Form: 8-K

Current report

April 6, 2023

Documents


Table 1
EMERSON AND SUBSIDIARIES
CONSOLIDATED OPERATING RESULTS
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)
Quarter Ended Dec 31 Percent
Change
  2021  2022 
Net sales $3,156  $3,373  7  %
Cost of sales 1,741  1,753 
Selling, general and administrative expenses 849  1,030 
Gain on subordinated interest (453) — 
Other deductions, net 38  120 
Interest expense, net 39  48 
Earnings from continuing operations before income taxes 942  422  (55) %
98
Income taxes 196  98 
Earnings from continuing operations 746  324  (57) %
Discontinued operations, net of tax: $84 and $966, respectively 149  2,002 
Net earnings 895  2,326 
Less: Noncontrolling interests in subsidiaries (1) (5)
Net earnings common stockholders $896 $2,331 160  %
Earnings common stockholders
Earnings from continuing operations $746 $329 (56) %
Discontinued operations 150  2,002 
Net earnings common stockholders $896 $2,331 160  %
Diluted average shares outstanding 598.1 586.7
Diluted earnings per share common stockholders
Earnings from continuing operations $1.25 $0.56 (55) %
Discontinued operations 0.25 3.41
Diluted earnings per common share $1.50 $3.97 165  %







Page 2

Table 2
EMERSON AND SUBSIDIARIES
SEGMENT SALES AND EARNINGS
(AMOUNTS IN MILLIONS, UNAUDITED)
The following tables show results for the Company's segments on an adjusted segment EBITA basis and are intended to supplement the Company's results of operations, including its segment earnings which are defined as earnings before interest and taxes. The Company defines adjusted segment and total segment EBITA as segment earnings excluding intangibles amortization expense, and restructuring and related expense. Adjusted segment and total segment EBITA, and adjusted segment and total segment EBITA margin are measures used by management and may be useful for investors to evaluate the Company's segments' operational performance.

Quarter Ended Dec 31 Sales Growth
2021 2022 Reported Underlying
Sales
Final Control $817  $862  6  % 10  %
Measurement & Analytical 737  749  2  % 6  %
Discrete Automation 617  618  —  % 6  %
Safety & Productivity 351  310  (12) % (10) %
Intelligent Devices $2,522  $2,539  1  % 5  %
Control Systems & Software 570  606  6  % 10  %
AspenTech 82  243  197  % N/A
Software and Control $652  $849  30  % 10  %
Eliminations (18) (15)
Total $3,156  $3,373  7  % 6  %






Page 3

Table 2 cont.
Quarter Ended Dec 31 Quarter Ended Dec 31
2021 2022
As Reported (GAAP) Adjusted EBITA (Non-GAAP) As Reported (GAAP) Adjusted EBITA (Non-GAAP)
Earnings
Final Control $122 $153 $158 $184
 Margins 14.9  % 18.7  % 18.4  % 21.4  %
Measurement & Analytical 170 178 175 181
 Margins 23.0  % 24.1  % 23.4  % 24.1  %
Discrete Automation 120 130 121 129
 Margins 19.4  % 21.0  % 19.6  % 21.0  %
Safety & Productivity 65 72 63 69
 Margins 18.6  % 20.8  % 20.4  % 22.4  %
Intelligent Devices $477 $533 $517 $563
 Margins 18.9  % 21.1  % 20.4  % 22.2  %
Control Systems & Software 116 122 107 114
 Margins 20.4  % 21.4  % 17.6  % 18.7  %
AspenTech (2) 20 (33) 88
 Margins (2.3) % 24.9  % (13.6) % 36.6  %
Software and Control $114 $142 $74 $202
 Margins 17.6  % 21.8  % 8.7  % 23.8  %
Corporate items and interest expense, net:
Stock compensation (34) (34) (102) (102)
Unallocated pension and postretirement costs 26 26 45 45
Corporate and other (55) (31) (64) (44)
Gain on subordinated interest 453 — 
Interest expense, net (39) (48)
Pretax Earnings / Adjusted EBITA $942 $636 $422 $664
 Margins 29.8  % 20.1  % 12.5  % 19.7  %
Supplemental Total Segment Earnings:
Adjusted Total Segment EBITA $675 $765
 Margins 21.4  % 22.7  %












Page 4




Table 2 cont.

