--------------------------------- (State or Other Jurisdiction of Incorporation) | ------------------- (Commission | --------------------------- (I.R.S. Employer Identification Number) | ||||||
File Number) |
------------------------------------------------ (Address of Principal Executive Offices) | ------------------ (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| ||||||||
NYSE Chicago | ||||||||
Exhibit Number | Description of Exhibits | |||||||
99.1 | ||||||||
99.2 | ||||||||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
EMERSON ELECTRIC CO. (Registrant) | |||||||||||
Date: | May 8, 2024 | By: | /s/ John A. Sperino | ||||||||
John A. Sperino Vice President and Assistant Secretary |
(dollars in millions, except per share) | 2023 Q2 | 2024 Q2 | Change | ||||||||||||||
Underlying Orders2 | (1)% | ||||||||||||||||
Net Sales | $3,756 | $4,376 | 17% | ||||||||||||||
Underlying Sales3 | 8% | ||||||||||||||||
Pretax Earnings | $639 | $652 | |||||||||||||||
Margin | 17.0% | 14.9% | (210) bps | ||||||||||||||
Adjusted Segment EBITA4 | $924 | $1,139 | |||||||||||||||
Margin | 24.6% | 26.0% | 140 bps | ||||||||||||||
GAAP Earnings Per Share | $0.92 | $0.87 | (5)% | ||||||||||||||
Adjusted Earnings Per Share5 | $1.09 | $1.36 | 25% | ||||||||||||||
Operating Cash Flow | $575 | $757 | 32% | ||||||||||||||
Free Cash Flow | $513 | $675 | 32% |
2024 Q3 | 2024 | |||||||
Net Sales Growth | 11% - 12.5% | 15% - 16% | ||||||
Underlying Sales Growth | 3% - 4.5% | 5.5% - 6.5% | ||||||
Earnings Per Share | $0.92 - $0.96 | $2.98 - $3.08 | ||||||
Amortization of Intangibles | ~$0.36 | ~$1.43 | ||||||
Restructuring and Related Costs | ~$0.07 | ~$0.32 | ||||||
Loss on Copeland Equity Method Investment | ~$0.02 | ~$0.19 | ||||||
Amortization of Acquisition-related Inventory Step-up | --- | $0.38 | ||||||
Acquisition / Divestiture Fees and Related Costs | ~$0.01 | ~$0.23 | ||||||
Divestiture Loss / (Gain), net | --- | ($0.03) | ||||||
Discrete Tax Benefits | --- | ($0.10) | ||||||
Adjusted Earnings Per Share | $1.38 - $1.42 | $5.40 - $5.50 | ||||||
Operating Cash Flow | ~$3.1B | |||||||
Free Cash Flow | ~$2.7B |
Investors: | Media: | ||||
Colleen Mettler | Joseph Sala / Greg Klassen | ||||
(314) 553-2197 | Joele Frank, Wilkinson Brimmer Katcher | ||||
(212) 355-4449 |
Table 1 | |||||||||||||||||||||||
EMERSON AND SUBSIDIARIES | |||||||||||||||||||||||
CONSOLIDATED OPERATING RESULTS | |||||||||||||||||||||||
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) | |||||||||||||||||||||||
Quarter Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
2023 | 2024 | 2023 | 2024 | ||||||||||||||||||||
Net sales | $ | 3,756 | $ | 4,376 | $ | 7,129 | $ | 8,493 | |||||||||||||||
Cost of sales | 1,955 | 2,092 | 3,708 | 4,293 | |||||||||||||||||||
SG&A expenses | 1,000 | 1,296 | 2,030 | 2,573 | |||||||||||||||||||
Gain on subordinated interest | — | (79) | — | (79) | |||||||||||||||||||
Other deductions, net | 109 | 389 | 229 | 876 | |||||||||||||||||||
Interest expense, net | 53 | 57 | 101 | 101 | |||||||||||||||||||
Interest income from related party1 | — | (31) | — | (62) | |||||||||||||||||||
Earnings from continuing operations before income taxes | 639 | 652 | 1,061 | 791 | |||||||||||||||||||
Income taxes | 134 | 149 | 232 | 156 | |||||||||||||||||||
Earnings from continuing operations | 505 | 503 | 829 | 635 | |||||||||||||||||||
Discontinued operations, net of tax | 265 | — | 2,267 | — | |||||||||||||||||||
