10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from ____________________ to __________________

Commission file number 1-278

EMERSON ELECTRIC CO.

(Exact name of registrant as specified in its charter)

Missouri (State or other jurisdiction of incorporation or organization)	43-0259330 (I.R.S. Employer Identification No.)
8000 W. Florissant Ave. P.O. Box 4100 St. Louis, Missouri (Address of principal executive offices)	63136 (Zip Code)

Registrant's telephone number, including area code: (314) 553-2000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ýNo ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ýNo £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý	Accelerated filer ¨
Non-accelerated filer ¨   (Do not check if a smaller reporting company)	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common stock of $0.50 par value per share outstanding at July 31, 2012: 727,323,739 shares.

1

FORM 10-Q

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EMERSON ELECTRIC CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

THREE AND NINE MONTHS ENDED JUNE 30, 2011 AND 2012

(Dollars in millions, except per share amounts; unaudited)

	Three Months Ended June 30,			Nine Months Ended June 30,
	2011		2012	2011	2012
Net sales	$	6,288	6,484	17,677	17,712
Costs and expenses:
Cost of sales	3,790		3,856	10,710	10,693
Selling, general and administrative expenses	1,363		1,338	3,989	4,051
Other deductions, net	87		84	266	279
Interest expense (net of interest income of $6, $5, $17 and $14, respectively)	56		51	174	167
Earnings before income taxes	992		1,155	2,538	2,522
Income taxes	294		368	782	798
Net earnings	698		787	1,756	1,724
Less: Noncontrolling interests in earnings of subsidiaries	15		17	37	38
Net earnings common stockholders	$	683	770	1,719	1,686
Basic earnings per share common stockholders	$	0.91	1.05	2.28	2.29
Diluted earnings per share common stockholders	$	0.90	1.04	2.26	2.28
Cash dividends per common share	$	0.35	0.40	1.04	1.20

See accompanying Notes to Consolidated Financial Statements.

2

FORM 10-Q

EMERSON ELECTRIC CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in millions, except shares and per share amounts; unaudited)

	Sept 30, 2011			June 30, 2012
ASSETS
Current assets
Cash and equivalents	$	2,052		2,292
Receivables, less allowances of $104 and $96, respectively	4,502			4,601
Inventories	2,100			2,367
Other current assets	691			743
Total current assets	9,345			10,003
Property, plant and equipment, net	3,437			3,418
Other assets
Goodwill	8,771			8,739
Other intangible assets	1,969			1,856
Other	339			310
Total other assets	11,079			10,905
Total assets	$	23,861		24,326
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings and current maturities of long-term debt	$	877		2,060
Accounts payable	2,677			2,617
Accrued expenses	2,772			2,561
Income taxes	139			158
Total current liabilities	6,465			7,396
Long-term debt	4,324			3,789
Other liabilities	2,521			2,476
Equity
Preferred stock, $2.50 par value per share;
Authorized, 5,400,000 shares; issued, none	—			—
Common stock, $0.50 par value per share;
Authorized, 1,200,000,000 shares; issued, 953,354,012 shares;      outstanding, 738,877,768 shares and 729,345,876 shares, respectively	477			477
Additional paid-in capital	317			317
Retained earnings	17,310			18,115
Accumulated other comprehensive income	(562		)	(767	)
Cost of common stock in treasury, 214,476,244 shares and 224,008,136 shares, respectively	(7,143		)	(7,623	)
Common stockholders’ equity	10,399			10,519
Noncontrolling interests in subsidiaries	152			146
Total equity	10,551			10,665
Total liabilities and equity	$	23,861		24,326

See accompanying Notes to Consolidated Financial Statements. 

3

FORM 10-Q

EMERSON ELECTRIC CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED JUNE 30, 2011 AND 2012

(Dollars in millions; unaudited)

	Nine Months Ended June 30,
	2011			2012
Operating activities
Net earnings	$	1,756		1,724
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	650			617
Changes in operating working capital	(469		)	(616	)
Pension funding	(100		)	(122	)
Other	141			139
Net cash provided by operating activities	1,978			1,742
Investing activities
Capital expenditures	(403		)	(428	)
Purchases of businesses, net of cash and equivalents acquired	(228		)	(178	)
Other	(42		)	(40	)
Net cash used in investing activities	(673		)	(646	)
Financing activities
Net increase in short-term borrowings	198			902
Principal payments on long-term debt	(54		)	(255	)
Dividends paid	(781		)	(881	)
Purchases of treasury stock	(495		)	(527	)
Other	(32		)	(37	)
Net cash used in financing activities	(1,164		)	(798	)
Effect of exchange rate changes on cash and equivalents	48			(58	)
Increase in cash and equivalents	189			240
Beginning cash and equivalents	1,592			2,052
Ending cash and equivalents	$	1,781		2,292
Changes in operating working capital
Receivables	$	(294	)	(179	)
Inventories	(240		)	(304	)
Other current assets	55			(74	)
Accounts payable	125			8
Accrued expenses	(135		)	(84	)
Income taxes	20			17
Total changes in operating working capital	$	(469	)	(616	)

See accompanying Notes to Consolidated Financial Statements.

4

EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

Notes to Consolidated Financial Statements

1. In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary for a fair presentation of operating results for the interim periods presented. Adjustments consist of normal and recurring accruals. The consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required for annual financial statements presented in conformity with U.S. generally accepted accounting principles (GAAP). For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2011. The former Tools and Storage segment has been renamed Commercial & Residential Solutions; this change had no affect on reported results or the composition of any business segment.

Effective January 1, 2012, the Company adopted updates to ASC 820, Fair Value Measurement, which established common fair value measurement and disclosure requirements for U.S. GAAP and International Financial Reporting Standards. Adoption had an inconsequential impact on the Company's financial statements.

2. Reconciliations of weighted average shares for basic and diluted earnings per common share follow (in millions). Earnings allocated to participating securities were inconsequential.

	Three Months Ended June 30,		Nine Months Ended June 30,
	2011	2012	2011	2012
Basic shares outstanding	748.7	730.4	751.0	732.5
Dilutive shares	4.6	3.9	5.2	4.0
Diluted shares outstanding	753.3	734.3	756.2	736.5

3. The change in equity for the first nine months of 2012 is shown below (in millions):  

	Common Stockholders' Equity			Noncontrolling Interests in Subsidiaries		Total Equity
September 30, 2011	$	10,399		152		10,551
Net earnings	1,686			38		1,724
Other comprehensive income/(loss)	(205		)	(3	)	(208	)
Cash dividends	(881		)	(37	)	(918	)
Net treasury stock purchases and other	(480		)	(4	)	(484	)
June 30, 2012	$	10,519		146		10,665

Comprehensive income, net of applicable income taxes, for the three and nine months ended June 30, 2012 and 2011 is summarized as follows (in millions):

	Three Months Ended June 30,					Nine Months Ended June 30,
	2011			2012		2011		2012
Net earnings	$	698		787		1,756		1,724
Foreign currency translation	89			(256	)	370		(262	)
Cash flow hedges and other	(16		)	(16	)	(17	)	54
	771			515		2,109		1,516
Less: Noncontrolling interests	12			16		38		35
Amounts attributable to common stockholders	$	759		499		2,071		1,481

The changes in foreign currency translation are primarily due to significant strengthening of the U.S. dollar in the third quarter of 2012, particularly compared to European currencies.The amount attributable to noncontrolling interests in subsidiaries consists primarily of earnings, plus foreign currency translation.

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EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

4. Net periodic pension and net postretirement plan expenses are summarized as follows (in millions):

	Three Months Ended June 30,									Nine Months Ended June 30,
	Pension					Postretirement				Pension				Postretirement
	2011			2012		2011		2012		2011		2012		2011		2012
Service cost	$	21		21		1		1		62		62		3		2
Interest cost	55			56		4		4		166		167		13		12
Expected return on plan assets	(82		)	(80	)					(246	)	(239	)
Net amortization	42			46		(2	)	(3	)	127		138		(6	)	(9	)
Total	$	36		43		3		2		109		128		10		5

5. Other deductions, net are summarized as follows (in millions):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2011		2012		2011		2012
Amortization of intangibles	$	64	67		195		182
Rationalization of operations	21		35		54		89
Other	2		25		39		58
Gains, net	—		(43	)	(22	)	(50	)
Total	$	87	84		266		279

Gains, net reflects $37 million for payments received in the third quarter related to dumping duties collected by U.S. Customs for 2006 through 2010, but not distributed to affected domestic producers pending resolution of certain legal challenges to the U.S. Continued Dumping and Subsidy Offset Act. Overall, this gain was partially offset by higher foreign currency transaction losses and increased rationalization expense. The nine months increase in other deductions, net is primarily due to higher rationalization expense and higher foreign currency transaction losses, partially offset by higher gains, including $43 million for payments received related to dumping duties, and lower amortization expense. Gains, net for the nine months ended June 30, 2011 included $15 million related to the acquisition of full ownership of a Process Management joint venture in India.

6. Rationalization of operations expense reflects costs associated with the Company’s efforts to continually improve operational efficiency and deploy assets globally in order to remain competitive on a worldwide basis. Details of the change in the liability for rationalization during the nine months ended June 30, 2012 follow (in millions):

	Sept 30, 2011		Expense	Paid/Utilized	June 30, 2012
Severance and benefits	$	24	47	47	24
Lease and other contract terminations	3		9	7	5
Fixed asset write-downs	—		2	2	—
Vacant facility and other shutdown costs	2		9	9	2
Start-up and moving costs	1		22	23	—
Total	$	30	89	88	31

Rationalization of operations expense by segment is summarized as follows (in millions):

	Three Months Ended June 30,			Nine Months Ended June 30,
	2011		2012	2011	2012
Process Management	$	4	4	8	13
Industrial Automation	8		13	18	21
Network Power	6		14	16	40
Climate Technologies	2		2	8	8
Commercial & Residential Solutions	1		2	4	7
Total	$	21	35	54	89

6

EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

The Company expects to incur full year 2012 rationalization expense of approximately $125 million, which includes $89 million incurred to date, as well as costs to complete actions initiated before the end of the third quarter and actions anticipated to be approved and initiated during the remainder of the year. Costs incurred during the nine months of 2012 included severance and other benefits associated with forcecount reduction, mainly for Network Power in Asia, Europe and North America. Start-up and moving costs incurred to redeploy assets to best cost locations and expand geographically to directly serve local markets were spread across all segments. Vacant facilities and other shutdown costs increased, primarily in Network Power and Industrial Automation.

