Missouri | 1-278 | 43-0259330 | ||||||
--------------------------------- (State or Other Jurisdiction of Incorporation) |
------------------- (Commission |
--------------------------- (I.R.S. Employer Identification Number) |
||||||
File Number) |
8000 West Florissant Avenue | |||||||||||
St. Louis, | Missouri | 63136 | |||||||||
------------------------------------------------ (Address of Principal Executive Offices) |
------------------ (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock of $0.50 par value per share | EMR | New York Stock Exchange | ||||||
NYSE Chicago | ||||||||
0.375% Notes due 2024 | EMR 24 | New York Stock Exchange | ||||||
1.250% Notes due 2025 | EMR 25A | New York Stock Exchange | ||||||
2.000% Notes due 2029 | EMR 29 | New York Stock Exchange |
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: | February 7, 2024 | By: | /s/ John A. Sperino | ||||||||
John A. Sperino
Vice President and
Assistant Secretary
|
(dollars in millions, except per share) | 2023 Q1 | 2024 Q1 | Change | ||||||||
Underlying Orders2 |
4% | ||||||||||
Net Sales | $3,373 | $4,117 | 22% | ||||||||
Underlying Sales3 |
10% | ||||||||||
Pretax Earnings | $422 | $139 | |||||||||
Margin | 12.5% | 3.4% | (910) bps | ||||||||
Adjusted Segment EBITA4 |
$765 | $1,014 | |||||||||
Margin | 22.7% | 24.6% | 190 bps | ||||||||
GAAP Earnings Per Share | $0.56 | $0.25 | (55)% | ||||||||
Adjusted Earnings Per Share5 |
$0.78 | $1.22 | 56% | ||||||||
Operating Cash Flow | $302 | $444 | 47% | ||||||||
Free Cash Flow | $243 | $367 | 51% |
2024 Q2 | 2024 | |||||||
Net Sales Growth | 12.5% - 14.5% | 14.5% - 17.0% | ||||||
Underlying Sales Growth | 3.5% - 5.5% | 4.5% - 6.5% | ||||||
Earnings Per Share | $0.68 - $0.72 | $2.80 - $2.95 | ||||||
Amortization of Intangibles | ~$0.35 | ~$1.42 | ||||||
Restructuring and Related Costs | ~$0.09 | ~$0.34 | ||||||
Loss on Copeland Equity Method Investment | ~$0.06 | ~$0.20 | ||||||
Amortization of Acquisition-related Inventory Step-up | --- | $0.38 | ||||||
Acquisition / Divestiture Fees and Related Costs | ~$0.04 | ~$0.26 | ||||||
Discrete Tax Benefits | --- | ($0.10) | ||||||
Adjusted Earnings Per Share | $1.22 - $1.26 | $5.30 - $5.45 | ||||||
Operating Cash Flow | $3.0B - $3.1B | |||||||
Free Cash Flow | $2.6B - $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 Dec 31 | |||||||||||
2022 | 2023 | ||||||||||
Net sales | $ | 3,373 | $ | 4,117 | |||||||
Cost and expenses | |||||||||||
Cost of sales | 1,753 | 2,201 | |||||||||
SG&A expenses | 1,030 | 1,277 | |||||||||
Other deductions, net | 120 | 487 | |||||||||
Interest expense, net | 48 | 44 | |||||||||
Interest income from related party1 |
— | (31) | |||||||||
Earnings from continuing operations before income taxes | 422 | 139 | |||||||||
Income taxes | 98 | 7 | |||||||||
Earnings from continuing operations | 324 | 132 | |||||||||
Discontinued operations, net of tax | 2,002 | — | |||||||||
Net earnings | 2,326 | 132 | |||||||||
Less: Noncontrolling interests in subsidiaries | (5) | (10) | |||||||||
Net earnings common stockholders | $ | 2,331 | $ | 142 | |||||||
Earnings common stockholders | |||||||||||
Earnings from continuing operations | $ | 329 | $ | 142 | |||||||
Discontinued operations | 2,002 | — | |||||||||
Net earnings common stockholders | $ | 2,331 | $ | 142 | |||||||
