--------------------------------- (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 | ||||||||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
EMERSON ELECTRIC CO. (Registrant) | |||||||||||
Date: | August 7, 2024 | By: | /s/ John A. Sperino | ||||||||
John A. Sperino Vice President and Assistant Secretary |
(dollars in millions, except per share) | 2023 Q3 | 2024 Q3 | Change | ||||||||||||||
Underlying Orders2 | 3% | ||||||||||||||||
Net Sales | $3,946 | $4,380 | 11% | ||||||||||||||
Underlying Sales3 | 3% | ||||||||||||||||
Pretax Earnings | $822 | $455 | |||||||||||||||
Margin | 20.8% | 10.4% | (1040) bps | ||||||||||||||
Adjusted Segment EBITA4 | $1,060 | $1,189 | |||||||||||||||
Margin | 26.9% | 27.1% | 20 bps | ||||||||||||||
GAAP Earnings Per Share | $1.12 | $0.60 | (46)% | ||||||||||||||
Adjusted Earnings Per Share5 | $1.29 | $1.43 | 11% | ||||||||||||||
Operating Cash Flow | $842 | $1,067 | 27% | ||||||||||||||
Free Cash Flow | $769 | $975 | 27% |
2024 | ||||||||
Net Sales Growth | ~15% | |||||||
Underlying Sales Growth | ~6% | |||||||
Earnings Per Share | $2.82 - $2.87 | |||||||
Amortization of Intangibles | ~$1.42 | |||||||
Restructuring and Related Costs | ~$0.34 | |||||||
Loss on Copeland Note Receivable | $0.38 | |||||||
Amortization of Acquisition-related Inventory Step-up | $0.38 | |||||||
Acquisition / Divestiture Fees and Related Costs | ~$0.24 | |||||||
Divestiture Loss / (Gain), net | ($0.03) | |||||||
Discrete Tax Benefits | ($0.10) | |||||||
Adjusted Earnings Per Share | $5.45 - $5.50 | |||||||
Operating Cash Flow | ~$3.2B | |||||||
Free Cash Flow | ~$2.8B |
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 June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
2023 | 2024 | 2023 | 2024 | ||||||||||||||||||||
Net sales | $ | 3,946 | $ | 4,380 | $ | 11,075 | $ | 12,873 | |||||||||||||||
Cost of sales | 1,952 | 2,066 | 5,660 | 6,359 | |||||||||||||||||||
SG&A expenses | 1,042 | 1,254 | 3,072 | 3,827 | |||||||||||||||||||
Gain on subordinated interest | — | — | — | (79) | |||||||||||||||||||
Loss on Copeland note receivable | — | 279 | — | 279 | |||||||||||||||||||
Other deductions, net | 130 | 294 | 359 | 1,075 | |||||||||||||||||||
Interest expense, net | 10 | 56 | 111 | 157 | |||||||||||||||||||
Interest income from related party1 | (10) | (24) | (10) | (86) | |||||||||||||||||||
Earnings from continuing operations before income taxes | 822 | 455 | 1,883 | 1,341 | |||||||||||||||||||
Income taxes | 168 | 88 | 400 | 266 | |||||||||||||||||||
Earnings from continuing operations | 654 | 367 | 1,483 | 1,075 | |||||||||||||||||||
Discontinued operations, net of tax | 8,712 | (15) | 10,979 | (88) | |||||||||||||||||||
Net earnings | 9,366 | 352 | 12,462 | 987 | |||||||||||||||||||
Less: Noncontrolling interests in subsidiaries | 14 | 23 | (13) | 15 | |||||||||||||||||||
Net earnings common stockholders | $ | 9,352 | $ | 329 | $ | 12,475 | $ | 972 | |||||||||||||||
Earnings common stockholders | |||||||||||||||||||||||
Earnings from continuing operations | $ | 643 | $ | 344 | $ | 1,502 | $ | 1,060 | |||||||||||||||
Discontinued operations | 8,709 | (15) | 10,973 | (88) | |||||||||||||||||||
