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.

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.


	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

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.


	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.

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.

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

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.

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.