Diluted avg. shares outstanding | 586.7 | 573.3 | |||||||||
Diluted earnings per share common stockholders | |||||||||||
Earnings from continuing operations | $ | 0.56 | $ | 0.25 | |||||||
Discontinued operations | 3.41 | — | |||||||||
Diluted earnings per common share | $ | 3.97 | $ | 0.25 | |||||||
Quarter Ended Dec 31 | |||||||||||
2022 | 2023 | ||||||||||
Other deductions, net | |||||||||||
Amortization of intangibles | $ | 118 | $ | 274 | |||||||
Restructuring costs | 10 | 83 | |||||||||
Other | (8) | 130 | |||||||||
Total | $ | 120 | $ | 487 | |||||||
1 Represents interest on the Copeland note receivable |
Table 2 | |||||||||||
EMERSON AND SUBSIDIARIES | |||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||
(DOLLARS IN MILLIONS, UNAUDITED) | |||||||||||
Sept 30, 2023 | Dec 31, 2023 | ||||||||||
Assets | |||||||||||
Cash and equivalents | $ | 8,051 | $ | 2,076 | |||||||
Receivables, net | 2,518 | 2,759 | |||||||||
Inventories | 2,006 | 2,432 | |||||||||
Other current assets | 1,244 | 1,399 | |||||||||
Total current assets | 13,819 | 8,666 | |||||||||
Property, plant & equipment, net | 2,363 | 2,701 | |||||||||
Goodwill | 14,480 | 17,983 | |||||||||
Other intangible assets | 6,263 | 11,270 | |||||||||
Copeland note receivable and equity investment | 3,255 | 3,253 | |||||||||
Other | 2,566 | 2,640 | |||||||||
Total assets | $ | 42,746 | $ | 46,513 | |||||||
Liabilities and equity | |||||||||||
Short-term borrowings and current maturities of long-term debt | $ | 547 | $ | 3,227 | |||||||
Accounts payable | 1,275 | 1,234 | |||||||||
Accrued expenses | 3,210 | 3,304 | |||||||||
Total current liabilities | 5,032 | 7,765 | |||||||||
Long-term debt | 7,610 | 7,632 | |||||||||
Other liabilities | 3,506 | 4,561 | |||||||||
Equity | |||||||||||
Common stockholders' equity | 20,689 | 20,674 | |||||||||
Noncontrolling interests in subsidiaries | 5,909 | 5,881 | |||||||||
Total equity | 26,598 | 26,555 | |||||||||
Total liabilities and equity | $ | 42,746 | $ | 46,513 |
Table 3 | ||||||||||||||
EMERSON AND SUBSIDIARIES | ||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
(DOLLARS IN MILLIONS, UNAUDITED) | ||||||||||||||
Three Months Ended Dec 31 | ||||||||||||||
2022 | 2023 | |||||||||||||
Operating activities | ||||||||||||||
Net earnings | $ | 2,326 | $ | 132 | ||||||||||
Earnings from discontinued operations, net of tax | (2,002) | — | ||||||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 260 | 422 | ||||||||||||
Stock compensation | 102 | 74 | ||||||||||||
Amortization of acquisition-related inventory step-up | — | 231 | ||||||||||||
Changes in operating working capital | (289) | (247) | ||||||||||||
Other, net | (95) | (168) | ||||||||||||
Cash from continuing operations | 302 | 444 | ||||||||||||
Cash from discontinued operations | 116 | (29) | ||||||||||||
Cash provided by operating activities | 418 | 415 | ||||||||||||
Investing activities | ||||||||||||||
Capital expenditures | (59) | (77) | ||||||||||||
Purchases of businesses, net of cash and equivalents acquired | — | (8,339) | ||||||||||||
Proceeds from subordinated interest | 15 | — | ||||||||||||
Other, net | (23) | (37) | ||||||||||||
Cash from continuing operations | (67) | (8,453) | ||||||||||||
Cash from discontinued operations | 2,953 | 1 | ||||||||||||