Net earnings | 770 | 503 | 3,096 | 635 | |||||||||||||||||||
Less: Noncontrolling interests in subsidiaries | (22) | 2 | (27) | (8) | |||||||||||||||||||
Net earnings common stockholders | $ | 792 | $ | 501 | $ | 3,123 | $ | 643 | |||||||||||||||
Earnings common stockholders | |||||||||||||||||||||||
Earnings from continuing operations | $ | 530 | $ | 501 | $ | 859 | $ | 643 | |||||||||||||||
Discontinued operations | 262 | — | 2,264 | — | |||||||||||||||||||
Net earnings common stockholders | $ | 792 | $ | 501 | $ | 3,123 | $ | 643 | |||||||||||||||
Diluted avg. shares outstanding | 573.6 | 574.1 | 580.1 | 573.7 | |||||||||||||||||||
Diluted earnings per share common stockholders | |||||||||||||||||||||||
Earnings from continuing operations | $0.92 | $0.87 | $1.48 | $1.12 | |||||||||||||||||||
Discontinued operations | 0.46 | — | 3.90 | — | |||||||||||||||||||
Diluted earnings per common share | $1.38 | $0.87 | $5.38 | $1.12 | |||||||||||||||||||
Quarter Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
2023 | 2024 | 2023 | 2024 | ||||||||||||||||||||
Other deductions, net | |||||||||||||||||||||||
Amortization of intangibles | $119 | $273 | $237 | $547 | |||||||||||||||||||
Restructuring costs | 19 | 30 | 29 | 113 | |||||||||||||||||||
Other | (29) | 86 | (37) | 216 | |||||||||||||||||||
Total | $109 | $389 | $229 | $876 | |||||||||||||||||||
1 Represents interest on the Copeland note receivable. |
Table 2 | |||||||||||
EMERSON AND SUBSIDIARIES | |||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||
(DOLLARS IN MILLIONS, UNAUDITED) | |||||||||||
Sept 30, 2023 | Mar 31, 2024 | ||||||||||
Assets | |||||||||||
Cash and equivalents | $ | 8,051 | $ | 2,318 | |||||||
Receivables, net | 2,518 | 2,877 | |||||||||
Inventories | 2,006 | 2,357 | |||||||||
Other current assets | 1,244 | 1,457 | |||||||||
Total current assets | 13,819 | 9,009 | |||||||||
Property, plant & equipment, net | 2,363 | 2,689 | |||||||||
Goodwill | 14,480 | 17,964 | |||||||||
Other intangible assets | 6,263 | 10,976 | |||||||||
Copeland note receivable and equity investment | 3,255 | 3,191 | |||||||||
Other | 2,566 | 2,611 | |||||||||
Total assets | $ | 42,746 | $ | 46,440 | |||||||
Liabilities and equity | |||||||||||
Short-term borrowings and current maturities of long-term debt | $ | 547 | $ | 3,155 | |||||||
Accounts payable | 1,275 | 1,271 | |||||||||
Accrued expenses | 3,210 | 3,238 | |||||||||
Total current liabilities | 5,032 | 7,664 | |||||||||
Long-term debt | 7,610 | 7,614 | |||||||||
Other liabilities | 3,506 | 4,381 | |||||||||
Equity | |||||||||||
Common stockholders' equity | 20,689 | 20,900 | |||||||||
Noncontrolling interests in subsidiaries | 5,909 | 5,881 | |||||||||
Total equity | 26,598 | 26,781 | |||||||||
Total liabilities and equity | $ | 42,746 | $ | 46,440 |
Table 3 | ||||||||||||||
EMERSON AND SUBSIDIARIES | ||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
(DOLLARS IN MILLIONS, UNAUDITED) | ||||||||||||||
Six Months Ended March 31, | ||||||||||||||
2023 | 2024 | |||||||||||||
Operating activities | ||||||||||||||
Net earnings | $ | 3,096 | $ | 635 | ||||||||||
Earnings from discontinued operations, net of tax | (2,267) | — | ||||||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 523 | 846 | ||||||||||||
Stock compensation | 142 | 147 | ||||||||||||
Amortization of acquisition-related inventory step-up | — | 231 | ||||||||||||
Gain on subordinated interest | — | (79) | ||||||||||||
