ROCKWELL AUTOMATION, INC

Previous wording

In the second quarter of 2026, sales in the U.S. accounted for over half of our total sales. The various indicators we use to gauge the direction and momentum of our served U.S. markets include:

Current wording

In the third quarter of 2026, sales in the U.S. accounted for over half of our total sales. The various indicators we use to gauge the direction and momentum of our served U.S. markets include:

Previous wording

The table below depicts trends in these indicators since the quarter ended September 2024. These figures are as of May 5, 2026, and are subject to revision by the issuing organizations. Through March, the IP index increased versus the first quarter of fiscal 2026. Manufacturing PMI results increased as well during the second quarter of fiscal 2026, with January, February, and March registering readings above 50 and the highest levels in over three years.

Current wording

The table below depicts trends in these indicators since the quarter ended September 2024. These figures are as of August 4, 2026, and are subject to revision by the issuing organizations. Through June, the IP index increased versus the second quarter of fiscal 2026. Manufacturing PMI results also increased during the third quarter of fiscal 2026, reaching their highest level in four years.

Previous wording

Inflation in the U.S. has also had an impact on our input costs and pricing. The Producer Price Index (PPI), published by the Bureau of Labor Statistics, measures the average change over time in the selling prices received by domestic producers for their output. PPI growth did not significantly change from the first quarter of 2026, and remains in the low single digits.

Current wording

Inflation in the U.S. has also had an impact on our input costs and pricing. The Producer Price Index (PPI), published by the Bureau of Labor Statistics, measures the average change over time in the selling prices received by domestic producers for their output. PPI growth increased to 5.5% as of June 2026, indicating an acceleration in producer price inflation.

Previous wording

In the second quarter of 2026, sales to customers outside the U.S. accounted for less than half of our total sales. These customers include both indigenous companies and multinational companies with a global presence. In addition to the global factors previously mentioned in the Overview section, international demand, particularly in emerging markets, has historically been driven by the strength of the industrial economy in each region, investments in infrastructure, and expanding consumer markets. We use changes in key countries' gross domestic product (GDP), IP, and PMI as indicators of the growth opportunities in each region where we do business. Industrial output outside the U.S. was mostly positive in the second quarter of fiscal 2026. Manufacturing PMI readings outside the U.S were mostly positive as well except for Mexico and Brazil where readings remained below 50.

Current wording

In the third quarter of 2026, sales to customers outside the U.S. accounted for less than half of our total sales. These customers include both indigenous companies and multinational companies with a global presence. In addition to the global factors previously mentioned in the Overview section, international demand, particularly in emerging markets, has historically been driven by the strength of the industrial economy in each region, investments in infrastructure, and expanding consumer markets. We use changes in key countries' gross domestic product (GDP), IP, and PMI as indicators of the growth opportunities in each region where we do business. Industrial output outside the U.S. was mostly positive in the third quarter of fiscal 2026. Manufacturing PMI readings outside the U.S were positive as well, with many countries across all regions reporting above 50 in June.

Previous wording

During the second half of the fiscal year, we expect continued inflationary pressures to affect certain cost categories, driven by strong market demand for data centers and continued volatility related to geopolitical tensions in the Middle East. These factors are expected to primarily impact commodities, memory‑related electronic components, energy, and freight costs. Our objective is to mitigate these cost pressures over the remainder of the year through price and supply chain actions.

Current wording

We expect continued inflationary pressures to affect certain cost categories, driven by strong market demand for data centers and continued volatility related to geopolitical tensions in the Middle East. These factors are expected to primarily impact memory‑related electronic components, commodities, energy, and freight costs. Our objective is to mitigate these cost pressures over the remainder of the year through price and supply chain actions.

Previous wording

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. If tariff amounts are ultimately refunded, the Company expects to implement a refund process for qualified customers.

Current wording

As a result of a U.S. Supreme Court ruling issued in February 2026, the Company is entitled to refunds of tariffs previously paid under the IEEPA on imported products. In July 2026, the Company took steps to preserve refund eligibility and submitted claims to U.S. Customs and Border Protection (CBP) through the applicable refund process for a large portion of the IEEPA tariffs paid that the Company believes are eligible for refund. As of June 30, 2026, the Company has not recognized an asset related to any refunds. The Company will continue to monitor developments associated with the refund program, including the processing and adjudication of its claims by CBP, and will recognize any refund when realization is determined to be appropriate under ASC 450, Contingencies. If tariff amounts are refunded, the Company expects to implement a refund process for qualified customers.