Cash provided by (used in) investing activities | 2,886 | (8,452) | ||||||||||||
Financing activities | ||||||||||||||
Net increase (decrease) in short-term borrowings | (539) | 2,647 | ||||||||||||
Payments of long-term debt | (9) | — | ||||||||||||
Dividends paid | (306) | (300) | ||||||||||||
Purchases of common stock | (2,000) | (175) | ||||||||||||
AspenTech purchases of common stock | — | (72) | ||||||||||||
Other, net | (41) | (45) | ||||||||||||
Cash provided by (used in) financing activities | (2,895) | 2,055 | ||||||||||||
Effect of exchange rate changes on cash and equivalents | 58 | 7 | ||||||||||||
Increase (decrease) in cash and equivalents | 467 | (5,975) | ||||||||||||
Beginning cash and equivalents | 1,804 | 8,051 | ||||||||||||
Ending cash and equivalents | $ | 2,271 | $ | 2,076 | ||||||||||
Table 4 | |||||||||||
EMERSON AND SUBSIDIARIES | |||||||||||
SEGMENT SALES AND EARNINGS | |||||||||||
(DOLLARS IN MILLIONS, UNAUDITED) |
Quarter Ended Dec 31 | ||||||||||||||||||||||||||
2022 | 2023 | Reported | Underlying | |||||||||||||||||||||||
Sales | ||||||||||||||||||||||||||
Final Control | $ | 862 | $ | 940 | 9 | % | 9 | % | ||||||||||||||||||
Measurement & Analytical | 749 | 947 | 26 | % | 28 | % | ||||||||||||||||||||
Discrete Automation | 618 | 613 | (1) | % | (2) | % | ||||||||||||||||||||
Safety & Productivity | 310 | 322 | 4 | % | 3 | % | ||||||||||||||||||||
Intelligent Devices | $ | 2,539 | $ | 2,822 | 11 | % | 11 | % | ||||||||||||||||||
Control Systems & Software | 606 | 675 | 11 | % | 11 | % | ||||||||||||||||||||
Test & Measurement | — | 382 | — | % | — | % | ||||||||||||||||||||
AspenTech | 243 | 257 | 6 | % | 6 | % | ||||||||||||||||||||
Software and Control | $ | 849 | $ | 1,314 | 55 | % | 9 | % | ||||||||||||||||||
Eliminations | (15) | (19) | ||||||||||||||||||||||||
Total | $ | 3,373 | $ | 4,117 | 22 | % | 10 | % |
Sales Growth by Geography | ||||||||||||||||||||
Quarter Ended Dec 31 | ||||||||||||||||||||
Americas | 8 | % | ||||||||||||||||||
Europe | 10 | % | ||||||||||||||||||
Asia, Middle East & Africa | 15 | % |
Table 4 cont. | |||||||||||
Quarter Ended Dec 31 | Quarter Ended Dec 31 | ||||||||||||||||||||||
2022 | 2023 | ||||||||||||||||||||||
As Reported (GAAP) | Adjusted EBITA (Non-GAAP) |
As Reported (GAAP) | Adjusted EBITA (Non-GAAP) |
||||||||||||||||||||
Earnings | |||||||||||||||||||||||
Final Control | $ | 158 | $ | 184 | $ | 194 | $ | 223 | |||||||||||||||
Margins | 18.4 | % | 21.4 | % | 20.6 | % | 23.6 | % | |||||||||||||||
Measurement & Analytical | 175 | 181 | 235 | 258 | |||||||||||||||||||
Margins | 23.4 | % | 24.1 | % | 24.9 | % | 27.3 | % | |||||||||||||||
Discrete Automation | 121 | 129 | 97 | 116 | |||||||||||||||||||
Margins | 19.6 | % | 21.0 | % | 15.8 | % | 18.9 | % | |||||||||||||||
Safety & Productivity | 63 | 69 | 68 | 74 | |||||||||||||||||||
Margins | 20.4 | % | 22.4 | % | 21.1 | % | 23.1 | % | |||||||||||||||
Intelligent Devices | $ | 517 | $ | 563 | $ | 594 | $ | 671 | |||||||||||||||
Margins | 20.4 | % | 22.2 | % | 21.0 | % | 23.8 | % | |||||||||||||||
Control Systems & Software | 107 | 114 | 149 | 155 | |||||||||||||||||||
Margins | 17.6 | % | 18.7 | % | 22.1 | % | 23.1 | % | |||||||||||||||
Test & Measurement | — | — | (78) | 101 | |||||||||||||||||||
Margins | — | % | — | % | (20.4) | % | 26.5 | % | |||||||||||||||