Changes in operating working capital | (390) | (373) | ||||||||||||
Other, net | (227) | (206) | ||||||||||||
Cash from continuing operations | 877 | 1,201 | ||||||||||||
Cash from discontinued operations | (391) | (43) | ||||||||||||
Cash provided by operating activities | 486 | 1,158 | ||||||||||||
Investing activities | ||||||||||||||
Capital expenditures | (121) | (159) | ||||||||||||
Purchases of businesses, net of cash and equivalents acquired | — | (8,342) | ||||||||||||
Proceeds from subordinated interest | 15 | 79 | ||||||||||||
Other, net | (76) | (68) | ||||||||||||
Cash from continuing operations | (182) | (8,490) | ||||||||||||
Cash from discontinued operations | 2,916 | 1 | ||||||||||||
Cash provided by (used in) investing activities | 2,734 | (8,489) | ||||||||||||
Financing activities | ||||||||||||||
Net increase (decrease) in short-term borrowings | (31) | 2,464 | ||||||||||||
Proceeds from short-term borrowings greater than three months | 395 | 99 | ||||||||||||
Payments of long-term debt | (742) | (1) | ||||||||||||
Dividends paid | (603) | (600) | ||||||||||||
Purchases of common stock | (2,000) | (175) | ||||||||||||
AspenTech purchases of common stock | — | (129) | ||||||||||||
Other, net | (55) | (45) | ||||||||||||
Cash provided by (used in) financing activities | (3,036) | 1,613 | ||||||||||||
Effect of exchange rate changes on cash and equivalents | 58 | (15) | ||||||||||||
Increase (decrease) in cash and equivalents | 242 | (5,733) | ||||||||||||
Beginning cash and equivalents | 1,804 | 8,051 | ||||||||||||
Ending cash and equivalents | $ | 2,046 | $ | 2,318 | ||||||||||
Table 4 | |||||||||||
EMERSON AND SUBSIDIARIES | |||||||||||
SEGMENT SALES AND EARNINGS | |||||||||||
(DOLLARS IN MILLIONS, UNAUDITED) |
Quarter Ended March 31, | ||||||||||||||||||||||||||
2023 | 2024 | Reported | Underlying | |||||||||||||||||||||||
Sales | ||||||||||||||||||||||||||
Final Control | $ | 992 | $ | 1,051 | 6 | % | 7 | % | ||||||||||||||||||
Measurement & Analytical | 888 | 1,013 | 14 | % | 16 | % | ||||||||||||||||||||
Discrete Automation | 683 | 632 | (8) | % | (7) | % | ||||||||||||||||||||
Safety & Productivity | 361 | 365 | 1 | % | 1 | % | ||||||||||||||||||||
Intelligent Devices | $ | 2,924 | $ | 3,061 | 5 | % | 6 | % | ||||||||||||||||||
Control Systems & Software | 623 | 687 | 11 | % | 12 | % | ||||||||||||||||||||
Test & Measurement | — | 367 | — | % | — | % | ||||||||||||||||||||
AspenTech | 230 | 278 | 21 | % | 21 | % | ||||||||||||||||||||
Software and Control | $ | 853 | $ | 1,332 | 56 | % | 14 | % | ||||||||||||||||||
Eliminations | (21) | (17) | ||||||||||||||||||||||||
Total | $ | 3,756 | $ | 4,376 | 17 | % | 8 | % |
Sales Growth by Geography | ||||||||||||||||||||
Quarter Ended March 31, | ||||||||||||||||||||
Americas | 4 | % | ||||||||||||||||||
Europe | 12 | % | ||||||||||||||||||
Asia, Middle East & Africa | 11 | % |
Table 4 cont. | |||||||||||
Six Months Ended March 31, | |||||||||||||||||||||||
2023 | 2024 | Reported | Underlying | ||||||||||||||||||||
Sales | |||||||||||||||||||||||
Final Control | $1,854 | $1,991 | 7 | % | 8 | % | |||||||||||||||||
Measurement & Analytical | 1,637 | 1,960 | 20 | % | 22 | % | |||||||||||||||||
Discrete Automation | 1,301 | 1,245 | (4) | % | (5) | % | |||||||||||||||||
Safety & Productivity | 671 | 687 | 2 | % | 2 | % | |||||||||||||||||
Intelligent Devices | $5,463 | $5,883 | 8 | % | 8 | % | |||||||||||||||||
Control Systems & Software | 1,229 | 1,362 | 11 | % | 11 | % | |||||||||||||||||
