What changed in this filing

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Item 1. Financial Statements

2024-05-08 compared with 2024-02-07 · 358 added, 132 removed, 594 unchanged (45% of the section changed)

3 unchanged sentences

& SUBSIDIARIES

Three months ended December 31, 2022 and 2023

Three and six months ended March 31, 2023 and 2024

(Dollars in millions, except per share amounts;

Three Months Ended

March 31, Six Months Ended

2023 2024 2023 2024

Net sales $ 3,756 4,376 $ 7,129 8,493

1 unchanged sentence

Selling, general and administrative 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 of interest income of $ 18 , $ 33 , $ 38 and $ 73 , respectively)

53 57 101 101

Interest income from related party — ( 31 ) — ( 62 )

3 unchanged sentences

Discontinued operations, net of tax of $ 39 , $ — , $ 1,005 and $ — , respectively

265 — 2,267 —

Net earnings 770 503 3,096 635

20 unchanged sentences

& SUBSIDIARIES

Three months ended December 31, 2022 and 2023

Three and six months ended March 31, 2023 and 2024

(Dollars in millions;

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2023 2024 2023 2024

Net earnings $ 770 503 $ 3,096 635

12 unchanged sentences

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

Sept 30, 2023 Dec 31, 2023

Sept 30, 2023 Mar 31, 2024

Current assets

36 unchanged sentences

& SUBSIDIARIES

Three months ended December 31, 2022 and 2023

Three and six months ended March 31, 2023 and 2024

(Dollars in millions;

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2023 2024 2023 2024

Common stock $ 477 477 477 477

35 unchanged sentences

& SUBSIDIARIES

Three Months Ended December 31, 2022 and 2023

Six Months Ended March 31, 2023 and 2024

(Dollars in millions;

Three Months Ended

Six Months Ended

Operating activities

5 unchanged sentences

Amortization of acquisition-related inventory step-up — 231

Gain on subordinated interest — ( 79 )

Changes in operating working capital ( 390 ) ( 373 )

13 unchanged sentences

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 )

31 unchanged sentences

The following table summarizes the balances of the Company's unbilled receivables (contract assets), which are reported in Other assets (current and noncurrent), and its customer advances (contract liabilities), which are reported in Accrued expenses and Other liabilities.

Sept 30, 2023 Dec 31, 2023

Sept 30, 2023 Mar 31, 2024

Unbilled receivables (contract assets) $ 1,453 1,480

3 unchanged sentences

The decrease in net contract assets was primarily due to the acquisition of National Instruments, which increased contract liabilities by approximately $ 190 , while customer billings slightly exceeded revenue recognized for performance completed during the period.

Revenue recognized for the three months ended December 31, 2023 included $ 368 that was included in the beginning contract liability balance.

Revenue recognized for the three and six months ended March 31, 2024 included $ 154 and $ 522 , respectively, that was included in the beginning contract liability balance.

Other factors that impacted the change in net contract assets were immaterial.

Revenue recognized for the three months ended December 31, 2023 for performance obligations that were satisfied in previous periods, including cumulative catchup adjustments on the Company's long- term contracts, was immaterial.

As of December 31, 2023, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately $ 8.8 billion (of which $ 1.2 billion was attributable to AspenTech and approximately $ 500 was attributable to the National Instruments acquisition) .

Revenue recognized for the three and six months ended March 31, 2024 for performance obligations that were satisfied in previous periods, including cumulative catchup adjustments on the Company's long- term contracts, was immaterial.

As of March 31, 2024, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately $ 8.8 billion (of which approximately $ 1.25 billion was attributable to AspenTech and approximately $ 500 was attributable to National Instruments) .

The Company expects to recognize appro ximately 75 percent of its remaining performance obligations as revenue over the next 12 months, with the remainder substantially over the following two years.

3 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2023 2024 2023 2024

Basic shares outstanding 570.9 571.4 577.2 571.1

35 unchanged sentences

Total $ 5,275

Results of operations for the three months ended December 31, 2023 attributable to the NI acquisition include sales of $ 382 and a net loss of $ 326 .

The net loss included the impact of inventory step-up amortization, intangibles amortization, retention bonuses, stock compensation expense and restructuring.

Results of operations for the three and six months ended March 31, 2024 attributable to the NI acquisition include sales of $ 367 and $ 749 , respectively, and a net loss of $ 80 and $ 406 , respectively.

The net loss included the impact of inventory step-up amortization recorded in the first quarter, intangibles amortization, retention bonuses, stock compensation expense and restructuring.

Pro Forma Financial Information

1 unchanged sentence

The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisition occurred as of that time ($ in millions, except per share amounts).

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2023 2024 2023 2024

Net Sales $ 4,193 4,376 $ 8,014 8,512

1 unchanged sentence

Diluted earnings per share from continuing operations $ 0.77 0.92 $ 0.53 1.65

The pro forma results for the three months ended December 31, 2022 include total transaction costs of $ 198 which were assumed to be incurred in the first quarter of fiscal 2023.

Pro forma Net sales for the three and six months ended March 31, 2023 include $ 437 and $ 885 , respectively, attributable to NI.

The pro forma results for the three months ended March 31, 2023 include ongoing intangibles amortization of $ 107 and backlog amortization of $ 34 , and exclude the mark-to-market gain of $ 35 recognized in the prior year on the Company's equity investment in National Instruments Corporation (see Note 7).

The pro forma results for the six months ended March 31, 2023 include transaction costs of $ 198 which were assumed to be incurred in the first quarter of fiscal 2023.

These transaction costs include $ 88 incurred by NI prior to the completion of the transaction and $ 110 incurred by Emerson in periods subsequent to the first quarter of fiscal 2023.

The pro forma results for the three months ended December 31, 2022 also include $ 105 of ongoing intangibles amortization, as well as backlog amortization of $ 34 , inventory step-up amortization of $ 213 , and retention bonuses of $ 43 which were all assumed to be incurred in the first quarter of fiscal 2023.

The pro forma results for the six months ended March 31, 2023 also include $ 212 of ongoing intangibles amortization, backlog amortization of $ 68 , inventory step-up amortization of $ 213 , and retention bonuses of $ 47 , and exclude the mark-to-market gain of $ 35 recognized in the prior year on the equity investment in National Instruments Corporation.

Other Transactions

In the second quarter of fiscal 2024, the Company received its final distribution of $ 79 related to its subordinated interest in Vertiv.

In addition, the Company divested a small business in the Final Control segment and recognized a non-cash loss of $ 39 .

In the fourth quarter of fiscal 2023, the Company acquired two businesses, Flexim, which is reported in the Measurement & Analytical segment, and Afag, which is reported in the Discrete Automation segment, for $ 715 , net of cash acquired.

The Company recognized goodwill of $ 428 ( none of which is expected to be tax deductible) and other identifiable intangible assets of $ 323 , primarily customer relationships and intellectual property with a weighted-average useful life of approximately 9 years.

The Company recognized goodwill of $ 423 ( none of which is expected to be tax deductible) and other

identifiable intangible assets of $ 323 , primarily customer relationships and intellectual property with a weighted-average useful life of approximately 9 years.

On March 31, 2023, Emerson completed the divestiture of Metran, its Russia-based manufacturing subsidiary.