Net earnings common stockholders | $ | 9,352 | $ | 329 | $ | 12,475 | $ | 972 | |||||||||||||||
Diluted avg. shares outstanding | 574.0 | 574.8 | 578.1 | 574.1 | |||||||||||||||||||
Diluted earnings per share common stockholders | |||||||||||||||||||||||
Earnings from continuing operations | $1.12 | $0.60 | $2.60 | $1.84 | |||||||||||||||||||
Discontinued operations | 15.16 | (0.03) | 18.96 | (0.15) | |||||||||||||||||||
Diluted earnings per common share | $16.28 | $0.57 | $21.56 | $1.69 | |||||||||||||||||||
Quarter Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
2023 | 2024 | 2023 | 2024 | ||||||||||||||||||||
Other deductions, net | |||||||||||||||||||||||
Amortization of intangibles | $120 | $264 | $357 | $811 | |||||||||||||||||||
Restructuring costs | 12 | 57 | 41 | 170 | |||||||||||||||||||
Other | (2) | (27) | (39) | 94 | |||||||||||||||||||
Total | $130 | $294 | $359 | $1,075 | |||||||||||||||||||
1 Represents interest on the Copeland note receivable through June 6, 2024. |
Table 2 | |||||||||||
EMERSON AND SUBSIDIARIES | |||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||
(DOLLARS IN MILLIONS, UNAUDITED) | |||||||||||
Sept 30, 2023 | June 30, 2024 | ||||||||||
Assets | |||||||||||
Cash and equivalents | $ | 8,051 | $ | 2,298 | |||||||
Receivables, net | 2,518 | 2,761 | |||||||||
Inventories | 2,006 | 2,303 | |||||||||
Other current assets | 1,244 | 1,458 | |||||||||
Total current assets | 13,819 | 8,820 | |||||||||
Property, plant & equipment, net | 2,363 | 2,688 | |||||||||
Goodwill | 14,480 | 17,936 | |||||||||
Other intangible assets | 6,263 | 10,627 | |||||||||
Copeland note receivable and equity investment held-for-sale | 3,255 | 2,908 | |||||||||
Other | 2,566 | 2,606 | |||||||||
Total assets | $ | 42,746 | $ | 45,585 | |||||||
Liabilities and equity | |||||||||||
Short-term borrowings and current maturities of long-term debt | $ | 547 | $ | 2,991 | |||||||
Accounts payable | 1,275 | 1,251 | |||||||||
Accrued expenses | 3,210 | 3,350 | |||||||||
Total current liabilities | 5,032 | 7,592 | |||||||||
Long-term debt | 7,610 | 7,111 | |||||||||
Other liabilities | 3,506 | 4,194 | |||||||||
Equity | |||||||||||
Common stockholders' equity | 20,689 | 20,799 | |||||||||
Noncontrolling interests in subsidiaries | 5,909 | 5,889 | |||||||||
Total equity | 26,598 | 26,688 | |||||||||
Total liabilities and equity | $ | 42,746 | $ | 45,585 |
Table 3 | ||||||||||||||
EMERSON AND SUBSIDIARIES | ||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
(DOLLARS IN MILLIONS, UNAUDITED) | ||||||||||||||
Nine Months Ended June 30, | ||||||||||||||
2023 | 2024 | |||||||||||||
Operating activities | ||||||||||||||
Net earnings | $ | 12,462 | $ | 987 | ||||||||||
Earnings from discontinued operations, net of tax | (10,979) | 88 | ||||||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 780 | 1,263 | ||||||||||||
Stock compensation | 198 | 203 | ||||||||||||
Amortization of acquisition-related inventory step-up | — | 231 | ||||||||||||
Gain on subordinated interest | — | (79) | ||||||||||||
Loss on Copeland note receivable | — | 279 | ||||||||||||
Changes in operating working capital | (359) | (176) | ||||||||||||
Other, net | (383) | (552) | ||||||||||||