Previous wording

(2) Legacy asbestos and environmental charges were previously included in Corporate and other. Three and six months ended March 31, 2025 have been recast to conform to current year presentation.

Current wording

(2) Legacy asbestos and environmental charges were previously included in Corporate and other. Three and nine months ended June 30, 2025 have been recast to conform to current year presentation.

Previous wording

(3)Enterprise operating profit and Enterprise operating margin are non-GAAP financial measures. We exclude from income before income taxes and pre-tax margin amortization of acquisition-related intangible assets, impairment, non-operating pension and postretirement benefit credit, net legacy asbestos and environmental charges, change in fair value of investments, restructuring charges aligned with enterprise-wide strategic initiatives, cost associated with dissolution of Sensia, and interest expense, net because we do not consider these items to be directly related to the operating performance of our enterprise. We believe Enterprise operating profit and Enterprise operating margin are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating enterprise. Our measures of Enterprise operating profit and Enterprise operating margin may be different from measures used by other companies.

Current wording

(3)Enterprise operating profit and Enterprise operating margin are non-GAAP financial measures. We exclude from income before income taxes and pre-tax margin amortization of acquisition-related intangible assets, impairment, non-operating pension and postretirement benefit credit, net legacy asbestos and environmental charges, change in fair value of investments, restructuring charges aligned with enterprise-wide strategic initiatives, gain on dissolution of Sensia, net of transaction costs, and interest expense, net because we do not consider these items to be directly related to the operating performance of our enterprise. We believe Enterprise operating profit and Enterprise operating margin are useful to investors as measures of operating performance. We use these measures to monitor and evaluate the profitability of our operating enterprise. Our measures of Enterprise operating profit and Enterprise operating margin may be different from measures used by other companies.

Previous wording

Three and Six Months Ended March 31, 2026, Compared to Three and Six Months Ended March 31, 2025

Current wording

Three and Nine Months Ended June 30, 2026, Compared to Three and Nine Months Ended June 30, 2025

Previous wording

Corporate and other expenses were $26 million and $56 million in the three and six months ended March 31, 2026, respectively, compared to $27 million and $62 million in the three and six months ended March 31, 2025, respectively.

Current wording

Corporate and other expenses were $34 million and $90 million in the three and nine months ended June 30, 2026, respectively, compared to $36 million and $98 million in the three and nine months ended June 30, 2025, respectively.

Previous wording

Income before income taxes increased to $440 million and $782 million in the three and six months ended March 31, 2026, respectively, from $299 million and $512 million in the three and six months ended March 31, 2025, respectively.

Current wording

Income before income taxes increased to $470 million and $1,252 million in the three and nine months ended June 30, 2026, respectively, from $342 million and $854 million in the three and nine months ended June 30, 2025, respectively.

Previous wording

Pre-tax margin was 19.7 percent and 18.0 percent in the three and six months ended March 31, 2026, respectively, compared to 14.9 percent and 13.2 percent in the three and six months ended March 31, 2025, respectively. Enterprise operating margin was 22.5 percent and 20.9 percent in the three and six months ended March 31, 2026, respectively, compared to 19.0 percent and 17.2 percent in the three and six months ended March 31, 2025, respectively. For both the three and six months ended March 31, 2026, pre-tax margin and Enterprise operating margin increased primarily due to higher sales volume, positive impact of price realization exceeding input costs, including productivity, and favorable mix, partially offset by higher compensation.

Current wording

Pre-tax margin was 20.3 percent and 18.8 percent in the three and nine months ended June 30, 2026, respectively, compared to 16.0 percent and 14.2 percent in the three and nine months ended June 30, 2025, respectively. Enterprise operating margin was 22.3 percent and 21.4 percent in the three and nine months ended June 30, 2026, respectively, compared to 19.5 percent and 18.0 percent in the three and nine months ended June 30, 2025, respectively. For the three months ended June 30, 2026, pre-tax margin and Enterprise operating margin increased primarily due to higher sales volume, favorable mix, and the margin benefit of the Sensia joint venture dissolution, partially offset by negative impacts of input costs exceeding price realization. For the nine months ended June 30, 2026, pre-tax margin and Enterprise operating margin increased primarily due to higher sales volume, favorable mix, and productivity, partially offset by higher compensation.