Quarter Ended Dec 31 Quarter Ended Dec 31
2021 2022
Amortization of
Intangibles1
Restructuring
and
Related Costs2
Amortization of
Intangibles1
Restructuring
and
Related Costs2
Final Control $24 $7 $22 $4
Measurement & Analytical 6 2 5 1
Discrete Automation 8 2 7 1
Safety & Productivity 6 1 6 — 
Intelligent Devices $44 $12 $40 $6
Control Systems & Software 5 1 6 1
AspenTech 22 —  121 — 
Software and Control $27 $1 $127 $1
Corporate —  1 —  8
Total $71 $14 $167 $15
1 Amortization of intangibles includes $14 and $49 reported in cost of sales for the three months ended December 31, 2021 and 2022, respectively.
2 Restructuring and related costs includes $8 and $5 reported in cost of sales for the three months ended December 31, 2021 and 2022, respectively.

Table 3
EMERSON AND SUBSIDIARIES
ADJUSTED CORPORATE AND OTHER SUPPLEMENTAL
(AMOUNTS IN MILLIONS, UNAUDITED)
The following table shows the Company's corporate and other expenses on an adjusted basis. The Company's definition of adjusted corporate and other excludes corporate restructuring and related costs, first year purchase accounting related items and transaction fees, and certain gains, losses or impairments. This metric is useful for reconciling from total adjusted segment EBITA to the Company's consolidated adjusted EBITA.

Quarter Ended Dec 31
Corporate and Other 2021 2022
 Corporate and other (GAAP) $(55) $(64)
 Corporate restructuring and related costs 1 8
 Acquisition / divestiture costs 23 — 
 Russia business exit —  47
 AspenTech Micromine purchase price hedge —  (35)
 Adjusted corporate and other (Non-GAAP) $(31) $(44)






Page 5

Table 4
EMERSON AND SUBSIDIARIES
ADJUSTED EBITA & EPS SUPPLEMENTAL
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)
The following tables, which show results on an adjusted EBITA basis and diluted earnings per share on an adjusted basis, are intended to supplement the Company's results of operations. The Company defines adjusted EBITA as earnings excluding net interest expense, income taxes, intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction fees, and certain gains, losses or impairments. Adjusted earnings per share excludes intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction fees, and certain gains, losses or impairments. Adjusted EBITA, adjusted EBITA margin, and adjusted earnings per share are measures used by management and may be useful for investors to evaluate the Company's operational performance.
Quarter Ended Dec 31
2021 2022
Pretax earnings $942 $422
Percent of sales 29.8  % 12.5  %
Interest expense, net 39 48
Amortization of intangibles 71 167
Restructuring and related costs 14 15
Gain on subordinated interest (453) —
Acquisition/divestiture costs 23 —
Russia business exit — 47
AspenTech Micromine purchase price hedge — (35)
Adjusted EBITA $636 $664
Percent of sales 20.1  % 19.7  %
Quarter Ended Dec 31
2021 2022
GAAP earnings from continuing operations per share $1.25 $0.56
Amortization of intangibles 0.09 0.15
Restructuring and related costs 0.02 0.02
Gain on subordinated interest (0.60) —
Acquisition/divestiture costs 0.03 —
Russia business exit — 0.08
AspenTech Micromine purchase price hedge — (0.03)
Adjusted earnings from continuing operations per share $0.79 $0.78
AspenTech contribution to adjusted earnings per share (0.05)
Adjusted earnings per share excluding AspenTech contribution $0.73
        







Page 6

Table 4 cont.
Quarter Ended December 31, 2022
Pretax
Earnings		 Income
Taxes		 Earnings from
Cont.
Ops.		 Non-Controlling
Interests		 3 Net
Earnings
Common
Stockholders		 Diluted
Earnings
Per
Share
As reported (GAAP) $422 $98 $324 $(5) $329 $0.56
Amortization of intangibles 167
1
 38 129 42 87 0.15
Restructuring and related costs 15
2
 4 11 11 0.02
Russia business exit 47 2 45 45 0.08
AspenTech Micromine purchase price hedge (35) (8) (27) (12) (15) (0.03)
Adjusted (Non-GAAP) $616 $134 $482 $25 $457 $0.78
Interest expense 48
Adjusted EBITA (Non-GAAP) $664
1 Amortization of intangibles includes $49 reported in cost of sales.
2 Restructuring and related costs includes $5 reported in cost of sales.
3 Represents the 45 percent non-controlling interest in AspenTech applied to AspenTech's share of each adjustment presented herein and eliminated from Emerson's consolidated results.