AspenTech | (33) | 88 | (35) | 87 | |||||||||||||||||||
Margins | (13.6) | % | 36.6 | % | (13.7) | % | 33.6 | % | |||||||||||||||
Software and Control | $ | 74 | $ | 202 | $ | 36 | $ | 343 | |||||||||||||||
Margins | 8.7 | % | 23.8 | % | 2.8 | % | 26.1 | % | |||||||||||||||
Corporate items and interest expense, net: |
|||||||||||||||||||||||
Stock compensation | (102) | (102) | (74) | (44) | |||||||||||||||||||
Unallocated pension and postretirement costs | 45 | 45 | 31 | 31 | |||||||||||||||||||
Corporate and other | (64) | (44) | (399) | (38) | |||||||||||||||||||
Loss on Copeland equity method investment | — | — | (36) | — | |||||||||||||||||||
Interest expense, net | (48) | — | (44) | — | |||||||||||||||||||
Interest income from related party1 |
— | — | 31 | — | |||||||||||||||||||
Pretax Earnings / Adjusted EBITA | $ | 422 | $ | 664 | $ | 139 | $ | 963 | |||||||||||||||
Margins | 12.5 | % | 19.7 | % | 3.4 | % | 23.4 | % | |||||||||||||||
Supplemental Total Segment Earnings: | |||||||||||||||||||||||
Adjusted Total Segment EBITA | $ | 765 | $ | 1,014 | |||||||||||||||||||
Margins | 22.7 | % | 24.6 | % | |||||||||||||||||||
1 Represents interest on the Copeland note receivable. |
Table 4 cont. |
Quarter Ended Dec 31 | Quarter Ended Dec 31 | |||||||||||||||||||||||||
2022 | 2023 | |||||||||||||||||||||||||
Amortization of
Intangibles1
|
Restructuring
and
Related Costs2
|
Amortization of
Intangibles1
|
Restructuring
and
Related Costs2
|
|||||||||||||||||||||||
Final Control | $ | 22 | $ | 4 | $ | 22 | $ | 7 | ||||||||||||||||||
Measurement & Analytical | 5 | 1 | 20 | 3 | ||||||||||||||||||||||
Discrete Automation | 7 | 1 | 9 | 10 | ||||||||||||||||||||||
Safety & Productivity | 6 | — | 6 | — | ||||||||||||||||||||||
Intelligent Devices | $ | 40 | $ | 6 | $ | 57 | $ | 20 | ||||||||||||||||||
Control Systems & Software | 6 | 1 | 5 | 1 | ||||||||||||||||||||||
Test & Measurement | — | — | 139 | 40 | ||||||||||||||||||||||
AspenTech | 121 | — | 122 | — | ||||||||||||||||||||||
Software and Control | $ | 127 | $ | 1 | $ | 266 | $ | 41 | ||||||||||||||||||
Corporate | — | 8 | — | 26 | 3 | |||||||||||||||||||||
Total | $ | 167 | $ | 15 | $ | 323 | $ | 87 | ||||||||||||||||||
1 Amortization of intangibles includes $49 and $49 reported in cost of sales for the three months ended December 31, 2022 and 2023, respectively. | ||||||||||||||||||||||||||
2 Restructuring and related costs includes $5 and $4 reported in cost of sales for the three months ended December 31, 2022 and 2023, respectively. | ||||||||||||||||||||||||||
3 Corporate restructuring of $26 for the three months ended December 31, 2023 is comprised entirely of integration-related stock compensation expense attributable to NI. |
Quarter Ended Dec 31 | |||||||||||
Depreciation and Amortization | 2022 | 2023 | |||||||||
Final Control | $ | 45 | $ | 40 | |||||||
Measurement & Analytical | 30 | 40 | |||||||||
Discrete Automation | 21 | 22 | |||||||||
Safety & Productivity | 14 | 14 | |||||||||
Intelligent Devices | 110 | 116 | |||||||||
Control Systems & Software | 21 | 21 | |||||||||
Test & Measurement | — | 151 | |||||||||
AspenTech | 123 | 123 | |||||||||
Software and Control | 144 | 295 | |||||||||
Corporate | 6 | 11 | |||||||||
Total | $ | 260 | $ | 422 |
Table 5 |
