What changed in this filing

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Item 1. Financial Statements

2025-02-05 compared with 2024-08-07 · 153 added, 476 removed, 507 unchanged (55% of the section changed)

3 unchanged sentences

& SUBSIDIARIES

Three and nine months ended June 30, 2023 and 2024

Three months ended December 31, 2023 and 2024

(Dollars in millions, except per share amounts;

Three Months Ended

June 30, Nine Months Ended

2023 2024 2023 2024

Net sales $ 4,117 4,175

1 unchanged sentence

Selling, general and administrative expenses 1,277 1,224

Gain on subordinated interest — — — ( 79 )

Loss on Copeland note receivable — 279 — 279

Other deductions, net 451 228

Interest expense (net of interest income of $ 40 and $ 44 , respectively)

10 56 111 157

Interest income from related party ( 31 ) —

3 unchanged sentences

Discontinued operations, net of tax of $ 9 and $ — , respectively

8,712 ( 15 ) 10,979 ( 88 )

Net earnings 132 593

20 unchanged sentences

& SUBSIDIARIES

Three and nine months ended June 30, 2023 and 2024

Three months ended December 31, 2023 and 2024

(Dollars in millions;

Three Months Ended June 30, Nine Months Ended June 30,

2023 2024 2023 2024

Three Months Ended December 31,

Net earnings $ 132 593

12 unchanged sentences

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

Sept 30, 2023 June 30, 2024

Sept 30, 2024 Dec 31, 2024

Current assets

7 unchanged sentences

Other intangible assets 10,436 10,025

Copeland note receivable and equity investment held-for-sale 3,255 2,908

Other 2,744 2,742

26 unchanged sentences

& SUBSIDIARIES

Three and nine months ended June 30, 2023 and 2024

Three months ended December 31, 2023 and 2024

(Dollars in millions;

Three Months Ended June 30, Nine Months Ended June 30,

2023 2024 2023 2024

Three Months Ended December 31,

Common stock $ 477 477

28 unchanged sentences

AspenTech purchases of common stock ( 31 ) —

Dividends paid ( 1 ) ( 3 ) ( 1 ) ( 3 )

Climate Technologies divestiture ( 29 ) — ( 29 ) —

Other comprehensive income 2 ( 7 )

5 unchanged sentences

& SUBSIDIARIES

Nine Months Ended June 30, 2023 and 2024

Three Months Ended December 31, 2023 and 2024

(Dollars in millions;

Nine Months Ended

Three 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 ( 238 ) ( 154 )

Loss on Copeland note receivable — 279

Other, net ( 204 ) ( 113 )

5 unchanged sentences

Purchases of businesses, net of cash and equivalents acquired ( 8,339 ) ( 37 )

Proceeds from subordinated interest 15 79

Proceeds from related party note receivable 918 —

Other, net ( 37 ) ( 22 )

1 unchanged sentence

Cash from discontinued operations 1 —

Cash provided by (used in) investing activities 13,100 ( 8,564 )

Cash used in investing activities ( 8,452 ) ( 142 )

Financing activities

Net increase (decrease) in short-term borrowings ( 1,476 ) 2,229

Proceeds from short-term borrowings greater than three months 395 322

Payments of short-term borrowings greater than three months ( 400 ) ( 100 )

Net increase in short-term borrowings 2,647 2

Payments of long-term debt — ( 2 )

2 unchanged sentences

AspenTech purchases of common stock ( 72 ) —

Payment of related party note payable ( 918 ) —

Other, net ( 45 ) ( 91 )

1 unchanged sentence

Effect of exchange rate changes on cash and equivalents 7 ( 98 )

Increase (decrease) in cash and equivalents 8,153 ( 5,753 )

Decrease in cash and equivalents ( 5,975 ) ( 754 )

Beginning cash and equivalents 8,051 3,588

19 unchanged sentences

Certain prior year amounts have been reclassified to conform to the current year presentation.

On June 6, 2024, the Company entered into definitive agreements to sell its 40 percent non-controlling common equity interest in Copeland to private equity funds managed by Blackstone for $ 1.5 billion and its note receivable to Copeland for $ 1.9 billion.

As a result of the definitive agreements, the equity interest and note receivable are reported as held-for-sale, and the equity method losses related to the Company's non-controlling common equity interest in Copeland, which were reported since May 2023 in Other deductions, net, have been reclassified and are now reported as discontinued operations for all periods presented (see Notes 5 and 10).

As a result of these transactions, the equity method losses related to the Company's non-controlling common equity interest in Copeland, which were previously reported in Other deductions, net, have been reclassified and are now reported as discontinued operations for all periods presented, and cash flows related to U.S.

tax distributions have been reclassified to operating cash flows from discontinued operations (see Notes 5 and 10).

(2) REVENUE RECOGNITION

Emerson is a global manufacturer that designs and manufactures products and delivers services that bring technology and engineering together to provide innovative solutions for its customers.

Emerson is a global technology and software company that provides innovative solutions for customers in a wide range of end markets around the world.

The majority of the Company's revenues relate to a broad offering of manufactured products and software which are recognized at the point in time when control transfers, while a smaller portion is recognized over time or relates to sales arrangements with multiple performance obligations.

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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 June 30, 2024

Sept 30, 2024 Dec 31, 2024

Unbilled receivables (contract assets) $ 1,599 1,596

2 unchanged sentences

The majority of the Company's contract balances relate to (1) arrangements where revenue is recognized over time and payments from customers are made according to a contractual billing schedule, and (2) revenue from term software license arrangements where the license revenue is recognized upfront upon delivery.

The decrease in net contract assets was primarily due to the acquisition of National Instruments, which increased contract liabilities by approximately $ 160 , while customer billings slightly exceeded revenue recognized for performance completed during the period.

Revenue recognized for the three and nine months ended June 30, 2024 included $ 83 and $ 605 , respectively, that was included in the beginning contract liability balance.

Revenue recognized for the three months ended December 31, 2024 included $ 422 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 and nine months ended June 30, 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 June 30, 2024, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately $ 8.7 billion (of which approximately $ 1.3 billion was attributable to AspenTech and approximately $ 450 was attributable to National Instruments) .

Revenue recognized for the three months ended December 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 December 31, 2024, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately $ 8.5 billion (of which $ 1.25 billion was attributable to AspenTech) .

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 .

1 unchanged sentence

Reconciliations of weighted-average shares for basic and diluted earnings per common share follow.

Diluted earnings per share are calculated using the two-class method.

Earnings allocated to participating securities were inconsequential.

Three Months Ended

June 30, Nine Months Ended

2023 2024 2023 2024

Basic shares outstanding 570.8 568.5

5 unchanged sentences

NI, which provides software-connected automated test and measurement systems that enable enterprises to bring products to market faster and at a lower cost, had revenues of approximately $ 1.7 billion and pretax earnings of approximately $ 170 for the 12 months ended September 30, 2023.

NI is now referred to as Test & Measurement and reported as a new segment in the Software and Control business group, see Note 14.

The following table summarizes the components of the purchase consideration reflected in the acquisition accounting for NI.

NI is now referred to as Test & Measurement and reported as a segment in the Software and Control business group, see Note 14.

The following table summarizes the components of the purchase consideration for NI.

Cash paid to acquire remaining NI shares not already owned by Emerson $ 7,833

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Total purchase consideration $ 8,653

The total purchase consideration for NI was allocated to assets and liabilities as follows.

Valuations of acquired assets and liabilities are in-process and subject to refinement.