Cash from continuing operations | 1,719 | 2,244 | ||||||||||||
Cash from discontinued operations | (439) | 4 | ||||||||||||
Cash provided by operating activities | 1,280 | 2,248 | ||||||||||||
Investing activities | ||||||||||||||
Capital expenditures | (194) | (251) | ||||||||||||
Purchases of businesses, net of cash and equivalents acquired | — | (8,342) | ||||||||||||
Proceeds from subordinated interest | 15 | 79 | ||||||||||||
Proceeds from related party note receivable | 918 | — | ||||||||||||
Other, net | (124) | (86) | ||||||||||||
Cash from continuing operations | 615 | (8,600) | ||||||||||||
Cash from discontinued operations | 12,485 | 36 | ||||||||||||
Cash provided by (used in) investing activities | 13,100 | (8,564) | ||||||||||||
Financing activities | ||||||||||||||
Net increase (decrease) in short-term borrowings | (1,476) | 2,229 | ||||||||||||
Proceeds from short-term borrowings greater than three months | 395 | 322 | ||||||||||||
Payments of short-term borrowings greater than three months | (400) | (100) | ||||||||||||
Payments of long-term debt | (744) | (547) | ||||||||||||
Dividends paid | (900) | (901) | ||||||||||||
Purchases of common stock | (2,000) | (175) | ||||||||||||
AspenTech purchases of common stock | (100) | (188) | ||||||||||||
Payment of related party note payable | (918) | — | ||||||||||||
Other, net | (159) | (57) | ||||||||||||
Cash provided by (used in) financing activities | (6,302) | 583 | ||||||||||||
Effect of exchange rate changes on cash and equivalents | 75 | (20) | ||||||||||||
Increase (decrease) in cash and equivalents | 8,153 | (5,753) | ||||||||||||
Beginning cash and equivalents | 1,804 | 8,051 | ||||||||||||
Ending cash and equivalents | $ | 9,957 | $ | 2,298 | ||||||||||
Table 4 | |||||||||||
EMERSON AND SUBSIDIARIES | |||||||||||
SEGMENT SALES AND EARNINGS | |||||||||||
(DOLLARS IN MILLIONS, UNAUDITED) |
Quarter Ended June 30, | ||||||||||||||||||||||||||
2023 | 2024 | Reported | Underlying | |||||||||||||||||||||||
Sales | ||||||||||||||||||||||||||
Final Control | $ | 1,035 | $ | 1,046 | 1 | % | 2 | % | ||||||||||||||||||
Measurement & Analytical | 913 | 982 | 8 | % | 9 | % | ||||||||||||||||||||
Discrete Automation | 668 | 618 | (8) | % | (6) | % | ||||||||||||||||||||
Safety & Productivity | 363 | 351 | (3) | % | (3) | % | ||||||||||||||||||||
Intelligent Devices | $ | 2,979 | $ | 2,997 | 1 | % | 2 | % | ||||||||||||||||||
Control Systems & Software | 663 | 700 | 6 | % | 7 | % | ||||||||||||||||||||
Test & Measurement | — | 355 | ||||||||||||||||||||||||
AspenTech | 320 | 343 | 7 | % | 7 | % | ||||||||||||||||||||
Software and Control | $ | 983 | $ | 1,398 | 42 | % | 7 | % | ||||||||||||||||||
Eliminations | (16) | (15) | ||||||||||||||||||||||||
Total | $ | 3,946 | $ | 4,380 | 11 | % | 3 | % |
Sales Growth by Geography | ||||||||||||||||||||
Quarter Ended June 30, | ||||||||||||||||||||
Americas | 3 | % | ||||||||||||||||||
Europe | 4 | % | ||||||||||||||||||
Asia, Middle East & Africa | 2 | % |
Table 4 cont. | |||||||||||
Nine Months Ended June 30, | |||||||||||||||||||||||
2023 | 2024 | Reported | Underlying | ||||||||||||||||||||
Sales | |||||||||||||||||||||||