EMERSON AND SUBSIDIARIES | |||||||||||
ADJUSTED CORPORATE AND OTHER SUPPLEMENTAL | |||||||||||
(DOLLARS IN MILLIONS, UNAUDITED) |
Quarter Ended Dec 31 | ||||||||||||||||||||||||||
2022 | 2023 | |||||||||||||||||||||||||
Stock compensation (GAAP) | $ | (102) | $ | (74) | ||||||||||||||||||||||
Integration-related stock compensation expense | — | 30 | 1 | |||||||||||||||||||||||
Adjusted stock compensation (non-GAAP) | $ | (102) | $ | (44) |
Quarter Ended Dec 31 | |||||||||||||||||||||||
2022 | 2023 | ||||||||||||||||||||||
Corporate and other (GAAP) | $ | (64) | $ | (399) | |||||||||||||||||||
Corporate restructuring and related costs | 8 | — | |||||||||||||||||||||
Acquisition / divestiture costs | — | 130 | |||||||||||||||||||||
Amortization of acquisition-related inventory step-up | — | 231 | |||||||||||||||||||||
Russia business exit | 47 | — | |||||||||||||||||||||
AspenTech Micromine purchase price hedge | (35) | — | |||||||||||||||||||||
Adjusted corporate and other (non-GAAP) | $ | (44) | $ | (38) | |||||||||||||||||||
1 Integration-related stock compensation expense relates to NI and includes $26 reported as restructuring costs. |
Table 6 | |||||||||||
EMERSON AND SUBSIDIARIES | |||||||||||
ADJUSTED EBITA & EPS SUPPLEMENTAL | |||||||||||
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) |
Quarter Ended Dec 31 | |||||||||||
2022 | 2023 | ||||||||||
Pretax earnings | $ | 422 | $ | 139 | |||||||
Percent of sales | 12.5 | % | 3.4 | % | |||||||
Interest expense, net | 48 | 44 | |||||||||
Interest income from related party1 |
— | (31) | |||||||||
Amortization of intangibles | 167 | 323 | |||||||||
Restructuring and related costs | 15 | 87 | |||||||||
Acquisition/divestiture fees and related costs | — | 134 | |||||||||
Amortization of acquisition-related inventory step-up | — | 231 | |||||||||
Loss on Copeland equity method investment | — | 36 | |||||||||
Russia business exit | 47 | — | |||||||||
AspenTech Micromine purchase price hedge | (35) | — | |||||||||
Adjusted EBITA | $ | 664 | $ | 963 | |||||||
Percent of sales | 19.7 | % | 23.4 | % | |||||||
Quarter Ended Dec 31 | |||||||||||
2022 | 2023 | ||||||||||
GAAP earnings from continuing operations per share | $ | 0.56 | $ | 0.25 | |||||||
Amortization of intangibles | 0.15 | 0.36 | |||||||||
Restructuring and related costs | 0.02 | 0.12 | |||||||||
Acquisition/divestiture fees and related costs | — | 0.17 | |||||||||
Amortization of acquisition-related inventory step-up | — | 0.38 | |||||||||
Loss on Copeland equity method investment | — | 0.04 | |||||||||
Discrete taxes | — | (0.10) | |||||||||
Russia business exit | 0.08 | — | |||||||||
AspenTech Micromine purchase price hedge | (0.03) | — | |||||||||
Adjusted earnings from continuing operations per share | $ | 0.78 | $ | 1.22 | |||||||
Less: AspenTech contribution to adjusted earnings per share | (0.07) | ||||||||||
Adjusted earnings per share excluding AspenTech contribution | $ | 1.15 | |||||||||
1 Represents interest on the Copeland note receivable |
Table 6 cont. |
Quarter Ended December 31, 2023 | |||||||||||||||||||||||||||||||||||
Pretax Earnings |
Income Taxes |
Earnings from Cont. Ops. |
Non-Controlling
Interests3
|
Net Earnings Common Stockholders |
Diluted Earnings Per Share |
||||||||||||||||||||||||||||||