Table 5
EMERSON AND SUBSIDIARIES
ASPENTECH CONTRIBUTION TO EMERSON RESULTS SUPPLEMENTAL
(AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)
The following tables reconcile the financial results of AspenTech reported to its shareholders with the amounts included in Emerson's consolidated financial results. Emerson owns 55 percent of AspenTech, a separately traded public company (NASDAQ: AZPN), and consolidates AspenTech in its financial results. The 45 percent non-controlling interest in AspenTech is removed from Emerson's net earnings common stockholders through the non-controlling interest line item. AspenTech is also one of Emerson's segments and its GAAP segment earnings is reconciled below to its consolidated impact to clarify that certain items are reported outside of its segment earnings within Emerson corporate, including interest income, stock compensation and the Micromine purchase price hedge.







Page 7

Quarter Ended December 31, 2022
Pretax
Earnings		 Income
Taxes		 Earnings from
Cont.
Ops.		 Non-Controlling
Interests		 5 Net
Earnings
Common
Stockholders		 Diluted
Earnings
Per
Share
Standalone reporting (GAAP) $(17) 1 $49 $(66)
 Interim tax reporting 0 (54) 2 54
Reported in Emerson consolidation (GAAP) (17) (5) (12) (5) (7) $(0.01)
Adjustments:
Amortization of intangibles 121 3 28 93 42 51 0.09
AspenTech Micromine purchase price hedge (35) 4 (8) (27) (12) (15) (0.03)
Adjusted
(Non-GAAP)		 $69 $15 $54 $25 $29 $0.05
 Interest income (4) 4
 Stock compensation 23 4
Adjusted Segment EBITA (Non-GAAP) $88
Reconciliation to Segment EBIT
Pre-tax earnings $(17)
Interest income (4) 4
Stock compensation 23 4
Micromine purchase price hedge (35) 4
Segment EBIT (GAAP) (33)
Amortization of intangibles 121 3
Adjusted Segment EBITA (Non-GAAP) $88
1 Amount reflects AspenTech's pretax earnings for the three months ended December 31, 2022, reported in its standalone quarterly report on Form 10-Q.
2 GAAP income taxes reported by AspenTech differ from the amount reflected in Emerson's consolidated financial statements due to the application of the ASC 740 interim tax rules at the AspenTech entity level in their stand-alone publicly reported financial statements as compared to the amount computed at the Emerson consolidated level.
3 Amortization of intangibles includes $48 reported in cost of sales.
4 Reported in Emerson corporate line items.
5 Represents the 45 percent non-controlling interest in AspenTech applied to each adjustment presented herein and eliminated from Emerson's consolidated results.







Page 8

Table 6
EMERSON AND SUBSIDIARIES
UNDERLYING SALES GROWTH SUPPLEMENTAL
Fiscal Year 2022
Q1 Q2 Q3 Q4 FY
Final Control 2  % 8  % 7  % 9  % 7  %
Measurement & Analytical 6  % 7  % 4  % 12  % 7  %
Discrete Automation 12  % 9  % 3  % 15  % 10  %
Safety & Productivity 17  % 6  % 6  % —  % 7  %
Intelligent Devices 8  % 7  % 5  % 10  % 8  %
Control Systems & Software 1  % 7  % 3  % 16  % 7  %
AspenTech N/A N/A N/A N/A N/A
Software and Control 1  % 7  % 3  % 16  % 7  %
Total 6  % 7  % 4  % 11  % 7  %