Cash and equivalents $ 135

Receivables 310

Inventory 496

Other current assets 140

Property, plant and equipment 329

Goodwill ($ 121 expected to be tax-deductible)

Other intangible assets 5,275

Other assets 113

Total assets 10,232

Accounts payable 52

Accrued expenses 328

Deferred taxes and other liabilities 1,199

Total purchase consideration $ 8,653

The estimated intangible assets attributable to the transaction are comprised of the following (in millions) :

Amount Estimated Weighted Average Life (Years)

Developed technology $ 1,570 9

Customer relationships 3,360 15

Trade names 210 9

Backlog 135 1

Total $ 5,275

Results of operations for the three and nine months ended June 30, 2024 attributable to the NI acquisition include sales of $ 355 and $ 1,104 , respectively, and a net loss of $ 86 and $ 492 , 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

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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 June 30, Nine Months Ended June 30,

2023 2024 2023 2024

Three Months Ended December 31,

Net Sales $ 4,136

1 unchanged sentence

Diluted earnings per share from continuing operations $ 0.78

Pro forma Net sales for the three and nine months ended June 30, 2023 include $ 417 and $ 1,302 , respectively, attributable to NI.

The pro forma results for the three months ended June 30, 2023 include ongoing intangibles amortization of $ 105 and backlog amortization of $ 34 , and exclude the mark-to-market gain of $ 12 recognized in the prior year on the Company's equity investment in National Instruments Corporation (see Note 7).

The pro forma results for the nine months ended June 30, 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 nine months ended June 30, 2023 also include $ 317 of ongoing intangibles amortization, backlog amortization of $ 102 , inventory step-up amortization of $ 213 , and retention bonuses of $ 51 , and exclude the mark-to-market gain of $ 47 recognized in the prior year on the equity investment in National Instruments Corporation.

The proforma results for the three months ended December 31, 2023 exclude transaction costs of $ 69 which were assumed to be incurred in the first quarter of fiscal 2023.

The proforma results for the three months ended December 31, 2023 also exclude 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.

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 $ 424 ( 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.

In the first quarter of fiscal 2023, the Company recognized a pretax loss of $ 47 in Other deductions ($ 47 after-tax, in total $ 0.08 per share) related to its exit of business operations in Russia.

On November 15, 2024, AspenTech acquired Open Grid Systems Limited, a global provider of network model management technology and a pioneer in developing model-driven applications supporting open access to data

through industry standards, for a total purchase price of $ 46 , net of cash acquired.

The Company recognized goodwill of $ 32 ( none of which is expected to be tax deductible) and other identifiable intangible assets of $ 20 , consisting of developed technology and customer relationships with a weighted-average useful life of approximately 5 years.

(5) DISCONTINUED OPERATIONS

On May 31, 2023, the Company completed the sale of a majority stake in its Climate Technologies business (which constitutes the former Climate Technologies segment, excluding Therm-O-Disc which was divested earlier in fiscal 2022) to private equity funds managed by Blackstone in a $ 14.0 billion transaction.

Emerson received upfront, pretax 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 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).

The new standalone business is named Copeland.

On June 6, 2024, the Company entered into a definitive agreement to sell its 40 percent non-controlling common equity interest in Copeland to private equity funds managed by Blackstone for $ 1.5 billion, and the transaction is expected to close by the end of August 2024.

The equity method losses related to the Company's non-controlling common equity interest in Copeland, which were reported since May 2023 in Other deductions, net, have been reclassified and are now reported as discontinued operations for all periods presented and are included within Climate Technologies in Other deductions, net in the tables below.

On May 31, 2023, the Company completed the sale of a majority stake in its Climate Technologies business to private equity funds managed by Blackstone in a $ 14.0 billion transaction.

As a part of this transaction, Emerson received a note receivable with a face value of $ 2.25 billion and retained a 40 percent non-controlling common equity interest in a new standalone joint venture between Emerson and Blackstone named Copeland.

Subsequently, on June 6, 2024, the Company entered into a definitive agreement to sell its 40 pe rcent non-controlling common equity interest in Copeland to private equity funds managed by Blackstone for $ 1.5 billion.

The transaction closed on August 13, 2024 and the Company recognized a gain of $ 539 ($ 435 after-tax) in discontinued operations in fiscal 2024.

In addition, the equity method losses related to the Company's non-controlling equity interest in Copeland, which were reported since May 2023 in Other deductions, net, have been reclassified and are now reported as discontinued operations for all periods presented and are included in Other deductions, net in the table below.

See Note 10 for further details.

On October 31, 2022, the Company completed the divestiture of its InSinkErator business, which manufactures food waste disposers, to Whirlpool Corporation for $ 3.0 billion.

This business had net sales of $ 630 and pretax earnings of $ 152 in fiscal 2022.

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

For the three and nine months ended June 30, 2024, the results of discontinued operations primarily reflect the Company's equity method losses on its non-controlling common equity interest in Copeland, which were $ 16 ($ 9 after-tax) and $ 111 ($ 82 after-tax), respectively.

For the three and nine months ended June 30, 2023, the financial results of Climate Technologies (including equity method losses on the equity interest in Copeland) and InSinkErator ("ISE") are reported as discontinued operations and were as follows:

Three Months Ended June 30, 2023

Climate Technologies ISE Total

Net sales $ 847 — 847

Cost of sales 516 — 516

SG&A 122 — 122

Gain on sale of business ( 10,576 ) — ( 10,576 )

Other deductions, net 69 — 69

Earnings before income taxes 10,716 — 10,716

Income taxes 2,004 — 2,004

Earnings, net of tax $ 8,712 — 8,712

Nine Months Ended June 30, 2023

Climate Technologies ISE Total

Results from discontinued operations for the three months ended December 31, 2023 were as follows:

Three Months Ended December 31, 2023

Net sales $ —

Cost of sales —

SG&A 391 8 399

Gain on sale of business —

3 unchanged sentences

Earnings, net of tax $ ( 27 )

Climate Technologies' results for the three and nine months ended June 30, 2023 included lower expense of $ 26 and $ 96 , respectively, due to ceasing depreciation and amortization upon the held-for-sale classification.

Other deductions, net for Climate Technologies included $ 57 of transaction-related costs for the nine months ended June 30, 2023.

For the three and nine months ended June 30, 2023, the Company recorded a loss of $ 61 in Other deductions, net to reflect equity method losses on its non-controlling common equity interest in Copeland.

Income taxes for the three and nine months ended June 30, 2023 included a tax benefit of $ 10 related to Copeland's U.S.

business, which is taxed as a partnership.

Income taxes for the nine months ended June 30, 2023 included approximately $ 2.2 billion for the gain on the 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 nine months ended June 30, 2024 and 2023 were as follows:

Climate Technologies ISE and TOD Total

Nine Months Ended June 30, Nine Months Ended June 30, Nine Months Ended June 30,

2023 2024 2023 2024 2023 2024

Results for the three months ended December 31, 2023 included equity method losses of $ 36 ($ 27 after-tax) related to the Company's non-controlling common equity interest in Copeland.

Net cash from operating and investing activities from discontinued operations for the three months ended December 31, 2023 were as follows:

Three Months Ended December 31, 2023

Cash from operating activities $ ( 29 )

Cash from investing activities $ 1

Cash from operating activities for the nine months ended June 30, 2023 reflects approximately $ 750 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 nine months ended June 30, 2023 reflects the proceeds of approximately $ 9.7 billion related to the Copeland transaction and approximately $ 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 June 30, Nine Months Ended June 30,

2023 2024 2023 2024

Three Months Ended December 31,

Service cost $ 9 18

7 unchanged sentences

Three Months Ended

June 30, Nine Months Ended

2023 2024 2023 2024

Amortization of intangibles (intellectual property and customer relationships) $ 274 229

2 unchanged sentences

Foreign currency transaction (gains) losses 34 1

Investment-related gains & gains from sales of capital assets

( 26 ) — ( 63 ) —

Loss on divestiture of business — — — 39

Russia business exit — — 47 —

Other ( 20 ) ( 26 )

Total $ 451 228

Intangibles amortization for the three and nine months ended June 30, 2024 included $ 139 and $ 419 , respectively, related to the NI acquisition.