Test & Measurement | — | 749 | — | % | — | % | |||||||||||||||||
AspenTech | 473 | 535 | 13 | % | 13 | % | |||||||||||||||||
Software and Control | $1,702 | $2,646 | 56 | % | 12 | % | |||||||||||||||||
Eliminations | (36) | (36) | |||||||||||||||||||||
Total | $7,129 | $8,493 | 19 | % | 9 | % |
Sales Growth by Geography | |||||||||||||||||||||||
Six Months Ended March 31, | |||||||||||||||||||||||
Americas | 6 | % | |||||||||||||||||||||
Europe | 11 | % | |||||||||||||||||||||
Asia, Middle East & Africa | 13 | % | |||||||||||||||||||||
Table 4 cont. | |||||||||||
Quarter Ended March 31, | Quarter Ended March 31, | ||||||||||||||||||||||
2023 | 2024 | ||||||||||||||||||||||
As Reported (GAAP) | Adjusted EBITA (Non-GAAP) | As Reported (GAAP) | Adjusted EBITA (Non-GAAP) | ||||||||||||||||||||
Earnings | |||||||||||||||||||||||
Final Control | $ | 215 | $ | 246 | $ | 259 | $ | 274 | |||||||||||||||
Margins | 21.6 | % | 24.7 | % | 24.7 | % | 26.1 | % | |||||||||||||||
Measurement & Analytical | 229 | 234 | 274 | 287 | |||||||||||||||||||
Margins | 25.8 | % | 26.5 | % | 27.0 | % | 28.3 | % | |||||||||||||||
Discrete Automation | 133 | 147 | 116 | 131 | |||||||||||||||||||
Margins | 19.5 | % | 21.5 | % | 18.4 | % | 20.9 | % | |||||||||||||||
Safety & Productivity | 83 | 92 | 83 | 91 | |||||||||||||||||||
Margins | 22.9 | % | 25.2 | % | 22.7 | % | 24.7 | % | |||||||||||||||
Intelligent Devices | $ | 660 | $ | 719 | $ | 732 | $ | 783 | |||||||||||||||
Margins | 22.6 | % | 24.6 | % | 23.9 | % | 25.6 | % | |||||||||||||||
Control Systems & Software | 127 | 137 | 151 | 165 | |||||||||||||||||||
Margins | 20.4 | % | 22.1 | % | 22.0 | % | 24.0 | % | |||||||||||||||
Test & Measurement | — | — | (79) | 78 | |||||||||||||||||||
Margins | — | % | — | % | (21.7) | % | 21.4 | % | |||||||||||||||
AspenTech | (54) | 68 | (8) | 113 | |||||||||||||||||||
Margins | (23.4) | % | 29.5 | % | (3.1) | % | 40.6 | % | |||||||||||||||
Software and Control | $ | 73 | $ | 205 | $ | 64 | $ | 356 | |||||||||||||||
Margins | 8.6 | % | 24.1 | % | 4.7 | % | 26.7 | % | |||||||||||||||
Corporate items and interest expense, net: | |||||||||||||||||||||||
Stock compensation | (40) | (40) | (73) | (59) | |||||||||||||||||||
Unallocated pension and postretirement costs | 46 | 46 | 38 | 38 | |||||||||||||||||||
Corporate and other | (47) | (55) | (103) | (46) | |||||||||||||||||||
Gain on subordinated interest | — | — | 79 | — | |||||||||||||||||||
Loss on Copeland equity method investment | — | — | (59) | — | |||||||||||||||||||
Interest expense, net | (53) | — | (57) | — | |||||||||||||||||||
Interest income from related party1 | — | — | 31 | — | |||||||||||||||||||
Pretax Earnings / Adjusted EBITA | $ | 639 | $ | 875 | $ | 652 | $ | 1,072 | |||||||||||||||
Margins | 17.0 | % | 23.3 | % | 14.9 | % | 24.5 | % | |||||||||||||||
Supplemental Total Segment Earnings: | |||||||||||||||||||||||
Adjusted Total Segment EBITA | $ | 924 | $ | 1,139 | |||||||||||||||||||
Margins | 24.6 | % | 26.0 | % | |||||||||||||||||||
1 Represents interest on the Copeland note receivable. |
Table 4 cont. |
Quarter Ended March 31, | Quarter Ended March 31, | |||||||||||||||||||||||||
2023 | 2024 | |||||||||||||||||||||||||
Amortization of Intangibles1 | Restructuring and Related Costs2 | Amortization of Intangibles1 | Restructuring and Related Costs2 | |||||||||||||||||||||||
Final Control | $ | 22 | $ | 9 | $ | 22 | $ | (7) | ||||||||||||||||||