Final Control | $ | 2,889 | $ | 3,037 | 5 | % | 6 | % | |||||||||||||||
Measurement & Analytical | 2,550 | 2,942 | 15 | % | 17 | % | |||||||||||||||||
Discrete Automation | 1,969 | 1,863 | (5) | % | (5) | % | |||||||||||||||||
Safety & Productivity | 1,034 | 1,038 | — | % | — | % | |||||||||||||||||
Intelligent Devices | $ | 8,442 | $ | 8,880 | 5 | % | 6 | % | |||||||||||||||
Control Systems & Software | 1,892 | 2,062 | 9 | % | 10 | % | |||||||||||||||||
Test & Measurement | — | 1,104 | |||||||||||||||||||||
AspenTech | 793 | 878 | 11 | % | 11 | % | |||||||||||||||||
Software and Control | $ | 2,685 | $ | 4,044 | 51 | % | 10 | % | |||||||||||||||
Eliminations | (52) | (51) | |||||||||||||||||||||
Total | $ | 11,075 | $ | 12,873 | 16 | % | 7 | % |
Sales Growth by Geography | |||||||||||||||||||||||
Nine Months Ended June 30, | |||||||||||||||||||||||
Americas | 5 | % | |||||||||||||||||||||
Europe | 9 | % | |||||||||||||||||||||
Asia, Middle East & Africa | 9 | % | |||||||||||||||||||||
Table 4 cont. | |||||||||||
Quarter Ended June 30, | Quarter Ended June 30, | ||||||||||||||||||||||
2023 | 2024 | ||||||||||||||||||||||
As Reported (GAAP) | Adjusted EBITA (Non-GAAP) | As Reported (GAAP) | Adjusted EBITA (Non-GAAP) | ||||||||||||||||||||
Earnings | |||||||||||||||||||||||
Final Control | $ | 245 | $ | 266 | $ | 253 | $ | 279 | |||||||||||||||
Margins | 23.7 | % | 25.7 | % | 24.2 | % | 26.8 | % | |||||||||||||||
Measurement & Analytical | 257 | 263 | 252 | 266 | |||||||||||||||||||
Margins | 28.1 | % | 28.7 | % | 25.6 | % | 27.0 | % | |||||||||||||||
Discrete Automation | 124 | 144 | 109 | 134 | |||||||||||||||||||
Margins | 18.5 | % | 21.4 | % | 17.6 | % | 21.5 | % | |||||||||||||||
Safety & Productivity | 82 | 88 | 79 | 86 | |||||||||||||||||||
Margins | 22.7 | % | 24.3 | % | 22.5 | % | 24.7 | % | |||||||||||||||
Intelligent Devices | $ | 708 | $ | 761 | $ | 693 | $ | 765 | |||||||||||||||
Margins | 23.7 | % | 25.5 | % | 23.1 | % | 25.5 | % | |||||||||||||||
Control Systems & Software | 144 | 151 | 168 | 178 | |||||||||||||||||||
Margins | 21.8 | % | 22.8 | % | 23.9 | % | 25.2 | % | |||||||||||||||
Test & Measurement | — | — | (88) | 76 | |||||||||||||||||||
Margins | (24.7) | % | 21.4 | % | |||||||||||||||||||
AspenTech | 27 | 148 | 49 | 170 | |||||||||||||||||||
Margins | 8.2 | % | 46.1 | % | 14.5 | % | 50.0 | % | |||||||||||||||
Software and Control | $ | 171 | $ | 299 | $ | 129 | $ | 424 | |||||||||||||||
Margins | 17.4 | % | 30.4 | % | 9.2 | % | 30.3 | % | |||||||||||||||
Corporate items and interest expense, net: | |||||||||||||||||||||||
Stock compensation | (56) | (56) | (56) | (47) | |||||||||||||||||||
Unallocated pension and postretirement costs | 42 | 42 | 38 | 38 | |||||||||||||||||||
Corporate and other | (43) | (19) | (38) | (24) | |||||||||||||||||||
Gain on subordinated interest | — | — | — | — | |||||||||||||||||||
Loss on Copeland note receivable | — | — | (279) | — | |||||||||||||||||||
Interest expense, net | (10) | — | (56) | — | |||||||||||||||||||
Interest income from related party1 | 10 | — | 24 | — | |||||||||||||||||||
Pretax Earnings / Adjusted EBITA | $ | 822 | $ | 1,027 | $ | 455 | $ | 1,156 | |||||||||||||||
Margins | 20.8 | % | 26.0 | % | 10.4 | % | 26.4 | % | |||||||||||||||
