What changed in this filing

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Item 1. Financial Statements

2025-05-07 compared with 2025-02-05 · 392 added, 141 removed, 519 unchanged (51% of the section changed)

3 unchanged sentences

& SUBSIDIARIES

Three months ended December 31, 2023 and 2024

Three and six months ended March 31, 2024 and 2025

(Dollars in millions, except per share amounts;

Three Months Ended

March 31, Six Months Ended

2024 2025 2024 2025

Net sales $ 4,376 4,432 $ 8,493 8,608

1 unchanged sentence

Selling, general and administrative expenses 1,296 1,283 2,573 2,506

Gain on subordinated interest ( 79 ) — ( 79 ) —

Other deductions, net 330 418 781 646

4 unchanged sentences

Earnings from continuing operations 549 430 708 1,022

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

Discontinued operations, net of tax of $ 13 , $ — , $ 22 and $ — ,

( 46 ) — ( 73 ) —

Net earnings 503 430 635 1,022

20 unchanged sentences

& SUBSIDIARIES

Three months ended December 31, 2023 and 2024

Three and six months ended March 31, 2024 and 2025

(Dollars in millions;

Three Months Ended December 31,

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

2024 2025 2024 2025

Net earnings $ 503 430 $ 635 1,022

12 unchanged sentences

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

Sept 30, 2024 Dec 31, 2024

Sept 30, 2024 Mar 31, 2025

Current assets

35 unchanged sentences

& SUBSIDIARIES

Three months ended December 31, 2023 and 2024

Three and six months ended March 31, 2024 and 2025

(Dollars in millions;

Three Months Ended December 31,

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

2024 2025 2024 2025

Common stock $ 477 477 $ 477 477

3 unchanged sentences

AspenTech purchases of common stock ( 33 ) — ( 74 ) —

Purchase of noncontrolling interest — ( 1,400 ) — ( 1,400 )

Settlement of AspenTech share awards — ( 76 ) — ( 76 )

Reclass negative APIC to retained earnings — 1,321 — 1,321

Ending balance 158 — 158 —

5 unchanged sentences

( 303 ) ( 299 ) ( 605 ) ( 602 )

Reclass negative APIC to retained earnings — ( 1,321 ) — ( 1,321 )

Ending balance 40,108 39,977 40,108 39,977

16 unchanged sentences

AspenTech purchases of common stock ( 24 ) — ( 55 ) —

Dividends paid — ( 1 ) — ( 1 )

Purchase of noncontrolling interest — ( 5,832 ) — ( 5,832 )

Other comprehensive income — 2 2 ( 5 )

5 unchanged sentences

& SUBSIDIARIES

Three Months Ended December 31, 2023 and 2024

Six Months Ended March 31, 2024 and 2025

(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 ( 347 ) ( 203 )

6 unchanged sentences

Purchases of businesses, net of cash and equivalents acquired ( 8,342 ) ( 36 )

Proceeds from subordinated interest 79 —

Other, net ( 68 ) ( 58 )

4 unchanged sentences

Net increase in short-term borrowings 2,464 2,628

Payments of long-term debt — ( 2 )

Proceeds from short-term borrowings greater than three months 99 2,496

Proceeds from long-term debt — 1,544

Dividends paid ( 600 ) ( 598 )

1 unchanged sentence

AspenTech purchases of common stock ( 129 ) —

Purchase of noncontrolling interest — ( 7,171 )

Settlement of AspenTech share awards — ( 76 )

Other, net ( 46 ) ( 83 )

21 unchanged sentences

generally accepted accounting principles (GAAP).

Results are computed independently each period;

as a result, the quarterly amounts may not sum to the calculated year-to-date figures.

For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2024.

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, and the transactions were subsequently completed in August 2024.

On March 12, 2025, Emerson completed its purchase of the remaining outstanding shares of common stock of Aspen Technology, Inc.

("AspenTech") not already owned by the Company.

As a result of the transaction, AspenTech is now a wholly owned subsidiary of the Company .

AspenTech was reorganized upon completion of the transaction and now reports to Control Systems & Software leadership.

A spenTech's results, which were previously reported as a separate segment, are now consolidated into the Control Systems & Software segment for all periods presented.

See Notes 4 and 15.