Measurement & Analytical | 5 | — | 12 | 1 | ||||||||||||||||||||||
Discrete Automation | 7 | 7 | 8 | 7 | ||||||||||||||||||||||
Safety & Productivity | 7 | 2 | 7 | 1 | ||||||||||||||||||||||
Intelligent Devices | $ | 41 | $ | 18 | $ | 49 | $ | 2 | ||||||||||||||||||
Control Systems & Software | 5 | 5 | 11 | 3 | ||||||||||||||||||||||
Test & Measurement | — | — | 141 | 16 | ||||||||||||||||||||||
AspenTech | 122 | — | 121 | — | ||||||||||||||||||||||
Software and Control | $ | 127 | $ | 5 | $ | 273 | $ | 19 | ||||||||||||||||||
Corporate | — | 3 | — | 12 | 3 | |||||||||||||||||||||
Total | $ | 168 | $ | 26 | $ | 322 | $ | 33 | ||||||||||||||||||
1 Amortization of intangibles includes $49 and $49 reported in cost of sales for the three months ended March 31, 2023 and 2024, respectively. | ||||||||||||||||||||||||||
2 Restructuring and related costs includes $7 and $3 reported in cost of sales and selling, general and administrative expenses for the three months ended March 31, 2023 and 2024, respectively. | ||||||||||||||||||||||||||
3 Corporate restructuring of $12 for the three months ended March 31, 2024 includes $10 related to integration-related stock compensation expense attributable to NI. |
Quarter Ended March 31, | |||||||||||
Depreciation and Amortization | 2023 | 2024 | |||||||||
Final Control | $ | 45 | $ | 39 | |||||||
Measurement & Analytical | 28 | 33 | |||||||||
Discrete Automation | 22 | 21 | |||||||||
Safety & Productivity | 15 | 15 | |||||||||
Intelligent Devices | 110 | 108 | |||||||||
Control Systems & Software | 24 | 28 | |||||||||
Test & Measurement | — | 153 | |||||||||
AspenTech | 123 | 124 | |||||||||
Software and Control | 147 | 305 | |||||||||
Corporate | 6 | 11 | |||||||||
Total | $ | 263 | $ | 424 |
Table 5 |
EMERSON AND SUBSIDIARIES | |||||||||||
ADJUSTED CORPORATE AND OTHER SUPPLEMENTAL | |||||||||||
(DOLLARS IN MILLIONS, UNAUDITED) |
Quarter Ended March 31, | ||||||||||||||||||||||||||
2023 | 2024 | |||||||||||||||||||||||||
Stock compensation (GAAP) | $ | (40) | $ | (73) | ||||||||||||||||||||||
Integration-related stock compensation expense | — | 14 | 1 | |||||||||||||||||||||||
Adjusted stock compensation (non-GAAP) | $ | (40) | $ | (59) |
Quarter Ended March 31, | |||||||||||||||||||||||
2023 | 2024 | ||||||||||||||||||||||
Corporate and other (GAAP) | $ | (47) | $ | (103) | |||||||||||||||||||
Corporate restructuring and related costs | 3 | 2 | |||||||||||||||||||||
Acquisition / divestiture costs | 10 | 16 | |||||||||||||||||||||
National Instruments investment gain | (35) | — | |||||||||||||||||||||
Loss on divestiture of business | — | 39 | |||||||||||||||||||||
AspenTech Micromine purchase price hedge | 14 | — | |||||||||||||||||||||
Adjusted corporate and other (non-GAAP) | $ | (55) | $ | (46) | |||||||||||||||||||
1 Integration-related stock compensation expense relates to NI and includes $10 reported as restructuring costs. |
Table 6 | |||||||||||
EMERSON AND SUBSIDIARIES | |||||||||||
ADJUSTED EBITA & EPS SUPPLEMENTAL | |||||||||||
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) |
Quarter Ended March 31, | |||||||||||
2023 | 2024 | ||||||||||
Pretax earnings | $ | 639 | $ | 652 | |||||||
Percent of sales | 17.0 | % | 14.9 | % | |||||||
Interest expense, net | 53 | 57 | |||||||||
Interest income from related party1 | — | (31) | |||||||||
Amortization of intangibles | 168 | 322 | |||||||||
Restructuring and related costs | 26 | 33 | |||||||||
Acquisition/divestiture fees and related costs | 10 | 20 | |||||||||
Loss on divestiture of business | — | 39 | |||||||||
Gain on subordinated interest | — | (79) | |||||||||
National Instruments investment gain | (35) | — | |||||||||
AspenTech Micromine purchase price hedge | 14 | — | |||||||||
Loss on Copeland equity method investment | — | 59 | |||||||||
Adjusted EBITA | $ | 875 | $ | 1,072 | |||||||
Percent of sales | 23.3 | % | 24.5 | % | |||||||
Quarter Ended March 31, | |||||||||||
2023 | 2024 | ||||||||||
GAAP earnings from continuing operations per share | $ | 0.92 | $ | 0.87 | |||||||
Amortization of intangibles | 0.16 | 0.36 | |||||||||
Restructuring and related costs | 0.04 | 0.05 | |||||||||
Acquisition/divestiture fees and related costs | 0.01 | 0.03 | |||||||||
Loss on divestiture of business | — | 0.07 | |||||||||
Gain on subordinated interest | — | (0.10) | |||||||||
National Instruments investment gain | (0.05) | — | |||||||||
AspenTech Micromine purchase price hedge | 0.01 | — | |||||||||
Loss on Copeland equity method investment | — | 0.08 | |||||||||
Adjusted earnings from continuing operations per share | $ | 1.09 | $ | 1.36 | |||||||
Less: AspenTech contribution to adjusted earnings per share | (0.04) | (0.10) | |||||||||
Adjusted earnings per share excluding AspenTech contribution | $ | 1.05 | $ | 1.26 | |||||||
1 Represents interest on the Copeland note receivable |
Table 6 cont. |
Quarter Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||
Pretax Earnings | Income Taxes | Earnings from Cont. Ops. | Non-Controlling Interests3 | Net Earnings Common Stockholders | Diluted Earnings Per Share | ||||||||||||||||||||||||||||||
As reported (GAAP) | $ | 652 | $ | 149 | $ | 503 | $ | 2 | $ | 501 | $ | 0.87 | |||||||||||||||||||||||
Amortization of intangibles | 322 | 1 | 72 | 250 | 41 | 209 | 0.36 | ||||||||||||||||||||||||||||
Restructuring and related costs | 33 | 2 | 5 | 28 | — | 28 | 0.05 | ||||||||||||||||||||||||||||
Acquisition/divestiture fees and related costs | 20 | 4 | 16 | — | 16 | 0.03 | |||||||||||||||||||||||||||||
Loss on Copeland equity method investment | 59 | 13 | 46 | — | 46 | 0.08 | |||||||||||||||||||||||||||||
Loss on divestiture of business | 39 | (2) | 41 | — | 41 | 0.07 | |||||||||||||||||||||||||||||
Gain on subordinated interest | (79) | (19) | (60) | — | (60) | (0.10) | |||||||||||||||||||||||||||||
Adjusted (non-GAAP) | $ | 1,046 | $ | 222 | $ | 824 | $ | 43 | $ | 781 | $ | 1.36 | |||||||||||||||||||||||
Interest expense, net | 57 | ||||||||||||||||||||||||||||||||||
Interest income from related party4 | (31) | ||||||||||||||||||||||||||||||||||
Adjusted EBITA (non-GAAP) | $ | 1,072 | |||||||||||||||||||||||||||||||||
1 Amortization of intangibles includes $49 reported in cost of sales. | |||||||||||||||||||||||||||||||||||
2 Restructuring and related costs includes $3 reported in cost of sales and and selling, general and administrative expenses. | |||||||||||||||||||||||||||||||||||
3 Represents the non-controlling interest in AspenTech applied to AspenTech's share of each adjustment presented herein and eliminated from Emerson's consolidated results. | |||||||||||||||||||||||||||||||||||
4 Represents interest on the Copeland note receivable. |
Table 7 | |||||||||||
EMERSON AND SUBSIDIARIES | |||||||||||
ASPENTECH CONTRIBUTION TO EMERSON RESULTS SUPPLEMENTAL | |||||||||||
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) |
Quarter Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||