Supplemental Total Segment Earnings: | |||||||||||||||||||||||
Adjusted Total Segment EBITA | $ | 1,060 | $ | 1,189 | |||||||||||||||||||
Margins | 26.9 | % | 27.1 | % | |||||||||||||||||||
1 Represents interest on the Copeland note receivable through June 6, 2024. |
Table 4 cont. |
Quarter Ended June 30, | Quarter Ended June 30, | |||||||||||||||||||||||||
2023 | 2024 | |||||||||||||||||||||||||
Amortization of Intangibles1 | Restructuring and Related Costs2 | Amortization of Intangibles1 | Restructuring and Related Costs2 | |||||||||||||||||||||||
Final Control | $ | 22 | $ | (1) | $ | 21 | $ | 5 | ||||||||||||||||||
Measurement & Analytical | 5 | 1 | 11 | 3 | ||||||||||||||||||||||
Discrete Automation | 8 | 12 | 9 | 16 | ||||||||||||||||||||||
Safety & Productivity | 7 | (1) | 6 | 1 | ||||||||||||||||||||||
Intelligent Devices | $ | 42 | $ | 11 | $ | 47 | $ | 25 | ||||||||||||||||||
Control Systems & Software | 6 | 1 | 6 | 4 | ||||||||||||||||||||||
Test & Measurement | — | — | 139 | 25 | ||||||||||||||||||||||
AspenTech | 121 | — | 121 | — | ||||||||||||||||||||||
Software and Control | $ | 127 | $ | 1 | $ | 266 | $ | 29 | ||||||||||||||||||
Corporate | — | 1 | — | 6 | 3 | |||||||||||||||||||||
Total | $ | 169 | $ | 13 | $ | 313 | $ | 60 | ||||||||||||||||||
1 Amortization of intangibles includes $49 and $49 reported in cost of sales for the three months ended June 30, 2023 and 2024, respectively. | ||||||||||||||||||||||||||
2 Restructuring and related costs includes $1 and $3 reported in cost of sales and selling, general and administrative expenses for the three months ended June 30, 2023 and 2024, respectively. | ||||||||||||||||||||||||||
3 Corporate restructuring of $6 for the three months ended June 30, 2024 includes $5 related to integration-related stock compensation expense attributable to NI. |
Quarter Ended June 30, | |||||||||||
Depreciation and Amortization | 2023 | 2024 | |||||||||
Final Control | $ | 39 | $ | 41 | |||||||
Measurement & Analytical | 26 | 32 | |||||||||
Discrete Automation | 20 | 22 | |||||||||
Safety & Productivity | 15 | 14 | |||||||||
Intelligent Devices | 100 | 109 | |||||||||
Control Systems & Software | 22 | 26 | |||||||||
Test & Measurement | — | 150 | |||||||||
AspenTech | 123 | 122 | |||||||||
Software and Control | 145 | 298 | |||||||||
Corporate | 12 | 10 | |||||||||
Total | $ | 257 | $ | 417 |
Table 5 |
EMERSON AND SUBSIDIARIES | |||||||||||
ADJUSTED CORPORATE AND OTHER SUPPLEMENTAL | |||||||||||
(DOLLARS IN MILLIONS, UNAUDITED) |
Quarter Ended June 30, | ||||||||||||||||||||||||||
2023 | 2024 | |||||||||||||||||||||||||
Stock compensation (GAAP) | $ | (56) | $ | (56) | ||||||||||||||||||||||
Integration-related stock compensation expense | — | 9 | 1 | |||||||||||||||||||||||
Adjusted stock compensation (non-GAAP) | $ | (56) | $ | (47) |
Quarter Ended June 30, | |||||||||||||||||||||||
2023 | 2024 | ||||||||||||||||||||||
Corporate and other (GAAP) | $ | (43) | $ | (38) | |||||||||||||||||||
Corporate restructuring and related costs | 1 | 1 | |||||||||||||||||||||
Acquisition / divestiture costs | 38 | 13 | |||||||||||||||||||||
National Instruments investment gain | (12) | — | |||||||||||||||||||||
AspenTech Micromine purchase price hedge | (3) | — | |||||||||||||||||||||
Adjusted corporate and other (non-GAAP) | $ | (19) | $ | (24) | |||||||||||||||||||
1 Integration-related stock compensation expense relates to NI and includes $5 reported as restructuring costs. |
Table 6 | |||||||||||
EMERSON AND SUBSIDIARIES | |||||||||||
ADJUSTED EBITA & EPS SUPPLEMENTAL | |||||||||||
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) |
Quarter Ended June 30, | |||||||||||
2023 | 2024 | ||||||||||
Pretax earnings | $ | 822 | $ | 455 | |||||||
Percent of sales | 20.8 | % | 10.4 | % | |||||||
Interest expense, net | 10 | 56 | |||||||||
Interest income from related party1 | (10) | (24) | |||||||||
Amortization of intangibles | 169 | 313 | |||||||||
Restructuring and related costs | 13 | 60 | |||||||||
Acquisition/divestiture fees and related costs | 38 | 17 | |||||||||
National Instruments investment gain | (12) | — | |||||||||
AspenTech Micromine purchase price hedge | (3) | — | |||||||||
Loss on Copeland note receivable | — | 279 | |||||||||
Adjusted EBITA | $ | 1,027 | $ | 1,156 | |||||||
Percent of sales | 26.0 | % | 26.4 | % | |||||||
Quarter Ended June 30, | |||||||||||
2023 | 2024 | ||||||||||
GAAP earnings from continuing operations per share | $ | 1.12 | $ | 0.60 | |||||||
Amortization of intangibles | 0.15 | 0.35 | |||||||||
Restructuring and related costs | 0.02 | 0.08 | |||||||||
Acquisition/divestiture fees and related costs | 0.07 | 0.02 | |||||||||
National Instruments investment gain | (0.02) | — | |||||||||
Interest income on undeployed proceeds from Copeland transaction | (0.05) | — | |||||||||
Loss on Copeland note receivable | — | 0.38 | |||||||||
Adjusted earnings from continuing operations per share | $ | 1.29 | $ | 1.43 | |||||||
Less: AspenTech contribution to adjusted earnings per share | (0.11) | (0.14) | |||||||||
Adjusted earnings per share excluding AspenTech contribution | $ | 1.18 | $ | 1.29 | |||||||
1 Represents interest on the Copeland note receivable through June 6, 2024. |
Table 6 cont. |
Quarter Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||
Pretax Earnings | Income Taxes | Earnings from Cont. Ops. | Non-Controlling Interests3 | Net Earnings Common Stockholders | Diluted Earnings Per Share | ||||||||||||||||||||||||||||||
As reported (GAAP) | $ | 455 | $ | 88 | $ | 367 | $ | 23 | $ | 344 | $ | 0.60 | |||||||||||||||||||||||
Amortization of intangibles | 313 | 1 | 74 | 239 | 40 | 199 | 0.35 | ||||||||||||||||||||||||||||
Restructuring and related costs | 60 | 2 | 14 | 46 | — | 46 | 0.08 | ||||||||||||||||||||||||||||
Acquisition/divestiture fees and related costs | 17 | 2 | 15 | — | 15 | 0.02 | |||||||||||||||||||||||||||||
Loss on Copeland note receivable | 279 | 62 | 217 | — | 217 | 0.38 | |||||||||||||||||||||||||||||
Adjusted (non-GAAP) | $ | 1,124 | $ | 240 | $ | 884 | $ | 63 | $ | 821 | $ | 1.43 | |||||||||||||||||||||||
Interest expense, net | 56 | ||||||||||||||||||||||||||||||||||
Interest income from related party4 | (24) | ||||||||||||||||||||||||||||||||||
Adjusted EBITA (non-GAAP) | $ | 1,156 | |||||||||||||||||||||||||||||||||