3 unchanged sentences

Emerson received upfront, pre-tax cash proceeds of approximately $ 9.7 billion and a note receivable with a face value of $ 2.25 billion (which accrues 5 percent interest payable in kind by capitalizing interest), while retaining a 40 percent non-controlling common equity interest in a new standalone joint venture between Emerson and Blackstone.

The Climate Technologies business,

which includes the Copeland compressor business and the entire portfolio of products and services across all residential and commercial HVAC and refrigeration end-markets, had fiscal 2022 net sales of approximately $ 5.0 billion and pretax earnings of $ 1.0 billion.

The Climate Technologies business, which includes the Copeland compressor business and the entire portfolio of products and services across all residential and commercial HVAC and refrigeration end-markets, had fiscal 2022 net sales of approximately $ 5.0 billion and pretax earnings of $ 1.0 billion.

The Company recognized a pretax gain of approximately $ 10.6 billion in the third quarter of fiscal 2023 (approximately $ 8.4 billion after-tax including tax expense recognized prior to the completion of the transaction related to subsidiary restructurings).

4 unchanged sentences

The Company recognized a pretax gain of approximately $ 2.8 billion (approximately $ 2.1 billion after-tax) in the first quarter of fiscal 2023.

The financial results of Climate Technologies and InSinkErator ("ISE") are reported as discontinued operations for the three months ended December 31, 2022 and were as follows:

Three Months Ended December 31, 2022

The financial results of Climate Technologies and InSinkErator ("ISE") are reported as discontinued operations for the three and six months ended March 31, 2023 and were as follows:

Three Months Ended March 31, 2023

Climate Technologies ISE Total

7 unchanged sentences

Earnings, net of tax $ 262 3 265

Climate Technologies' results for the three months ended December 31, 2022 included lower expense of $ 27 due to ceasing depreciation and amortization upon the held-for-sale classification.

Other deductions, net for Climate Technologies included $ 27 of transaction-related costs for the three months ended December 31, 2022.

Income taxes for the three months ended December 31, 2022 included approximately $ 275 for Climate Technologies subsidiary restructurings and approximately $ 660 related to the gain on the InSinkErator divestiture.

Net cash from operating and investing activities for Climate Technologies, InSinkErator and Therm-O-Disc for the three months ended December 31, 2023 and 2022 were as follows:

Six Months Ended March 31, 2023

Climate Technologies ISE Total

Net sales $ 2,309 49 2,358

Cost of sales 1,484 29 1,513

SG&A 269 8 277

Gain on sale of business — ( 2,783 ) ( 2,783 )

Other deductions, net 67 12 79

Earnings before income taxes 489 2,783 3,272

Income taxes 352 653 1,005

Earnings, net of tax $ 137 2,130 2,267

Climate Technologies' results for the three and six months ended March 31, 2023 included lower expense of $ 43 and $ 70 , respectively, due to ceasing depreciation and amortization upon the held-for-sale classification.

Other deductions, net for Climate Technologies included $ 28 and $ 55 of transaction-related costs for the three and six months ended March 31, 2023, respectively.

Income taxes for the six months ended March 31, 2023 included approximately $ 245 for Climate Technologies subsidiary restructurings and approximately $ 660 related to the gain on the InSinkErator divestiture.

Net cash from operating and investing activities for Climate Technologies, InSinkErator and Therm-O-Disc for the six months ended March 31, 2024 and 2023 were as follows:

Climate Technologies ISE and TOD Total

Three Months Ended December 31, Three Months Ended December 31, Three Months Ended December 31,

Six Months Ended March 31, Six Months Ended March 31, Six Months Ended March 31,

2023 2024 2023 2024 2023 2024

1 unchanged sentence

Cash from investing activities $ ( 139 ) 1 3,055 — 2,916 1

For the three months ended December 31, 2022, net cash from operating activities reflects the payment of ISE transaction fees and unfavorable working capital.

Cash from investing activities reflects the proceeds of approximately $ 3.0 billion related to the InSinkErator divestiture.

Cash from operating activities for the six months ended March 31, 2023 reflects approximately $ 575 of income taxes paid related to the gain on the InSinkErator divestiture and the Climate Technologies subsidiary restructurings, transaction fees and unfavorable working capital.

Cash from investing activities for the six months ended March 31, 2023 reflects the proceeds of $ 3.0 billion related to the InSinkErator divestiture.

(6) PENSION & POSTRETIREMENT PLANS

Total periodic pension and postretirement (income) expense is summarized below:

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2023 2024 2023 2024

Service cost $ 12 9 $ 24 18

7 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2023 2024 2023 2024

Amortization of intangibles (intellectual property and customer relationships) $ 119 273 237 547

3 unchanged sentences

Investment-related gains & gains from sales of capital assets

( 35 ) — ( 39 ) —

Loss on Copeland equity method investment — 59 — 95

Loss on divestiture of business — 39 — 39

Russia business exit — — 47 —

1 unchanged sentence

Total $ 109 389 229 876

Intangibles amortization for the three months ended December 31, 2023 included $ 139 related to the NI acquisition.

Foreign currency transaction gains for the three months ended December 31, 2022 included a mark-to-market gain of $ 35 related to foreign currency forward contracts that were terminated in June 2023.

Other is composed of several items, including pension expense, litigation costs, provision for bad debt and other items, none of which is individually significant.

Intangibles amortization for the three and six months ended March 31, 2024 included $ 141 and $ 280 , respectively, related to the NI acquisition.

Foreign currency transaction losses for the three and six months ended March 31, 2023 included a mark-to-market loss of $ 14 and a gain of $ 21 , respectively, related to foreign currency forward contracts that were terminated in June 2023 .

The Company recognized a mark-to-market gain of $ 35 for the three months ended March 31, 2023 related to its equity investment in National Instruments Corporation.

Other is composed of several items, including a portion of pension expense, litigation costs, provision for bad debt and other items, none of which is individually significant.

(8) RESTRUCTURING COSTS

Restructuring expense reflects costs associated with the Company’s ongoing efforts to improve operational efficiency and deploy assets globally in order to remain competitive on a worldwide basis.

The Company expects fiscal 2024 restructuring expense and related costs to be approximately $ 250 , including costs to complete actions initiated in the first three months of the year.

The Company expects fiscal 2024 restructuring expense and related costs to be approximately $ 230 , including costs to complete actions initiated in the first six months of the year.

Restructuring expense by business segment follows:

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended

2023 2024 2023 2024

Final Control $ 2 ( 7 ) 1 ( 4 )

9 unchanged sentences

Total $ 19 30 29 113

Corporate restructuring of $ 26 for the three months ended December 31, 2023 is comprised entirely of integration-related stock compensation expense attributable to NI.

Details of the change in the liability for restructuring costs during the three months ended December 31, 2023 follow:

Sept 30, 2023 Expense Utilized/Paid Dec 31, 2023

Corporate restructuring of $ 11 and $ 37 for the three and six months ended March 31, 2024, respectively, is comprised almost entirely of integration-related stock compensation expense attributable to NI.

Details of the change in the liability for restructuring costs during the six months ended March 31, 2024 follow:

Sept 30, 2023 Expense Utilized/Paid Mar 31, 2024

Severance and benefits $ 85 95 100 80

1 unchanged sentence

Total $ 87 113 115 85

The tables above do not include $ 5 and $ 4 of costs related to restructuring actions incurred for the three months ended December 31, 2022 and 2023, respectively, that are required to be reported in cost of sales.