Pretax Earnings | Income Taxes (Benefit) | Earnings from Cont. Ops. | Non-Controlling Interests4 | Net Earnings Common Stockholders | Diluted Earnings Per Share | ||||||||||||||||||||||||||||||
Standalone reporting (GAAP) | $ | (7) | 1 | $ | (9) | $ | 2 | ||||||||||||||||||||||||||||
Other | — | (1) | 1 | ||||||||||||||||||||||||||||||||
Reported in Emerson consolidation (GAAP) | (7) | (10) | 3 | 1 | 2 | $ | — | ||||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||
Amortization of intangibles | 121 | 2 | 26 | 95 | 41 | 54 | 0.10 | ||||||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 114 | $ | 16 | $ | 98 | $ | 42 | $ | 56 | $ | 0.10 | |||||||||||||||||||||||
Interest income | (14) | 3 | |||||||||||||||||||||||||||||||||
Stock compensation | 13 | 3 | |||||||||||||||||||||||||||||||||
Adjusted segment EBITA (non-GAAP) | $ | 113 | |||||||||||||||||||||||||||||||||
Reconciliation to Segment EBIT | |||||||||||||||||||||||||||||||||||
Pre-tax earnings | $ | (7) | |||||||||||||||||||||||||||||||||
Interest income | (14) | 3 | |||||||||||||||||||||||||||||||||
Stock compensation | 13 | 3 | |||||||||||||||||||||||||||||||||
Segment EBIT (GAAP) | $ | (8) | |||||||||||||||||||||||||||||||||
Amortization of intangibles | 121 | 2 | |||||||||||||||||||||||||||||||||
Adjusted segment EBITA (non-GAAP) | $ | 113 | |||||||||||||||||||||||||||||||||
1 Amount reflects AspenTech's pretax earnings for the three months ended March 31, 2024 as reported in its quarterly earnings release 8-K. | |||||||||||||||||||||||||||||||||||
2 Amortization of intangibles includes $49 reported in cost of sales. | |||||||||||||||||||||||||||||||||||
3 Reported in Emerson corporate line items. | |||||||||||||||||||||||||||||||||||
4 Represents the non-controlling interest in AspenTech applied to each adjustment presented herein and eliminated from Emerson's consolidated results. |
Reconciliations of Non-GAAP Financial Measures & Other | Table 8 | ||||||||||||||||||||||
Reconciliations of Non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts). See tables 4 through 7 for additional non-GAAP reconciliations. |
2024 Q2 Underlying Sales Change | Reported | (Favorable) / Unfavorable FX | (Acquisitions) / Divestitures | Underlying | ||||||||||
Final Control | 6 | % | 1 | % | — | % | 7 | % | ||||||
Measurement & Analytical | 14 | % | 1 | % | 1 | % | 16 | % | ||||||
Discrete Automation | (8) | % | 1 | % | — | % | (7) | % | ||||||
Safety & Productivity | 1 | % | — | % | — | % | 1 | % | ||||||
Intelligent Devices | 5 | % | 1 | % | — | % | 6 | % | ||||||
Control Systems & Software | 11 | % | 1 | % | — | % | 12 | % | ||||||
Test & Measurement | — | % | — | % | — | % | — | % | ||||||
AspenTech | 21 | % | — | % | — | % | 21 | % | ||||||
Software and Control | 56 | % | 1 | % | (43) | % | 14 | % | ||||||
Emerson | 17 | % | 1 | % | (10) | % | 8 | % |
Six Months Ended March 31, 2024 Underlying Sales Change | Reported | (Favorable) / Unfavorable FX | (Acquisitions) / Divestitures | Underlying | ||||||||||
Final Control | 7 | % | — | % | 1 | % | 8 | % | ||||||
Measurement & Analytical | 20 | % | — | % | 2 | % | 22 | % | ||||||
Discrete Automation | (4) | % | (1) | % | — | % | (5) | % | ||||||
Safety & Productivity | 2 | % | — | % | — | % | 2 | % | ||||||
Intelligent Devices | 8 | % | — | % | — | % | 8 | % | ||||||
Control Systems & Software | 11 | % | — | % | — | % | 11 | % | ||||||
Test & Measurement | — | % | — | % | — | % | — | % | ||||||