Reconciliations of Non-GAAP Financial Measures & Other Table 7
Reconciliations of Non-GAAP measures with the most directly comparable GAAP measure (dollars in millions, except per share amounts). See tables 2 through 5 for additional non-GAAP reconciliations.
Q1 FY23 Underlying Sales Change Final
Control		 Measurement & Analytical Discrete
Automation		 Safety &
Productivity		 Intelligent
Devices
Reported (GAAP) 6  % 2  % —  % (12) % 1  %
(Favorable) / Unfavorable FX 4  % 4  % 6  % 2  % 4  %
(Acquisitions) / Divestitures —  % —  % —  % —  % —  %
Underlying (Non-GAAP) 10  % 6  % 6  % (10) % 5  %

Q1 FY23 Underlying Sales Change Control
Systems &
Software		 AspenTech Software and Control Emerson
Reported (GAAP) 6  % 197  % 30  % 7  %
(Favorable) / Unfavorable FX 4  % —  % 4  % 4  %
(Acquisitions) / Divestitures —  % (197) % (24) % (5) %
Underlying (Non-GAAP) 10  % —  % 10  % 6  %

FY22 Underlying Sales Change Emerson
Q1 Q2 Q3 Q4 FY
Reported (GAAP) 6  % 5  % 5  % 11  % 7  %
(Favorable) / Unfavorable FX 1  % 2  % 4  % 5  % 3  %
(Acquisitions) / Divestitures (1) % —  % (5) % (5) % (3) %
Underlying (Non-GAAP) 6  % 7  % 4  % 11  % 7  %







Page 9

Table 7 cont.
FY22 Underlying Sales Change Final Control
Q1 Q2 Q3 Q4 FY
Reported (GAAP) 1  % 6  % 3  % 4  % 4  %
(Favorable) / Unfavorable FX 1  % 2  % 4  % 5  % 3  %
(Acquisitions) / Divestitures —  % —  % —  % —  % —  %
Underlying (Non-GAAP) 2  % 8  % 7  % 9  % 7  %

FY22 Underlying Sales Change Measurement & Analytical
Q1 Q2 Q3 Q4 FY
Reported (GAAP) 5  % 5  % 1  % 7  % 4  %
(Favorable) / Unfavorable FX 1  % 2  % 3  % 5  % 3  %
(Acquisitions) / Divestitures —  % —  % —  % —  % —  %
Underlying (Non-GAAP) 6  % 7  % 4  % 12  % 7  %

FY22 Underlying Sales Change Discrete Automation
Q1 Q2 Q3 Q4 FY
Reported (GAAP) 11  % 6  % (2) % 8  % 6  %
(Favorable) / Unfavorable FX 1  % 3  % 5  % 7  % 4  %
(Acquisitions) / Divestitures —  % —  % —  % —  % —  %
Underlying (Non-GAAP) 12  % 9  % 3  % 15  % 10  %

FY22 Underlying Sales Change Safety & Productivity
Q1 Q2 Q3 Q4 FY
Reported (GAAP) 16  % 4  % 3  % (4) % 5  %
(Favorable) / Unfavorable FX 1  % 2  % 3  % 4  % 2  %
(Acquisitions) / Divestitures —  % —  % —  % —  % —  %
Underlying (Non-GAAP) 17  % 6  % 6  % —  % 7  %

FY22 Underlying Sales Change Intelligent Devices
Q1 Q2 Q3 Q4 FY
Reported (GAAP) 7  % 5  % 1  % 5  % 5  %
(Favorable) / Unfavorable FX 1  % 2  % 4  % 5  % 3  %
(Acquisitions) / Divestitures —  % —  % —  % —  % —  %
Underlying (Non-GAAP) 8  % 7  % 5  % 10  % 8  %

FY22 Underlying Sales Change Control Systems & Software
Q1 Q2 Q3 Q4 FY
Reported (GAAP) —  % 5  % (1) % 10  % 3  %
(Favorable) / Unfavorable FX 1  % 2  % 4  % 6  % 4  %
(Acquisitions) / Divestitures —  % —  % —  % —  % —  %
Underlying (Non-GAAP) 1  % 7  % 3  % 16  % 7  %








Page 10

Table 7 cont.
FY22 Underlying Sales Change AspenTech
Q1 Q2 Q3 Q4 FY
Reported (GAAP) 11  % (1) % 191  % 217  % 106  %
(Favorable) / Unfavorable FX N/A N/A N/A N/A N/A
(Acquisitions) / Divestitures (11) % 1  % (191) % (217) % (106) %
Underlying (Non-GAAP) N/A N/A N/A N/A N/A

FY22 Underlying Sales Change Software and Control
Q1 Q2 Q3 Q4 FY
Reported (GAAP) 1  % 4  % 23  % 34  % 16  %
(Favorable) / Unfavorable FX 1  % 2  % 4  % 6  % 4  %
(Acquisitions) / Divestitures (1) % 1  % (24) % (24) % (13) %
Underlying (Non-GAAP) 1  % 7  % 3  % 16  % 7  %

Final Control Adjusted EBITA Q1 2022 Q1 2023 Q1 2022 Q1 2023
Business Segment EBIT / EBIT margin (GAAP) $122 $158 14.9  % 18.4  %
Amortization of intangibles and restructuring and related costs 31 26 3.8  % 3.0  %
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP)
 $153 $184 18.7  % 21.4  %

Measurement & Analytical Adjusted EBITA Q1 2022 Q1 2023 Q1 2022 Q1 2023
Business Segment EBIT / EBIT margin (GAAP) $170 $175 23.0  % 23.4  %
Amortization of intangibles and restructuring and related costs 8 6 1.1  % 0.7  %
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP)
 $178 $181 24.1  % 24.1  %

Discrete Automation Adjusted EBITA Q1 2022 Q1 2023 Q1 2022 Q1 2023
Business Segment EBIT / EBIT margin (GAAP) $120 $121 19.4  % 19.6  %
Amortization of intangibles and restructuring and related costs 10 8 1.6  % 1.4  %
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP)
 $130 $129 21.0  % 21.0  %

Safety & Productivity Adjusted EBITA Q1 2022 Q1 2023 Q1 2022 Q1 2023
Business Segment EBIT / EBIT margin (GAAP) $65 $63 18.6  % 20.4  %
Amortization of intangibles and restructuring and related costs 7 6 2.2  % 2.0  %
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP)
 $72 $69 20.8  % 22.4  %











Page 11

Table 7 cont.
Intelligent Devices Adjusted EBITA Q1 2022 Q1 2023 Q1 2022 Q1 2023
Business Segment EBIT / EBIT margin (GAAP) $477 $517 18.9  % 20.4  %
Amortization of intangibles and restructuring and related costs 56 46 2.2  % 1.8  %
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP)
 $533 $563 21.1  % 22.2  %

Control Systems & Software Adjusted EBITA Q1 2022 Q1 2023 Q1 2022 Q1 2023
Business Segment EBIT / EBIT margin (GAAP) $116 $107 20.4  % 17.6  %
Amortization of intangibles and restructuring and related costs 6 7 1.0  % 1.1  %
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP)
 $122 $114 21.4  % 18.7  %

AspenTech Adjusted EBITA Q1 2022 Q1 2023 Q1 2022 Q1 2023
Business Segment EBIT / EBIT margin (GAAP) $(2) $(33) (2.3) % (13.6) %
Amortization of intangibles and restructuring and related costs 22 121 27.2  % 50.2  %
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP)
 $20 $88 24.9  % 36.6  %

Software and Control Adjusted EBITA Q1 2022 Q1 2023 Q1 2022 Q1 2023
Business Segment EBIT / EBIT margin (GAAP) $114 $74 17.6  % 8.7  %
Amortization of intangibles and restructuring and related costs 28 128 4.2  % 15.1  %
Adjusted Business Segment EBITA / EBITA margin (Non-GAAP)
 $142 $202 21.8  % 23.8  %

Total Business Segment Adjusted EBITA Margin Q1 2022 Q1 2023 Q1 2022 Q1 2023
Pretax earnings / margin (GAAP) $942 $422 29.8  % 12.5  %
Corporate items and interest expense, net (351) 169 (11.1) % 5.0  %
Total Business Segment EBIT / margin 591 591 18.7  % 17.5  %
Amortization of intangibles and restructuring and related costs 84 174 2.7  % 5.2  %
Adjusted Total Business Segment EBITA / margin (Non-GAAP)
 $675 $765 21.4  % 22.7  %