7. Other Financial Information (in millions):

	Sept 30, 2011		June 30, 2012
Inventories
Finished products	$	742	845
Raw materials and work in process	1,358		1,522
Total	$	2,100	2,367

Property, plant and equipment, net
Property, plant and equipment, at cost	$	8,731	8,821
Less: Accumulated depreciation	5,294		5,403
Total	$	3,437	3,418

Goodwill by business segment
Process Management	$	2,368	2,356
Industrial Automation	1,393		1,332
Network Power	3,990		4,017
Climate Technologies	483		503
Commercial & Residential Solutions	537		531
Total	$	8,771	8,739

Changes in goodwill since September 30, 2011 are primarily due to foreign currency translation and two small acquisitions in the second quarter. Valuations of certain acquired assets and liabilities are in-process and purchase price allocations for acquisitions are subject to refinement.

As of June 30, 2012, the Company's total market value based on its exchange-traded stock price was $34 billion and common stockholders' equity was $11 billion. As discussed in the 2011 Annual Report, the Company's annual goodwill impairment assessment identified certain units for which fair value exceeded the carrying value of the businesses by small margins. During fiscal 2012, demand in certain end markets has slowed as global business conditions have weakened. In the fourth quarter, the Company began its process to develop business plans for fiscal 2013 and beyond, including any potential changes in strategy, which will be used in the fiscal 2012 assessment. The operations that will be a focus of the assessment have goodwill totaling in excess of $1 billion, and include the embedded computing and power business in the Network Power segment and the subsea oil and gas devices and software business in the Process Management segment.

	Sept 30, 2011		June 30, 2012
Accrued expenses include the following:
Employee compensation	$	640	609
Customer advanced payments	$	385	387
Product warranty	$	211	197

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EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

Other liabilities
Deferred income taxes	$	764	714
Pension plans	736		688
Postretirement plans, excluding current portion	361		348
Other	660		726
Total	$	2,521	2,476

8. Summarized information about the Company's results of operations by business segment follows (in millions):

	Three Months Ended June 30,									Nine Months Ended June 30,
	Sales					Earnings				Sales				Earnings
	2011			2012		2011		2012		2011		2012		2011		2012
Process Management	$	1,789		2,122		366		490		4,984		5,518		952		1,021
Industrial Automation	1,391			1,378		230		259		3,909		3,891		625		644
Network Power	1,683			1,588		176		163		4,968		4,632		508		419
Climate Technologies	1,171			1,146		229		232		2,995		2,805		539		490
Commercial & Residential Solutions	472			481		96		98		1,373		1,413		280		295
	6,506			6,715		1,097		1,242		18,229		18,259		2,904		2,869
Differences in accounting methods						60		59						169		163
Corporate and other						(109	)	(95	)					(361	)	(343	)
Eliminations/Interest	(218		)	(231	)	(56	)	(51	)	(552	)	(547	)	(174	)	(167	)
Total	$	6,288		6,484		992		1,155		17,677		17,712		2,538		2,522

Industrial Automation intersegment sales for the third quarter ended June 30, 2012 and 2011 were $206 million and $198 million, respectively, and year-to-date, $479 million and $500 million. Corporate and other for the 2012 third quarter includes lower incentive stock compensation expense of $23 million. The year-to-date decrease in Corporate and other primarily reflects lower incentive stock compensation expense of $55 million, partially offset by a $17 million charge related to the elimination of post-65 supplemental retiree medical benefits for approximately 8,000 active employees and the absence of the $15 million India joint venture gain. In 2011, the India joint venture acquisition gain was offset by $15 million of acquisition-related costs.

9. Following is a discussion regarding the Company’s use of financial instruments:

Hedging Activities – As of June 30, 2012, the notional amount of foreign currency hedge positions was approximately $2.0 billion, while commodity hedge contracts totaled approximately 79 million pounds of copper and aluminum. All derivatives receiving deferral accounting are cash flow hedges. The majority of hedging gains and losses deferred as of June 30, 2012 are expected to be recognized over the next 12 months as the underlying forecasted transactions occur. The following amounts are included in earnings and Other Comprehensive Income (OCI) for the three and nine months ended June 30, 2012 and 2011 (in millions):

		Gain (Loss) to Earnings							Gain (Loss) to OCI
		3rd Quarter				Nine Months			3rd Quarter				Nine Months
		2011		2012		2011	2012		2011		2012		2011	2012
Deferred	Location
Foreign currency	Sales	$	2	(1	)	8	1		—		—		6	6
Foreign currency	Cost of sales	6		—		16	2		5		(13	)	15	22
Commodity	Cost of sales	19		(9	)	48	(31	)	(2	)	(21	)	27	29
Not Deferred
Foreign currency	Other deductions, net	7		17		13	32
		$	34	7		85	4		3		(34	)	48	57

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EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

Regardless of whether derivatives receive deferral accounting, the Company expects hedging gains or losses to be essentially offset by losses or gains on the related underlying exposures. The amounts ultimately recognized will differ from those presented above for open positions, which remain subject to ongoing market price fluctuations until settlement. Derivatives receiving deferral accounting are highly effective, no amounts were excluded from the assessment of hedge effectiveness, and hedge ineffectiveness was immaterial for the three and nine months ended June 30, 2012 and 2011.

Fair Value Measurements – Valuations for all derivatives and the Company's long-term debt fall within Level 2 of the GAAP valuation hierarchy. At June 30, 2012, the fair value of commodity contracts and foreign currency contracts were reported in accrued expenses and other current assets, respectively. Collateral of $22 million was posted with counterparties as of June 30, 2012. The maximum collateral that could have been required was $23 million. As of June 30, 2012, the fair value of long-term debt was $5,079 million, which exceeded the carrying value by $730 million. Valuations of derivative contract positions are summarized below (in millions):  

	September 30, 2011				June 30, 2012
	Assets		Liabilities		Assets	Liabilities
Foreign Currency	$	17	(48	)	33	(21	)
Commodity	$	—	(83	)	2	(25	)

10. In March 2012, the Company acquired one-hundred percent of Avtron Loadbank, a designer and manufacturer of high quality load banks and testing systems for power equipment industries, and a marine controls business which supplies controls and software solutions for optimal operation of refrigerated sea containers and marine boilers, for a total of $170 million. Avtron is reported in the Network Power segment while the marine controls business is reported in the Climate Technologies segment. Combined annual sales for the two companies were approximately $100 million in 2011.

The Company expects to complete the divestiture of its Knaack business unit in the fourth quarter. Knaack, a leading provider of premium secure storage solutions for job sites and work vehicles, has annual sales of approximately $100 million and is reported in the Commercial & Residential Solutions business segment. 

Items 2 and 3.

Management's Discussion and Analysis of Financial Condition and Results of Operations 

OVERVIEW

Third quarter 2012 sales and earnings increased versus the prior year period, reflecting strong underlying growth in Asia, Latin America and Canada and solid growth in the United States and Middle East/Africa. Europe was essentially flat. The significant strengthening of the U.S. dollar in the third quarter had a negative impact on sales. Forecasts are for slowing growth in worldwide gross fixed investment as macroeconomic indicators remain mixed, including weakness in Europe due to the financial situation, slower growth in China and the decelerating recovery in the U.S. Growth continued in industrial end markets for Process Management as Thailand flooding issues have largely been resolved. Sales and earnings increased primarily due to continued growth in global oil and gas, chemical and power end markets. Growth in Commercial & Residential Solutions reflected improvements in commercial and residential construction spending. Sales decreased slightly in Industrial Automation on unfavorable foreign currency and mixed results among businesses. Demand in Network Power end markets was mixed and sales and earnings declined, reflecting volume decreases and deleverage related to weakness in telecommunications and information technology markets. Network Power sales, earnings, and margin improved sequentially from the second quarter. Sales for Climate Technologies were negatively affected by global weakness in residential air conditioning markets, while earnings increased slightly on cost containment actions. Emerson's financial position remains strong and the Company continues to generate substantial cash flow.

9

EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

THREE MONTHS ENDED JUNE 30, 2012, COMPARED WITH THREE MONTHS ENDED JUNE 30, 2011

Following is an analysis of the Company’s operating results for the third quarter ended June 30, 2012, compared with the third quarter ended June 30, 2011.

RESULTS OF OPERATIONS

Three Months Ended June 30	2011			2012		Change
(dollars in millions, except per share amounts)
Net sales	$	6,288		6,484		3	%
Gross profit	$	2,498		2,628		5	%
Percent of sales	39.7		%	40.5	%
SG&A	$	1,363		1,338
Percent of sales	21.6		%	20.6	%
Other deductions, net	$	87		84
Interest expense, net	$	56		51
Earnings before income taxes	$	992		1,155		16	%
Percent of sales	15.8		%	17.8	%
Net earnings common stockholders	$	683		770		13	%
Percent of sales	10.9		%	11.9	%
Diluted EPS – Net earnings	$	0.90		1.04		16	%

Net sales for the quarter were $6,484 million, an increase of $196 million, or 3 percent, compared with $6,288 million for the prior year. Consolidated results reflect a 6 percent ($364 million) increase in underlying sales (which exclude acquisitions, divestitures and foreign currency translation), a negative 3 percent ($177 million) impact from foreign currency translation and a negligible impact from acquisitions, net of divestitures ($9 million). The 6 percent increase in underlying sales reflects 5 percent volume growth and an estimated 1 percent from price. Underlying sales increased 6 percent in both the United States and internationally, including Asia (9 percent, with China up 2 percent), Latin America (19 percent), Middle East/Africa (5 percent) and Canada (10 percent), while sales in Europe were flat. Segment results were mixed as sales for Process Management and Commercial & Residential Solutions grew $333 million and $9 million, respectively, while sales in Network Power, Climate Technologies and Industrial Automation decreased $95 million, $25 million and $13 million, respectively.

Costs of sales for the quarters were $3,856 million and $3,790 million, respectively. Gross profit of $2,628 million and $2,498 million, respectively, resulted in gross margins of 40.5 percent and 39.7 percent. The increases in gross profit and gross margin reflect increased volume and associated leverage, pricing, materials cost containment and savings from cost reduction actions, partially offset by unfavorable product mix and other costs.

Selling, general and administrative (SG&A) expenses decreased $25 million, to $1,338 million, or 20.6 percent of sales, compared with $1,363 million, or 21.6% in 2011, largely due to leverage on increased Process Management volume, cost containment actions, and $23 million lower stock compensation expense due to a lower stock price, partially offset by volume deleverage in Network Power.