1 Amortization of intangibles includes $49 reported in cost of sales. | |||||||||||||||||||||||||||||||||||
2 Restructuring and related costs includes $3 reported in cost of sales 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 through June 6, 2024. |
Table 7 | |||||||||||
EMERSON AND SUBSIDIARIES | |||||||||||
ASPENTECH CONTRIBUTION TO EMERSON RESULTS SUPPLEMENTAL | |||||||||||
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) |
Quarter Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||
Pretax Earnings | Income Taxes (Benefit) | Earnings from Cont. Ops. | Non-Controlling Interests4 | Net Earnings Common Stockholders | Diluted Earnings Per Share | ||||||||||||||||||||||||||||||
Standalone reporting (GAAP) | $ | 53 | 1 | $ | 8 | $ | 45 | ||||||||||||||||||||||||||||
Other | (1) | (5) | 4 | ||||||||||||||||||||||||||||||||
Reported in Emerson consolidation (GAAP) | 52 | 3 | 49 | 21 | 28 | $ | 0.05 | ||||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||
Amortization of intangibles | 121 | 2 | 27 | 94 | 40 | 54 | 0.09 | ||||||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 173 | $ | 30 | $ | 143 | $ | 61 | $ | 82 | $ | 0.14 | |||||||||||||||||||||||
Interest income | (14) | 3 | |||||||||||||||||||||||||||||||||
Stock compensation | 11 | 3 | |||||||||||||||||||||||||||||||||
Adjusted segment EBITA (non-GAAP) | $ | 170 | |||||||||||||||||||||||||||||||||
Reconciliation to Segment EBIT | |||||||||||||||||||||||||||||||||||
Pre-tax earnings | $ | 52 | |||||||||||||||||||||||||||||||||
Interest income | (14) | 3 | |||||||||||||||||||||||||||||||||
Stock compensation | 11 | 3 | |||||||||||||||||||||||||||||||||
Segment EBIT (GAAP) | $ | 49 | |||||||||||||||||||||||||||||||||
Amortization of intangibles | 121 | 2 | |||||||||||||||||||||||||||||||||
Adjusted segment EBITA (non-GAAP) | $ | 170 | |||||||||||||||||||||||||||||||||
1 Amount reflects AspenTech's pretax earnings for the three months ended June 30, 2024 as reported in its quarterly earnings release 8-K. | |||||||||||||||||||||||||||||||||||
2 Amortization of intangibles includes $48 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 Q3 Underlying Sales Change | Reported | (Favorable) / Unfavorable FX | (Acquisitions) / Divestitures | Underlying | ||||||||||
Final Control | 1 | % | 1 | % | — | % | 2 | % | ||||||
Measurement & Analytical | 8 | % | 1 | % | — | % | 9 | % | ||||||
Discrete Automation | (8) | % | 2 | % | — | % | (6) | % | ||||||
Safety & Productivity | (3) | % | — | % | — | % | (3) | % | ||||||
Intelligent Devices | 1 | % | 1 | % | — | % | 2 | % | ||||||
Control Systems & Software | 6 | % | 1 | % | — | % | 7 | % | ||||||
Test & Measurement | ||||||||||||||
AspenTech | 7 | % | — | % | — | % | 7 | % | ||||||
Software and Control | 42 | % | 1 | % | (36) | % | 7 | % | ||||||
Emerson | 11 | % | 1 | % | (9) | % | 3 | % |
Nine Months Ended June 30, 2024 Underlying Sales Change | Reported | (Favorable) / Unfavorable FX | (Acquisitions) / Divestitures | Underlying | ||||||||||
Final Control | 5 | % | 1 | % | — | % | 6 | % | ||||||
Measurement & Analytical | 15 | % | 1 | % | 1 | % | 17 | % | ||||||
Discrete Automation | (5) | % | — | % | — | % | (5) | % | ||||||
Safety & Productivity | — | % | — | % | — | % | — | % | ||||||
