Company: ROK
Filing Date: 2025-11-12
Form Type: 10-K
Source: 0001024478-25-000116
Chunk: 305

Company: ROCKWELL AUTOMATION, INC
Filing Date: 2025-11-12
Form: 10-K
Item: Item 8
Chunk 305
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 ContentsNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Legacy Asbestos and Environmental MattersWe record liabilities for asbestos and environmental matters in the period in which our responsibility is probable and the costs can be reasonably estimated. We make changes to the liabilities in the periods in which the estimated costs of remediation or cost to defend and resolve claims change. If we determine that future recoveries from insurers or other third parties are probable and a right of set off exists, we record the liability net of the estimated recovery. If we determine that future recoveries from insurers or other third parties are probable but a right of set off does not exist, we record a liability for the total estimated costs of remediation or resolution of the claims and a receivable for the estimated recovery. Accruals for legacy asbestos and environmental matters are included in the Consolidated Balance Sheet in Other current liabilities and Other liabilities, and recoveries related to these matters when a right of set off does not exist are recorded in Receivables and Other assets.EnvironmentalAt third-party environmental sites where more than one potentially responsible party has been identified, we record a liability for our estimated allocable share of costs related to our involvement with the site, as well as an estimated allocable share of costs related to the involvement of insolvent or unidentified parties. At environmental sites where we are the sole responsible party, we record a liability for the total estimated costs of remediation. Ongoing operating and maintenance expenditures included in our environmental remediation obligations are discounted to present value over the probable future remediation period. Our remaining environmental remediation obligations are undiscounted due to the subjectivity of the timing and/or amount of future cash payments.AsbestosIn the fourth quarter of 2025, we elected to change our method of accounting for net legacy asbestos-related defense costs from expensing as incurred to accruing for all future defense costs for both known and unknown claims, similar to how we account for indemnity costs. The defense costs were historically expensed as incurred due to volatility and unpredictability. Over time, more and better data has become available and we have deployed a consistent defense strategy, with dedicated in-house counsel and national counsel managing our cases, contributing to the quantity and quality of data available related to defense costs enabling our ability to reasonably estimate. In 2025, we engaged a third-party actuarial firm to provide actuarial modeling of future defense and indemnity costs, together with our own review, we believe that we can now reasonably estimate future net legacy asbestos-related