Income taxes were $ 7 in the first quarter of fiscal 2024 and $ 98 in 2023, resulting in effective tax rates of 5 percent and 23 percent, respectively.

The current year rate included a $ 57 ($ 0.10 per share) benefit related to discrete tax items and the impact of inventory step-up amortization, which in total had a 16 percentage point impact on the rate.

The prior year rate included a 2 per centage point unfavorable impact related to the Russia charge, which had no related tax benefit.

The tables above do not include $ 7 and $ 3 of costs related to restructuring actions incurred for the three months ended March 31, 2023 and 2024, respectively, that are required to be reported in cost of sales and selling, general and administrative expenses;

year-to-date amounts are $ 12 and $ 7 , respectively .

Income taxes were $ 149 in the second quarter of fiscal 2024 and $ 134 in 2023, resulting in effective tax rates of 23 percent and 21 percent, respectively.

The current year rate was negatively impacted by approximately 2 percentage points due to the loss on divestiture (see Note 4), which was nondeductible for tax purposes.

Income taxes were $ 156 in the first six of months of fiscal 2024 and $ 232 in 2023 , resulting in effective tax rates of 20 percent and 22 percent, respectively.

The current year rate i ncluded a $ 57 ($ 0.10 per share) benefit related to discrete tax items, partially offset by unfavorable impacts from inventory step-up amortization and the loss on divestiture noted above.

In total, the net impact of these items benefited the rate by approximately 1 percentage point.

(10) EQUITY METHOD INVESTMENT AND NOTE RECEIVABLE

1 unchanged sentence

The Company records its share of Copeland's income or loss using the equity method of accounting.

For the three months ended December 31, 2023 the Company recorded a loss of $ 36 in Other deductions to reflect its share of Copeland's losses and a tax benefit of $ 9 in Income taxes related to Copeland's U.S.

business, which is taxed as a partnership (in total, a loss of $ 0.04 per share).

The Company recognized non-cash interest income on the note receivable of $ 31 , which is reported in Interest income from related party and capitalized to the carrying value of the note.

As of December 31, 2023, the carrying values of the retained equity investment and note receivable were $ 1,129 and $ 2,124 , respectively.

Summarized financial information for Copeland for the three months ended December 31, 2023 is as follows.

Three Months Ended December 31,

For the three and six months ended March 31, 2024 the Company recorded a loss of $ 59 and $ 95 , respectively, in Other deductions to reflect its share of Copeland's losses and a tax benefit of $ 13 and $ 22 , respectively, in Income taxes related to Copeland's U.S.

business, which is taxed as a partnership (in total, a loss of $ 0.08 and $ 0.12 per share, respectively).

The Company recognized non-cash interest income on the note receivable of $ 31 and $ 62 for the three and six months ended March 31, 2024, respectively, which is reported in Interest income from related party and capitalized to the carrying value of the note.

As of March 31, 2024, the carrying values of the retained equity investment and note receivable were $ 1,036 and $ 2,155 , respectively.

Summarized financial information for Copeland for the three and six months ended March 31, 2024 is as follows.

Three Months Ended March 31, Six Months Ended March 31,

Net sales $ 1,175 $ 2,199

4 unchanged sentences

(11) OTHER FINANCIAL INFORMATION

Sept 30, 2023 Dec 31, 2023

Sept 30, 2023 Mar 31, 2024

Finished products $ 446 593

16 unchanged sentences

Total $ 14,480 17,964

Sept 30, 2023 Dec 31, 2023

Sept 30, 2023 Mar 31, 2024

Other intangible assets

2 unchanged sentences

Net carrying amount $ 6,263 10,976

Other intangible assets include customer relationships, net, of $ 3,353 and $ 6,612 and intellectual property, net, of $ 2,707 and $ 4,445 as of September 30, 2023 and December 31, 2023, respectively.

Other intangible assets include customer relationships, net, of $ 3,353 and $ 6,501 and intellectual property, net, of $ 2,707 and $ 4,247 as of September 30, 2023 and March 31, 2024, respectively.

The increase in goodwill and intangibles was primarily due to the NI acquisition.

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2023 2024 2023 2024

Depreciation and amortization expense include the following:

1 unchanged sentence

Amortization of intangibles (includes $ 49 , $ 49 , $ 98 and $ 98 reported in Cost of Sales, respectively)

168 322 335 645

Amortization of capitalized software 23 23 42 43

Total $ 263 424 523 846

Amortization of intangibles included $ 139 related to the NI acquisition for the three months ended December 31, 2023.

Sept 30, 2023 Dec 31, 2023

Amortization of intangibles included $ 141 and $ 280 related to the NI acquisition for the three and six months ended March 31, 2024.

Sept 30, 2023 Mar 31, 2024

Other assets include the following:

4 unchanged sentences

Asbestos-related insurance receivables 53 48

As of December 31, 2023, the Company had one operating lease that had not yet commenced with a lease term of approximately 15 years and total undiscounted future minimum payments of approximately $ 80 .

This lease is expected to commence in the second quarter of fiscal 2024 and will be recorded as a right-of-use asset and lease liability.

Accrued expenses include the following:

11 unchanged sentences

(12) FINANCIAL INSTRUMENTS

Hedging Activities – As of December 31, 2023, the notional amount of foreign currency hedge positions was approximately $ 2.8 billion.

Hedging Activities – As of March 31, 2024, the notional amount of foreign currency hedge positions was approximately $ 3.2 billion.

All derivatives receiving hedge accounting are cash flow hedges.

The majority of hedging gains and losses deferred as of December 31, 2023 are expected to be recognized over the next 12 months as the underlying forecasted transactions occur.

The majority of hedging gains and losses deferred as of March 31, 2024 are expected to be recognized over the next 12 months as the underlying forecasted transactions occur.

Gains and losses on foreign currency derivatives reported in Other deductions, net reflect hedges of balance sheet exposures that do not receive hedge accounting.

2 unchanged sentences

Foreign currency gains or losses associated with the euro-denominated debt are deferred in accumulated other comprehensive income (loss) and will remain until the hedged investment is sold or substantially liquidated.

The following gains and losses are included in earnings and other comprehensive income (OCI) for the three months ended December 31, 2022 and 2023:

The following gains and losses are included in earnings and other comprehensive income (OCI) for the three and six months ended March 31, 2023 and 2024:

Into Earnings Into OCI

1st Quarter 1st Quarter

2nd Quarter Six Months 2nd Quarter Six Months

Gains (Losses) Location 2023 2024 2023 2024 2023 2024 2023 2024

1 unchanged sentence

Foreign currency

( 1 ) — ( 2 ) — ( 1 ) ( 5 ) 3 2

Foreign currency

Cost of sales

10 3 18 6 17 6 14 7

Foreign currency

Other deductions, net

( 22 ) ( 26 ) ( 17 ) ( 11 )

Net Investment Hedges

5 unchanged sentences

Fair Value Measurement – Valuations for all derivatives, the Company's note receivable from Copeland, and the Company's long-term debt fall within Level 2 of the GAAP valuation hierarchy.

The fair value of the note receivable as of December 31, 2023 was approximately $ 2.0 billion, which was lower than the carrying value by approximately $ 100 .

The fair value of the note receivable as of March 31, 2024 was approximately $ 2.0 billion, which was lower than the carrying value by approximately $ 100 .

See Note 10 for further details.

As of December 31, 2023, the fair value of long-term debt was approximately $ 7.4 billion, which was lower than the carrying value by $ 847 .

As of March 31, 2024, the fair value of long-term debt was approximately $ 7.2 billion, which was lower than the carrying value by $ 963 .

The fair value of foreign currency contracts, which are reported in Other current assets and Accrued expenses, did not materially change since September 30, 2023.

5 unchanged sentences

The Company also can demand full collateralization of derivatives in net asset positions should any counterparty credit ratings fall below certain thresholds.

No collateral was posted with counterparties and none was held by the Company as of December 31, 2023.

No collateral was posted with counterparties and none was held by the Company as of March 31, 2024.

(13) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Activity in Accumulated other comprehensive income (loss) for the three months ended December 31, 2022 and 2023 is shown below, net of income taxes:

Three Months Ended December 31,

Activity in Accumulated other comprehensive income (loss) for the three and six months ended March 31, 2023 and 2024 is shown below, net of income taxes:

Three Months Ended March 31, Six Months Ended March 31,

2023 2024 2023 2024

Foreign currency translation

1 unchanged sentence

Other comprehensive income (loss), net of tax of $ 4 , $( 1 ), $ 32 and $ 12 , respectively

111 ( 17 ) 347 155

Reclassification to loss on divestiture of business — 23 — 23

Ending balance ( 918 ) ( 834 ) ( 918 ) ( 834 )

8 unchanged sentences

Reclassification of realized (gains) losses to sales and cost of sales, net of tax of $ 2 , $ 1 , $ 2 and $ 1 , respectively

( 5 ) ( 2 ) ( 4 ) ( 5 )

Ending balance 25 8 25 8

4 unchanged sentences

Summarized information about the Company's results of operations by business segment follows:

Three Months Ended December 31,

Sales Earnings (Loss)

Three Months Ended March 31, Six Months Ended March 31,

Sales Earnings (Loss) Sales Earnings (Loss)

2023 2024 2023 2024 2023 2024 2023 2024

13 unchanged sentences

Loss on Copeland equity method investment — ( 59 ) — ( 95 )

Gain on subordinated interest — 79 — 79

Eliminations/Interest ( 21 ) ( 17 ) ( 53 ) ( 57 ) ( 36 ) ( 36 ) ( 101 ) ( 101 )

1 unchanged sentence

Total $ 3,756 4,376 639 652 7,129 8,493 1,061 791

Stock compensation for the three months ended December 31, 2023 included $ 30 of integration-related stock compensation expense attributable to NI ($ 26 of which was reported as restructuring costs).

Corporate and other for the three months ended December 31, 2023 included acquisition-related inventory step-up amortization of $ 231 and acquisition/divestiture fees and related costs of $ 130 , while 2022 included a loss of $ 47 related to the Company's exit of business operations in Russia and a mark-to-market gain of $ 35 related to foreign currency forward contracts that were terminated in June 2023.

Stock compensation for the three months and six months ended March 31, 2024 included $ 14 and $ 44 of integration-related stock compensation expense attributable to NI (of which $ 10 and $ 36 , respectively, was reported as restructuring costs).

Corporate and other for the three and six months ended March 31, 2024 included acquisition/divestiture fees and related costs of $ 16 and $ 146 , respectively, and a divestiture loss of $ 39 , while year-to-date also includes acquisition-related inventory step-up amortization of $ 231 .

Corporate and other for the six months ended March 31, 2023 included a loss of $ 47 related to the Company's exit of business operations in Russia and a mark-to-market gain of $ 35 related to its equity investment in National Instruments Corporation.

Depreciation and amortization (includes intellectual property, customer relationships and capitalized software) by business segment are summarized below:

Three Months Ended December 31,

Three Months Ended March 31, Six Months Ended March 31,

2023 2024 2023 2024

Final Control $ 45 39 90 79

9 unchanged sentences

Total $ 263 424 523 846

Test & Measurement depreciation and amortization for the three months ended December 31, 2023 included intangibles amortization of $ 139 due to the acquisition.

Test & Measurement depreciation and amortization for the three and six months ended March 31, 2024 included intangibles amortization of $ 141 and $ 280 due to the acquisition.

Sales by geographic destination, Americas, Asia, Middle East & Africa ("AMEA") and Europe, are summarized below:

Three Months Ended December 31, Three Months Ended December 31,

Three Months Ended March 31, Three Months Ended March 31,

Americas AMEA Europe Total Americas AMEA Europe Total

9 unchanged sentences

Total $ 1,960 1,113 704 3,777 2,192 1,306 895 4,393

Six Months Ended March 31, Six Months Ended March 31,

Americas AMEA Europe Total Americas AMEA Europe Total

Final Control $ 940 670 244 1,854 967 774 250 1,991

Measurement & Analytical 851 550 236 1,637 987 659 314 1,960

Discrete Automation 602 359 340 1,301 580 323 342 1,245

Safety & Productivity 508 33 130 671 512 35 140 687

Intelligent Devices 2,901 1,612 950 5,463 3,046 1,791 1,046 5,883

Control Systems & Software 608 371 250 1,229 646 426 290 1,362

Test & Measurement — — — — 326 197 226 749

AspenTech 226 124 123 473 261 133 141 535

Software and Control 834 495 373 1,702 1,233 756 657 2,646

Corporate and other

Total $ 3,735 2,107 1,323 7,165 4,279 2,547 1,703 8,529

Items 2 and 3.

3 unchanged sentences

NI provides software-connected automated test and measurement systems that enable enterprises to bring products to market faster and at a lower cost, and had revenues of approximately $1.7 billion for the 12 months ended September 30, 2023.

For the first quarter of fiscal 2024, net sales were $4.1 billion, up 22 percent compared with the prior year.

For the second quarter of fiscal 2024, net sales were $4.4 billion, up 17 percent compared with the prior year.

Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, were up 8 percent.

Foreign currency translation had a 1 percent favorable impact, the Test & Measurement acquisition added 12 percent and the divestiture of Metran, Emerson's Russia-based manufacturing subsidiary, deducted 1 percent.

Foreign currency translation had a 1 percent unfavorable impact and the Test & Measurement acquisition added 10 percent.

Earnings from continuing operations attributable to common stockholders were $501, down 6 percent, and diluted earnings per share from continuing operations were $0.87, down 5 percent compared with $0.92 in the prior year.

Adjusted diluted earnings per share from continuing operations were $1.22, up 56 percent compared with $0.78 in the prior year, reflecting the strong sales growth and operating performance, as well as a $0.13 contribution from Test & Measurement.

Adjusted diluted earnings per share from continuing operations were $1.36, up 25 percent compared with $1.09 in the prior year, reflecting the strong sales growth and operating performance, as well as an $0.11 contribution from Test & Measurement.

The table below presents the Company's diluted earnings per share from continuing operations on an adjusted basis to facilitate period-to-period comparisons and provide additional insight into the underlying, ongoing operating performance of the Company.

Adjusted diluted earnings per share from continuing operations excludes intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction-related costs, and certain gains, losses or impairments.

Three Months Ended Dec 31 2022 2023

Three Months Ended March 31, 2023 2024

Diluted earnings from continuing operations per share $ 0.92 0.87

2 unchanged sentences

Acquisition/divestiture fees and related costs 0.01 0.03

Amortization of acquisition-related inventory step-up — 0.38

Loss on Copeland equity method investment — 0.04

Discrete tax benefits — (0.10)

Russia business exit 0.08 —

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 diluted earnings from continuing operations per share $ 1.09 1.36

2 unchanged sentences

Three Months Ended

Adjusted diluted earnings from continuing operations per share - Dec 31, 2022

Adjusted diluted earnings from continuing operations per share - March 31, 2023

Operations 0.27

Corporate and other 0.02

Stock compensation (0.04)

Interest income from related party 0.04

Share count 0.02

Foreign currency (0.02)

Pensions (0.01)

Effective tax rate 0.01

Adjusted diluted earnings from continuing operations per share - Dec 31, 2023

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31

Following is an analysis of the Company’s operating results for the first quarter ended December 31, 2022, compared with the first quarter ended December 31, 2023.

Interest income from related party 0.04

Adjusted diluted earnings from continuing operations per share - March 31, 2024

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31

Following is an analysis of the Company’s operating results for the second quarter ended March 31, 2023, compared with the second quarter ended March 31, 2024.

2023 2024 Change

5 unchanged sentences

Percent of sales 26.7 % 29.6 % 2.9 pts

Gain on subordinated interest $ — (79)

Other deductions, net $ 109 389

11 unchanged sentences

Adjusted Diluted EPS - Earnings from continuing operations $ 1.09 1.36 25 %

Net sales for the first quarter of fiscal 2024 were $4.1 billion, up 22 percent compared with 2023.

Net sales for the second quarter of fiscal 2024 were $4.4 billion, up 17 percent compared with 2023.

Intelligent Devices sales were up 5 percent, while Software and Control sales were up 56 percent , which included the impact of the Test & Measurement acquisition.

Underlying sales were up 8 percent on 5 percent higher volume and 3 percent higher price.

For eign currency translation had a 1 percent favorable impact, t he Test & Measurement acquisition added 12 percent and the divestiture of Metran, Emerson's Russia-based manufacturing subsidiary, deducted 1 percent.

For eign currency translation had a 1 percent unfavorable impact and t he Test & Measurement acquisition added 10 percent.

Underlying sales were up 2 percent in the U.S.

and up 12 percent internationally.

The Americas was up 8 percent, Europe was up 10 percent, and Asia, Middle East & Africa was up 15 percent (China up 9 percent).

Cost of sales for the first quarter of fiscal 2024 were $2,201, an increase of $448 compared with 2023, reflecting the impact of higher volume and the Test & Measurement acquisition.

Gross margin of 46.5% decreased 1.5 percentage po ints, reflecting the impact from acquisition-related inventory step-up amortization of $231, which negatively impacted margins by 5.6 percentage points.

Excluding this impact, gross margin improved due to the Test & Measurement acquisition and higher price.

Selling, general and administrative (SG&A) expens es of $1,277 increased $247 and SG&A as a percent of sales increased 0.5 percentage points to 31.0 percent compared with the prior year, reflecting the impact of the Test & Measurement acquisition, partially offset by lower stock compensation expense and strong operating leverage on higher sales.

Other deductions, net were $487 for the first quarter of fiscal 2024, an increase of $367 compared with the prior year.

The current year included intangibles amortization r elated to the Test & Measurement acquisition of $139, restructuring costs of $83, acquisition/divestiture costs of $80 and a loss of $36 on the Company's equity method investment in Copeland.

The prior year included a charge of $47 related to the Company exiting its business in Russia and a mark-to-market gain of $35 related to foreign currency forward contracts that were terminated in June 2023.

was up 4 percent, Europe was up 12 percent, and Asia, Middle East & Africa was up 11 percent (China down 3 percent).

Cost of sales for the second quarter of fiscal 2024 were $2,092, an increase of $137 compared with 2023, reflecting the impact of higher volume and the Test & Measurement acquisition.

Gross margin of 52.2 percent increased 4.3 percentage po ints, reflecting the Test & Measurement acquisition, higher price and leverage on higher sales.

Selling, general and administrative (SG&A) expens es of $1,296 increased $296 and SG&A as a percent of sales increased 2.9 percentage points to 29.6 percent compared with the prior year, reflecting the impact of the Test & Measurement acquisition and higher stock compensation expense, partially offset by strong operating leverage on higher sales.

In the second quarter of fiscal 2024, the Company received its final distribution of $79 related to its subordinated interest in Vertiv.

Other deductions, net were $389 for the second quarter of fiscal 2024, an increase of $280 compared with the prior year.

The current year included intangibles amortization r elated to the Test & Measurement acquisition of $141, restructuring costs of $30, a loss of $59 on the Company's equity method investment in Copeland and a divestiture loss of $39.

The prior year included a mark-to-market gain of $35 related to its equity investment in National Instruments Corporation and a mark-to-market loss of $14 related to foreign currency forward contracts that were terminated in June 2023.

See Note 7 and Note 10.

Pretax earnings from continuing operations of $139 decreased $283, down 67 percent compared with the prior year.

Pretax earnings from continuing operations of $652 increased $13, up 2 percent compared with the prior year.

Earnings increased $72 in Intelligent Devices and decreased $9 in Software and Control, see the Business Segments discussion that follows and Note 14.

Income taxes were $7 in the first quarter of fiscal 2024 and $98 in 2023, resulting in effective tax rates of 5 percent and 23 percent, respectively.

The current year rate included a $57 ($0.10 per share) benefit related to discrete tax items and the impact of inventory step-up amortization, which in total had a 16 percentage point impact on the rate.

The prior year rate included a 2 per centage point unfavorable impact related to the Russia charge, which had no related tax benefit.

Income taxes were $ 149 in the second quarter of fiscal 2024 and $134 in 2023, resulting in effective tax rates of 23 percent and 21 percent, respectively.

The current year rate was negatively impacted by approximately 2 percentage points due to the loss on divestiture (see Note 4), which was nondeductible for tax purposes.

1 unchanged sentence

See the analysis above of adjusted earnings per share for further details.

Earnings from discontinued operations were $2,002 ($3.41 per share) in the prior year, reflecting the $2.1 billion after-tax gain on the InSinkErator divestiture.

Net earnings common stockholders in the first quarter of fiscal 2024 were $142 compared with $2,331 in the prior year, and earnings per share were $0.25 compared with $3.97 in the prior year.

Earnings from discontinued operations were $262 ($0.46 per share) in the prior year.

Net earnings common stockholders in the second quarter of fiscal 2024 were $501 compared with $792 in the prior year, and earnings per share were $0.87 compared with $1.38 in the prior year.

The table below, which shows results from continuing operations on an adjusted EBITA basis, is intended to supplement the Company's discussion of its results of operations herein.

1 unchanged sentence

Adjusted EBITA and adjusted EBITA margin are measures used by management and may be useful for investors to evaluate the Company's operational performance.

Three Months Ended Dec 31 2022 2023 Change

Three Months Ended March 31, 2023 2024 Change

Earnings from continuing operations before income taxes $ 639 652 2 %

5 unchanged sentences

Acquisition/divestiture fees and related costs 10 20

Amortization of acquisition-related inventory step-up — 231

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

Russia business exit 47 —

AspenTech Micromine purchase price hedge gain (35) —

Adjusted EBITA from continuing operations $ 875 1,072 23 %

1 unchanged sentence

Business Segments

Following is an analysis of operating results for the Company’s business segments for the first quarter ended December 31, 2022, compared with the first quarter ended December 31, 2023.

Following is an analysis of operating results for the Company’s business segments for the second quarter ended March 31, 2023, compared with the second quarter ended March 31, 2024.

The Company defines segment earnings as earnings before interest and taxes.

26 unchanged sentences

Adjusted EBITA Margin 24.6 % 25.6 % 1.0 pts

Intelligent Devices sales were $2.8 billion in the first quarter of 2024, an increase of $283, or 11 percent.

Intelligent Devices sales were $3.1 billion in the second quarter of 2024, an increase of $137, or 5 percent.

Underlying sales increased 6 percent on 3 percent higher volume and 3 percent higher price.

Unde rlying sales increased 6 percent in the Americas, Europe increased 14 percent and Asia, Middle East & Africa was up 18 percent (China up 10 percent ).

F inal Control sales increased $78 , or 9 percent, reflecting strength in energy and power end markets.

Unde rlying sales increased 4 percent in the Americas, Europe increased 6 percent and Asia, Middle East & Africa was up 9 percent (China down 5 percent ).

F inal Control sales increased $59 , or 6 percent, reflecting strength in energy and power end markets, particularly in Asia, Middle East & Africa.

Sales for Measurement & Analytical increased $125 , or 14 percent, reflecting robust growth in all geographies and strong backlog conversion.

Discrete Automation sales decreased $5, or 1 percent, reflecting softness in the Americas and Asia, Middle East & Africa.

Safety & Productivity sales increased $12, or 4 percent, reflecting solid demand in the Americas and Europe.

Discrete Automation sales decreased $51, or 8 percent, reflecting softness in all geographies driven in part by lower factory automation demand.

Safety & Productivity sales increased $4, or 1 percent, as modest growth in Europe and strength in Asia, Middle Ease & Africa was largely offset by softness in the Americas.

Earnings for Intelligent Devices were $732 , an increase of $72 , or 11 percent , and margin increased 1.3 percentage points to 23.9 percent.

Adjusted EBITA margin was 23.8 percent, an increase of 1.6 percentage points, reflecting leverage on higher sales and favorable price less net material inflation, partially offset by higher headcount and other costs.

Adjusted EBITA margin was 25.6 percent, an increase of 1.0 percentage points, reflecting leverage on higher sales, favorable mix and favorable price less net material inflation, partially offset by increases in other costs.

SOFTWARE AND CONTROL

5 unchanged sentences

Control Systems & Software $ 127 151 19 %

Test & Measurement — (78) #DIV/0!

Test & Measurement — (79) — %

AspenTech (54) (8) 84 %

12 unchanged sentences

Adjusted EBITA Margin 24.1 % 26.7 % 2.6 pts

Software and Control sales were $1,314 in the first quarter of 2024, an increase of $465, or 55 percent compared to the prior year, reflecting the impact of the Test & Measurement acquisition and strong growth in Control Systems & Software.

Software and Control sales were $1,332 in the second quarter of 2024, an increase of $479, or 56 percent compared to the prior year, reflecting the impact of the Test & Measurement acquisition and strong growth in Control Systems & Software.

Underlying sales were up 14 percent on 11 percent higher volume and 3 percent higher price.

Underlying sales increased 4 percent in the Americas, 31 percent in Europe and 20 percent in Asia, Middle East & Africa (China up 9 percent).

Control Systems & Software sales increased $69, or 11 percent, reflecting robust global demand in process end markets and strong demand in power end markets in the Americas and Asia, Middle East & Africa.

Test & Measurement sales were $382 in the first quarter, reflecting the impact of the acquisition.

AspenTech sales increased $14, or 6 percent, primarily due to higher maintenance and services revenue.

Control Systems & Software sales increased $64, or 11 percent, reflecting strong international demand in process end markets and strong demand in power end markets in the Americas.

Test & Measurement sales were $367 in the second quarter, reflecting the acquisition.

AspenTech sales increased $48, or 21 percent, primarily due to higher license and maintenance revenue.

Earnings for Software and Control decreased $9, down 14 percent, and margin decreased 3.9 percentage points due to the Test & Measurement loss which reflected significant intangibles amortization and restructuring.

Adjusted EBITA margin increased 2.3 percentage points, reflecting leverage on higher sales, higher price and favorable mix.

Adjusted EBITA margin increased 2.6 percentage points, reflecting leverage on higher sales and higher price.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31

Following is an analysis of the Company’s operating results for the six months ended March 31, 2023, compared with the six months ended March 31, 2024.

2023 2024 Change

(dollars in millions, except per share amounts)

Net sales $ 7,129 8,493 19 %

Gross profit $ 3,421 4,200 23 %

Percent of sales 48.0 % 49.5 % 1.5 pts

SG&A $ 2,030 2,573 27 %

Percent of sales 28.5 % 30.3 % 1.8 pts

Gain on subordinated interest $ — (79)

Other deductions, net $ 229 876

Amortization of intangibles $ 237 547

Restructuring costs $ 29 113

Interest expense, net $ 101 101

Interest income from related party $ — (62)

Earnings from continuing operations before income taxes $ 1,061 791 (25) %

Percent of sales 14.9 % 9.3 % (5.6) pts

Earnings from continuing operations common stockholders $ 859 643 (25) %

Percent of sales 12.0 % 7.6 % (4.4) pts

Net earnings common stockholders $ 3,123 643 (79) %

Diluted EPS - Earnings from continuing operations $ 1.48 1.12 (24) %

Diluted EPS - Net earnings $ 5.38 1.12 (79) %

Adjusted Diluted EPS - Earnings from continuing operations $ 1.86 2.58 39 %

Net sales for the first six months of 2024 were $8.5 billion, up 19 percent compared with 2023.

Intelligent Devices sales were up 8 percent, while Software and Control sales were up 56 percent, which included the impact of the Test & Measurement acquisition.

Underlying sales were up 9 percent on 6.5 percent higher volume and 2.5 percent higher price.

Foreign currency translation had a negligible impact, the Test & Measurement acquisition added 11 percent and the divestiture of Metran deducted 1 percent.

Underlying sales increased 6 percent in the U.S.

and increased 12 percent internationally.

The Americas was up 6 percent, Europe was up 11 percent and Asia, Middle East & Africa was up 13 percent (China was up 3 percent).

Cost of sales for 2024 were $4,293, an increase of $585 versus $3,708 in 2023, r eflecting the impact of higher volume and the Test & Measurement acquisition .

Gross margin of 49.5 percent increased 1.5 percentage points, reflecting the Test & Measurement acquisition, higher price and leverage on higher sales, partially offset by the impact from acquisition-related inventory step-up amortization of $231, which negatively impacted margins by approximately 2.7 percentage points.

SG&A expenses of $2,573 increased $543 and SG&A as a percent of sales increased 1.8 percentage points to 30.3 percent, reflecting the impact of the Test & Measurement acquisition, partially offset by strong operating leverage on higher sales.

In the second quarter of fiscal 2024, the Company received its final distribution of $79 related to its subordinated interest in Vertiv.

Other deductions, net were $876 in 2024, an increase of $647 compared with the prior year.

The current year included intangibles amortization r elated to the Test & Measurement acquisition of $280 , restructuring costs of $113 , acquisition/divestiture costs of $85, a loss of $95 on the Company's equity method investment in Copeland and a divestiture loss of $39 .

The prior year included a charge of $47 related to the Company exiting its business in Russia, a mark-to-market gain of $35 related to its equity investment in National Instruments Corporation and a mark-to-market gain of $21 related to foreign currency forward contracts that were terminated in June 2023 .