Foreign currency transaction losses for the three and nine months ended June 30, 2023 included a mark-to-market gain of $ 3 and $ 24 , respectively, related to foreign currency forward contracts that were terminated in June 202 3.

The Company recognized a mark-to-market gain of $ 12 and $ 47 for the three and nine months ended June 30, 2023, respectively, 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.

In the first quarter of fiscal 2025, the decrease in intangibles amortization was largely due to backlog amortization of $ 34 in the prior year related to the NI acquisition.

Other is composed of several items, including 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 nine months of the year.

The Company expects fiscal 2025 restructuring expense and related costs to be approximately $ 110 , including costs to complete actions initiated in the first three months of the year.

Restructuring expense by business segment follows:

Three Months Ended June 30, Nine Months Ended

2023 2024 2023 2024

Three Months Ended December 31,

Final Control $ 3 2

9 unchanged sentences

Total $ 83 11

Corporate restructuring of $ 5 and $ 42 for the three and nine months ended June 30, 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 nine months ended June 30, 2024 follow:

Sept 30, 2023 Expense Utilized/Paid June 30, 2024

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

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

Sept 30, 2024 Expense Utilized/Paid Dec 31, 2024

Severance and benefits $ 105 9 26 88

1 unchanged sentence

Total $ 112 11 28 95

The tables above do not include $ 1 and $ 3 of costs related to restructuring actions incurred for the three months ended June 30, 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 $ 13 and $ 10 , respectively .

Income taxes were $ 88 in the third quarter of fiscal 2024 and $ 168 in 2023, resulting in effective tax rates of 19 percent and 21 percent, respectively.

The current year rate reflected a 3 percentage point benefit related to the filing of the prior year U.S.

tax return, partially offset by other items.

Income taxes were $ 266 in the first nine of months of fiscal 2024 and $ 400 in 2023 , resulting in effective tax rates of 20 percent and 21 percent, respectively.

The current year rate i ncluded a $ 57 ($ 0.10 per share) benefit related to discrete tax items and the benefit discussed above related to the prior year U.S.

tax return, partially offset by unfavorable impacts from inventory step-up amortization and the loss on divestiture (see Note 4), which was nondeductible for tax purposes.

In total, the net impact of these items benefited the rate by approximately 2 percentage points, which was partially offset by other items.

The tables above do not include $ 2 and $ 4 of costs related to restructuring actions incurred for the three months ended December 31, 2024 and 2023, respectively, that are required to be reported in selling, general and administrative expenses.

Income taxes were $ 182 in the first quarter of fiscal 2025 and $ 16 in 2024, resulting in effective tax rates of 24 percent and 9 percent, respectively.

The prior 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 12 percentage point impact on the rate.

(10) EQUITY METHOD INVESTMENT AND NOTE RECEIVABLE

As discussed in Note 5, the Company completed the divestiture of a majority stake in Copeland on May 31, 2023, and received upfront, pretax cash proceeds of approximately $ 9.7 billion and a note receivable with a face value of $ 2.25 billion, while retaining a 40 percent non-controlling common equity interest in Copeland.

The equity interest and note receivable, as well as $ 33 of future indemnity obligations included in Other liabilities (net of tax), are reported as held-for-sale as of June 30, 2024.

Subsequent to the end of the quarter, the Company completed the sale of the note receivable on August 2, 2024 and received $ 1.9 billion of pretax cash proceeds.

The sale of the equity interest is expected to close by the end of August 2024.

The Company recognized non-cash interest income on the note receivable (through the date of the agreement) of $ 24 and $ 86 for the three and nine months ended June 30, 2024, respectively, which is reported in Interest income from related party within continuing operations and capitalized to the carrying value of the note.

Upon entering into the note agreement, the Company recorded a pretax loss of $ 279 ($ 217 after-tax, $ 0.38 per share) to adjust the carrying value of the note to $ 1.9 billion to reflect the transaction price.

The Company's share of Copeland's income or loss, which will continue to be recorded using the equity method of accounting until the transaction is completed, is now reported in discontinued operations for all periods presented (see Note 5).

As of June 30, 2024, the carrying value of the retained equity investment was $ 1,008 .

Summarized financial information for Copeland for the three and nine months ended June 30, 2024 is as follows.

Three Months Ended June 30, Nine Months Ended June 30,

As discussed in Note 5, the Company completed the divestiture of a majority stake in Copeland on May 31, 2023, and received upfront, pre-tax cash proceeds of approximately $ 9.7 billion and a note receivable with a face value of $ 2.25 billion, while retaining a 40 percent non-controlling common equity interest in Copeland.

As a result of these transactions, the gain on the sale of the Company's non-controlling common equity interest in Copeland and the historical equity method losses, which were recorded since May 2023 in Other deductions, net, have been reclassified and are now reported as discontinued operations for all periods presented (see Note 5).

For the three months ended December 31, 2023 the Company recognized non-cash interest income on the note receivable of $ 31 , which is reported in Interest income from related party within continuing operations.

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

Three Months Ended December 31,

Net sales $ 1,024

4 unchanged sentences

(11) OTHER FINANCIAL INFORMATION

Sept 30, 2023 June 30, 2024

Sept 30, 2024 Dec 31, 2024

Finished products $ 512 522

5 unchanged sentences

Total $ 2,807 2,743

Sept 30, 2023 June 30, 2024

Goodwill by business segment

13 unchanged sentences

Net carrying amount $ 10,436 10,025

Other intangible assets include customer relationships, net, of $ 3,353 and $ 6,325 and intellectual property, net, of $ 2,707 and $ 4,067 as of September 30, 2023 and June 30, 2024, respectively.

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

Three Months Ended June 30, Nine Months Ended June 30,

2023 2024 2023 2024

Other intangible assets include customer relationships, net, of $ 6,029 and $ 6,296 and intellectual property, net, of $ 3,751 and $ 3,901 as of December 31, 2024 and September 30, 2024, respectively.

Three Months Ended December 31,

Depreciation and amortization expense include the following:

1 unchanged sentence

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

169 313 504 958

Amortization of capitalized software 20 22

Total $ 422 383

Amortization of intangibles included $ 139 and $ 419 related to the NI acquisition for the three and nine months ended June 30, 2024.

Sept 30, 2023 June 30, 2024

Sept 30, 2024 Dec 31, 2024

Other assets include the following:

4 unchanged sentences

Asbestos-related insurance receivables 37 37

Sept 30, 2023 June 30, 2024

Accrued expenses include the following:

9 unchanged sentences

Asbestos litigation 151 147

The increase in deferred income tax liabilities reflects the impact of the NI acquisition.

(12) FINANCIAL INSTRUMENTS

Hedging Activities – As of June 30, 2024, the notional amount of foreign currency hedge positions was approximately $ 3.1 billion.

Hedging Activities – As of December 31, 2024, the notional amount of foreign currency hedge positions was approximately $ 3.4 billion.

All derivatives receiving hedge accounting are cash flow hedges.

The majority of hedging gains and losses deferred as of June 30, 2024 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 December 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.

Net Investment Hedge – In fiscal 2019, the Company issued euro-denominated debt of € 1.5 billion, of which € 500 was repaid in the third quarter of fiscal 2024.

Net Investment Hedge – In fiscal 2019, the Company issued euro-denominated debt of € 1.5 billion, of which € 500 was repaid in 2024.

The euro notes reduce foreign currency risk associated with the Company's international subsidiaries that use the euro as their functional currency and have been designated as a hedge of a portion of the investment in these operations.

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 and nine months ended June 30, 2023 and 2024:

Cash flows related to the euro-denominated debt are classified within financing cash flows.

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

Three Months Ended

Into Earnings Into OCI

3rd Quarter Nine Months 3rd Quarter Nine Months

Gains (Losses) Location 2023 2024 2023 2024

Commodity Cost of sales $ ( 9 ) — ( 19 ) — ( 13 ) — 6 —

Foreign currency

— — ( 2 ) — ( 2 ) 5 1 7

Foreign currency

Cost of sales

42 3 60 9 24 ( 10 ) 38 ( 3 )

Foreign currency

Other deductions, net

( 91 ) ( 12 ) ( 108 ) ( 23 )

Net Investment Hedges

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

As of June 30, 2024, the fair value of long-term debt was approximately $ 6.6 billion, which was lower than the carrying value by $ 1,012 .

As of December 31, 2024, the fair value of long-term debt was approximately $ 6.7 billion, which was lower than the carrying value by $ 932 .

The fair value of foreign currency contracts, which are reported in Other current assets and Accrued expenses, did not materially change since September 30, 2024.

Commodity contracts related to discontinued operations and were novated to Copeland upon the completion of the transaction.

Counterparties to derivatives arran gements are companies with investment-grade credit ratings.

3 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 June 30, 2024.

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

(13) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Activity in Accumulated other comprehensive income (loss) for the three and nine months ended June 30, 2023 and 2024 is shown below, net of income taxes:

Three Months Ended June 30, Nine Months Ended June 30,

2023 2024 2023 2024

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

Three Months Ended December 31,

Foreign currency translation

1 unchanged sentence

Other comprehensive income (loss), net of tax of $ 13 and $ 16 , respectively

( 10 ) ( 122 ) 337 33

Reclassification to loss on divestiture of business 95 — 95 23

Ending balance ( 840 ) ( 1,101 )

2 unchanged sentences

Amortization of deferred actuarial losses into earnings, net of tax of $ 2 and $( 1 ), respectively

( 12 ) ( 12 ) ( 45 ) ( 36 )

Reclassified to gain on sale of business 22 — 22 —

Ending balance ( 259 ) ( 242 )

3 unchanged sentences

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

( 7 ) ( 2 ) ( 11 ) ( 7 )

Reclassified to gain on sale of business ( 19 ) — ( 19 ) —

Ending balance 9 3

2 unchanged sentences

As disclosed in Note 4, the Company completed the acquisition of NI on October 11, 2023.

NI is now referred to as Test & Measurement and reported as a new segment in the Software and Control business group.

NI is now referred to as Test & Measurement and reported as a segment in the Software and Control business group.

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

Three Months Ended June 30, Nine Months Ended June 30,

Sales Earnings (Loss) Sales Earnings (Loss)

Three Months Ended December 31,

Sales Earnings (Loss)

2023 2024 2023 2024

12 unchanged sentences

Corporate and other ( 399 ) ( 57 )

Loss on Copeland note receivable — ( 279 ) — ( 279 )

Gain on subordinated interest — — — 79

Eliminations/Interest ( 19 ) ( 20 ) ( 44 ) ( 8 )

1 unchanged sentence

Total $ 4,117 4,175 175 775

Stock compensation for the three months and nine months ended June 30, 2024 included $ 9 and $ 53 of integration-related stock compensation expense attributable to NI (of which $ 5 and $ 41 , respectively, was reported as restructuring costs).

Corporate and other for the three and nine months ended June 30, 2024 included acquisition/divestiture fees and related costs of $ 13 and $ 159 , respectively, while year-to-date also includes acquisition-related inventory step-up amortization of $ 231 and a divestiture loss of $ 39 .

Corporate and other for the three and nine months ended June 30, 2023 included acquisition/divestiture costs of $ 38 and $ 48 , respectively, and a mark-to-market gain of $ 12 and $ 47 , respectively, related to its equity investment in National Instruments Corporation, while year-to-date also included a loss of $ 47 related to the Company's exit of business operations in Russia.

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, 2024 included acquisition/divestiture fees and related costs of $ 22 compared to $ 130 in 2023, while 2023 also included acquisition-related inventory step-up amortization of $ 231 .

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

Three Months Ended June 30, Nine Months Ended June 30,

2023 2024 2023 2024

Three Months Ended December 31,

Final Control $ 40 40

9 unchanged sentences

Total $ 422 383

Test & Measurement depreciation and amortization for the three and nine months ended June 30, 2024 included intangibles amortization of $ 139 and $ 419 due to the acquisition.

The decrease in Test & Measurement depreciation and amortization for the three months ended December 31, 2024 compared to the three months ended December 31, 2023 was due to backlog amortization of $ 34 in the prior year.

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

Three Months Ended June 30, Three Months Ended June 30,

Americas AMEA Europe Total Americas AMEA Europe Total

Final Control $ 498 399 138 1,035 509 398 139 1,046

Measurement & Analytical 482 303 128 913 488 345 149 982

Discrete Automation 312 180 176 668 294 154 170 618

Safety & Productivity 269 18 76 363 262 18 71 351

Intelligent Devices 1,561 900 518 2,979 1,553 915 529 2,997

Control Systems & Software 322 207 134 663 326 224 150 700

Test & Measurement — — — — 160 98 97 355

AspenTech 111 104 105 320 167 75 101 343

Software and Control 433 311 239 983 653 397 348 1,398

Total $ 1,994 1,211 757 3,962 2,206 1,312 877 4,395

Nine Months Ended June 30, Nine Months Ended June 30,

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

Americas AMEA Europe Total Americas AMEA Europe Total

9 unchanged sentences

Total $ 2,087 1,241 808 4,136 2,144 1,275 776 4,195

(15) SUBSEQUENT EVENTS

On January 27, 2025, the Company announced that it reached an agreement with AspenTech under which Emerson will acquire all outstanding shares of common stock of AspenTech not already owned by Emerson for $ 265 per share pursuant to an all-cash tender offer.

The Company currently owns approximately 57 percent of AspenTech's outstanding shares of common stock.

The transaction values the minority stake being acquired at $ 7.2 billion, and the Company expects to finance the transaction from cash on hand and debt financing.

The transaction is expected to close in the first half of calendar year 2025, and upon closing, AspenTech will become a wholly owned subsidiary of Emerson.

Items 2 and 3.

1 unchanged sentence

(Dollars are in millions, except per share amounts or where noted)

On October 11, 2023, the Company completed the acquisition of National Instruments Corporation (“NI”), which is now referred to as Test & Measurement and reported as a new segment in the Software and Control business group.

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.

On June 6, 2024, the Company entered into definitive agreements to sell its 40 percent non-controlling common equity interest in Copeland to private equity funds managed by Blackstone for $1.5 billion and its note receivable to Copeland for $1.9 billion.

Upon entering into the note agreement, the Company recorded a pretax loss of $279 ($217 after-tax, $0.38 per share) to adjust the carrying value of the note to $1.9 billion to reflect the transaction price.

See Notes 5 and 10 for further detail.

For the third quarter of fiscal 2024, net sales were $4.4 billion, up 11 percent compared with the prior year.

For the first quarter of fiscal 2025, net sales were $4.2 billion, up 1 percent compared with the prior year.

Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, were up 2 percent.

Foreign currency translation had a 1 percent unfavorable impact and the Test & Measurement acquisition added 9 percent.

Earnings from continuing operations attributable to common stockholders were $344, down 46 percent, and diluted earnings per share from continuing operations were $0.60, down 46 percent compared with $1.12 in the prior year.

The decrease was largely due to the Company's definitive agreement to sell its Copeland note receivable for $1.9 billion, which resulted in a pretax loss of $279 ($217 after-tax, $0.38 per share) to adjust the carrying value of the note to reflect the transaction price (see Note 10 and further discussion below).