Additionally, 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 $ 1.50 billion and its note receivable to Copeland for $ 1.9 billion, and the transactions were subsequently completed in August 2024.

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.

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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, 2024 Dec 31, 2024

Sept 30, 2024 Mar 31, 2025

Unbilled receivables (contract assets) $ 1,599 1,709

Customer advances (contract liabilities) ( 1,115 ) ( 1,197 )

Net contract assets (liabilities) $ 484 479

Net contract assets $ 484 512

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.

Revenue recognized for the three months ended December 31, 2024 included $ 422 that was included in the beginning contract liability balance.

Revenue recognized for the three and six months ended March 31, 2025 included $ 224 and $ 646 , 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, 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) .

Revenue recognized for the three and six months ended March 31, 2025 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, 2025, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately $ 8.8 billion .

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

March 31, Six Months Ended

2024 2025 2024 2025

Basic shares outstanding 571.4 563.0 571.1 565.7

2 unchanged sentences

(4) ACQUISITIONS AND DIVESTITURES

On March 12, 2025, Emerson completed its purchase of the remaining outstanding shares of common stock of AspenTech not already owned by the Company for approximately $ 7.2 billion.

Emerson also incurred fees of $ 76 ($ 65 after-tax;

the majority of the fees were accrued as of March 31, 2025 and will be reported as Financing cash flows when paid) and paid $ 76 to settle certain AspenTech share-based awards that were outstanding prior to the transaction closing.

The purchase of the remaining outstanding shares and related costs are reported as an adjustment to Equity.

Separately, AspenTech incurred $ 127 ($ 113 after-tax) of deal-related fees which are reported as acquisition/divestiture costs in Other deductions, net.

AspenTech is now reported as a part of the Control Systems & Software segment in the Software and Control business group, see Note 15.

National Instruments

1 unchanged sentence

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 segment in the Software and Control business group, see Note 14.

NI is now referred to as Test & Measurement and reported as a new segment in the Software and Control business group, see Note 15.

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

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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 December 31,

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

Net Sales $ 4,376 $ 8,512

1 unchanged sentence

Diluted earnings per share from continuing operations $ 1.00 $ 1.78

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.

The pro forma results for the three months ended March 31, 2024 exclude backlog amortization of $ 34 which was assumed to be incurred in the first quarter of fiscal 2023.

The pro forma results for the six months ended March 31, 2024 exclude transaction costs of $ 69 which were assumed to be incurred in the first quarter of fiscal 2023.

The pro forma results for the six months ended March 31, 2024 also exclude backlog amortization of $ 68 , inventory step-up amortization of $ 213 , and retention bonuses of $ 47 which were all assumed to be incurred in the six months ended March 31, 2023.

Other Transactions

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.

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 .

(5) DISCONTINUED OPERATIONS

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See Note 10 for further details.

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

Three Months Ended December 31, 2023

Results from discontinued operations for the three and six months ended March 31, 2024 were as follows:

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

Net sales $ — $ —

2 unchanged sentences

Other deductions, net 59 95

Earnings before income taxes ( 36 )

Earnings (Loss) before income taxes ( 59 ) ( 95 )

Income taxes ( 13 ) ( 22 )

Earnings, net of tax $ ( 27 )

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

Earnings (Loss), net of tax $ ( 46 ) $ ( 73 )

Results for the three months ended and six months ended March 31, 2024 included equity method losses of $ 59 ( $ 46 after-tax) and $ 95 ( $ 73 after-tax), respectively, related to the Company's non-controlling common equity interest in Copeland.

Net cash from operating and investing activities from discontinued operations for the six months ended March 31, 2025 and 2024 were as follows:

Six Months Ended March 31

Cash from operating activities $ ( 19 ) $ ( 585 )

Cash from investing activities $ 1 $ —

Cash from operating activities for the six months ended March 31, 2025 represents income taxes paid related to the sale of the Company's 40 percent non-controlling common equity interest in Copeland.

(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,

2024 2025 2024 2025

Service cost $ 9 18 $ 18 36

7 unchanged sentences

Three Months Ended

March 31, Six Months Ended

2024 2025 2024 2025

Amortization of intangibles (intellectual property and customer relationships) $ 273 229 $ 547 457

Restructuring costs 30 21 113 32

Acquisition/divestiture costs 80 13

Acquisition/divestiture fees and related costs 5 144 85 157

Foreign currency transaction (gains) losses 17 41 51 42

Loss on divestiture of business 39 — 39 —

Other ( 34 ) ( 17 ) ( 54 ) ( 42 )

Total $ 330 418 $ 781 646

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.