Other deductions, net were $84 million, a $3 million decrease from the prior year, primarily due to payments of $37 million received related to dumping duties, partially offset by higher rationalization expense and higher current year foreign currency transaction losses. See Notes 5 and 6 for further details regarding other deductions, net and rationalization costs.

Pretax earnings of $1,155 million increased $163 million, or 16 percent, compared with $992 million for 2011. Earnings results primarily reflect increases of $124 millionin Process Management and $29 million in Industrial Automation.

Income taxes were $368 million and $294 million for the third quarters of 2012 and 2011, respectively, resulting in effective tax rates of 32 percent and 30 percent. The effective tax rate for fiscal year 2012 is estimated at approximately 32 percent.

10

EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

Net earnings common stockholders were $770 million, an increase of 13 percent, and net earnings per share were $1.04, an increase of 16 percent, compared with $683 million and $0.90 for 2011. The 16 percent increase in earnings per share reflects improved operating results and the repurchase of common shares.

BUSINESS SEGMENTS

Following is an analysis of operating results for the Company’s business segments for the third quarter ended June 30, 2012, compared with the third quarter ended June 30, 2011. The Company defines segment earnings as earnings before interest and taxes.

Process Management

Three Months Ended June 30	2011			2012		Change
(dollars in millions)
Sales	$	1,789		2,122		19	%
Earnings	$	366		490		34	%
Margin	20.4		%	23.1	%

Process Management third quarter sales increased 19%, $333 million, to $2,122 million as nearly all businesses reported higher sales, partially due to recovery of sales (estimated at 7%) delayed by Thailand flooding in the first quarter. Strong growth in the measurement and flow businesses and the valves and regulators businesses was driven by solid global oil and gas investment and demand in the chemical end market. The systems and solutions businesses also reported strong sales growth. Backlog remains at high levels. Underlying sales increased 23 percent on volume growth, while foreign currency translation had a 4 percent ($61 million) unfavorable impact. Geographically, underlying sales increased in all regions, including 29 percent in the United States, 25 percent in Asia, 33 percent in Latin America, 14 percent in Europe and 13 percent in both Middle East/Africa and Canada. Earnings increased $124 million to $490 million, while margin increased 2.7 percentage points. Recovery of sales delayed by the Thailand flooding, along with savings from cost reductions, contributed to the strong volume leverage. Margin growth was partially offset by a $4 million unfavorable impact from foreign currency transactions, and other incremental costs associated with Thailand flooding.

Industrial Automation

Three Months Ended June 30	2011			2012		Change
(dollars in millions)
Sales	$	1,391		1,378		(1	)%
Earnings	$	230		259		12	%
Margin	16.6		%	18.8	%

Industrial Automation sales decreased $13 million, to $1,378 million as strong growth in ultrasonic welding, solid growth in hermetic motors and moderate growth in electrical distribution was more than offset by decreases in primarily fluid automation and electrical drives. Strength in power generating alternators was mostly offset by decreases in industrial motors. An underlying sales increase of 3 percent, including 2 percent from price, was more than offset by unfavorable foreign currency translation of 4 percent ($54 million). Geographically, underlying sales increased 12 percent in the United States and 9 percent in Latin America, partially offset by decreases of 4 percent in Europe and 1 percent in Middle East/Africa. Sales in Asia were flat, however China was up 3 percent. Earnings increased $29 million to $259 million and margin increased 2.2 percentage points, reflecting a $37 million gain on payments received by the power transmission business related to dumping duties (see Note 5) and savings from cost reduction actions, partially offset by $5 million higher restructuring expense and unfavorable foreign currency translation due to the stronger U.S. dollar.

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EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

Network Power

Three Months Ended June 30	2011			2012		Change
(dollars in millions)
Sales	$	1,683		1,588		(6	)%
Earnings	$	176		163		(7	)%
Margin	10.4		%	10.3	%

Sales for Network Power decreased $95 million, to $1,588 million, reflecting mixed results as challenging telecommunications and information technology end markets continued to weigh on the businesses. Demand remained weak in embedded computing and power across all regions and product line rationalization in this business continued. The network power systems business was down moderately overall. Uninterruptible power supply and precision cooling growth was strong in Asia (led by progress on the National Broadband Network (NBN) contract in Australia) and Latin America, offset by decreases in Europe and North America. In addition, the North America and Europe energy systems and infrastructure management businesses decreased. Underlying sales decreased 4 percent, excluding a 3 percent ($39 million) negative impact from foreign currency translation, slightly offset by a 1 percent ($15 million) favorable impact from the Avtron acquisition. Total underlying segment sales decreased 14 percent in the United States, 7 percent in Europe and 6 percent in Middle East/Africa, while sales increased 16 percent in Latin America and 6 percent in Asia (with China down 2 percent). Earnings of $163 million decreased $13 million primarily due to lower volume and resulting deleverage, unfavorable mix, and higher restructuring expense of $8 million. Segment margin decreased 0.1 percentage point due to the factors noted above plus a $6 million unfavorable foreign currency impact, nearly offset by materials and other cost containment and the absence of $16 million in Chloride acquisition-related costs included in the prior year. Sequential margin expansion is expected to continue into the fourth quarter.

Climate Technologies

Three Months Ended June 30	2011			2012		Change
(dollars in millions)
Sales	$	1,171		1,146		(2	)%
Earnings	$	229		232		1	%
Margin	19.6		%	20.2	%

Climate Technologies sales decreased $25 million, to $1,146 million. Sales decreased modestly as continued softness in global residential markets and weakness in Europe adversely affected results. U.S. air conditioning was down slightly as strong growth in residential and commercial was offset by weakness in service. Additionally, global refrigeration was down moderately (U.S. flat) and China air conditioning was down substantially. Europe air conditioning and refrigeration were down significantly. Underlying sales decreased 1 percent, including 3 percent lower volume partially offset by approximately 2 percent from price, a 2 percent ($18 million) negative impact from foreign currency translation, and a 1 percent ($12 million) favorable impact from the marine controls business acquisition. Underlying sales decreased 5 percent in Asia (China down 8 percent), 12 percent in Europe and 14 percent in Middle East/Africa, partially offset by increases of 1 percent in the United States, 9 percent in Latin America and 14 percent in Canada. Earnings increased $3 million to $232 million and margin increased 0.6 percentage points, due to savings from cost containment actions, partially offset by other incremental costs. Overall, demand is expected to improve at a modest pace, but mixed across regions.

Commercial & Residential Solutions

Three Months Ended June 30	2011			2012		Change
(dollars in millions)
Sales	$	472		481		2	%
Earnings	$	96		98		3	%
Margin	20.2		%	20.4	%

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EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

Commercial & Residential Solutions sales increased $9 million to $481 million in the third quarter, reflecting a 7 percent ($32 million) increase in underlying sales, mostly offset by a negative 4 percent ($18 million) impact from the prior year heating elements unit divestiture and an unfavorable 1 percent ($5 million) impact from foreign currency translation. Underlying sales growth reflects 5 percent from higher volume and an estimated 2 percent from price. Sales increased in all businesses, led by strong growth in residential and commercial storage and moderate growth in professional tools and food waste disposers. The wet/dry vacuums business grew modestly. Underlying sales increased 4 percent in the United States and 10 percent internationally, with strong growth in the Middle East/Africa, Canada and Asia. Earnings of $98 million were up $2 million compared to the prior year and margin increased 0.2 percentage points, reflecting the sales increase and cost reductions, which were mostly offset by unfavorable mix and other incremental costs. The divestiture of the heating elements unit had a favorable impact on the margin comparison.

NINE MONTHS ENDED JUNE 30, 2012, COMPARED WITH NINE MONTHS ENDED JUNE 30, 2011

Following is an analysis of the Company’s operating results for the nine months ended June 30, 2012, compared with the nine months ended June 30, 2011.

RESULTS OF OPERATIONS

Nine Months Ended June 30	2011			2012		Change
(dollars in millions, except per share amounts)
Net sales	$	17,677		17,712		—
Gross profit	$	6,967		7,019		1	%
Percent of sales	39.4		%	39.6	%
SG&A	$	3,989		4,051
Percent of sales	22.6		%	22.8	%
Other deductions, net	$	266		279
Interest expense, net	$	174		167
Earnings before income taxes	$	2,538		2,522		(1	)%
Percent of sales	14.4		%	14.2	%
Net earnings common stockholders	$	1,719		1,686		(2	)%
Percent of sales	9.7		%	9.5	%
Diluted EPS – Net earnings	$	2.26		2.28		1	%

Net sales were $17,712 million, an increase of $35 million, or essentially flat compared with net sales of $17,677 million for the prior year. Consolidated results reflect a 2 percent ($303 million) increase in underlying sales, a negative 2 percent ($239 million) impact from foreign currency translation and a negligible impact (negative $29 million) from a small divestiture, net of acquisitions. Underlying sales reflected 1 percent growth in both volume and price, on increases in the United States (2 percent), Asia (1 percent), Latin America (12 percent), Middle East/Africa (2 percent) and Canada (9 percent). Sales in Europe decreased slightly (1 percent). Segment results were mixed as sales in Process Management and Commercial & Residential Solutions were up $534 million and $40 million, respectively, while sales in Network Power, Climate Technologies and Industrial Automation decreased $336 million, $190 million and $18 million, respectively.

Costs of sales for 2012 and 2011 were $10,693 million and $10,710 million, respectively. Gross profit of $7,019 million and $6,967 million, respectively, resulted in gross margins of 39.6 percent and 39.4 percent. The slight increase in gross profit and gross margin reflects third quarter volume and leverage improvements, pricing, and savings from cost reduction actions in prior periods, partially offset by unfavorable product mix plus volume deleverage and higher incremental costs related to the first quarter Thailand flooding.

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EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

Selling, general and administrative expenses were $4,051 million, or 22.8 percent of net sales, increases of $62 million and 0.2 percentage points compared with $3,989 million and 22.6 percent for 2011. The increases were largely due to the business mix impact from higher Process Management volume, deleverage on lower volume in Network Power, Industrial Automation and Climate Technologies, and a $17 million charge related to the elimination of post-65 supplemental retiree medical benefits for approximately 8,000 active employees and higher wage costs, partially offset by significant cost reduction actions and lower incentive stock compensation expense of $55 million, reflecting no incentive stock plan overlap in 2012 and a stock option award in the prior year.