As reported (GAAP) | $ | 139 | $ | 7 | $ | 132 | $ | (10) | $ | 142 | $ | 0.25 | |||||||||||||||||||||||
Amortization of intangibles | 323 | 1 |
74 | 249 | 41 | 208 | 0.36 | ||||||||||||||||||||||||||||
Restructuring and related costs | 87 | 2 |
18 | 69 | — | 69 | 0.12 | ||||||||||||||||||||||||||||
Acquisition/divestiture fees and related costs | 134 | 38 | 96 | — | 96 | 0.17 | |||||||||||||||||||||||||||||
Amortization of acquisition-related inventory step-up | 231 | 14 | 217 | — | 217 | 0.38 | |||||||||||||||||||||||||||||
Loss on Copeland equity method investment | 36 | 9 | 27 | — | 27 | 0.04 | |||||||||||||||||||||||||||||
Discrete taxes | — | 57 | (57) | — | (57) | (0.10) | |||||||||||||||||||||||||||||
Adjusted (non-GAAP) | $ | 950 | $ | 217 | $ | 733 | $ | 31 | $ | 702 | $ | 1.22 | |||||||||||||||||||||||
Interest expense, net | 44 | ||||||||||||||||||||||||||||||||||
Interest income from related party4 |
(31) | ||||||||||||||||||||||||||||||||||
Adjusted EBITA (non-GAAP) | $ | 963 | |||||||||||||||||||||||||||||||||
1 Amortization of intangibles includes $49 reported in cost of sales. | |||||||||||||||||||||||||||||||||||
2 Restructuring and related costs includes $4 reported in cost of sales. | |||||||||||||||||||||||||||||||||||
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 December 31, 2023 | |||||||||||||||||||||||||||||||||||
Pretax Earnings |
Income Taxes (Benefit) |
Earnings from Cont. Ops. |
Non-Controlling
Interests4
|
Net Earnings Common Stockholders |
Diluted Earnings Per Share |
||||||||||||||||||||||||||||||
Standalone reporting (GAAP) | $ | (37) | 1 | $ | (15) | $ | (22) | ||||||||||||||||||||||||||||
Other | (2) | — | (2) | ||||||||||||||||||||||||||||||||
Reported in Emerson consolidation (GAAP) | (39) | (15) | (24) | (10) | (14) | $ | (0.02) | ||||||||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||
Amortization of intangibles | 122 | 2 | 27 | 95 | 41 | 54 | 0.09 | ||||||||||||||||||||||||||||
Adjusted (Non-GAAP) | $ | 83 | $ | 12 | $ | 71 | $ | 31 | $ | 40 | $ | 0.07 | |||||||||||||||||||||||
Interest income | (12) | 3 | |||||||||||||||||||||||||||||||||
Stock compensation | 16 | 3 | |||||||||||||||||||||||||||||||||
Adjusted segment EBITA (non-GAAP) | $ | 87 | |||||||||||||||||||||||||||||||||
Reconciliation to Segment EBIT | |||||||||||||||||||||||||||||||||||
Pre-tax earnings | $ | (39) | |||||||||||||||||||||||||||||||||
Interest income | (12) | 3 | |||||||||||||||||||||||||||||||||
Stock compensation | 16 | 3 | |||||||||||||||||||||||||||||||||
Segment EBIT (GAAP) | $ | (35) | |||||||||||||||||||||||||||||||||
Amortization of intangibles | 122 | 2 | |||||||||||||||||||||||||||||||||
Adjusted segment EBITA (non-GAAP) | $ | 87 | |||||||||||||||||||||||||||||||||
1 Amount reflects AspenTech's pretax earnings for the three months ended December 31, 2023 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 Q1 Underlying Sales Change | Reported | (Favorable) / Unfavorable FX | (Acquisitions) | Divestitures | Underlying | ||||||||||||
Final Control | 9 | % | (1) | % | — | % | 1 | % | 9 | % | |||||||
Measurement & Analytical | 26 | % | — | % | — | % | 2 | % | 28 | % | |||||||
Discrete Automation | (1) | % | (1) | % | — | % | — | % | (2) | % | |||||||
Safety & Productivity | 4 | % | (1) | % | — | % | — | % | 3 | % | |||||||