Previous wording

The effective tax rates for the three and six months ended March 31, 2026, were 20.2 percent and 16.5 percent, respectively, compared to 17.1 percent and 16.8 percent for the three and six months ended March 31, 2025, respectively. Our Adjusted Effective Tax Rates for the three and six months ended March 31, 2026, were 20.6 percent and 19.1 percent, respectively, compared to 17.7 percent for both the three and six months ended March 31, 2025. The increases in the effective tax rate and the Adjusted Effective Tax Rate were primarily due to the application of BEPS Pillar Two minimum tax rules in Singapore offset by favorable discrete tax items in the first quarter of fiscal year 2026.

Current wording

The effective tax rates for the three and nine months ended June 30, 2026, were 13.2 percent and 15.3 percent, respectively, compared to 14.3 percent and 15.8 percent for the three and nine months ended June 30, 2025, respectively. The decrease in the effective tax rate was primarily due to the favorable discrete tax items related to the dissolution of the Sensia joint venture, partially offset by the impact of BEPS Pillar Two minimum tax rules. Our Adjusted Effective Tax Rate for both the three and nine months ended June 30, 2026, was 19.2 percent, compared to 15.3 percent and 16.7 percent for the three and nine months ended June 30, 2025, respectively. The increase in the Adjusted Effective Tax Rate was primarily due to the application of BEPS Pillar Two minimum tax rules in Singapore.

Previous wording

Fiscal 2026 second quarter Net income attributable to Rockwell Automation was $350 million or $3.10 per share, compared to $252 million or $2.22 per share in the second quarter of 2025. The increases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to higher pre-tax margin. Adjusted EPS was $3.30 in the second quarter 2026, up 32 percent compared to $2.50 in the second quarter of 2025, primarily due to higher Enterprise operating margin.

Current wording

Fiscal 2026 third quarter Net income attributable to Rockwell Automation was $408 million or $3.65 per share, compared to $295 million or $2.60 per share in the third quarter of 2025. The increases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to higher pre-tax margin. Adjusted EPS was $3.49 in the third quarter 2026, up 22 percent compared to $2.85 in the third quarter of 2025, primarily due to higher Enterprise operating margin.

Previous wording

Net income attributable to Rockwell Automation was $655 million or $5.79 per share in the six months ended March 31, 2026, compared to $436 million or $3.83 per share in the six months ended March 31, 2025. The increases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to higher pre-tax margin. Adjusted EPS was $6.05 in the six months ended March 31, 2026, up 39 percent compared to $4.35 in the six months ended March 31, 2025, primarily due to higher Enterprise operating margin.

Current wording

Net income attributable to Rockwell Automation was $1,063 million or $9.44 per share in the nine months ended June 30, 2026, compared to $731 million or $6.43 per share in the nine months ended June 30, 2025. The increases in Net income attributable to Rockwell Automation and diluted EPS were primarily due to higher pre-tax margin. Adjusted EPS was $9.55 in the nine months ended June 30, 2026, up 33 percent compared to $7.20 in the nine months ended June 30, 2025, primarily due to higher Enterprise operating margin.

Previous wording

Intelligent Devices sales increased 13 percent and 15 percent year over year in the three and six months ended March 31, 2026, respectively. Organic sales increased 9 percent and 13 percent year over year in the three and six months ended March 31, 2026, respectively. The effects of currency translation increased sales by 4 percent and 2 percent year over year in the three and six months ended March 31, 2026. For the three months ended March 31, 2026, reported and organic sales increased in all regions. For the six months ended March 31, 2026, reported sales increased in all regions, while organic sales increased in all regions except for Latin America.

Current wording

Intelligent Devices sales increased 12 percent and 14 percent year over year in the three and nine months ended June 30, 2026, respectively. Organic sales increased 10 percent and 12 percent year over year in the three and nine months ended June 30, 2026, respectively. The effects of currency translation increased sales by 2 percent year over year in both the three and nine months ended June 30, 2026, respectively. For the three months ended June 30, 2026, reported and organic sales increased in all regions except for Latin America. For the nine months ended June 30, 2026, reported sales increased in all regions, while organic sales increased in all regions except for Latin America.

Previous wording

Intelligent Devices segment operating earnings increased 33 percent year over year in the three months ended March 31, 2026. Segment operating margin increased to 20.9 percent in the three months ended March 31, 2026, from 17.7 percent in the same period a year ago, primarily due to positive impact of price realization exceeding input costs, including productivity, higher sales volume, and favorable mix, partially offset by higher compensation.

Current wording

Intelligent Devices segment operating earnings increased 28 percent year over year in the nine months ended June 30, 2026. Segment operating margin increased to 19.5 percent in the nine months ended June 30, 2026, from 17.3 percent in the same period a year ago, primarily due to higher sales volume and productivity, partially offset by higher compensation and negative impacts of input costs exceeding price realization.