Other deductions, net were $279 million, a $13 million increase from the prior year, primarily due to higher rationalization expense and higher foreign currency transaction losses, partially offset by higher current year gains, including a $43 million gain on payments received related to dumping duties, and lower intangibles amortization. Gains in 2011 included the $15 million India joint venture acquisition gain. See Notes 5 and 6 for further details regarding other deductions, net and rationalization costs.

Pretax earnings of $2,522 million for the first nine months of 2012 decreased $16 million, or 1 percent, compared with $2,538 million for 2011. Earnings results reflect decreases of $89 million in Network Power and $49 million in Climate Technologies, partially offset by increases of $69 million in Process Management, $19 million in Industrial Automation and $15 million in Commercial & Residential Solutions.

Income taxes were $798 million and $782 million for the first nine months of 2012 and 2011, respectively, resulting in effective tax rates of 32 percent and 31 percent.

Net earnings common stockholders were $1,686 million and net earnings per share were $2.28, a decrease of 2 percent and an increase of 1 percent, respectively, compared with $1,719 million and $2.26 for 2011.

BUSINESS SEGMENTS

Following is an analysis of operating results for the Company’s business segments for the nine months ended June 30, 2012, compared with the nine months ended June 30, 2011. The Company defines segment earnings as earnings before interest and taxes.

Process Management

Nine Months Ended June 30	2011			2012		Change
(dollars in millions)
Sales	$	4,984		5,518		11	%
Earnings	$	952		1,021		7	%
Margin	19.1		%	18.5	%

Process Management sales increased $534 million to $5,518 million as nearly all businesses reported higher sales due to strong second and especially third quarter results. Strong growth in the measurement and flow businesses and the valves and regulators businesses was driven by solid global oil and gas investment and demand in the chemical end market. The systems and solutions businesses reported solid sales growth. The supply chain disruptions from Thailand flooding that adversely affected several businesses in the first quarter have largely been resolved. Underlying sales increased 13 percent on volume growth while foreign currency translation had a 2 percent ($84 million) unfavorable impact. Geographically, underlying sales increased in all regions, including 18 percent in the United States, 10 percent in Asia, 21 percent in Latin America, 8 percent in Europe, 12 percent in Canada and 5 percent in Middle East/Africa. Earnings increased $69 million for the period to $1,021 million on higher volume and leverage, while margin decreased 0.6 percentage points due to unfavorable product mix, a $9 million unfavorable impact from foreign currency transactions, $5 million in higher restructuring expense, and other incremental costs associated with Thailand flooding, partially offset by savings from cost reduction actions.

Industrial Automation

Nine Months Ended June 30	2011			2012		Change
(dollars in millions)
Sales	$	3,909		3,891		—
Earnings	$	625		644		3	%
Margin	16.0		%	16.6	%

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EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

Industrial Automation sales decreased $18 million, to $3,891 million, essentially flat compared to prior year as strong growth in electrical distribution and ultrasonic welding and slight growth in power generating alternators and industrial motors were offset by decreases in fluid automation and the electrical drives, solar and wind power businesses, and first half softness in hermetic motors due to lower global compressor demand. Underlying sales grew 2 percent, reflecting price, offset by a 2 percent ($76 million) unfavorable impact from foreign currency translation. Geographically, underlying sales increased 4 percent in the United States, 7 percent in Latin America, 8 percent in Middle East/Africa, and were flat in both Europe and Asia (China down 3 percent). Earnings of $644 million were up $19 million and margin increased 0.6 percentage points, primarily reflecting a $43 million gain on payments received by the power transmission business related to dumping duties (see Note 5), partially offset by lower volume and resulting deleverage, higher materials cost and unfavorable product mix.

Network Power

Nine Months Ended June 30	2011			2012		Change
(dollars in millions)
Sales	$	4,968		4,632		(7	)%
Earnings	$	508		419		(18	)%
Margin	10.2		%	9.0	%

Sales for Network Power decreased $336 million to $4,632 million due to weak demand and product rationalization in the embedded computing and power business, weakness in telecommunications and information technology end markets, and lower first half spending by customers due to disruptions in their supply chains from Thailand flooding. A moderate sales decrease in the network power systems business reflects declines in North America and Europe energy systems, infrastructure management, and North America and Europe uninterruptible power supply and precision cooling, partially offset by strong growth in Asia, led by the NBN contract, and modest growth in Latin America. Total underlying sales decreased 6 percent on lower volume, foreign currency translation had a 1 percent ($54 million) unfavorable impact, and the Avtron acquisition had a negligible favorable impact ($14 million). Geographically, underlying sales decreased 12 percent in the United States, 10 percent in Europe, 1 percent in Latin America and 2 percent in Middle East/Africa, partially offset by increases of 1 percent in Asia (China down 3 percent) and 11 percent in Canada. Earnings of $419 million decreased $89 million and margin decreased 1.2 percentage points, primarily due to lower volume and resulting deleverage in the embedded computing and power, infrastructure management, and energy systems businesses. Segment margin was also affected by labor-related costs in China, unfavorable product mix, higher rationalization expense of $24 million and an $8 million unfavorable impact from foreign currency transactions, partially offset by cost reductions and materials cost containment. Additionally, Chloride acquisition-related costs were $27 million in the first nine months of the prior year.

Climate Technologies

Nine Months Ended June 30	2011			2012		Change
(dollars in millions)
Sales	$	2,995		2,805		(6	)%
Earnings	$	539		490		(9	)%
Margin	18.0		%	17.5	%

Climate Technologies sales decreased $190 million, to $2,805 million on decreases in the air conditioning compressors, temperature controls, and temperature sensors businesses as global softness in residential air conditioning markets and weakness in Europe adversely affected results. Modest growth in Asia included a significant decrease in China. Strength in U.S. refrigeration was more than offset by decreases in U.S. and China air conditioning, while Europe air conditioning and refrigeration were down significantly. Results reflect an underlying sales decrease of 6 percent, including 8 percent lower volume partially offset by approximately 2 percent from price, a 1 percent ($19 million) negative impact from foreign currency translation, and a 1 percent ($12 million) favorable impact from the marine controls business acquisition. Underlying sales decreased 5 percent in the United States, 11 percent in Asia (down 21 percent in China), and 12 percent in Europe, while sales increased 18 percent in Latin America. Earnings decreased $49 million to $490 million and margin declined 0.5 percentage points, due to lower sales volume and resulting deleverage, slightly offset by savings from cost reduction actions.

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EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

Commercial & Residential Solutions

Nine Months Ended June 30	2011			2012		Change
(dollars in millions)
Sales	$	1,373		1,413		3	%
Earnings	$	280		295		6	%
Margin	20.4		%	20.9	%

Commercial & Residential Solutions sales increased $40 million to $1,413 million, reflecting a 7 percent ($101 million) increase in underlying sales, a 4 percent ($55 million) unfavorable impact from the prior year heating elements unit divestiture and a negligible ($6 million) unfavorable impact from foreign currency translation. Underlying sales growth includes 5 percent higher volume and an estimated 2 percent from price. The sales increase was led by strong growth in storage and professional tools and solid growth in food waste disposers, slightly offset by a modest decrease in the wet/dry vacuums business. Underlying sales increased 6 percent in the United States and 8 percent internationally, including strong growth in Latin America and Middle East/Africa, solid growth in Canada and moderate growth in Asia. Earnings of $295 million were up $15 million compared to the prior year, reflecting increases in the professional tools and storage businesses, partially offset by small decreases in the wet/dry vacuums and food waste disposers businesses, and a $7 million unfavorable comparison with prior year earnings from the divested heating elements unit. Margin increased 0.5 percentage points as the sales increase, leverage, cost reductions and the comparative effect of the heating products divestiture were partially offset by higher materials and other costs, and unfavorable product mix.

FINANCIAL CONDITION

Key elements of the Company's financial condition for the nine months ended June 30, 2012 as compared to the year ended September 30, 2011 and the nine months ended June 30, 2011 follow:

	Sept 30, 2011			Jun 30, 2012
Working capital (in millions)	$	2,880		2,607
Current ratio	1.4 to 1			1.4 to 1
Total debt-to-total capital	33.3		%	35.7	%
Net debt-to-net capital	23.2		%	25.3	%
Interest coverage ratio	15.8X			15.0X

The Company's interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) was 15.0X for the first nine months of 2012 compared to 14.3X in the prior year. The increase in 2012 is primarily due to lower average rates on borrowings in 2012, partially offset by lower earnings.

Cash provided by operating activities of $1,742 million decreased $236 million compared with $1,978 million in the prior year period, primarily due to increased investment in working capital, including higher inventory levels in connection with Thailand flooding which are being brought back in line through the end of the year, and the decrease in earnings. Operating cash flow and an increase in short-term borrowings of $902 million funded capital expenditures of $428 million, dividends of $881 million, treasury stock purchases of $527 million and long-term debt payments of $255 million. For the nine months ended June 30, 2012, free cash flow of $1,314 million (operating cash flow of $1,742 million less capital expenditures of $428 million) was down $261 million from free cash flow of $1,575 million (operating cash flow of $1,978 million less capital expenditures of $403 million) in the prior year period as the Company continues to make capital investments in technology and capacity to support future growth. Overall, cash and equivalents increased $240 million during the first nine months of 2012.

Emerson maintains a conservative financial structure which provides the strength and flexibility necessary to achieve its strategic objectives. The Company has been able to readily meet all its funding requirements and currently believes that sufficient funds will be available to meet the Company’s needs in the foreseeable future through ongoing operations, existing resources, short- and long-term debt capacity or backup credit lines. These resources allow Emerson to reinvest in existing businesses, pursue strategic acquisitions and manage its capital structure on a short- and long-term basis.

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EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

FISCAL 2012 OUTLOOK

Since the Company last provided guidance in May, significant strengthening of the U.S. dollar, particularly against the euro, is expected to further reduce sales for the second half of fiscal 2012 by $200 million, or an incremental 1 percentage point. Additionally, underlying growth has improved at a slower pace than expected due to the financial situation in Europe, the slowing Chinese economy and the decelerating recovery in the United States, necessitating a downward adjustment to the upper end of the range previously communicated. Accordingly, the Company's current outlook for fiscal 2012 is for underlying sales to increase approximately 3 percent to 4 percent, which excludes an estimated 2 percent unfavorable impact from foreign currency translation. Net sales growth for the year is forecast to be in the range of positive 1 percent to 2 percent compared with 2011 sales of $24.2 billion. The Company continues to expect operating profit margin of approximately 17.5 percent to 17.8 percent (excluding approximately 2.5 percent for other deductions, net and interest) and pretax margin of approximately 15.0 percent to 15.3 percent. Earnings per share is forecast in the range of $3.35 to $3.40. Expectations are for operating cash flow of approximately $3.3 billion to $3.4 billion and capital expenditures of approximately $0.7 billion.