AspenTech | 13 | % | — | % | — | % | 13 | % | ||||||
Software and Control | 56 | % | — | % | (44) | % | 12 | % | ||||||
Emerson | 19 | % | — | % | (10) | % | 9 | % |
Underlying Growth Guidance | 2024 Q3 Guidance | 2024 Guidance | ||||||
Reported (GAAP) | 11% - 12.5% | 15% - 16% | ||||||
(Favorable) / Unfavorable FX | ~ 1 pts | ~ 0.5 pts | ||||||
(Acquisitions) / Divestitures | ~(9) pts | ~ (10) pts | ||||||
Underlying (non-GAAP) | 3% - 4.5% | 5.5% - 6.5% |
2023 Q2 Adjusted Segment EBITA | EBIT | EBIT Margin | Amortization of Intangibles | Restructuring and Related Costs | Adjusted Segment EBITA | Adjusted Segment EBITA Margin | ||||||||||||||
Final Control | $ | 215 | 21.6 | % | $ | 22 | $ | 9 | $ | 246 | 24.7 | % | ||||||||
Measurement & Analytical | 229 | 25.8 | % | 5 | — | 234 | 26.5 | % | ||||||||||||
Discrete Automation | 133 | 19.5 | % | 7 | 7 | 147 | 21.5 | % | ||||||||||||
Safety & Productivity | 83 | 22.9 | % | 7 | 2 | 92 | 25.2 | % | ||||||||||||
Intelligent Devices | $ | 660 | 22.6 | % | $ | 41 | $ | 18 | $ | 719 | 24.6 | % | ||||||||
Control Systems & Software | 127 | 20.4 | % | 5 | 5 | 137 | 22.1 | % | ||||||||||||
Test & Measurement | — | — | % | — | — | — | — | % | ||||||||||||
AspenTech | (54) | (23.4) | % | 122 | — | 68 | 29.5 | % | ||||||||||||
Software and Control | $ | 73 | 8.6 | % | $ | 127 | $ | 5 | $ | 205 | 24.1 | % |
2024 Q2 Adjusted Segment EBITA | EBIT | EBIT Margin | Amortization of Intangibles | Restructuring and Related Costs | Adjusted Segment EBITA | Adjusted Segment EBITA Margin | ||||||||||||||
Final Control | $ | 259 | 24.7 | % | $ | 22 | $ | (7) | $ | 274 | 26.1 | % | ||||||||
Measurement & Analytical | 274 | 27.0 | % | 12 | 1 | 287 | 28.3 | % | ||||||||||||
Discrete Automation | 116 | 18.4 | % | 8 | 7 | 131 | 20.9 | % | ||||||||||||
Safety & Productivity | 83 | 22.7 | % | 7 | 1 | 91 | 24.7 | % | ||||||||||||
Intelligent Devices | $ | 732 | 23.9 | % | $ | 49 | $ | 2 | $ | 783 | 25.6 | % | ||||||||
Control Systems & Software | 151 | 22.0 | % | 11 | 3 | 165 | 24.0 | % | ||||||||||||
Test & Measurement | (79) | (21.7) | % | 141 | 16 | 78 | 21.4 | % | ||||||||||||
AspenTech | (8) | (3.1) | % | 121 | — | 113 | 40.6 | % | ||||||||||||
Software and Control | $ | 64 | 4.7 | % | $ | 273 | $ | 19 | $ | 356 | 26.7 | % |
Total Adjusted Segment EBITA | 2023 Q2 | 2024 Q2 | |||||||||
Pretax earnings (GAAP) | $ | 639 | $ | 652 | |||||||
Margin | 17.0 | % | 14.9 | % | |||||||
Corporate items and interest expense, net | 94 | 144 | |||||||||
Amortization of intangibles | 168 | 322 | |||||||||
Restructuring and related costs | 23 | 21 | |||||||||
Adjusted segment EBITA (non-GAAP) | $ | 924 | $ | 1,139 | |||||||
Margin | 24.6 | % | 26.0 | % |
Free Cash Flow | 2023 Q2 | 2024 Q2 | 2024E ($ in billions) | |||||||||||||||||
Operating cash flow (GAAP) | $ | 575 | $ | 757 | ~ $ 3.1 | |||||||||||||||
Capital expenditures | (62) | (82) | ~(0.4) | |||||||||||||||||
Free cash flow (non-GAAP) | $ | 513 | $ | 675 | ~ $2.7 | |||||||||||||||
Note 1: Underlying sales and orders exclude the impact of currency translation and significant acquisitions and divestitures. | ||||||||||||||||||||
Note 2: All fiscal year 2024E figures are approximate, except where range is given. |
Exhibit 99.2 |
Investors: | Media: | ||||
Colleen Mettler | Joseph Sala / Greg Klassen | ||||
(314) 553-2197 | Joele Frank, Wilkinson Brimmer Katcher | ||||
(212) 355-4449 |
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