Previous wording

Software & Control sales increased 20 percent year over year in both the three and six months ended March 31, 2026. Organic sales increased 17 percent year over year in both the three and six months ended March 31, 2026. The effects of currency translation increased sales by 3 percent year over year in both the three and six months ended March 31, 2026. For the three months ended March 31, 2026, reported sales increased in all regions, while organic sales increased in all regions except for Latin America. For the six months ended March 31, 2026, reported and organic sales increased in all regions.

Current wording

Software & Control sales increased 19 percent and 20 percent year over year in the three and nine months ended June 30, 2026, respectively. Organic sales increased 18 percent and 17 percent year over year in the three and nine months ended June 30, 2026, respectively. The effects of currency translation increased sales by 1 percent and 3 percent year over year in the three and nine months ended June 30, 2026, respectively. For the three and nine months ended June 30, 2026, reported and organic sales increased in all regions.

Previous wording

Software & Control segment operating earnings increased 43 percent year over year in the six months ended March 31, 2026. Segment operating margin increased to 33.1 percent in the six months ended March 31, 2026, from 27.7 percent in the same period a year ago, primarily due to higher sales volume, partially offset by higher compensation.

Current wording

Software & Control segment operating earnings increased 31 percent year over year in the three months ended June 30, 2026. Segment operating margin increased to 34.8 percent in the three months ended June 30, 2026, from 31.6 percent in the same period a year ago, primarily due to higher sales volume, partially offset by negative impact of input costs exceeding price realization.

Previous wording

Lifecycle Services sales increased 2 percent and decreased 1 percent year over year in the three and six months ended March 31, 2026, respectively. Organic sales decreased 1 percent and 4 percent year over year in the three and six months ended March 31, 2026, respectively. The effects of currency translation increased sales by 3 percent year over year in the three and six months ended March 31, 2026. For the three months ended March 31, 2026, reported and organic sales increased in Europe, Middle East, and Africa and Asia Pacific, while decreasing in North America and Latin America. For the six months ended March 31, 2026, reported and organic sales decreased in all regions, except Europe, Middle East, and Africa.

Current wording

Lifecycle Services sales decreased 12 percent and 5 percent year over year in the three and nine months ended June 30, 2026, respectively. Organic sales decreased 2 percent and 3 percent year over year in the three and nine months ended June 30, 2026, respectively. The effects of divestitures decreases sales by 11 percent and 4 percent year over year in the three and nine months ended June 30, 2026, respectively. The effects of currency translation increased sales by 1 percent and 2 percent year over year in the three and nine months ended June 30, 2026, respectively. For the three months ended June 30, 2026, reported and organic sales increased in Latin America and Asia Pacific, while decreasing in Europe, Middle East, and Africa and North America. For the nine months ended June 30, 2026, reported and organic sales decreased in all regions.

Previous wording

Lifecycle Services segment operating earnings increased 3 percent year over year in the three months ended March 31, 2026. Segment operating margin increased to 14.6 percent in the three months ended March 31, 2026, from 14.5 percent in the same period a year ago.

Current wording

Lifecycle Services segment operating earnings were flat year over year in the three months ended June 30, 2026. Segment operating margin increased to 15.1 percent in the three months ended June 30, 2026, from 13.3 percent in the same period a year ago, primarily due to strong project execution and the margin benefit from the Sensia joint venture dissolution, partially offset by lower sales volume.

Previous wording

Lifecycle Services segment operating earnings increased 5 percent year over year in the six months ended March 31, 2026. Segment operating margin increased to 14.4 percent in the six months ended March 31, 2026, from 13.5 percent in the same period a year ago, primarily due to strong project execution, partially offset by higher compensation.

Current wording

Lifecycle Services segment operating earnings increased 4 percent year over year in the nine months ended June 30, 2026. Segment operating margin increased to 14.6 percent in the nine months ended June 30, 2026, from 13.4 percent in the same period a year ago, primarily due to strong project execution, partially offset by lower sales volume.

Previous wording

(1)Amortization of acquisition-related intangible assets does not include amortization for intangibles internally developed, which is included in segment operating earnings. For the three and six months ended March 31, 2026, the amortization expense for internally developed intangible amortization was $4 million and $6 million, respectively.

Current wording

(1)Amortization of acquisition-related intangible assets does not include amortization for intangibles internally developed, which is included in segment operating earnings. For the three and nine months ended June 30, 2026, the amortization expense for internally developed intangible amortization was $2 million and $8 million, respectively. For the three and nine months ended June 30, 2025, the amortization expense for internally developed intangible amortization was $3 million and $8 million, respectively.

Previous wording

Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate are non-GAAP earnings measures that exclude non-operating pension and postretirement benefit credit, amortization of acquisition-related intangible assets, net legacy asbestos and environmental charges, cost and tax items associated with dissolution of Sensia attributable to Rockwell Automation, change in fair value of investments, and restructuring charges aligned with enterprise-wide strategic initiatives, including their respective tax effects. See Note 9 in the Consolidated Financial Statements for more information on our net periodic pension and postretirement benefit cost.

Current wording

Adjusted Income, Adjusted EPS, and Adjusted Effective Tax Rate are non-GAAP earnings measures that exclude non-operating pension and postretirement benefit credit, amortization of acquisition-related intangible assets, net legacy asbestos and environmental charges, gain on dissolution of Sensia, net of transaction costs, change in fair value of investments, and restructuring charges aligned with enterprise-wide strategic initiatives, including their respective tax effects and discrete tax items. See Note 9 in the Consolidated Financial Statements for more information on our net periodic pension and postretirement benefit cost.

Previous wording

In fiscal 2026, we updated the definition of our non-GAAP earnings measures to exclude cost, net of tax, and tax items associated with the April 1, 2026 dissolution of the Sensia joint venture. We believe the change to our definition provides a more useful presentation of our operating performance to investors as these costs and tax effects are not reflective of our ongoing operations. We did not revise prior years because there were no similar amounts.

Current wording

In fiscal 2026, we updated the definition of our non-GAAP earnings measures to exclude the gain on the dissolution of the Sensia joint venture, net of transaction costs, tax, and tax items. We believe the change to our definition provides a more useful presentation of our operating performance to investors as these costs and tax effects are not reflective of our ongoing operations. We did not revise prior years because there were no similar amounts.

Previous wording

Cash provided by operating activities was $554 million for the six months ended March 31, 2026, compared to $563 million for the six months ended March 31, 2025. Free cash flow was $445 million for the six months ended March 31, 2026, compared to $464 million for the six months ended March 31, 2025. The year over year decreases in cash provided by operating activities and free cash flow were primarily due to the payout of incentive compensation in fiscal 2026 related to fiscal 2025 performance while no incentive compensation was paid in fiscal 2025 related to fiscal 2024 performance, and increases in working capital, partially offset by higher pre-tax income.

Current wording

Cash provided by operating activities was $1,278 million for the nine months ended June 30, 2026, compared to $1,090 million for the nine months ended June 30, 2025. Free cash flow was $1,099 million for the nine months ended June 30, 2026, compared to $953 million for the nine months ended June 30, 2025. The year over year increases in cash provided by operating activities and free cash flow were primarily due to higher pre-tax income, partially offset by the payout of incentive compensation in fiscal 2026 related to fiscal 2025 performance while no incentive compensation was paid in fiscal 2025 related to fiscal 2024 performance, as well as increases in working capital.

Previous wording

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.

Current wording

Our Short-term debt as of June 30, 2026, included commercial paper borrowings of $684 million with a weighted average interest rate of 3.89 percent, and a weighted average maturity period of 25 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.

Previous wording

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 in the Consolidated Financial Statements, all intercompany debt was settled by the joint venture partners upon dissolution.

Current wording

In December 2022, Sensia entered into an unsecured $75 million line of credit. 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 debt as of September 30, 2025, were the following interest-bearing loans from SLB to Sensia: $14 million in Short-term debt, and $42 million in Long-term debt. In December 2025, the credit line matured and was closed. The outstanding debt was settled with loans from the joint venture partners. Upon dissolution of the Sensia joint venture, interest-bearing loans from SLB to Sensia were assumed by SLB. Refer to Note 1 for additional details on the dissolution.

Previous wording

We repurchased approximately 1.6 million shares of our common stock under our share repurchase program in the first six months of 2026. The total cost of these shares was $608 million, of which $12 million was recorded in Accounts payable at March 31, 2026, related to shares that did not settle until April 2026. Excise tax of $2 million was paid during the three months ended March 31, 2026, related to our 2026 share repurchases. At September 30, 2025, there were $1 million of outstanding common stock share repurchases recorded in Accounts payable. We repurchased approximately 0.8 million shares of our common stock under our share repurchase program in the first six months of 2025. The total cost of these shares was $228 million, of which $3 million was recorded in Accounts payable at March 31, 2025, related to shares that did not settle until April 2025. Our decision to repurchase shares in the remainder of 2026 will depend on business conditions, free cash flow generation, other cash requirements, and stock price. At March 31, 2026, we had approximately $318 million remaining for share repurchases under our existing board authorization. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, for additional information regarding share repurchases.

Current wording

We repurchased approximately 2.0 million shares of our common stock under our share repurchase program in the first nine months of fiscal 2026. The total cost of these shares was $754 million, of which $2 million was recorded in Accounts payable at June 30, 2026, related to shares that did not settle until July 2026. At September 30, 2025, there were $1 million of outstanding common stock share repurchases recorded in Accounts payable. We repurchased approximately 1.3 million shares of our common stock under our share repurchase program in the first nine months of fiscal 2025. The total cost of these shares was $350 million, of which $1 million was recorded in Accounts payable at June 30, 2025, related to shares that did not settle until July 2025. Our decision to repurchase shares in the remainder of fiscal 2026 will depend on business conditions, free cash flow generation, other cash requirements, and stock price. At June 30, 2026, we had approximately $1.2 billion remaining for share repurchases under our existing board authorizations. See Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, for additional information regarding share repurchases.

Previous wording

At March 31, 2026, the majority of our Cash and cash equivalents were held by non-U.S. subsidiaries. We use a global cash pooling arrangement to allocate capital resources among our entities. As a result of the broad changes to the U.S. international tax system under the Tax Act, the Company accounts for taxes on earnings of substantially all of its non-U.S. subsidiaries including both non-U.S. and U.S. taxes. The Company has concluded that earnings of a limited number of its non-U.S. subsidiaries are indefinitely reinvested.

Current wording

At June 30, 2026, the majority of our Cash and cash equivalents were held by non-U.S. subsidiaries. We use a global cash pooling arrangement to allocate capital resources among our entities. As a result of the broad changes to the U.S. international tax system under the Tax Cuts and Jobs Act of 2017, the Company accounts for taxes on earnings of substantially all of its non-U.S. subsidiaries including both non-U.S. and U.S. taxes. The Company has concluded that earnings of a limited number of its non-U.S. subsidiaries are indefinitely reinvested.

Previous wording

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.

Current wording

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 financing 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 June 30, 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.

Previous wording

Separate short-term unsecured credit facilities of approximately $275 million at March 31, 2026, were available to non-U.S. subsidiaries, of which, approximately $35 million was committed under letters of credit. Borrowings under our non-U.S. credit facilities at March 31, 2026, and September 30, 2025, were not significant. We were in compliance with all covenants under our credit facilities at March 31, 2026, and September 30, 2025. There are no significant commitment fees or compensating balance requirements under our credit facilities.

Current wording

Separate short-term unsecured credit facilities of approximately $274 million at June 30, 2026, were available to non-U.S. subsidiaries, of which, approximately $32 million was committed under letters of credit. Borrowings under our non-U.S. credit facilities at June 30, 2026, and September 30, 2025, were not significant. We were in compliance with all covenants under our credit facilities at June 30, 2026, and September 30, 2025. There are no significant commitment fees or compensating balance requirements under our credit facilities.

Previous wording

Net gains and losses related to derivative forward exchange contracts designated as cash flow hedges offset the related gains and losses on the hedged items during the periods in which the hedged items are recognized in earnings. During the three and six months ended March 31, 2026, we reclassified $3 million and $4 million, respectively, in pre-tax net losses related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. During both the three and six months ended March 31, 2025, we reclassified $7 million in pre-tax net gains related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. As of March 31, 2026, we expect that approximately $6 million of pre-tax net unrealized losses on cash flow hedges will be reclassified into earnings during the next 12 months.

Current wording

Net gains and losses related to derivative forward exchange contracts designated as cash flow hedges offset the related gains and losses on the hedged items during the periods in which the hedged items are recognized in earnings. During the three and nine months ended June 30, 2026, we reclassified $2 million and $6 million, respectively, in pre-tax net losses related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. During the three months ended June 30, 2025, we reclassified $1 million in pre-tax losses related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. During the nine months ended June 30, 2025 we reclassified $6 million in pre-tax net gains related to cash flow hedges from Accumulated other comprehensive loss into the Consolidated Statement of Operations. As of June 30, 2026, we expect that approximately $1 million of pre-tax net unrealized gains on cash flow hedges will be reclassified into earnings during the next 12 months.