Statements in this report that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later developments. These risks and uncertainties include economic and currency conditions, market demand, pricing, and competitive and technological factors, among others which are set forth in the “Risk Factors” of Part I, Item 1, and the "Safe Harbor Statement" of Exhibit 13, to the Company's Annual Report on Form 10-K for the year ended September 30, 2011, which are hereby incorporated by reference.

Item 4. Controls and Procedures 

Emerson maintains a system of disclosure controls and procedures which are designed to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to management, including the Company’s certifying officers, as appropriate to allow timely decisions regarding required disclosure. Based on an evaluation performed, the Company's certifying officers have concluded that the disclosure controls and procedures were effective as of June 30, 2012, to provide reasonable assurance of the achievement of these objectives.

Notwithstanding the foregoing, there can be no assurance that the Company's disclosure controls and procedures will detect or uncover all failures of persons within the Company and its consolidated subsidiaries to report material information otherwise required to be set forth in the Company's reports.

There was no change in the Company's internal control over financial reporting during the quarter ended June 30, 2012 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.  

PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c) Issuer Purchases of Equity Securities (shares in 000s).

Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 2012	530	$	50.88	530	23,665
May 2012	1,860	$	47.81	1,860	21,805
June 2012	2,010	$	45.80	2,010	19,795
Total	4,400	$	47.26	4,400	19,795

The Company’s Board of Directors authorized the repurchase of up to 80 million shares under the May 2008 program.

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EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

Item 6. Exhibits

(a) Exhibits (Listed by numbers corresponding to the Exhibit Table of Item 601 in Regulation S-K). 

12	Ratio of Earnings to Fixed Charges.
31	Certifications pursuant to Exchange Act Rule 13a-14(a).
32	Certifications pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350.
101	Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Earnings for the three and nine months ended June 30, 2011 and 2012, (ii) Consolidated Balance Sheets at September 30, 2011 and June 30, 2012, (iii) Consolidated Statements of Cash Flows for the nine months ended June 30, 2011 and 2012, and (iv) Notes to Consolidated Financial Statements for the three and nine months ended June 30, 2012.

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EMERSON ELECTRIC CO. AND SUBSIDIARIES FORM 10-Q

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

		EMERSON ELECTRIC CO.
Date:	August 8, 2012	By	/s/ Frank J. Dellaquila
			Frank J. Dellaquila
			Senior Vice President and Chief Financial Officer
			(on behalf of the registrant and as Chief Financial Officer)

INDEX TO EXHIBITS

Exhibit No.	Exhibit
12	Ratio of Earnings to Fixed Charges.
31	Certifications pursuant to Exchange Act Rule 13a-14(a).
32	Certifications pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350.
101	Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Earnings for the three and nine months ended June 30, 2011 and 2012, (ii) Consolidated Balance Sheets at September 30, 2011 and June 30, 2012, (iii) Consolidated Statements of Cash Flows for the nine months ended June 30, 2011 and 2012, and (iv) Notes to Consolidated Financial Statements for the three and nine months ended June 30, 2012.

19

EX-12

Exhibit 12

EMERSON ELECTRIC CO. AND SUBSIDIARIES

COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES

(Dollars in Millions)

							Nine Months Ended June 30, 2012
	Year Ended September 30,
	2007		2008	2009	2010	2011
Earnings:
Earnings from continuing operations before income taxes	$	3,107	3,645	2,450	2,879	3,631	2,522
Fixed charges	356		351	362	398	370	274
Earnings, as defined	$	3,463	3,996	2,812	3,277	4,001	2,796
Fixed Charges:
Interest Expense	$	261	244	244	280	246	181
One-third of all rents	95		107	118	118	124	93
Total fixed charges	$	356	351	362	398	370	274
Ratio of Earnings to Fixed Charges	9.7X		11.4X	7.8X	8.2X	10.8X	10.2X

EX-31

Exhibit 31

Certification

I, D. N. Farr, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Emerson Electric Co.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 8, 2012	/s/ D. N. Farr
		D. N. Farr
		Chairman of the Board and
		Chief Executive Officer
		Emerson Electric Co.

Certification

I, F. J. Dellaquila, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Emerson Electric Co.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors: 

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and 

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	August 8, 2012	/s/ F. J. Dellaquila
		F. J. Dellaquila
		Senior Vice President and
		Chief Financial Officer
		Emerson Electric Co.

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

EXCHANGE ACT RULE 13a-14(b) AND

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Emerson Electric Co. (the "Company") on Form 10-Q for the period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, D. N. Farr, certify, to the best of my knowledge, pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/	D. N. Farr
	D. N. Farr
	Chairman of the Board and
	Chief Executive Officer
	Emerson Electric Co.
	August 8, 2012

CERTIFICATION PURSUANT TO

EXCHANGE ACT RULE 13a-14(b) AND

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Emerson Electric Co. (the "Company") on Form 10-Q for the period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, F. J. Dellaquila, certify, to the best of my knowledge, pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/	F. J. Dellaquila
	F. J. Dellaquila
	Senior Vice President and
	Chief Financial Officer
	Emerson Electric Co.
	August 8, 2012

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Financial Instruments (Schedule Of Derivative Instruments) (Details) (USD $)	3 Months Ended		9 Months Ended
	Jun. 30, 2012 lb	Jun. 30, 2011	Jun. 30, 2012 lb	Jun. 30, 2011
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) to Earnings	$ 7,000,000	$ 34,000,000	$ 4,000,000	$ 85,000,000
Gain (Loss) to OCI	(34,000,000)	3,000,000	57,000,000	48,000,000
Notional value of foreign currency hedges	2,000,000,000		2,000,000,000
Weight In Pounds Of The Copper And Aluminum Commodity Hedges Outstanding	79,000,000		79,000,000
Foreign Currency Derivatives Receiving Deferral Accounting - Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) to Earnings	(1,000,000)	2,000,000	1,000,000	8,000,000
Gain (Loss) to OCI	0	0	6,000,000	6,000,000
Foreign Currency Derivatives Receiving Deferral Accounting - Cost Of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) to Earnings	0	6,000,000	2,000,000	16,000,000
Gain (Loss) to OCI	(13,000,000)	5,000,000	22,000,000	15,000,000
Commodity Derivatives Receiving Deferral Accounting - Cost Of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) to Earnings	(9,000,000)	19,000,000	(31,000,000)	48,000,000
Gain (Loss) to OCI	(21,000,000)	(2,000,000)	29,000,000	27,000,000
Foreign Currency Derivatives Not Receiving Deferral Accounting - Other Deductions, Net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) to Earnings	$ 17,000,000	$ 7,000,000	$ 32,000,000	$ 13,000,000

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Weighted Average Common Shares (Schedule Of Basic And Diluted Earnings Per Share Reconciliation) (Details) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Weighted Average Common Shares [Abstract]
Basic shares outstanding	730.4	748.7	732.5	751.0
Dilutive shares	3.9	4.6	4.0	5.2
Diluted shares outstanding	734.3	753.3	736.5	756.2

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Equity

9 Months Ended

Jun. 30, 2012

Equity [Abstract]

Equity

The change in equity for the first nine months of 2012 is shown below (in millions):  

	Common Stockholders' Equity			Noncontrolling Interests in Subsidiaries		Total Equity
September 30, 2011	$	10,399		152		10,551
Net earnings	1,686			38		1,724
Other comprehensive income/(loss)	(205		)	(3	)	(208	)
Cash dividends	(881		)	(37	)	(918	)
Net treasury stock purchases and other	(480		)	(4	)	(484	)
June 30, 2012	$	10,519		146		10,665

Comprehensive income, net of applicable income taxes, for the three and nine months ended June 30, 2012 and 2011 is summarized as follows (in millions):

	Three Months Ended June 30,					Nine Months Ended June 30,
	2011			2012		2011		2012
Net earnings	$	698		787		1,756		1,724
Foreign currency translation	89			(256	)	370		(262	)
Cash flow hedges and other	(16		)	(16	)	(17	)	54
	771			515		2,109		1,516
Less: Noncontrolling interests	12			16		38		35
Amounts attributable to common stockholders	$	759		499		2,071		1,481

The changes in foreign currency translation are primarily due to significant strengthening of the U.S. dollar in the third quarter of 2012, particularly compared to European currencies.The amount attributable to noncontrolling interests in subsidiaries consists primarily of earnings, plus foreign currency translation.

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Other Deductions, Net (Schedule Of Other Deductions, Net) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Other Deductions, Net [Abstract]
Amortization of intangibles	$ 67	$ 64	$ 182	$ 195
Rationalization of operations, expense	35	21	89	54
Other	25	2	58	39
Gains, net	(43)	0	(50)	(22)
Total	84	87	279	266
Dumping duties received	37		43
Joint Venture Ownership Acquisition Gain				$ 15

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Pension And Postretirement Plan Expenses (Summary Of Net Periodic Pension And Net Postretirement Plan Expenses) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Pension [Member]
Pension And Postretirement Plan Expenses [Line Items]
Service cost	$ 21	$ 21	$ 62	$ 62
Interest cost	56	55	167	166
Expected return on plan assets	(80)	(82)	(239)	(246)
Net amortization	46	42	138	127
Total	43	36	128	109
Postretirement [Member]
Pension And Postretirement Plan Expenses [Line Items]
Service cost	1	1	2	3
Interest cost	4	4	12	13
Net amortization	(3)	(2)	(9)	(6)
Total	$ 2	$ 3	$ 5	$ 10