Adjusted diluted earnings per share from continuing operations were $1.43, up 11 percent compared with $1.29 in the prior year, reflecting sales growth and strong operating performance, as well as a $0.09 contribution from Test & Measurement.

Foreign currency translation had a 1 percent unfavorable impact.

Earnings from continuing operations attributable to common stockholders were $585, up 247 percent, and diluted earnings per share from continuing operations were $1.02, up 252 percent compared with $0.29 in the prior year.

Adjusted diluted earnings per share from continuing operations were $1.38, up 13 percent compared with $1.22 in the prior year, reflecting strong operating results.

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 June 30, 2023 2024

Three Months Ended Dec 31 2023 2024

Diluted earnings from continuing operations per share $ 0.29 1.02

2 unchanged sentences

Acquisition/divestiture fees and related costs 0.17 0.03

National Instruments investment gain (0.02) —

Interest income on undeployed proceeds from Copeland transaction (0.05) —

Loss on Copeland note receivable — 0.38

Amortization of acquisition-related inventory step-up 0.38 —

Discrete tax benefits (0.10) —

Adjusted diluted earnings from continuing operations per share $ 1.22 1.38

2 unchanged sentences

Three Months Ended

Adjusted diluted earnings from continuing operations per share - June 30, 2023

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

Operations 0.16

Stock compensation (0.03)

Foreign currency 0.04

Effective tax rate and other (0.03)

Adjusted diluted earnings from continuing operations per share - June 30, 2024

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30

Following is an analysis of the Company’s operating results for the third quarter ended June 30, 2023, compared with the third quarter ended June 30, 2024.

2023 2024 Change

Pensions (0.01)

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

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, 2024 compared with the first quarter ended December 31, 2023.

Three Months Ended Dec 31 2023 2024 Change

(dollars in millions, except per share amounts)

4 unchanged sentences

Percent of sales 31.0 % 29.3 % (1.7) pts

Loss on Copeland note receivable $ — 279

Other deductions, net $ 451 228

11 unchanged sentences

Adjusted Diluted EPS - Earnings from continuing operations $ 1.22 1.38 13 %

Net sales for the third quarter of fiscal 2024 were $4.4 billion, up 11 percent compared with 2023.

Intelligent Devices sales were up 1 percent, while Software and Control sales were up 42 percent , which included the impact of the Test & Measurement acquisition.

Net sales for the first quarter of fiscal 2025 were $4.2 billion, up 1 percent compared with 2024.

Intelligent Devices sales were up 1 percent, while Software and Control sales were up 3 percent.

Underlying sales were up 2 percent on 0.5 percent higher volume and 1.5 percent higher price .

For eign currency translation had a 1 percent unfavorable impact and t he Test & Measurement acquisition added 9 percent.

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

For eign currency translation had a 1 percent unfavorable impact.

Underlying sales were up 1 percent in the U.S.

and up 3 percent internationally.

The Americas was up 3 percent, Europe was up 4 percent, and Asia, Middle East & Africa was up 2 percent (China down 11 percent).

Cost of sales for the third quarter of fiscal 2024 were $2,066, an increase of $114 compared with 2023, reflecting the impact of higher volume and the Test & Measurement acquisition.

Gross margin of 52.8 percent increased 2.3 percentage po ints, reflecting the Test & Measurement acquisition and higher price, partially offset by unfavorable geographic mix in Intelligent Devices.

Selling, general and administrative (SG&A) expens es of $1,254 increased $212 and SG&A as a percent of sales increased 2.2 percentage points to 28.6 percent compared with the prior year, reflecting the impact of the Test & Measurement acquisition.

As discussed above, u pon entering into the agreement to sell the Copeland note receivable, the Company recorded a pretax loss of $279 ($217 after-tax, $0.38 per share) to adjust the carrying value of the note to $1.9 billion to reflect the transaction price.

Other deductions, net were $ 294 for the third quarter of fiscal 2024, an increase of $164 compared with the prior year.

The current year included intangibles amortization r elated to the Test & Measurement acquisition of $139 and restructuring costs of $57.

The prior year included acquisition/divestiture costs of $38, a mark-to-market gain of $12 related to the Company's equity investment in National Instruments Corporation and a mark-to-market gain of $3 related to foreign currency forward contracts that were terminated in June 2023.

See Note 7 and Note 10.

Pretax earnings from continuing operations of $455 decreased $367, down 45 percent compared with the prior year.

Earnings decreased $15 in Intelligent Devices and decreased $42 in Software and Control.

See the Business Segments discussion that follows and Note 14.

Income taxes were $88 in the third quarter of fiscal 2024 and $168 in 2023, resulting in effective tax rates of 19 percent and 21 percent, respectively.

The current year rate reflected a 3 percentage point benefit related to the filing of the prior year U.S.

tax return, partially offset by other items.

Earnings from continuing operations attributable to common stockholders were $344 , down 46 percent, and diluted earnings per share from continuing operations were $ 0.60 , down 46 percent compared with $ 1.12 in the prior year.

Adjusted diluted earnings per share from continuing operations were $1.43 compared with $1.29 in the prior year, up 11 percent, reflecting strong operating results.

The Americas was up 3 percent, Europe was down 2 percent, and Asia, Middle East & Africa was up 4 percent (China down 5 percent).

Cost of sales for the first quarter of fiscal 2025 were $1,940, a decrease of $261 compared with 2024 and gross margin of 53.5 percent increased 7.0 percentage po ints, as the prior year reflected the impact from acquisition-related inventory step-up amortization of $231, which negatively impacted margins in the prior year by 5.6 percentage points .

Favorable price less net material inflation also contributed to the increase in gross margin.

Selling, general and administrative (SG&A) expens es of $1,224 decreased $53 and SG&A as a percent of sales decreased 1.7 percentage points to 29.3 percent compared with the prior year, reflecting savings from cost reduction actions and the impact of Test & Measurement acquisition-related costs incurred in the prior year.

Other deductions, net were $228 for the first quarter of fiscal 2025, a decrease of $223 compared with the prior year, reflecting higher restructuring and acquisition/divestiture costs in the prior year, as well as backlog amortization related to the Test & Measurement acquisition of $34.

Pretax earnings from continuing operations of $775 increased $600, up 343 percent compared with the prior year.

Earnings increased $92 in Intelligent Devices and increased $159 in Software and Control, see the Business Segments discussion that follows and Note 14.

Income taxes were $182 in the first quarter of fiscal 2025 and $16 in 2024, resulting in effective tax rates of 24 percent and 9 percent, respectively.

The prior 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 12 percentage point impact on the rate.

Adjusted diluted earnings per share from continuing operations were $1.38 compared with $1.22 in the prior year, reflecting strong operating results.

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

Earnings (Loss) from discontinued operations were ($15) ($(0.03) per share) for the third quarter of fiscal 2024 and $ 8,709 ($15.16 per share) in the prior year.

Net earnings common stockholders in the third quarter of fiscal 2024 were $329 compared with $9,352 in the prior year, and earnings per share were $0.57 compared with $16.28 in the prior year.

Loss from discontinued operations was $(27) ($(0.04) per share) in the prior year .

Net earnings common stockholders in the first quarter of fiscal 2025 were $585 compared with $142 in the prior year, and earnings per share were $1.02 compared with $0.25 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.

The Company defines adjusted EBITA as earnings from continuing operations excluding interest expense, net, income taxes, intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction-related costs, and certain gains, losses or impairments.

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 June 30, 2023 2024 Change

Earnings from continuing operations before income taxes $ 822 455 (45) %

Percent of sales 20.8 % 10.4 % (10.4) pts

Interest expense, net 10 56

Interest income from related party (10) (24)

Amortization of intangibles 169 313

Restructuring and related costs 13 60

Acquisition/divestiture fees and related costs 38 17

National Instruments investment gain (12) —

AspenTech Micromine purchase price hedge (3) —

Loss on Copeland note receivable — 279

Adjusted EBITA from continuing operations $ 1,027 1,156 13 %

Percent of sales 26.0 % 26.4 % 0.4 pts

Business Segments

Following is an analysis of operating results for the Company’s business segments for the third quarter ended June 30, 2023, compared with the third quarter ended June 30, 2024.

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

See Note 14 for a discussion of the Company's business segments.

INTELLIGENT DEVICES

2023 2024 Change FX Acq/Div U/L

Final Control $ 1,035 1,046 1 % 1 % — % 2 %

Measurement & Analytical 913 982 8 % 1 % — % 9 %

Discrete Automation 668 618 (8) % 2 % — % (6) %

Safety & Productivity 363 351 (3) % — % — % (3) %

Total $ 2,979 2,997 1 % 1 % — % 2 %

Final Control $ 245 253 3 %

Measurement & Analytical 257 252 (2) %

Discrete Automation 124 109 (12) %

Safety & Productivity 82 79 (4) %

Total $ 708 693 (2) %

Margin 23.7 % 23.1 % (0.6) pts

Amortization of intangibles:

Final Control $ 22 21

Measurement & Analytical 5 11

Discrete Automation 8 9

Safety & Productivity 7 6

Total $ 42 47

Restructuring and related costs:

Final Control $ (1) 5

Measurement & Analytical 1 3

Discrete Automation 12 16

Safety & Productivity (1) 1

Total $ 11 25

Adjusted EBITA $ 761 765 1 %

Adjusted EBITA Margin 25.5 % 25.5 % - pts

Intelligent Devices sales were $3.0 billion in the third quarter of 2024, an increase of $18, or 1 percent.

Underlying sales increased 2 percent on higher price.

Unde rlying sales were flat in the Americas, Europe increased 3 percent and Asia, Middle East & Africa was up 4 percent (China down 9 percent ).

Final Control sales increased $11, or 1 percent, reflecting strength in energy and power end markets, particularly in Latin America and Middle East & Africa, largely offset by declines in the U.S.

Sales for Measurement & Analytical increased $69, or 8 percent, reflecting strong growth in nearly all geographies and strong backlog conversion.

Discrete Automation sales decreased $50, or 8 percent, reflecting weakness across most geographies driven in part by lower factory automation demand.

Safety & Productivity sales decreased $12, or 3 percent, due to softness across all geographies.

Earnings for Intelligent Devices were $693, a decrease of $15, or 2 percent, and margin decreased 0.6 percentage points to 23.1 percent, reflecting higher restructuring costs.

Adjusted EBITA margin was 25.5 percent, flat compared with the prior year, reflecting favorable price less net material inflation, partially offset by unfavorable geographic mix, softer MRO and increases in other costs.

SOFTWARE AND CONTROL

2023 2024 Change FX Acq/Div U/L

Control Systems & Software $ 663 700 6 % 1 % — % 7 %

Test & Measurement — 355 — %

AspenTech 320 343 7 % — % — % 7 %

Total $ 983 1,398 42 % 1 % (36) % 7 %

Control Systems & Software $ 144 168 16 %

Test & Measurement — (88) — %

AspenTech 27 49 90 %

Total $ 171 129 (24) %

Margin 17.4 % 9.2 % (8.2) pts

Amortization of intangibles:

Control Systems & Software $ 6 6

Test & Measurement — 139

AspenTech 121 121

Total $ 127 266

Restructuring and related costs:

Control Systems & Software $ 1 4

Test & Measurement — 25

AspenTech — —

Adjusted EBITA $ 299 424 42 %

Adjusted EBITA Margin 30.4 % 30.3 % (0.1) pts

Software and Control sales were $1.4 billion in the third quarter of 2024, an increase of $415, or 42 percent compared to the prior year, reflecting the impact of the Test & Measurement acquisition and strong growth in Control Systems & Software and AspenTech.

Underlying sales were up 7 percent on 5 percent higher volume and 2 percent higher price.

Underlying sales increased 15 percent in the Americas and 6 percent in Europe, while Asia, Middle East & Africa decreased 3 percent (China down 20 percent).

Control Systems & Software sales increased $37, or 6 percent, reflecting strong international demand in process and hybrid end markets and strong demand in power end markets in the Americas.

Test & Measurement sales were $355 for the third quarter.

AspenTech sales increased $23, or 7 percent, reflecting higher license, maintenance and services revenue.

Earnings for Software and Control decreased $42, down 24 percent, and margin decreased 8.2 percentage points due to the Test & Measurement loss which reflected significant intangibles amortization and restructuring.

Adjusted EBITA margin decreased 0.1 perce ntage points, reflecting the impact of the Test & Measurement acquisition, largely offset by leverage on higher sales and higher price.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30

Following is an analysis of the Company’s operating results for the nine months ended June 30, 2023, compared with the nine months ended June 30, 2024.

2023 2024 Change

(dollars in millions, except per share amounts)

Net sales $ 11,075 12,873 16 %

Gross profit $ 5,415 6,514 20 %

Percent of sales 48.9 % 50.6 % 1.7 pts

SG&A $ 3,072 3,827 25 %

Percent of sales 27.7 % 29.7 % 2.0 pts

Loss on Copeland note receivable $ — 279

Gain on subordinated interest $ — (79)

Other deductions, net $ 359 1,075

Amortization of intangibles $ 357 811

Restructuring costs $ 41 170

Interest expense, net $ 111 157

Interest income from related party $ (10) (86)

Earnings from continuing operations before income taxes $ 1,883 1,341 (29) %

Percent of sales 17.0 % 10.4 % (6.6) pts

Earnings from continuing operations common stockholders $ 1,502 1,060 (30) %

Percent of sales 13.6 % 8.2 % (5.4) pts

Net earnings common stockholders $ 12,475 972 (92) %

Diluted EPS - Earnings from continuing operations $ 2.60 1.84 (29) %

Diluted EPS - Net earnings $ 21.56 1.69 (92) %

Adjusted Diluted EPS - Earnings from continuing operations $ 3.15 4.01 27 %

Net sales for the first nine months of 2024 were $12.9 billion , up 16 percent compared with 2023.

Intelligent Devices sales were up 5 percent, while Software and Control sales were up 51 percent, which included the impact of the Test & Measurement acquisition.

Underlying sales were up 7 percent on 5 percent higher volume and 2 percent higher price.

Foreign currency translation had a 0.5 percent unfavorable impact, the Test & Measurement acquisition added 10 percent and the divestiture of Metran deducted 0.5 percent.

Underlying sales increased 3 percent in the U.S.

and increased 10 percent internationally.

The Americas was up 5 percent, Europe was up 9 percent and Asia, Middle East & Africa was up 9 percent (China was down 2 percent).

Cost of sales for 2024 were $6,359, an increase of $699 versus $5,660 in 2023, r eflecting the impact of higher volume and the Test & Measurement acquisition .

Gross margin of 50.6 percent increased 1.7 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 1.8 percentage points.

SG&A expenses of $3,827 increased $755 and SG&A as a percent of sales increased 2.0 percentage points to 29.7 percent, reflecting the impact of the Test & Measurement acquisition, partially offset by strong operating leverage on higher sales and mix.

On June 6, 2024, the Company entered into definitive agreements to sell its 40 percent non-controlling common equity interest in Copeland to private equity funds managed by Blackstone for $1.5 billion and its note receivable to Copeland for $1.9 billion.

Upon entering into the note agreement, the Company recorded a pretax loss of $279 ($217 after-tax, $0.38 per share) to adjust the carrying value of the note to $1.9 billion to reflect the transaction price.

See Notes 5 and 10 for further detail.

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 $1,075 in 2024, an increase of $716 compared with the prior year.

The current year included intangibles amortization r elated to the Test & Measurement acquisition of $419 , restructuring costs of $170 , acquisition/divestiture costs of $92 , and a divestiture loss of $39 .

The prior year included a charge of $47 related to the Company exiting its business in Russia, acquisition/divestiture costs of $48, a mark-to-market gain of $47 related to the Company's equity investment in National Instruments Corporation and a mark-to-market gain of $24 related to foreign currency forward contracts that were terminated in June 2023 .

See Note 7 and Note 10.

Pretax earnings from continuing operations of $1,341 decreased $542 compared with prior year.

Earnings increased $134 in Intelligent Devices and decreased $89 in Software and Control.

See the Business Segments discussion that follows and Note 14.

Income taxes were $266 in the first nine of months of fiscal 2024 and $400 in 2023 , resulting in effective tax rates of 20 percent and 21 percent , re spectively.

The current year rate included a $57 ($0.10 per share) benefit related to discrete tax items and a benefit related to the filing of the prior year U.S.

tax return, partially offset by unfavorable impacts from inventory step-up amortization and the loss on divestiture (see Note 4), which was nondeductible for tax purposes.

In total, the net impact of these items benefited the rate by approximately 2 percentage points, which was partially offset by other items.

Earnings from continuing operations attributable to common stockholders were $1,060, down 30 percent compared with the prior year, and diluted earnings per share from continuing operations were $1.84, down 29 percent compared with $2.60 in 2023.

Adjusted diluted earnings per share from continuing operations were $4.01 compared with $3.15 in the prior year, up 27 percent.

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

Earnings (Loss) from discontinued operations were $ (88) ($ (0.15) per share) , compared with $10,973 ($19.06 per share) in the prior year, reflecting the $8.4 billion after-tax gain on the Copeland transaction and the $2.1 billion after-tax gain on the InSinkErator divestiture.

Net earnings common stockholders were $972 ($ 1.69 per share) compared with $12,475 ($21.56 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.

Nine Months Ended June 30, 2023 2024

Diluted earnings from continuing operations per share $ 2.60 1.84

Amortization of intangibles 0.46 1.07

Restructuring and related costs 0.07 0.25

Discrete taxes — (0.10)

Amortization of acquisition-related inventory step-up — 0.38

Acquisition/divestiture fees and related costs 0.07 0.22

Loss on divestiture of business — 0.07

Gain on subordinated interest — (0.10)

National Instruments investment gain (0.06) —

AspenTech Micromine purchase price hedge (0.02) —

Interest income on undeployed proceeds from Copeland transaction (0.05) —

Loss on Copeland note receivable — 0.38

Russia business exit charge 0.08 —

Adjusted diluted earnings from continuing operations per share $ 3.15 4.01

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.

Nine Months Ended

Adjusted diluted earnings from continuing operations per share - June 30, 2023

Operations 0.79

Stock compensation 0.05

Foreign currency (0.01)

Pensions (0.02)

Effective tax rate (0.04)

Interest income from related party 0.08

Share count 0.01

Adjusted diluted earnings from continuing operations per share - June 30, 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.

Nine Months Ended June 30, 2023 2024 Change

Three Months Ended Dec 31 2023 2024 Change

Earnings from continuing operations before income taxes $ 175 775 343 %

5 unchanged sentences

Acquisition/divestiture fees and related costs 134 22

Loss on divestiture of business — 39

Amortization of acquisition-related inventory step-up 231 —

Gain on subordinated interest — (79)

National Instruments investment gain (47) —

AspenTech Micromine purchase price hedge (24) —

Loss on Copeland note receivable — 279

Russia business exit charge 47 —

Adjusted EBITA from continuing operations $ 963 1,096 14 %

1 unchanged sentence

Business Segments

Following is an analysis of operating results for the Company’s business segments for the nine months ended June 30, 2023, compared with the nine months ended June 30, 2024.

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

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.

See Note 14 for a discussion of the Company's business segments.

INTELLIGENT DEVICES

2023 2024 Change FX Acq/Div U/L

Three Months Ended Dec 31 2023 2024 Change FX Acq/Div U/L

Final Control $ 940 976 4 % 1 % — % 5 %

20 unchanged sentences

Safety & Productivity — —

Total $ 35 47

Adjusted EBITA $ 671 741 11 %

Adjusted EBITA Margin 23.8 % 26.1 % 2.3 pts

Intelligent Devices sales were $8.9 billion in the first nine months of 2024, an increase of $438, or 5 percent.

Underlying sales increased 6 percent on 4 percent higher volume and 2 percent higher price.

Underlying sales increased 3 percent in the Americas, Europe increased 8 percent, and Asia, Middle East & Africa was up 10 percent (China down 2 percent).

Final Control sales increased $148, or 5 percent, reflecting strength in energy and power end markets.

Sales for Measurement & Analytical increased $392, or 15 percent, reflecting robust growth in all geographies and strong backlog conversion.

Intelligent Devices sales were $2.8 billion in the first quarter of 2025, an increase of $21, or 1 percent.

Underlying sales increased 2 percent on 1 percent higher price and 1 percent higher volume.

Unde rlying sales increased 2 percent in the Americas, Europe decreased 3 percent and Asia, Middle East & Africa was up 3 percent (China down 2 percent ).

F inal Control sales increased $36 , or 4 percent, reflecting strength in power end markets .

Sales for Measurement & Analytical increased $28 , or 3 percent, reflecting robust growth in Middle East & Africa and moderate growth in the Americas and Europe.

Discrete Automation sales decreased $33, or 5 percent, reflecting softness in all geographies.

Safety & Productivity sales increased $4, essentially flat, reflecting moderate results across all geographies.

Earnings for Intelligent Devices were $2,019, an increase of $134, or 7 percent, and margin increased 0.4 percentage points to 22.7 percent.

Adjusted EBITA margin was 25.0 percent, an increase of 0.8 percentage points, reflecting leverage on higher sales and favorable price less net material inflation, partially offset by increases in other costs.

Safety & Productivity sales decreased $10, or 3 percent, reflecting softness in the Americas and Europe .

Earnings for Intelligent Devices were $686 , an increase of $92 , or 16 percent , and margin increased 3.1 percentage points to 24.1 percent, reflecting strong operational performance, favorable price less net material inflation and favorable foreign currency transactions of $32 due to gains in the first quarter of 2025 compared to losses in the prior year.

Adjusted EBITA margin was 26.1 percent, an increase of 2.3 percentage points .

SOFTWARE AND CONTROL

2023 2024 Change FX Acq/Div U/L

Three Months Ended Dec 31 2023 2024 Change FX Acq/Div U/L

Control Systems & Software $ 675 690 2 % 1 % — % 3 %

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Adjusted EBITA Margin 26.1 % 31.6 % 5.5 pts

Software and Control sales were $4,044 in the first nine months of 2024,an increase of $1,359, or 51 percent compared to the prior year, reflecting the impact of the Test & Measurement acquisition.

Software and Control sales were $1,352 in the first quarter of 2025, an increase of $38, or 3 percent compared to the prior year, reflecting strong growth in AspenTech.

Underlying sales were up 4 percent on 2 percent higher volume and 2 percent higher price.

Underlying sales increased 11 percent in the Americas, 12 percent in Europe and 8 percent in Asia, Middle East & Africa (China down 3 percent).

Control Systems & Software sales increased $170, or 9 percent, reflecting strong international demand in process and hybrid end markets while power end markets were strong globally.

Test & Measurement sales were $1,104 in the first nine months of 2024.

AspenTech sales increased $85, or 11 percent, reflecting higher license, maintenance and services revenue.