See Note 7 and Note 10.

Pretax earnings from continuing operations of $791 decreased $270 compared with prior year.

Earnings increased $149 in Intelligent Devices and decreased $47 in Software and Control, see the Business Segments discussion that follows and Note 14.

Income taxes were $156 in the first six of months of fiscal 2024 and $232 in 2023 , resulting in effective tax rates of 20 percent and 22 percent, respectively.

The current year rate i ncluded a $57 ($0.10 per share) benefit related to discrete tax items, partially offset by unfavorable impacts from inventory step-up amortization and the loss on divestiture noted above.

In total, the net impact of these items benefited the rate by approximately 1 percentage point.

Earnings from continuing operations attributable to common stockholders were $643, down 25 percent compared with the prior year, and diluted earnings per share from continuing operations were $1.12, down 24 percent compared with $1.48 in 2023.

See the analysis above of adjusted earnings per share for further details.

Earnings from discontinued operations were $2,264 ($3.90 per share) in the prior year, reflecting the $2.1 billion after-tax gain on the InSinkErator divestiture.

Net earnings common stockholders were $643 ($1.12 per share) compared with $3,123 ($5.38 per share) in the prior year.

The table below presents the Company's diluted earnings per share on an adjusted basis to facilitate period-to-period comparisons and provide additional insight into the underlying, ongoing operating performance of the Company.

Six Months Ended March 31, 2023 2024

Diluted earnings from continuing operations per share $ 1.48 1.12

Amortization of intangibles 0.30 0.73

Restructuring and related costs 0.06 0.17

Discrete taxes — (0.10)

Amortization of acquisition-related inventory step-up — 0.38

Acquisition/divestiture fees and related costs 0.01 0.19

Loss on divestiture of business — 0.07

Gain on subordinated interest — (0.10)

National Instruments investment gain (0.05) —

AspenTech Micromine purchase price hedge (0.02) —

Loss on Copeland equity method investment — 0.12

Russia business exit charge 0.08 —

Adjusted diluted earnings from continuing operations per share $ 1.86 2.58

The table below summarizes the changes in adjusted diluted earnings per share.

The items identified below are discussed throughout MD&A, see further discussion above and in the Business Segments and Financial Position sections below.

Six Months Ended

Adjusted diluted earnings from continuing operations per share - March 31, 2023

Operations 0.59

Corporate and other 0.03

Stock compensation 0.05

Foreign currency (0.02)

Pensions (0.02)

Effective tax rate (0.01)

Interest income from related party 0.08

Share count 0.02

Adjusted diluted earnings from continuing operations per share - March 31, 2024

The table below, which shows results on an adjusted EBITA basis, is intended to supplement the Company's discussion of its results of operations herein.

Six Months Ended March 31, 2023 2024 Change

Earnings from continuing operations before income taxes $ 1,061 791 (25) %

Percent of sales 14.9 % 9.3 % (5.6) pts

Interest expense, net 101 101

Interest income from related party — (62)

Amortization of intangibles 335 645

Restructuring and related costs 41 120

Acquisition/divestiture fees and related costs 10 154

Loss on divestiture of business — 39

Amortization of acquisition-related inventory step-up — 231

Gain on subordinated interest — (79)

National Instruments investment gain (35) —

AspenTech Micromine purchase price hedge (21) —

Loss on Copeland equity method investment — 95

Russia business exit charge 47 —

Adjusted EBITA from continuing operations $ 1,539 2,035 32 %

Percent of sales 21.6 % 24.0 % 2.4 pts

Business Segments

Following is an analysis of operating results for the Company’s business segments for the six months ended March 31, 2023, compared with the six months ended March 31, 2024.

The Company defines segment earnings as earnings before interest and taxes.

As a result of the Company's portfolio transformation, the Company has realigned its business segments and now reports six segments and two business groups.

INTELLIGENT DEVICES

2023 2024 Change FX Acq/Div U/L

Final Control $ 1,854 1,991 7 % — % 1 % 8 %

Measurement & Analytical 1,637 1,960 20 % — % 2 % 22 %

Discrete Automation 1,301 1,245 (4) % (1) % — % (5) %

Safety & Productivity 671 687 2 % — % — % 2 %

Total $ 5,463 5,883 8 % — % — % 8 %

Final Control $ 373 453 22 %

Measurement & Analytical 404 509 26 %

Discrete Automation 254 213 (16) %

Safety & Productivity 146 151 3 %

Total $ 1,177 1,326 13 %

Margin 21.5 % 22.5 % 1.0 pts

Amortization of intangibles:

Final Control $ 44 44

Measurement & Analytical 10 32

Discrete Automation 14 17

Safety & Productivity 13 13

Total $ 81 106

Restructuring and related costs:

Final Control $ 13 —

Measurement & Analytical 1 4

Discrete Automation 8 17

Safety & Productivity 2 1

Total $ 24 22

Adjusted EBITA $ 1,282 1,454 13 %

Adjusted EBITA Margin 23.5 % 24.7 % 1.2 pts

Intelligent Devices sales were $5.9 billion in the first six months of 2024, an increase of $420, or 8 percent.

Underlying sales increased 8 percent on 6 percent higher volume and 2 percent higher price.

Underlying sales increased 5 percent in the Americas, Europe increased 10 percent, and Asia, Middle East & Africa was up 13 percent (China up 2 percent).

Final Control sales increased $137, or 7 percent, reflecting strength in energy and power end markets.

Sales for Measurement & Analytical increased $323, or 20 percent, reflecting robust growth in all geographies and strong backlog conversion.

Discrete Automation sales decreased $56, or 4 percent, reflecting softness in all geographies.

Safety & Productivity sales increased $16, or 2 percent, reflecting slight growth in the Americas, moderate growth in Europe and strength in Asia, Middle East & Africa.

Earnings for Intelligent Devices were $1,326, an increase of $149, or 13 percent, and margin increased 1.0 percentage points to 22.5 percent.

Adjusted EBITA margin was 24.7 percent, an increase of 1.2 percentage points, reflecting leverage on higher sales, favorable mix and favorable price less net material inflation, partially offset by increases in other costs.

SOFTWARE AND CONTROL

2023 2024 Change FX Acq/Div U/L

Control Systems & Software $ 1,229 1,362 11 % — % — % 11 %

Test & Measurement — 749 — %

AspenTech 473 535 13 % — % — % 13 %

Total $ 1,702 2,646 56 % — % (44) % 12 %

Control Systems & Software $ 234 300 29 %

Test & Measurement — (157) — %

AspenTech (87) (43) 50 %

Total $ 147 100 (32) %

Margin 8.6 % 3.8 % (4.8) pts

Amortization of intangibles:

Control Systems & Software $ 11 16

Test & Measurement — 280

AspenTech 243 243

Total $ 254 539

Restructuring and related costs:

Control Systems & Software $ 6 4

Test & Measurement — 56

AspenTech — —

Adjusted EBITA $ 407 699 72 %

Adjusted EBITA Margin 23.9 % 26.4 % 2.5 pts

Software and Control sales were $2,646 in the first six months of 2024, an increase of $944, or 56 percent compared to the prior year, reflecting the impact of the Test & Measurement acquisition.

Underlying sales were up 12 percent on 9 percent higher volume and 3 percent higher price.