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Rationalization Of Operations (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Rationalization Of Operations [Line Items]
Rationalization of operations, expense	$ 35	$ 21	$ 89	$ 54
Rationalization of operations, liability	31		31			30
Rationalization of operations, paid/utilized during the period			88
Expected fiscal year rationalization expense					125
Severance and benefits [Member]
Rationalization Of Operations [Line Items]
Rationalization of operations, expense			47
Rationalization of operations, liability	24		24			24
Rationalization of operations, paid/utilized during the period			47
Lease and other contract terminations [Member]
Rationalization Of Operations [Line Items]
Rationalization of operations, expense			9
Rationalization of operations, liability	5		5			3
Rationalization of operations, paid/utilized during the period			7
Fixed asset write downs [Member]
Rationalization Of Operations [Line Items]
Rationalization of operations, expense			2
Rationalization of operations, liability	0		0			0
Rationalization of operations, paid/utilized during the period			2
Vacant facility and other shutdown costs [Member]
Rationalization Of Operations [Line Items]
Rationalization of operations, expense			9
Rationalization of operations, liability	2		2			2
Rationalization of operations, paid/utilized during the period			9
Start-up and moving costs [Member]
Rationalization Of Operations [Line Items]
Rationalization of operations, expense			22
Rationalization of operations, liability	0		0			1
Rationalization of operations, paid/utilized during the period			23
Process Management [Member]
Rationalization Of Operations [Line Items]
Rationalization of operations, expense	4	4	13	8
Industrial Automation [Member]
Rationalization Of Operations [Line Items]
Rationalization of operations, expense	13	8	21	18
Network Power [Member]
Rationalization Of Operations [Line Items]
Rationalization of operations, expense	14	6	40	16
Climate Technologies [Member]
Rationalization Of Operations [Line Items]
Rationalization of operations, expense	2	2	8	8
Commercial & Residential Solutions [Member]
Rationalization Of Operations [Line Items]
Rationalization of operations, expense	$ 2	$ 1	$ 7	$ 4

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Other Financial Information (Details) (USD $)	Jun. 30, 2012	Sep. 30, 2011
Other Financial Information [Line Items]
Finished products	$ 845,000,000	$ 742,000,000
Raw materials and work in process	1,522,000,000	1,358,000,000
Total Inventories	2,367,000,000	2,100,000,000
Property, plant and equipment, at cost	8,821,000,000	8,731,000,000
Less: Accumulated depreciation	5,403,000,000	5,294,000,000
Total Property, plant and equipment, net	3,418,000,000	3,437,000,000
Goodwill	8,739,000,000	8,771,000,000
Market Value	34,000,000,000
Stockholders' Equity Attributable to Parent	10,519,000,000	10,399,000,000
Goodwill for certain business units where fair value does not exceed the carrying value by significant amounts.	1,000,000,000
Employee compensation	609,000,000	640,000,000
Customer advanced payments	387,000,000	385,000,000
Product warranty	197,000,000	211,000,000
Deferred income taxes	714,000,000	764,000,000
Pension plans	688,000,000	736,000,000
Postretirement plans, excluding current portion	348,000,000	361,000,000
Other	726,000,000	660,000,000
Total Other liabilities	2,476,000,000	2,521,000,000
Process Management [Member]
Other Financial Information [Line Items]
Goodwill	2,356,000,000	2,368,000,000
Industrial Automation [Member]
Other Financial Information [Line Items]
Goodwill	1,332,000,000	1,393,000,000
Network Power [Member]
Other Financial Information [Line Items]
Goodwill	4,017,000,000	3,990,000,000
Climate Technologies [Member]
Other Financial Information [Line Items]
Goodwill	503,000,000	483,000,000
Commercial & Residential Solutions [Member]
Other Financial Information [Line Items]
Goodwill	$ 531,000,000	$ 537,000,000

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Weighted Average Common Shares

9 Months Ended

Jun. 30, 2012

Weighted Average Common Shares [Abstract]

Weighted Average Common Shares

Reconciliations of weighted average shares for basic and diluted earnings per common share follow (in millions). Earnings allocated to participating securities were inconsequential.

	Three Months Ended June 30,		Nine Months Ended June 30,
	2011	2012	2011	2012
Basic shares outstanding	748.7	730.4	751.0	732.5
Dilutive shares	4.6	3.9	5.2	4.0
Diluted shares outstanding	753.3	734.3	756.2	736.5

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Segment Reporting (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012 employees	Jun. 30, 2011
Segment Reporting Information [Line Items]
Segment Sales	$ 6,715	$ 6,506	$ 18,259	$ 18,229
Segment Earnings	1,242	1,097	2,869	2,904
Net sales	6,484	6,288	17,712	17,677
Earnings before income taxes	1,155	992	2,522	2,538
Change in stock compensation expense	(23)		(55)
Interest expense	(51)	(56)	(167)	(174)
Charge for the elimination of post-65 supplemental retiree medical benefits			17
Approximate number of active employees affected by elimination of post-65 supplemental retiree medical benefits			8,000
Joint Venture Ownership Acquisition Gain				15
Purchase Accounting Adjustments				15
Process Management [Member]
Segment Reporting Information [Line Items]
Segment Sales	2,122	1,789	5,518	4,984
Segment Earnings	490	366	1,021	952
Industrial Automation [Member]
Segment Reporting Information [Line Items]
Segment Sales	1,378	1,391	3,891	3,909
Segment Earnings	259	230	644	625
Intersegment sales	206	198	479	500
Network Power [Member]
Segment Reporting Information [Line Items]
Segment Sales	1,588	1,683	4,632	4,968
Segment Earnings	163	176	419	508
Climate Technologies [Member]
Segment Reporting Information [Line Items]
Segment Sales	1,146	1,171	2,805	2,995
Segment Earnings	232	229	490	539
Commercial & Residential Solutions [Member]
Segment Reporting Information [Line Items]
Segment Sales	481	472	1,413	1,373
Segment Earnings	98	96	295	280
Differences In Accounting Methods [Member]
Segment Reporting Information [Line Items]
Differences in accounting methods	59	60	163	169
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Segment Earnings	(95)	(109)	(343)	(361)
Eliminations Interest [Member]
Segment Reporting Information [Line Items]
Segment Sales	(231)	(218)	(547)	(552)
Interest expense	$ (51)	$ (56)	$ (167)	$ (174)

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Consolidated Statements Of Earnings (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Statement [Abstract]
Net sales	$ 6,484	$ 6,288	$ 17,712	$ 17,677
Costs and expenses:
Cost of sales	3,856	3,790	10,693	10,710
Selling, general and administrative expenses	1,338	1,363	4,051	3,989
Other deductions, net	84	87	279	266
Interest expense (net of interest income of $5, $6, $14, and $17, respectively)	51	56	167	174
Earnings before income taxes	1,155	992	2,522	2,538
Income taxes	368	294	798	782
Net earnings	787	698	1,724	1,756
Less: Noncontrolling interests in earnings of subsidiaries	17	15	38	37
Net earnings common stockholders	$ 770	$ 683	$ 1,686	$ 1,719
Basic earnings per share common stockholders	$ 1.05	$ 0.91	$ 2.29	$ 2.28
Diluted earnings per share common stockholders	$ 1.04	$ 0.90	$ 2.28	$ 2.26
Cash dividends per common share	$ 0.40	$ 0.35	$ 1.20	$ 1.04

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Consolidated Statements Of Cash Flows (USD $) In Millions, unless otherwise specified	9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating activities
Net earnings	$ 1,724	$ 1,756
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	617	650
Changes in operating working capital	(616)	(469)
Pension funding	(122)	(100)
Other	139	141
Net cash provided by operating activities	1,742	1,978
Investing activities
Capital expenditures	(428)	(403)
Purchases of businesses, net of cash and equivalents acquired	(178)	(228)
Other	(40)	(42)
Net cash used in investing activities	(646)	(673)
Financing activities
Net increase in short-term borrowings	902	198
Principal payments on long-term debt	(255)	(54)
Dividends paid	(881)	(781)
Purchases of treasury stock	(527)	(495)
Other	(37)	(32)
Net cash used in financing activities	(798)	(1,164)
Effect of exchange rate changes on cash and equivalents	(58)	48
Increase in cash and equivalents	240	189
Beginning cash and equivalents	2,052	1,592
Ending cash and equivalents	2,292	1,781
Changes in operating working capital
Receivables	(179)	(294)
Inventories	(304)	(240)
Other current assets	(74)	55
Accounts payable	8	125
Accrued expenses	(84)	(135)
Income taxes	17	20
Total changes in operating working capital	$ (616)	$ (469)

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Acquisitions and Divestitures (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended		3 Months Ended	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Mar. 31, 2012 Avtron Loadbank and Marine Controls Business [Member]	Sep. 30, 2011 Avtron Loadbank and Marine Controls Business [Member]	Sep. 30, 2011 Knaack [Member]
Acquisitions and Divestitures [Line Items]
Percent of Entity Acquired					100.00%
Total Consideration Paid To Acquire Businesses					$ 170
Business Acquisition, Revenue Reported by Acquired Entity for Last Annual Period						100
Net sales	$ 6,484	$ 6,288	$ 17,712	$ 17,677			$ 100

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Other Financial Information (Tables)

9 Months Ended

Jun. 30, 2012

Other Financial Information [Abstract]

Inventories

	Sept 30, 2011		June 30, 2012
Inventories
Finished products	$	742	845
Raw materials and work in process	1,358		1,522
Total	$	2,100	2,367

Property, Plant And Equipment, Net

Property, plant and equipment, net
Property, plant and equipment, at cost	$	8,731	8,821
Less: Accumulated depreciation	5,294		5,403
Total	$	3,437	3,418

Goodwill By Business Segment

Goodwill by business segment
Process Management	$	2,368	2,356
Industrial Automation	1,393		1,332
Network Power	3,990		4,017
Climate Technologies	483		503
Commercial & Residential Solutions	537		531
Total	$	8,771	8,739

Accrued Expenses

	Sept 30, 2011		June 30, 2012
Accrued expenses include the following:
Employee compensation	$	640	609
Customer advanced payments	$	385	387
Product warranty	$	211	197

Other Liabilities

Other liabilities
Deferred income taxes	$	764	714
Pension plans	736		688
Postretirement plans, excluding current portion	361		348
Other	660		726
Total	$	2,521	2,476

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Financial Instruments (Tables)

9 Months Ended

Jun. 30, 2012

Financial Instruments [Abstract]

Schedule Of Derivative Instruments

		Gain (Loss) to Earnings							Gain (Loss) to OCI
		3rd Quarter				Nine Months			3rd Quarter				Nine Months
		2011		2012		2011	2012		2011		2012		2011	2012
Deferred	Location
Foreign currency	Sales	$	2	(1	)	8	1		—		—		6	6
Foreign currency	Cost of sales	6		—		16	2		5		(13	)	15	22
Commodity	Cost of sales	19		(9	)	48	(31	)	(2	)	(21	)	27	29
Not Deferred
Foreign currency	Other deductions, net	7		17		13	32
		$	34	7		85	4		3		(34	)	48	57

Fair Value Measurements

	September 30, 2011				June 30, 2012
	Assets		Liabilities		Assets	Liabilities
Foreign Currency	$	17	(48	)	33	(21	)
Commodity	$	—	(83	)	2	(25	)

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Basis Of Presentation And Recently Issued Accounting Pronouncements

9 Months Ended

Jun. 30, 2012

Basis Of Presentation And Recently Issued Accounting Pronouncements [Abstract]

Basis Of Presentation And Recently Issued Accounting Pronouncements

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary for a fair presentation of operating results for the interim periods presented. Adjustments consist of normal and recurring accruals. The consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required for annual financial statements presented in conformity with U.S. generally accepted accounting principles (GAAP). For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2011. The former Tools and Storage segment has been renamed Commercial & Residential Solutions; this change had no affect on reported results or the composition of any business segment.

Effective January 1, 2012, the Company adopted updates to ASC 820, Fair Value Measurement, which established common fair value measurement and disclosure requirements for U.S. GAAP and International Financial Reporting Standards. Adoption had an inconsequential impact on the Company's financial statements.

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Consolidated Statement of Earnings (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Statement [Abstract]
Interest Income	$ 5	$ 6	$ 14	$ 17

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Weighted Average Common Shares (Tables)

9 Months Ended

Jun. 30, 2012

Weighted Average Common Shares [Abstract]

Schedule Of Basic And Diluted Earnings Per Share Reconciliation

	Three Months Ended June 30,		Nine Months Ended June 30,
	2011	2012	2011	2012
Basic shares outstanding	748.7	730.4	751.0	732.5
Dilutive shares	4.6	3.9	5.2	4.0
Diluted shares outstanding	753.3	734.3	756.2	736.5

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Document and Entity Information Document	9 Months Ended
	Jun. 30, 2012	Jul. 31, 2012
Entity Information [Line Items]
Entity Registrant Name	EMERSON ELECTRIC CO
Entity Central Index Key	0000032604
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		727,323,739

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Equity (Tables)

9 Months Ended

Jun. 30, 2012

Equity [Abstract]

Schedule of Stockholders Equity

	Common Stockholders' Equity			Noncontrolling Interests in Subsidiaries		Total Equity
September 30, 2011	$	10,399		152		10,551
Net earnings	1,686			38		1,724
Other comprehensive income/(loss)	(205		)	(3	)	(208	)
Cash dividends	(881		)	(37	)	(918	)
Net treasury stock purchases and other	(480		)	(4	)	(484	)
June 30, 2012	$	10,519		146		10,665

Comprehensive Income, Net Of Applicable Income Taxes

	Three Months Ended June 30,					Nine Months Ended June 30,
	2011			2012		2011		2012
Net earnings	$	698		787		1,756		1,724
Foreign currency translation	89			(256	)	370		(262	)
Cash flow hedges and other	(16		)	(16	)	(17	)	54
	771			515		2,109		1,516
Less: Noncontrolling interests	12			16		38		35
Amounts attributable to common stockholders	$	759		499		2,071		1,481

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Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Sep. 30, 2011
ASSETS
Cash and equivalents	$ 2,292	$ 2,052
Receivables, less allowances of $96 and $104, respectively	4,601	4,502
Inventories	2,367	2,100
Other current assets	743	691
Total current assets	10,003	9,345
Property, plant and equipment, net	3,418	3,437
Other assets
Goodwill	8,739	8,771
Other intangible assets	1,856	1,969
Other	310	339
Total other assets	10,905	11,079
Total assets	24,326	23,861
LIABILITIES AND EQUITY
Short-term borrowings and current maturities of long-term debt	2,060	877
Accounts payable	2,617	2,677
Accrued expenses	2,561	2,772
Income taxes	158	139
Total current liabilities	7,396	6,465
Long-term debt	3,789	4,324
Other liabilities	2,476	2,521
Equity [Abstract]
Preferred stock, $2.50 par value per share; Authorized, 5,400,000 shares; issued, none	0	0
Common stock, $0.50 par value per share; Authorized, 1,200,000,000 shares; issued, 953,354,012 shares; outstanding, 729,345,876 shares and 738,877,768 shares, respectively	477	477
Additional paid-in capital	317	317
Retained earnings	18,115	17,310
Accumulated other comprehensive income	(767)	(562)
Cost of common stock in treasury, 224,008,136 shares and 214,476,244 shares, respectively	(7,623)	(7,143)
Common stockholders' equity	10,519	10,399
Noncontrolling interests in subsidiaries	146	152
Total equity	10,665	10,551
Total liabilities and equity	$ 24,326	$ 23,861

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Rationalization Of Operations

9 Months Ended

Jun. 30, 2012

Restructuring Charges [Abstract]

Rationalization Of Operations

Rationalization of operations expense reflects costs associated with the Company’s efforts to continually improve operational efficiency and deploy assets globally in order to remain competitive on a worldwide basis. Details of the change in the liability for rationalization during the nine months ended June 30, 2012 follow (in millions):

	Sept 30, 2011		Expense	Paid/Utilized	June 30, 2012
Severance and benefits	$	24	47	47	24
Lease and other contract terminations	3		9	7	5
Fixed asset write-downs	—		2	2	—
Vacant facility and other shutdown costs	2		9	9	2
Start-up and moving costs	1		22	23	—
Total	$	30	89	88	31

Rationalization of operations expense by segment is summarized as follows (in millions):

	Three Months Ended June 30,			Nine Months Ended June 30,
	2011		2012	2011	2012
Process Management	$	4	4	8	13
Industrial Automation	8		13	18	21
Network Power	6		14	16	40
Climate Technologies	2		2	8	8
Commercial & Residential Solutions	1		2	4	7
Total	$	21	35	54	89

The Company expects to incur full year 2012 rationalization expense of approximately $125 million, which includes $89 million incurred to date, as well as costs to complete actions initiated before the end of the third quarter and actions anticipated to be approved and initiated during the remainder of the year. Costs incurred during the nine months of 2012 included severance and other benefits associated with forcecount reduction, mainly for Network Power in Asia, Europe and North America. Start-up and moving costs incurred to redeploy assets to best cost locations and expand geographically to directly serve local markets were spread across all segments. Vacant facilities and other shutdown costs increased, primarily in Network Power and Industrial Automation.

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Other Deductions, Net

9 Months Ended

Jun. 30, 2012

Other Deductions, Net [Abstract]

Other Deductions, Net

Other deductions, net are summarized as follows (in millions):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2011		2012		2011		2012
Amortization of intangibles	$	64	67		195		182
Rationalization of operations	21		35		54		89
Other	2		25		39		58
Gains, net	—		(43	)	(22	)	(50	)
Total	$	87	84		266		279

Gains, net reflects $37 million for payments received in the third quarter related to dumping duties collected by U.S. Customs for 2006 through 2010, but not distributed to affected domestic producers pending resolution of certain legal challenges to the U.S. Continued Dumping and Subsidy Offset Act. Overall, this gain was partially offset by higher foreign currency transaction losses and increased rationalization expense. The nine months increase in other deductions, net is primarily due to higher rationalization expense and higher foreign currency transaction losses, partially offset by higher gains, including $43 million for payments received related to dumping duties, and lower amortization expense. Gains, net for the nine months ended June 30, 2011 included $15 million related to the acquisition of full ownership of a Process Management joint venture in India.

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Segment Reporting (Tables)

9 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Results Of Operations By Business Segment

	Three Months Ended June 30,									Nine Months Ended June 30,
	Sales					Earnings				Sales				Earnings
	2011			2012		2011		2012		2011		2012		2011		2012
Process Management	$	1,789		2,122		366		490		4,984		5,518		952		1,021
Industrial Automation	1,391			1,378		230		259		3,909		3,891		625		644
Network Power	1,683			1,588		176		163		4,968		4,632		508		419
Climate Technologies	1,171			1,146		229		232		2,995		2,805		539		490
Commercial & Residential Solutions	472			481		96		98		1,373		1,413		280		295
	6,506			6,715		1,097		1,242		18,229		18,259		2,904		2,869
Differences in accounting methods						60		59						169		163
Corporate and other						(109	)	(95	)					(361	)	(343	)
Eliminations/Interest	(218		)	(231	)	(56	)	(51	)	(552	)	(547	)	(174	)	(167	)
Total	$	6,288		6,484		992		1,155		17,677		17,712		2,538		2,522

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Pension And Postretirement Plan Expenses (Tables)

9 Months Ended

Jun. 30, 2012

Pension And Postretirement Plan Expenses [Abstract]

Summary Of Net Periodic Pension And Net Postretirement Plan Expenses

	Three Months Ended June 30,									Nine Months Ended June 30,
	Pension					Postretirement				Pension				Postretirement
	2011			2012		2011		2012		2011		2012		2011		2012
Service cost	$	21		21		1		1		62		62		3		2
Interest cost	55			56		4		4		166		167		13		12
Expected return on plan assets	(82		)	(80	)					(246	)	(239	)
Net amortization	42			46		(2	)	(3	)	127		138		(6	)	(9	)
Total	$	36		43		3		2		109		128		10		5

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Financial Instruments

9 Months Ended

Jun. 30, 2012

Financial Instruments [Abstract]

Financial Instruments

Following is a discussion regarding the Company’s use of financial instruments:

Hedging Activities – As of June 30, 2012, the notional amount of foreign currency hedge positions was approximately $2.0 billion, while commodity hedge contracts totaled approximately 79 million pounds of copper and aluminum. All derivatives receiving deferral accounting are cash flow hedges. The majority of hedging gains and losses deferred as of June 30, 2012 are expected to be recognized over the next 12 months as the underlying forecasted transactions occur. The following amounts are included in earnings and Other Comprehensive Income (OCI) for the three and nine months ended June 30, 2012 and 2011 (in millions):

		Gain (Loss) to Earnings							Gain (Loss) to OCI
		3rd Quarter				Nine Months			3rd Quarter				Nine Months
		2011		2012		2011	2012		2011		2012		2011	2012
Deferred	Location
Foreign currency	Sales	$	2	(1	)	8	1		—		—		6	6
Foreign currency	Cost of sales	6		—		16	2		5		(13	)	15	22
Commodity	Cost of sales	19		(9	)	48	(31	)	(2	)	(21	)	27	29
Not Deferred
Foreign currency	Other deductions, net	7		17		13	32
		$	34	7		85	4		3		(34	)	48	57

Regardless of whether derivatives receive deferral accounting, the Company expects hedging gains or losses to be essentially offset by losses or gains on the related underlying exposures. The amounts ultimately recognized will differ from those presented above for open positions, which remain subject to ongoing market price fluctuations until settlement. Derivatives receiving deferral accounting are highly effective, no amounts were excluded from the assessment of hedge effectiveness, and hedge ineffectiveness was immaterial for the three and nine months ended June 30, 2012 and 2011.