For the three and six months ended March 31, 2025, the increase in acquisition/divestiture costs is primarily related to the AspenTech transaction.

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

The Company expects fiscal 2025 restructuring expense and related costs to be approximately $ 140 , 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

2024 2025 2024 2025

Final Control $ ( 7 ) 2 $ ( 4 ) 4

5 unchanged sentences

Test & Measurement 14 4 54 3

AspenTech — —

Software and Control 17 10 58 11

1 unchanged sentence

Total $ 30 21 $ 113 32

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

Corporate restructuring for the three and six months ended March 31, 2025 includes $ 1 of integration-related stock compensation expense attributable to the AspenTech transaction.

Corporate restructuring for the three and six months ended March 31, 2024 of $ 11 and $ 37 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, 2025 follow:

Sept 30, 2024 Expense Utilized/Paid Mar 31, 2025

Severance and benefits $ 105 26 46 85

1 unchanged sentence

Total $ 112 32 54 90

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.

The tables above do not include $ 3 and $ 6 of costs related to restructuring actions incurred for the three months ended March 31, 2024 and 2025, respectively, that are required to be reported in cost of sales and selling, general and administrative expenses;

year-to-date amounts are $ 7 and $ 8 , respectively .

Income taxes were $ 199 in the second quarter of fiscal 2025 and $ 162 in 2024, resulting in effective tax rates of 32 percent and 23 percent, respectively.

The current year rate was negatively impacted by $ 49 ($ 0.09 per share) of discrete tax items related to the AspenTech transaction.

In addition, the fees incurred by AspenTech were not fully deductible.

In total, the net impact of these items increased the rate by approximately 10 percentage points.

The prior year rate was negatively impacted by approximately 2 percentage points due to the loss on divestiture, which was nondeductible for tax purposes.

Income taxes were $ 382 in the first six months of fiscal 2025 and $ 178 in 2024 , resulting in effective tax rates of 27 percent and 20 percent, respectively.

The items discussed above increased the current year rate by approximately 5 percentage points.

The prior 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

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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,

For the three and six months ended March 31, 2024 the Company recognized non-cash interest income on the note receivable of $ 31 and $ 62 , respectively which is reported in Interest income from related party within continuing operations.

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

Net sales $ 1,175 $ 2,199

4 unchanged sentences

(11) OTHER FINANCIAL INFORMATION

Sept 30, 2024 Dec 31, 2024

Sept 30, 2024 Mar 31, 2025

Finished products $ 512 527

13 unchanged sentences

Test & Measurement 3,463 3,446

AspenTech 8,329 8,355

Software and Control 12,466 12,472

Total $ 18,067 17,999

Sept 30, 2024 Mar 31, 2025

Other intangible assets

2 unchanged sentences

Net carrying amount $ 10,436 9,823

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,

Other intangible assets include customer relationships, net, of $ 5,953 and $ 6,296 and intellectual property, net, of $ 3,618 and $ 3,901 as of March 31, 2025 and September 30, 2024, respectively.

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

2024 2025 2024 2025

Depreciation and amortization expense include the following:

1 unchanged sentence

Amortization of intangibles (includes $ 49 , $ 49 , $ 98 and $ 99 reported in Cost of Sales, respectively)

322 278 645 556

Amortization of capitalized software 23 23 43 45

Total $ 424 384 $ 846 767

Sept 30, 2024 Dec 31, 2024

Sept 30, 2024 Mar 31, 2025

Other assets include the following:

10 unchanged sentences

Product warranty 82 84

The decrease in income taxes was due to $ 585 of income taxes paid in the second quarter related to the sale of the Company's 40 percent non-controlling common equity interest in Copeland.

Other liabilities include the following:

3 unchanged sentences

Asbestos litigation 151 141

On February 11, 2025, the Company entered into a $ 3 billion 364-day revolving backup credit facility to support increased commercial paper borrowings in connection with the AspenTech transaction.

This facility is in addition to the Company's existing $ 3.5 billion revolving backup credit facility.

Both credit facilities are unsecured and may be accessed under various interest rate alternatives at the Company's option.