Earnings for Software and Control decreased $89, down 28 percent, and margin decreased 6.1 percentage points, reflecting the impact from $419 of incremental intangibles amortization related to the Test & Measurement acquisition.

Adjusted EBITA margin increased 1.5 percentage points, reflecting leverage on higher sales and higher price, partially offset by the impact of the Test & Measurement acquisition.

Underlying sales increased 5 percent in the Americas and were up 5 percent in Asia, Middle East & Africa (China down 11 percent), while Europe decreased 1 percent .

Control Systems & Software sales increased $15, or 2 percent, and underlying sales increased 3 percent reflecting strong demand in process end markets in Europe and Asia, Middle East & Africa, while power end markets were strong in Asia, Middle East & Africa.

Test & Measurement sales decreased $23, or 6 percent in the first quarter, reflecting weakness in Europe, partially offset by strong growth in the Americas.

AspenTech sales increased $46, or 18 percent, reflecting strong license revenue due to the timing of renewals and new contracts signed during the quarter.

Earnings for Software and Control increased $159, up 434 percent, and margin increased 11.6 percentage points, reflecting leverage on higher AspenTech sales, higher price, savings from cost reduction actions, and lower restructuring and related costs and intangibles amortization compared to the prior year.

Adjusted EBITA margin increased 5.5 percentage points.

FINANCIAL CONDITION

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

June 30, 2023 Sept 30, 2023 June 30, 2024

Key elements of the Company's financial condition for the three months ended December 31, 2024 as compared to the year ended September 30, 2024 and the three months ended December 31, 2023 follow.

Dec 31, 2023 Sept 30, 2024 Dec 31, 2024

Operating working capital $ 2,052 $ 1,394 $ 1,468

3 unchanged sentences

Interest coverage ratio 10.5 X 7.2 X 10.0 X

Operating working capital increased due to the acquisition of NI.

As of June 30, 2024 , Emerson's cash and equivalents totaled $2,298, which included approximately $240 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 6.1X for the first nine months of fiscal 2024 compares to 10.1X for the nine months ended June 30, 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 $454, acquisition/divestiture fees and related costs of $171, higher restructuring and related costs of $127, the loss of $279 on the Copeland note receivable and the gain on subordinated interest of $79, the interest coverage ratio was 10.7X.

Operating cash flow from continuing operations for the first nine months of fiscal 2024 was $2,244, an increase of $525 compared with $1,719 in the prior year, reflecting higher earnings (excluding the impact of items related to the NI acquisition and the loss on the Copeland note receivable) and favorable changes in working capital.

Acquisition-related costs and integration activities negatively impacted operating cash flow in the current year by approximately $210.

AspenTech generated operating cash flow of approximately $320 compared to approximately $295 in the prior year.

Free cas h flow from continuing operations of $1,993 in the first nine months of fiscal 2024 (operating cash flow of $2,244 less capital expenditures of $251) increased $468 compared to free cash flow of $1,525 in 2023 (operating cash flow of $1,719 less capital expenditures of $194), reflecting the increase in operating cash flow, partially offset by higher capital expenditures.

Cash used in investing activities from continuing operations was $8,600, reflecting the acquisition of NI.

Cash provided by financing activities from continuing operations was $583, reflecting an increase in short-term borrowings of $2,229 , partially offset by the repayment of €500 of euro-denominated debt that was due in May 2024, share repurchases and dividends.

Operating working capital increased slightly compared to September 30, 2024.

T he current ratio decreased compared to September 30, 2024, reflecting the decrease in cash driven by share repurchases.

The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 10.0X for the 12 months ended December 31, 2024 compares to 10.5X for the 12 months ended December 31, 2023.

Operati ng cash flow from continuing operations for the first three months of fiscal 2025 was $777, an increase of $333 compared with $444 in the prior year, reflecting higher earnings and favorable receivables performance.

Acquisition-related costs and integration activities negatively impacted operating cash flow in the prior year by approximately $100.

Free cas h flow from continuing operations of $694 in the first three months of fiscal 2025 (operating cash flow of $777 less capital expenditures of $83) increased $327 compared to free cash flow of $367 in 2024 (operating cash flow of $444 less capital expenditures of $77), reflecting the increase in operating cash flow.

Cash used in investing activities from continuing operations was $142, and cash used in financing activities from continuing operations was $1,291, reflecting share repurchases of $899 and dividends.

Total cash provided by operating activities was $777 including the impact of discontinued operations, and increased $362 compared with $415 in the prior year.

Subsequent to the end of the quarter, the Company completed the sale of its note receivable to Copeland on August 2, 2024 and received $1.9 billion of pretax cash proceeds.

The Company expects the sale of its 40 percent non-controlling common equity interest in Copeland to private equity funds managed by Blackstone for $1.5 billion to close by the end of August 2024.

The Company intends to use the approximately $2.9 billion of after-tax cash proceeds from both transactions to pay down its existing debt obligations.

On January 27, 2025, the Company announced that it reached an agreement with AspenTech under which Emerson will acquire all outstanding shares of common stock of AspenTech not already owned by Emerson for $265 per share pursuant to an all-cash tender offer.

The Company currently owns approximately 57 percent of AspenTech's outstanding shares of common stock.

The transaction values the minority stake being acquired at $7.2 billion, and the Company expects to finance the transaction from cash on hand and debt financing.

The transaction is expected to close in the first half of calendar year 2025, and upon closing, AspenTech will become a wholly owned subsidiary of Emerson.

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 2025 OUTLOOK

For the full year, consolidated net sales from continuing operations are expected to be up approximately 15 percent, with underlying sales up approximately 6 percent excluding an approximate 9.5 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 $2.82 to $2.87, while adjusted earnings per share from continuing operations are expected to be $5.45 to $5.50 (see the following reconciliation).

For fiscal year 2025, consolidated net sales from continuing operations are expected to be up 1.5 to 3.5 percent, with underlying sales up 3 to 5 percent, excluding a 1.5 percent unfavorable impact from foreign currency translation.

Earnings per share are expected to be $4.42 to $4.62, while adjusted earnings per share are expected to be $5.85 to $6.05 (see the following reconciliation).

Outlook for Fiscal 2025 Earnings Per Share 2025

2 unchanged sentences

Restructuring and related costs ~ 0.14

Loss on Copeland note receivable 0.38

Amortization of acquisition-related inventory step-up 0.38

Acquisition/divestiture fees and related costs ~ 0.08

Divestiture loss / (gain), net (0.03)

Discrete tax benefits (0.10)

Adjusted diluted earnings from continuing operations per share $5.85- $6.05

Operating cash flow from continuing operations is expected to be approximately $3.2 billion and free cash flow from continuing operations, which excludes projected capital spending of approximately $0.4 billion, is expected to be approximately $2.8 billion.

The fiscal 2024 outlook assumes approximately $300 million returned to shareholders through share repurchases and approximately $1.2 billion of dividend payments.

Opera ting cash flow is expected to be $3.6 to $3.7 billion and free cash flow, which excludes projected capital spending of approximately $0.4 billion, is expected to be $3.2 to $3.3 billion.

The fiscal 2025 outlook assumes returning approximately $3.2 billion to shareholders through approximately $2.0 billion of share repurchases and approximately $1.2 billion of dividend payments.

Emerson's guidance excludes any impact from the proposed transaction with AspenTech, which is expected to close in the first half of calendar year 2025, and strategic alternatives, including a cash sale, for its Safety & Productivity segment.

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, 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.

These risks and uncertainties include the proposed acquisition by Emerson of the outstanding shares of common stock of AspenTech that Emerson does not already own, 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, 2024, "Risk Factors" of Part II - Other Information, Item 1A of the Company's Quarterly Report on Form 10-Q for the three-month period ended December 31, 2024 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