Fair Value Measurements – Valuations for all derivatives and the Company's long-term debt fall within Level 2 of the GAAP valuation hierarchy. At June 30, 2012, the fair value of commodity contracts and foreign currency contracts were reported in accrued expenses and other current assets, respectively. Collateral of $22 million was posted with counterparties as of June 30, 2012. The maximum collateral that could have been required was $23 million. As of June 30, 2012, the fair value of long-term debt was $5,079 million, which exceeded the carrying value by $730 million. Valuations of derivative contract positions are summarized below (in millions):  

	September 30, 2011				June 30, 2012
	Assets		Liabilities		Assets	Liabilities
Foreign Currency	$	17	(48	)	33	(21	)
Commodity	$	—	(83	)	2	(25	)

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Other Financial Information

9 Months Ended

Jun. 30, 2012

Other Financial Information [Abstract]

Other Financial Information

Other Financial Information (in millions):

	Sept 30, 2011		June 30, 2012
Inventories
Finished products	$	742	845
Raw materials and work in process	1,358		1,522
Total	$	2,100	2,367

Property, plant and equipment, net
Property, plant and equipment, at cost	$	8,731	8,821
Less: Accumulated depreciation	5,294		5,403
Total	$	3,437	3,418

Goodwill by business segment
Process Management	$	2,368	2,356
Industrial Automation	1,393		1,332
Network Power	3,990		4,017
Climate Technologies	483		503
Commercial & Residential Solutions	537		531
Total	$	8,771	8,739

Changes in goodwill since September 30, 2011 are primarily due to foreign currency translation and two small acquisitions in the second quarter. Valuations of certain acquired assets and liabilities are in-process and purchase price allocations for acquisitions are subject to refinement.

As of June 30, 2012, the Company's total market value based on its exchange-traded stock price was $34 billion and common stockholders' equity was $11 billion. As discussed in the 2011 Annual Report, the Company's annual goodwill impairment assessment identified certain units for which fair value exceeded the carrying value of the businesses by small margins. During fiscal 2012, demand in certain end markets has slowed as global business conditions have weakened. In the fourth quarter, the Company began its process to develop business plans for fiscal 2013 and beyond, including any potential changes in strategy, which will be used in the fiscal 2012 assessment. The operations that will be a focus of the assessment have goodwill totaling in excess of $1 billion, and include the embedded computing and power business in the Network Power segment and the subsea oil and gas devices and software business in the Process Management segment.

	Sept 30, 2011		June 30, 2012
Accrued expenses include the following:
Employee compensation	$	640	609
Customer advanced payments	$	385	387
Product warranty	$	211	197

Other liabilities
Deferred income taxes	$	764	714
Pension plans	736		688
Postretirement plans, excluding current portion	361		348
Other	660		726
Total	$	2,521	2,476

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Segment Reporting

9 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Segment Reporting

Summarized information about the Company's results of operations by business segment follows (in millions):

	Three Months Ended June 30,									Nine Months Ended June 30,
	Sales					Earnings				Sales				Earnings
	2011			2012		2011		2012		2011		2012		2011		2012
Process Management	$	1,789		2,122		366		490		4,984		5,518		952		1,021
Industrial Automation	1,391			1,378		230		259		3,909		3,891		625		644
Network Power	1,683			1,588		176		163		4,968		4,632		508		419
Climate Technologies	1,171			1,146		229		232		2,995		2,805		539		490
Commercial & Residential Solutions	472			481		96		98		1,373		1,413		280		295
	6,506			6,715		1,097		1,242		18,229		18,259		2,904		2,869
Differences in accounting methods						60		59						169		163
Corporate and other						(109	)	(95	)					(361	)	(343	)
Eliminations/Interest	(218		)	(231	)	(56	)	(51	)	(552	)	(547	)	(174	)	(167	)
Total	$	6,288		6,484		992		1,155		17,677		17,712		2,538		2,522

Industrial Automation intersegment sales for the third quarter ended June 30, 2012 and 2011 were $206 million and $198 million, respectively, and year-to-date, $479 million and $500 million. Corporate and other for the 2012 third quarter includes lower incentive stock compensation expense of $23 million. The year-to-date decrease in Corporate and other primarily reflects lower incentive stock compensation expense of $55 million, partially offset by a $17 million charge related to the elimination of post-65 supplemental retiree medical benefits for approximately 8,000 active employees and the absence of the $15 million India joint venture gain. In 2011, the India joint venture acquisition gain was offset by $15 million of acquisition-related costs.

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Acquisitions and Divestitures

9 Months Ended

Jun. 30, 2012

Acquisitions And Divestitures [Abstract]

Acquistions and Divestitures [Text Block]

In March 2012, the Company acquired one-hundred percent of Avtron Loadbank, a designer and manufacturer of high quality load banks and testing systems for power equipment industries, and a marine controls business which supplies controls and software solutions for optimal operation of refrigerated sea containers and marine boilers, for a total of $170 million. Avtron is reported in the Network Power segment while the marine controls business is reported in the Climate Technologies segment. Combined annual sales for the two companies were approximately $100 million in 2011.

The Company expects to complete the divestiture of its Knaack business unit in the fourth quarter. Knaack, a leading provider of premium secure storage solutions for job sites and work vehicles, has annual sales of approximately $100 million and is reported in the Commercial & Residential Solutions business segment.

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Financial Instruments (Fair Value Measurements) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Sep. 30, 2011
Derivatives, Fair Value [Line Items]
Collateral posted to counterparties	$ 22
Maximum collateral balance could have been required to post	23
Fair value of long-term debt	5,079
Fair value of long-term debt compared with carrying value	730
Foreign Currency Derivatives [Member]
Derivatives, Fair Value [Line Items]
Fair value of derivative assets	33	17
Fair value of derivative liabilities	(21)	(48)
Commodity Derivatives [Member]
Derivatives, Fair Value [Line Items]
Fair value of derivative assets	2	0
Fair value of derivative liabilities	$ (25)	$ (83)

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Rationalization Of Operations (Tables)

9 Months Ended

Jun. 30, 2012

Restructuring Charges [Abstract]

Change In Liability For Rationalization Costs

	Sept 30, 2011		Expense	Paid/Utilized	June 30, 2012
Severance and benefits	$	24	47	47	24
Lease and other contract terminations	3		9	7	5
Fixed asset write-downs	—		2	2	—
Vacant facility and other shutdown costs	2		9	9	2
Start-up and moving costs	1		22	23	—
Total	$	30	89	88	31

Rationalization Of Operations Expense By Segment

	Three Months Ended June 30,			Nine Months Ended June 30,
	2011		2012	2011	2012
Process Management	$	4	4	8	13
Industrial Automation	8		13	18	21
Network Power	6		14	16	40
Climate Technologies	2		2	8	8
Commercial & Residential Solutions	1		2	4	7
Total	$	21	35	54	89

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Equity (Schedule Of Change In Equity) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Total Equity [Line Items]
Beginning balance			$ 10,551
Net earnings	787	698	1,724	1,756
Other comprehensive income/(loss)			(208)
Cash dividends			(918)
Net treasury stock purchases and other			(484)
Ending balance	10,665		10,665
Common Stockholders' Equity [Member]
Total Equity [Line Items]
Beginning balance			10,399
Net earnings			1,686
Other comprehensive income/(loss)			(205)
Cash dividends			(881)
Net treasury stock purchases and other			(480)
Ending balance	10,519		10,519
Noncontrolling Interests In Subsidiaries [Member]
Total Equity [Line Items]
Beginning balance			152
Net earnings			38
Other comprehensive income/(loss)			(3)
Cash dividends			(37)
Net treasury stock purchases and other			(4)
Ending balance	$ 146		$ 146

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Consolidated Balance Sheet (Parenthetical) (USD $)	Jun. 30, 2012	Sep. 30, 2011
Statement of Financial Position [Abstract]
Allowance for Doubtful Accounts Receivable, Current	$ 96,000,000	$ 104,000,000
Preferred Stock, Par or Stated Value Per Share	$ 2.50	$ 2.50
Preferred Stock, Shares Authorized	5,400,000	5,400,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.50	$ 0.50
Common Stock, Shares Authorized	1,200,000,000	1,200,000,000
Common Stock, Shares, Issued	953,354,012	953,354,012
Common Stock, Shares, Outstanding	729,345,876	738,877,768
Treasury Stock, Shares	224,008,136	214,476,244

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Pension And Postretirement Plan Expenses

9 Months Ended

Jun. 30, 2012

Pension And Postretirement Plan Expenses [Abstract]

Pension And Postretirement Plan Expenses

Net periodic pension and net postretirement plan expenses are summarized as follows (in millions):

	Three Months Ended June 30,									Nine Months Ended June 30,
	Pension					Postretirement				Pension				Postretirement
	2011			2012		2011		2012		2011		2012		2011		2012
Service cost	$	21		21		1		1		62		62		3		2
Interest cost	55			56		4		4		166		167		13		12
Expected return on plan assets	(82		)	(80	)					(246	)	(239	)
Net amortization	42			46		(2	)	(3	)	127		138		(6	)	(9	)
Total	$	36		43		3		2		109		128		10		5

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Equity (Comprehensive Income, Net Of Applicable Income Taxes) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Equity [Abstract]
Net earnings	$ 787	$ 698	$ 1,724	$ 1,756
Foreign currency translation	(256)	89	(262)	370
Cash flow hedges and other	(16)	(16)	54	(17)
Total	515	771	1,516	2,109
Less: Noncontrolling interests	16	12	35	38
Amounts attributable to common stockholders	$ 499	$ 759	$ 1,481	$ 2,071

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Other Deductions, Net (Tables)

9 Months Ended

Jun. 30, 2012

Other Deductions, Net [Abstract]

Schedule Of Other Deductions, Net

	Three Months Ended June 30,				Nine Months Ended June 30,
	2011		2012		2011		2012
Amortization of intangibles	$	64	67		195		182
Rationalization of operations	21		35		54		89
Other	2		25		39		58
Gains, net	—		(43	)	(22	)	(50	)
Total	$	87	84		266		279