Financial Analysis

Commitments and Contingent Liabilities 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, and intellectual property. 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 componen …

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Short-Term and Long-Term Debt Our Short-term debt as of December 31, 2025, included commercial paper borrowings of $671 million, with a weighted average interest rate of 3.89 percent, and a weighted average maturity period of 32 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. Included in Current portion of long-term debt as of December 31, 2025, was $62 million related to the purchase of the Mequon facility in January 2026, referenced in Note 1. 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 December 31, 2025, were the following interest-bearing loans from Schlumberger (SLB) to Sensia: $42 million due October 15, 2026, $14 million which in February 2026 was extended to be due June 15, 2026, and $33 million entered into in December 2025 and 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 …

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The following table presents 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 December 31, 2025 North America Europe, Middle East, and Africa Asia Pacific Latin America Total Intelligent Devices $ 650 $ 141 $ 96 $ 66 $ 953 Software & Control 430 91 66 42 629 Lifecycle Services 259 140 93 31 523 Total Company Sales $ 1,339 $ 372 $ 255 $ 139 $ 2,105 Three Months Ended December 31, 2024 North America Europe, Middle East, and Africa Asia Pacific Latin America Total Intelligent Devices $ 519 $ 135 $ 86 $ 66 $ 806 Software & Control 365 73 55 36 529 Lifecycle Services 266 124 110 46 546 Total Company Sales $ 1,150 $ 332 $ 251 $ 148 $ 1,881

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Share-Based Compensation We recognized $21 million and $23 million of pre-tax share-based compensation expense during the three months ended December 31, 2025 and 2024, 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): Three Months Ended December 31, 2025 2024 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 161 399.94 86 296.48 Unrestricted stock 3 402.22 6 297.10

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Goodwill and Other Intangible Assets Changes in the carrying amount of Goodwill for the three months ended December 31, 2025, were (in millions): Intelligent Devices Software & Control Lifecycle Services Total Balance as of September 30, 2025 $ 904 $ 2,440 $ 495 $ 3,839 Translation 7 6 13 Balance as of December 31, 2025 $ 911 $ 2,446 $ 495 $ 3,852 Gross carrying value of goodwill $ 911 $ 2,446 $ 814 $ 4,171 Accumulated impairment losses (319) (319) Goodwill $ 911 $ 2,446 $ 495 $ 3,852 We perform our annual evaluation of goodwill and indefinite life intangible assets for impairment 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. We assessed the changes in events and circumstances during the first quarter of 2026 and concluded that no triggering events, which would require interim quantitative testing, occurred. Other intangible assets consist of (in millions): December 31, 2025 Carrying Amount Accumulated Amortization Net Amortized intangible assets Software products $ 108 $ (85) $ 23 Customer relationships 418 (136) $ 282 Technology 656 (288) $ 368 Trademarks 108 (50) $ 58 Other 2 (2) $ Total amortized intangible assets 1,292 (561) 731 Allen-Bradley trademark not subject to amortization 44 44 Other intangible assets $ 1,336 $ (561) $ 775 September 30, 2025 Carrying Amount Accumulated Amortization Net Amortized intangible assets …

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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 rate was 11.7 percent for the three months ended December 31, 2025, compared to 16.4 percent for the three months ended December 31, 2024. The effective tax rate was lower than the U.S. statutory rate of 21 percent for the three months ended December 31, 2025 and 2024, primarily due to higher discrete tax benefits, including a tax benefit related to the anticipated dissolution of the Sensia joint venture, and excess income tax benefits on share-based compensation. 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) will be paid in the second quarter of 2026 and is classified in Other current liabilities in the Consolidated Balance Sheet as of December 31, 2025, and September 30, 2025. In October 2021, the Organization for Economic Cooperation and Development (OECD) and G20 Finance Ministers reached an agreement, known as Base Erosion and Profit Shifting (BEPS) Pillar Two, that, among other things, ensures that income earned in each j …

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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.

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Retirement Benefits The components of net periodic pension and postretirement benefit cost were (in millions): Pension Benefits Three Months Ended December 31, 2025 2024 Service cost $ 9 $ 10 Interest cost 34 34 Expected return on plan assets (42) (41) Amortization of net actuarial loss 4 6 Net periodic pension benefit cost $ 5 $ 9 Other Postretirement Benefits Three Months Ended December 31, 2025 2024 Amortization of net actuarial loss $ 1 $ 1 Net periodic postretirement benefit cost $ 1 $ 1 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.

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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 $10 million and $14 million during the three months ended December 31, 2025 and 2024, respectively. Accruals remaining under these restructuring actions were $17 million and $27 million at December 31, 2025, and September 30, 2025, respectively.

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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 di …

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Business Segment Information Sales and operating results of our reportable segments were (in millions): Three Months Ended December 31, 2025 Intelligent Devices Software & Control Lifecycle Services Total Sales $ 953 $ 629 $ 523 $ 2,105 Less: Segment cost of sales (532) (187) (344) Segment selling, general and administrative expenses (192) (152) (93) Segment engineering and development expenses (63) (95) (14) Other segment items (1) (1) 1 2 Segment operating earnings $ 165 $ 196 $ 74 435 Purchase accounting depreciation and amortization (32) Corporate and other (30) Non-operating pension and postretirement benefit credit 3 Net legacy asbestos and environmental charges (1) Cost associated with dissolution of Sensia (4) Interest expense, net (29) Income before income taxes $ 342 (1) Other segment items are primarily comprised of foreign currency adjustments for each segment. Three Months Ended December 31, 2024 Intelligent Devices Software & Control Lifecycle Services Total Sales $ 806 $ 529 $ 546 $ 1,881 Less: Segment cost of sales (439) (160) (368) Segment selling, general and administrative expenses (183) (151) (99) Segment engineering and development expenses (61) (83) (12) Other segment items (1) (3) (2) 1 Segment operating earnings $ 120 $ 133 $ 68 321 Purchase accounting depreciation and amortization (35) Corporate and other (35) Non-operating pension and postretirement benefit credit Net legacy asbestos and environmental charges (2) (3) Cost associated with diss …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing