Company: ROK
Filing Date: 2025-11-12
Form Type: 10-K
Source: 0001024478-25-000116
Chunk: 59

Company: ROCKWELL AUTOMATION, INC
Filing Date: 2025-11-12
Form: 10-K
Item: Item 4
Chunk 59
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. The estimated undiscounted future cash flows attributable to the reporting unit were less than the carrying value; therefore, we determined the fair value for Sensia identifiable intangible assets as of September 30, 2025. We engaged an independent third-party valuation specialist to assist with the fair value determination of the identifiable intangible assets, primarily customer relationships, using a multi-period excess earnings model. We compared the fair value of $58 million to the carrying value, which resulted in a pre-tax, non-cash intangible asset impairment charge of $63 million during the fourth quarter of fiscal 2025. Subsequent to the impairment, our consolidated intangible asset balance as of September 30, 2025, is $864 million, including $58 million of identifiable intangible assets within the Sensia reporting unit.

Following the intangible asset impairment analysis, we estimated the fair value of the Sensia reporting unit using an income approach derived from discounted cash flows. As of September 30, 2025, the carrying value of the Sensia reporting unit, after consideration of the fourth quarter intangible asset impairment, was determined to be in excess of the reporting unit’s fair value, resulting in a $161 million pre-tax, non-cash goodwill impairment charge recorded in the Consolidated Statement of Operations. Subsequent to the impairment, our consolidated goodwill balance as of September 30, 2025, is $3,839 million and there is no remaining goodwill within the Sensia reporting unit.

Critical assumptions used in this approach included estimated future revenue growth rates and Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) margins, and a discount rate. Estimated future revenue and EBITDA margins are based on our best estimate about current and future conditions. The forecasted near-term growth rate projections take into account recent revenue performance and the order backlog. Margin assumptions reflect volume, mix, productivity and price estimates. These estimates and assumptions are based on a number of factors, including historical experience, reference to external product available market and industry growth publications, and analysis of peer group projections. Actual results and forecasts of revenue growth and margins for the Sensia reporting unit may be impacted by its concentration within the Oil & Gas industry and with its customer base. Demand for Sensia hardware and software products, solutions, and services is sensitive to industry volatility and risks, including those related to commodity prices, supply and demand dynamics, production costs, geological activity, and political activities. We determined the discount rate