Underlying sales increased 9 percent in the Americas, 16 percent in Europe and 14 percent in Asia, Middle East & Africa (China up 7 percent).

Control Systems & Software sales increased $133, or 11 percent, reflecting global strength in process end markets while power end markets were up strong in the Americas and Europe.

Test & Measurement sales were $749 in the first six months of 2024, reflecting the acquisition.

AspenTech sales increased $62, or 13 percent, reflecting higher license, maintenance and services revenue.

Earnings for Software and Control decreased $47, down 32 percent, and margin decreased 4.8 percentage points, reflecting the impact from $280 of incremental intangibles amortization related to the Test & Measurement acquisition.

Adjusted EBITA margin increased 2.5 percentage points, reflecting leverage on higher sales and higher price.

FINANCIAL CONDITION

Key elements of the Company's financial condition for the three months ended December 31, 2023 as compared to the year ended September 30, 2023 and the three months ended December 31, 2022 follow.

Dec 31, 2022 Sept 30, 2023 Dec 31, 2023

Key elements of the Company's financial conditi on as of and for the six months ended March 31, 2024 as compared to the year ended September 30, 2023 and the six months ended March 31, 2023 follow.

Mar 31, 2023 Sept 30, 2023 Mar 31, 2024

Operating working capital $ 1,140 $ 1,283 $ 2,182

3 unchanged sentences

Interest coverage ratio 8.6 X 11.5 X 5.5 X

Operating working capital increased due to the acquisition of NI, changes in accrued expenses and higher inventory levels to support sales growth.

As of December 31 , 2023, Emerson's cash and equivalents totaled $2,076, which included approximately $180 attributable to AspenTech.

Operating working capital increased due to the acquisition of NI and changes in accrued expenses.

As of March 31, 2024 , Emerson's cash and equivalents totaled $2,318, which included approximately $180 attributable to AspenTech.

The cash held by AspenTech is intended to be used for its own purposes and is not available to return to Emerson shareholders.

The current ratio decreased compared to September 30, 2023, reflecting the decrease in cash and increase in short-term borrowings used to support the NI acquisition.

The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 2.6X for the first three months of fiscal 2024 compares to 7.3X for the three months ended December 31, 2022, reflecting lower GAAP pretax earnings largely due to the NI acquisition.

Excluding the impact from acquisition-related inventory step-up amortization of $231, higher intangibles amortization of $156, acquisition/divestiture fees and related costs of $134, higher restructuring and related costs of $72, and the loss of $36 on the Copeland equity method investment, the interest coverage ratio was 10.1X.

Operating cash flow from continuing operations for the first three months of fiscal 2024 was $444, an increase of $142 compared with $302 in the prior year, reflecting higher earnings (excluding the impact of items related to the NI acquisition).

The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 5.5X for the first six months of fiscal 2024 compares to 8.6X for the six months ended March 31, 2023, reflecting lower GAAP pretax earnings largely due to the NI acquisition.

Excluding the impact from acquisition-related inventory step-up amortization of $231, higher intangibles amortization of $310, acquisition/divestiture fees and related costs of $154, higher restructuring and related costs of $79, the loss of $95 on the Copeland equity method investment and the gain on subordinated interest of $79, the interest coverage ratio was 10.1X.

Operating cash flow from continuing operations for the first six months of fiscal 2024 was $1,201, an increase of $324 compared with $877 in the prior year, reflecting higher earnings (excluding the impact of items related to the NI acquisition).

Acquisition-related costs and integration activities negatively impacted operating cash flow in the current year by approximately $170.

AspenTech generated approximately $30 compared to $50 in the prior year.

Free cas h flow from continuing operations of $367 in the first three months of fiscal 2024 (operating cash flow of $444 less capital expenditures of $77) increased $124 compared to free cash flow of $243 in 2023 (operating cash flow of $302 less capital expenditures of $59), reflecting the increase in operating cash flow.

AspenTech generated operating cash flow of approximately $170 compared to approximately $180 in the prior year.

Free cas h flow from continuing operations of $1,042 in the first six months of fiscal 2024 (operating cash flow of $1,201 less capital expenditures of $159) increased $286 compared to free cash flow of $756 in 2023 (operating cash flow of $877 less capital expenditures of $121), reflecting the increase in operating cash flow, partially offset by higher capital expenditures.

Cash used in investing activities from continuing operations was $8,490, reflecting the acquisition of NI.

Cash provided by financing activities from continuing operations was $1,613, reflecting an increase in short-term borrowings of $2,464 , partially offset by share repurchases and dividends.

Total cash provided by operating activities was $415 including the impact of discontinued operations, and decreased $3 compared with $418 in the prior year.

Total cash provided by operating activities was $1,158 including the impact of discontinued operations, and increased $672 compared with $486 in the prior year.

Emerson maintains a conservative financial structure to provide the strength and flexibility necessary to achieve our strategic objectives and has been successful in efficiently deploying cash where needed worldwide to fund operations, complete acquisitions and sustain long-term growth.

1 unchanged sentence

FISCAL 2024 OUTLOOK

For the full year, consolidated net sales from continuing operations are expected to be up 14.5 percent to 17 percent, with underlying sales up 4.5 percent to 6.5 percent excluding a 10 to 10.5 percent impact from the NI acquisition.

For the full year, consolidated net sales from continuing operations are expected to be up 15 percent to 16 percent, with underlying sales up 5.5 percent to 6.5 percent excluding a 10 percent impact from the NI acquisition and a 0.5 percent unfavorable impact from foreign currency.

Earnings per share from continuing operations are expected to be $2.98 to $3.08, while adjusted earnings per share from continuing operations are expected to be $5.40 to $5.50 (see the following reconciliation).

6 unchanged sentences

Acquisition/divestiture fees and related costs ~ 0.23

Divestiture loss / (gain), net (0.03)

Discrete tax benefits (0.10)

Adjusted diluted earnings from continuing operations per share $5.40- $5.50

Operating cash flow from continuing operations is expected to be $3.0 to $3.1 billion and free cash flow from continuing operations, which excludes projected capital spending of approximately $0.4 billion, is expected to be $2.6 to $2.7 billion.

Operating cash flow from continuing operations is expected to be approximately $3.1 billion and free cash flow from continuing operations, which excludes projected capital spending of approximately $0.4 billion, is expected to be approximately $2.7 billion.

The fiscal 2024 outlook assumes approximately $500 million returned to shareholders through share repurchases and approximately $1.2 billion of dividend payments.

Statements in this report that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later developments.

These risks and uncertainties include the scope, duration and ultimate impacts of the Russia-Ukraine and other global conflicts, as well as economic and currency conditions, market demand, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, inflation, among others, which are set forth in the “Risk Factors” of Part I, Item 1A, and the "Safe Harbor Statement" of Part II, Item 7, to the Company's Annual Report on Form 10-K for the year ended September 30, 2023 and in subsequent reports filed with the SEC, which are hereby incorporated by reference.

These risks and uncertainties include the scope, duration and ultimate impacts of the Russia-Ukraine and other global conflicts, as well as economic and currency conditions, market demand, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, and inflation, among others, which are set forth in the “Risk Factors” of Part I, Item 1A, and the "Safe Harbor Statement" of Part II, Item 7, to the Company's Annual Report on Form 10-K for the year ended September 30, 2023 and in subsequent reports filed with the SEC, which are hereby incorporated by reference.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements