Company: ROK
Filing Date: 2025-02-10
Form Type: 10-Q
Source: 0001024478-25-000010
Chunk: 18

Company: ROCKWELL AUTOMATION, INC
Filing Date: 2025-02-10
Form: 10-Q
Item: Part I, Item 1
Chunk 18
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2024, and September 30, 2024, respectively.

20

Table of ContentsROCKWELL AUTOMATION, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)(Unaudited)

15. 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 16.4 percent for the three months ended December 31, 2024, compared to 18.1 percent for the three months ended December 31, 2023. The effective tax rate was lower than the U.S. statutory rate of 21 percent for the three months ended December 31, 2024 and 2023, primarily due to the geographical mix of pre-tax income. An income tax liability of $97 million related to the U.S. transition tax under the Tax Cuts and Jobs Act of 2017 (the Tax Act) that is payable greater than 12 months after both December 31, 2024, and September 30, 2024, is recorded in Other liabilities in the Consolidated Balance Sheet.Unrecognized Tax BenefitsThe amount of gross unrecognized tax benefits was $26 million at December 31, 2024, and $25 million at September 30, 2024, respectively, of which the entire amount would reduce our effective tax rate if recognized.Accrued interest and penalties related to unrecognized tax benefits were $2 million at both December 31, 2024 and September 30, 2024. We recognize interest and penalties related to unrecognized tax benefits in the income tax provision.We believe it is reasonably possible that the amount of gross unrecognized tax benefits could be reduced by up to $2 million in the next 12 months as a result of the resolution of tax matters in various global jurisdictions and the lapses of statutes of limitations. If all of the unrecognized tax benefits were recognized, the net reduction to our income tax provision, including the recognition of interest and penalties and offsetting tax assets, could be up to $3 million.We conduct business globally and are routinely audited by the various tax jurisdictions in which we operate. We are no longer