Basis of Presentation and Accounting Policies

9 Months Ended

Jun. 30, 2026

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 nine months ended June 30, 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 nine months ended June 30, 2025, the reclassifications resulted in a decrease to Cost of sales in the amount of $170 million and $488 million, respectively.

Dissolution of the Sensia Joint Venture

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. As a result of the impairment, there is no remaining goodwill within the Sensia reporting unit. Remaining identifiable intangible asset balance for Sensia was $58 million as of 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 Sensia joint venture had historically been included in the Lifecycle Services reportable segment.

The dissolution of the Sensia joint venture was completed April 1, 2026. Upon the dissolution, the businesses contributed to the joint venture were distributed back to the respective joint venture partners at fair value and resulted in a $40 million cash payment from the joint venture partner to Rockwell. Additionally, a payment will be made to account for the proportional distribution of the book value of working capital assets distributed to each joint venture partner at closing. As a result of closing the transaction, we derecognized net assets of $94 million, primarily consisting of (i) cash and cash equivalents of $47 million, (ii) receivables of $60 million, (iii) inventories of $54 million, (iv) other intangible assets of $56 million, (v) short-term debt of $89 million, and (vi) contract liabilities of $20 million. We recognized a pre-tax gain on the dissolution of Sensia of $20 million, which was recorded in Other income in the Consolidated Statement of Operations. We incurred $2 million and $10 million of transaction costs during the three and nine months ended June 30, 2026, respectively, which were recorded in Selling, general and administrative expenses in the Consolidated Statement of Operations.

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 $17 million at June 30, 2026, and $21 million at September 30, 2025. The changes to our allowance for doubtful accounts during the three and nine months ended June 30, 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 June 30,				Nine Months Ended June 30,
	2026		2025		2026		2025
Net income attributable to Rockwell Automation, Inc.	$	408	$	295	$	1,063	$	731
Less: Allocation to participating securities	(1)		(1)		(3)		(3)
Net income available to common shareowners	$	407	$	294	$	1,060	$	728
Basic weighted average outstanding shares	111.1		112.5		111.8		112.8
Effect of dilutive securities
Stock options	0.5		0.4		0.5		0.4
Performance shares	—		0.1		—		—
Diluted weighted average outstanding shares	111.6		113.0		112.3		113.2
Earnings per share:


Basic	$	3.66	$	2.61	$	9.48	$	6.45



Diluted	$	3.65	$	2.60	$	9.44	$	6.43

For the three and nine months ended June 30, 2026, there were 0.3 million and 0.9 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 nine months ended June 30, 2025, there were 0.4 million and 1.7 million shares, respectively, related to share-based compensation awards that were excluded from the diluted EPS calculation because they were antidilutive.

Non-Cash Investing and Financing Activities

Capital expenditures of $14 million and $20 million were accrued within Accounts payable and Other current liabilities at June 30, 2026 and 2025, respectively. Outstanding common stock share repurchases of $2 million and $1 million that did not settle until the next quarter were accrued within Accounts payable at June 30, 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):


	2026		2025
Beginning Balance, March 31	$	64	$	56
Invoices confirmed during the period	66		63
Payments made during the period	(53)		(52)
Ending Balance, June 30	$	77	$	67

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.