Intelligent Devices | 11 | % | (1) | % | — | % | 1 | % | 11 | % | |||||||
Control Systems & Software | 11 | % | (1) | % | — | % | 1 | % | 11 | % | |||||||
Test & Measurement | — | % | — | % | — | % | — | % | — | % | |||||||
AspenTech | 6 | % | — | % | — | % | — | % | 6 | % | |||||||
Software and Control | 55 | % | (1) | % | (46) | % | 1 | % | 9 | % | |||||||
Emerson | 22 | % | (1) | % | (12) | % | 1 | % | 10 | % |
Underlying Growth Guidance | 2024 Q2 Guidance | 2024 Guidance |
||||||
Reported (GAAP) | 12.5% - 14.5% | 14.5% - 17% | ||||||
(Favorable) / Unfavorable FX | ~- pts | ~- pts | ||||||
(Acquisitions) | ~(9) pts | (10.0) - (10.5) pts | ||||||
Divestitures | ~- pts | ~- pts | ||||||
Underlying (non-GAAP) | 3.5% - 5.5% | 4.5% - 6.5% |
2023 Q1 Adjusted Segment EBITA | EBIT | EBIT Margin |
Amortization of Intangibles |
Restructuring and Related Costs | Adjusted Segment EBITA | Adjusted Segment EBITA Margin | ||||||||||||||
Final Control | $ | 158 | 18.4 | % | $ | 22 | $ | 4 | $ | 184 | 21.4 | % | ||||||||
Measurement & Analytical | 175 | 23.4 | % | 5 | 1 | 181 | 24.1 | % | ||||||||||||
Discrete Automation | 121 | 19.6 | % | 7 | 1 | 129 | 21.0 | % | ||||||||||||
Safety & Productivity | 63 | 20.4 | % | 6 | — | 69 | 22.4 | % | ||||||||||||
Intelligent Devices | $ | 517 | 20.4 | % | $ | 40 | $ | 6 | $ | 563 | 22.2 | % | ||||||||
Control Systems & Software | 107 | 17.6 | % | 6 | 1 | 114 | 18.7 | % | ||||||||||||
Test & Measurement | — | — | % | — | — | — | — | % | ||||||||||||
AspenTech | (33) | (13.6) | % | 121 | — | 88 | 36.6 | % | ||||||||||||
Software and Control | $ | 74 | 8.7 | % | $ | 127 | $ | 1 | $ | 202 | 23.8 | % |
2024 Q1 Adjusted Segment EBITA | EBIT | EBIT Margin |
Amortization of Intangibles |
Restructuring and Related Costs | Adjusted Segment EBITA | Adjusted Segment EBITA Margin | ||||||||||||||
Final Control | $ | 194 | 20.6 | % | $ | 22 | $ | 7 | $ | 223 | 23.6 | % | ||||||||
Measurement & Analytical | 235 | 24.9 | % | 20 | 3 | 258 | 27.3 | % | ||||||||||||
Discrete Automation | 97 | 15.8 | % | 9 | 10 | 116 | 18.9 | % | ||||||||||||
Safety & Productivity | 68 | 21.1 | % | 6 | — | 74 | 23.1 | % | ||||||||||||
Intelligent Devices | $ | 594 | 21.0 | % | $ | 57 | $ | 20 | $ | 671 | 23.8 | % | ||||||||
Control Systems & Software | 149 | 22.1 | % | 5 | 1 | 155 | 23.1 | % | ||||||||||||
Test & Measurement | (78) | (20.4) | % | 139 | 40 | 101 | 26.5 | % | ||||||||||||
AspenTech | (35) | (13.7) | % | 122 | — | 87 | 33.6 | % | ||||||||||||
Software and Control | $ | 36 | 2.8 | % | $ | 266 | $ | 41 | $ | 343 | 26.1 | % |
Total Adjusted Segment EBITA | 2023 Q1 | 2024 Q1 | |||||||||
Pretax earnings (GAAP) | $ | 422 | $ | 139 | |||||||
Margin | 12.5 | % | 3.4 | % | |||||||
Corporate items and interest expense, net | 169 | 491 | |||||||||
Amortization of intangibles | 167 | 323 | |||||||||
Restructuring and related costs | 7 | 61 | |||||||||
Adjusted segment EBITA (non-GAAP) | $ | 765 | $ | 1,014 | |||||||
Margin | 22.7 | % | 24.6 | % |
Free Cash Flow | 2023 Q1 | 2024 Q1 | 2024E ($ in billions) |
|||||||||||||||||
Operating cash flow (GAAP) | $ | 302 | $ | 444 | $3.0 - $3.1 | |||||||||||||||
Capital expenditures | (59) | (77) | ~(0.4) | |||||||||||||||||
Free cash flow (non-GAAP) | $ | 243 | $ | 367 | $2.6 - $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. |