The fees to maintain the facilities are immaterial and the Company has not incurred any borrowings under either facility or previous facilities.

Overall, the Company's commercial paper borrowings increased to approximately $ 5.1 billion at March 31, 2025.

In March 2025, the Company issued € 500 of 3.0 % notes due March 2031, $ 500 of 5.0 % notes due March 2035, and € 500 of 3.5 % notes due March 2037.

The Company used the net proceeds from the sale of the notes and increased commercial paper borrowings, along with cash on hand, to fund the AspenTech transaction (see Note 4).

(13) FINANCIAL INSTRUMENTS

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

Hedging Activities – As of March 31, 2025, the notional amount of foreign currency hedge positions was approximately $ 3.8 billion.

All derivatives receiving hedge accounting are cash flow hedges.

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.

The majority of hedging gains and losses deferred as of March 31, 2025 are expected to be recognized over the next 12 months as the underl ying 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 2024.

Additionally, in March 2025, the Company issued € 500 of 3.0 % notes due March 2031 and € 500 of 3.5 % notes due March 2037.

The net proceeds from the sale of the March 2025 euro notes were used for general corporate purposes and to fund a portion of the purchase price of the AspenTech transaction (see Note 4).

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.

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

The following gains and losses are included in earnings and other comprehensive income (OCI) for the three and six months ended March 31, 2024 and 2025:

Into Earnings Into OCI

2nd Quarter Six Months 2nd Quarter Six Months

Gains (Losses) Location 2024 2025 2024 2025 2024 2025 2024 2025

Foreign currency

— 2 — 3 ( 5 ) — 2 11

Foreign currency

Cost of sales

3 — 6 — 6 2 7 5

Foreign currency

Other deductions, net

( 26 ) 18 ( 11 ) ( 33 )

Net Investment Hedges

5 unchanged sentences

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

As of March 31, 2025, the fair value of long-term debt was approximately $ 8.4 billion, which was lower than the carrying value by $ 834 .

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.

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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, 2024.

No collateral was posted with counterparties and none was held by the Company as of March 31, 2025.

(14) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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,

Activity in Accumulated other comprehensive income (loss) for the three and six months ended March 31, 2025 and 2024 is shown below, net of income taxes:

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

2024 2025 2024 2025

Foreign currency translation

1 unchanged sentence

Other comprehensive income (loss), net of tax of $( 1 ), $ 17 , $ 12 and $ 1 , respectively

( 17 ) 184 155 ( 301 )

Purchase of noncontrolling interest — 3 — 3

Reclassification to loss on divestiture of business 23 — 23 —

Ending balance ( 834 ) ( 914 ) ( 834 ) ( 914 )

2 unchanged sentences

Amortization of deferred actuarial losses into earnings, net of tax of $ 2 , $( 1 ), $ 4 and $( 2 ), respectively

( 12 ) 3 ( 24 ) 6

Ending balance ( 271 ) ( 239 ) ( 271 ) ( 239 )

3 unchanged sentences

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

( 2 ) ( 1 ) ( 5 ) ( 2 )

Ending balance 8 3 8 3

1 unchanged sentence

(15) BUSINESS SEGMENTS

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

As disclosed in Note 4, on March 12, 2025, Emerson completed its purchase of the remaining outstanding shares of common stock of AspenTech not already owned by the Company.

As a result of the transaction, AspenTech is now a wholly owned subsidiary of the Company.

AspenTech was reorganized upon completion of the transaction and now reports to Control Systems & Software leadership.

AspenTech's results, which were previously reported as a separate segment, are now consolidated into the Control Systems & Software segment for all periods presented.

Prior year amounts have been reclassified to conform to the current year presentation.

In 2024, the Company completed the acquisition of NI on October 11, 2023.

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 December 31,

Sales Earnings (Loss)

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

Sales Earnings (Loss) Sales Earnings (Loss)

2024 2025 2024 2025 2024 2025 2024 2025

6 unchanged sentences

Test & Measurement 367 359 ( 79 ) ( 24 ) 749 718 ( 157 ) ( 37 )

AspenTech 257 303 ( 35 ) 15

Software and Control 1,332 1,421 64 215 2,646 2,773 100 409

3 unchanged sentences

Corporate and other ( 103 ) ( 238 ) ( 502 ) ( 295 )

Gain on subordinated interest 79 — 79 —

Eliminations/Interest ( 17 ) ( 18 ) ( 57 ) ( 41 ) ( 36 ) ( 37 ) ( 101 ) ( 50 )

1 unchanged sentence

Total $ 4,376 4,432 711 629 $ 8,493 8,608 886 1,404

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 .

Stock compensation for the three months and six months ended March 31, 2025 included $ 6 of integration-related stock compensation expense attributable to AspenTech (of which $ 1 , was reported as restructuring costs).

Additionally, the three months and six months ended March 31, 2025 included $ 3 and $ 5 of integration-related stock compensation expense attributable to NI.

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, 2025 included acquisition/divestiture fees and related costs of $ 160 and $ 179 , respectively.

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 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 December 31,

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

2024 2025 2024 2025

Final Control $ 39 41 $ 79 81

5 unchanged sentences

Test & Measurement 153 119 304 237

AspenTech 123 124

Software and Control 305 265 600 530

1 unchanged sentence

Total $ 424 384 $ 846 767

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.

Test & Measurement depreciation and amortization for the three and six months ended March 31, 2024 included backlog amortization of $ 34 and $ 68 , respectively.

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

6 unchanged sentences

Test & Measurement 162 98 107 367 156 101 102 359

AspenTech 140 60 57 257 163 68 72 303

Software and Control 604 388 340 1,332 649 421 351 1,421

Total $ 2,192 1,306 895 4,393 2,252 1,331 867 4,450

(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.

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

Americas AMEA Europe Total Americas AMEA Europe Total

Final Control $ 967 774 250 1,991 1,026 780 243 2,049

Measurement & Analytical 987 659 314 1,960 982 693 302 1,977

Discrete Automation 580 323 342 1,245 577 298 320 1,195

Safety & Productivity 512 35 140 687 501 31 119 651

Intelligent Devices 3,046 1,791 1,046 5,883 3,086 1,802 984 5,872

Control Systems & Software 907 559 431 1,897 979 610 466 2,055

Test & Measurement 326 197 226 749 331 194 193 718

Software and Control 1,233 756 657 2,646 1,310 804 659 2,773

Total $ 4,279 2,547 1,703 8,529 4,396 2,606 1,643 8,645

Items 2 and 3.

1 unchanged sentence

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

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

On March 12, 2025, Emerson completed its purchase of the remaining outstanding shares of common stock of AspenTech not already owned by the Company for approximately $7.2 billion.

As a result of the transaction, AspenTech is now a wholly owned subsidiary of the Company.

AspenTech was reorganized upon completion of the transaction and now reports to Control Systems & Software leadership.

AspenTech's results, which were previously reported as a separate segment, are now consolidated into the Control Systems & Software segment for all periods presented.

See Notes 4 and 15.

For the second quarter of fiscal 2025, net sales were $4.4 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.

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.

Earnings from continuing operations attributable to common stockholders were $485, down 11 percent, and diluted earnings per share from continuing operations were $0.86, down 9 percent compared with $0.95 in the prior year, reflecting the impact of higher acquisition/divestiture fees and related costs primarily related to the AspenTech transaction.

Adjusted diluted earnings per share from continuing operations were $1.48, up 9 percent compared with $1.36 in the prior year, reflecting strong operating results.

1 unchanged sentence

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 2023 2024

Three Months Ended March 31, 2024 2025

Diluted earnings from continuing operations per share $ 0.95 0.86

2 unchanged sentences

Acquisition/divestiture fees and related costs 0.03 0.17

Amortization of acquisition-related inventory step-up 0.38 —

Discrete tax benefits (0.10) —

Loss on divestiture of business 0.07 —

Gain on subordinated interest (0.10) —

Discrete taxes related to AspenTech transaction — 0.09

Adjusted diluted earnings from continuing operations per share $ 1.36 1.48

2 unchanged sentences

Three Months Ended

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

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

Operations 0.14

Stock compensation (0.03)

Benefit from full ownership of AspenTech 0.07

Foreign currency (0.05)

Pensions (0.02)

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

Interest expense, net (0.02)

Adjusted diluted earnings from continuing operations per share - March 31, 2025

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, 2025, compared with the second quarter ended March 31, 2024.