Intelligent Devices | 5 | % | 1 | % | — | % | 6 | % | ||||||
Control Systems & Software | 9 | % | — | % | 1 | % | 10 | % | ||||||
Test & Measurement | ||||||||||||||
AspenTech | 11 | % | — | % | — | % | 11 | % | ||||||
Software and Control | 51 | % | — | % | (41) | % | 10 | % | ||||||
Emerson | 16 | % | 1 | % | (10) | % | 7 | % |
Underlying Growth Guidance | 2024 Guidance | ||||
Reported (GAAP) | ~15% | ||||
(Favorable) / Unfavorable FX | ~0.5 pts | ||||
(Acquisitions) / Divestitures | ~(9.5) pts | ||||
Underlying (non-GAAP) | ~6% |
2023 Q3 Adjusted Segment EBITA | EBIT | EBIT Margin | Amortization of Intangibles | Restructuring and Related Costs | Adjusted Segment EBITA | Adjusted Segment EBITA Margin | ||||||||||||||
Final Control | $ | 245 | 23.7 | % | $ | 22 | $ | (1) | $ | 266 | 25.7 | % | ||||||||
Measurement & Analytical | 257 | 28.1 | % | 5 | 1 | 263 | 28.7 | % | ||||||||||||
Discrete Automation | 124 | 18.5 | % | 8 | 12 | 144 | 21.4 | % | ||||||||||||
Safety & Productivity | 82 | 22.7 | % | 7 | (1) | 88 | 24.3 | % | ||||||||||||
Intelligent Devices | $ | 708 | 23.7 | % | $ | 42 | $ | 11 | $ | 761 | 25.5 | % | ||||||||
Control Systems & Software | 144 | 21.8 | % | 6 | 1 | 151 | 22.8 | % | ||||||||||||
Test & Measurement | — | — | % | — | — | — | — | % | ||||||||||||
AspenTech | 27 | 8.2 | % | 121 | — | 148 | 46.1 | % | ||||||||||||
Software and Control | $ | 171 | 17.4 | % | $ | 127 | $ | 1 | $ | 299 | 30.4 | % |
2024 Q3 Adjusted Segment EBITA | EBIT | EBIT Margin | Amortization of Intangibles | Restructuring and Related Costs | Adjusted Segment EBITA | Adjusted Segment EBITA Margin | ||||||||||||||
Final Control | $ | 253 | 24.2 | % | $ | 21 | $ | 5 | $ | 279 | 26.8 | % | ||||||||
Measurement & Analytical | 252 | 25.6 | % | 11 | 3 | 266 | 27.0 | % | ||||||||||||
Discrete Automation | 109 | 17.6 | % | 9 | 16 | 134 | 21.5 | % | ||||||||||||
Safety & Productivity | 79 | 22.5 | % | 6 | 1 | 86 | 24.7 | % | ||||||||||||
Intelligent Devices | $ | 693 | 23.1 | % | $ | 47 | $ | 25 | $ | 765 | 25.5 | % | ||||||||
Control Systems & Software | 168 | 23.9 | % | 6 | 4 | 178 | 25.2 | % | ||||||||||||
Test & Measurement | (88) | (24.7) | % | 139 | 25 | 76 | 21.4 | % | ||||||||||||
AspenTech | 49 | 14.5 | % | 121 | — | 170 | 50.0 | % | ||||||||||||
Software and Control | $ | 129 | 9.2 | % | $ | 266 | $ | 29 | $ | 424 | 30.3 | % |
Total Adjusted Segment EBITA | 2023 Q3 | 2024 Q3 | |||||||||
Pretax earnings (GAAP) | $ | 822 | $ | 455 | |||||||
Margin | 20.8 | % | 10.4 | % | |||||||
Corporate items and interest expense, net | 57 | 367 | |||||||||
Amortization of intangibles | 169 | 313 | |||||||||
Restructuring and related costs | 12 | 54 | |||||||||
Adjusted segment EBITA (non-GAAP) | $ | 1,060 | $ | 1,189 | |||||||
Margin | 26.9 | % | 27.1 | % |
Free Cash Flow | 2023 Q3 | 2024 Q3 | 2024E ($ in billions) | |||||||||||||||||
Operating cash flow (GAAP) | $ | 842 | $ | 1,067 | ~$3.2 | |||||||||||||||
Capital expenditures | (73) | (92) | ~(0.4) | |||||||||||||||||
Free cash flow (non-GAAP) | $ | 769 | $ | 975 | ~$2.8 | |||||||||||||||
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. |
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