automation, Inc.
Results of Review of Interim Financial Information
We have reviewed the accompanying consolidated balance sheet of Rockwell Automation, Inc. and subsidiaries (the "Company") as of March 31, 2026, the related consolidated statements of operations, comprehensive income, and shareowners’ equity for the three-month and six-month periods ended March 31, 2026, and 2025, and of cash flows for the six-month periods ended March 31, 2026, and 2025, and the related notes (collectively referred to as the "interim financial information"). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of September 30, 2025, and the related consolidated statements of operations, comprehensive income, cash flows, and shareowners’ equity for the year then ended (not presented herein); and in our report dated November 12, 2025, we expressed an unqualified opinion on those consolidated financial statements and included an explanatory paragraph regarding a change in accounting principle. In our opinion, the information set forth in the accompanying consolidated balance sheet as of September 30, 2025, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
This interim financial information is the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our reviews in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
/s/ DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
May 5, 2026
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