2024 2025 Change

(dollars in millions, except per share amounts)

4 unchanged sentences

Percent of sales 29.6 % 28.9 % (0.7) pts

Gain on subordinated interest $ (79) —

Other deductions, net $ 330 418

11 unchanged sentences

Adjusted Diluted EPS - Earnings from continuing operations $ 1.36 1.48 9 %

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.

Net sales for the second quarter of fiscal 2025 were $4.4 billion, up 1 percent compared with 2024.

Software and Control sales were up 7 percent, while Intelligent Devices sales were down 1 percent .

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

3 unchanged sentences

The Americas was up 3 percent, Europe was down 1 percent, and Asia, Middle East & Africa was up 3 percent (China down 8 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.

Cost of sales for the second quarter of fiscal 2025 were $2,061, a decrease of $31 compared with 2024.

Gross margin of 53.5 percent increased 1.3 percentage po ints, reflecting favorable price less net material inflation.

Selling, general and administrative (SG&A) expens es of $1,283 decreased $13 and SG&A as a percent of sales decreased 0.7 percentage points to 28.9 percent compared with the prior year, reflecting savings from cost reduction actions.

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 $418 for the second quarter of fiscal 2025, an increase of $88 compared with the prior year, primarily due to an increase in acquisition/divestiture fees and related costs, which included $127 of deal-related fees incurred by AspenTech.

Higher foreign currency transaction losses also negatively impacted the current year, while the prior year included backlog amortization related to the Test & Measurement acquisition of $34 and a divestiture loss of $39.

Pretax earnings from continuing operations of $629 decreased $82, down 12 percent compared with the prior year, reflecting the impact of the AspenTech deal-related fees discussed above and the prior year subordinated interest gain.

Earnings decreased $7 in Intelligent Devices and increased $151 in Software and Control, see the Business Segments discussion that follows and Note 15.

Income taxes were $ 199 in the second quarter of fiscal 2025 and $162 in 2024, resulting in effective tax rates of 32 percent and 23 percent, respectively.

The current year rate was negatively impacted by $ 49 ($ 0.09 per share) of discrete tax items related to the AspenTech transaction.

In addition, the fees incurred by AspenTech were not fully deductible.

In total, the net impact of these items increased the rate by 10 percentage points.

The prior year rate was negatively impacted by approximately 2 percentage points due to the loss on divestiture, which was nondeductible for tax purposes.

Adjusted diluted earnings per share from continuing operations were $1.48 compared with $1.36 in the prior year, reflecting strong operating results.

1 unchanged sentence

Loss from discontinued operations was $46 ($(0.08) 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.

Net earnings common stockholders in the second quarter of fiscal 2025 were $485 compared with $501 in the prior year, and earnings per share were $0.86 compared with $0.87 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, gains or losses on the Copeland equity method investment, 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 Dec 31 2023 2024 Change

Three Months Ended March 31, 2024 2025 Change

Earnings from continuing operations before income taxes $ 711 629 (12) %

5 unchanged sentences

Acquisition/divestiture fees and related costs 20 168

Amortization of acquisition-related inventory step-up 231 —

Loss on divestiture of business 39 —

Gain on subordinated interest (79) —

Adjusted EBITA from continuing operations $ 1,072 1,143 7 %

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, 2024, 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, 2025, compared with the second quarter ended March 31, 2024.

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

1 unchanged sentence

INTELLIGENT DEVICES

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

2024 2025 Change FX Acq/Div U/L

Final Control $ 1,051 1,073 2 % 1 % — % 3 %

22 unchanged sentences

Adjusted EBITA Margin 25.6 % 25.8 % 0.2 pts

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 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.

Intelligent Devices sales were $3.0 billion in the second quarter of 2025, a decrease of $32, or 1 percent.

Underlying sales were flat as slightly lower volume was offset by higher price.

Unde rlying sales increased 2 percent in the Americas, Europe decreased 5 percent and Asia, Middle East & Africa was flat (China down 8 percent ).

F inal Control sales increased $22 , or 2 percent, reflecting strength in power end markets, particularly in Middle East & Africa.

Sales for Measurement & Analytical decreased $11 , or 1 percent, reflecting difficult comparisons and mixed geographic results.

Discrete Automation sales improved sequentially, but decreased compared to the prior year by $17, or 3 percent, reflecting softness in Europe and Asia, Middle East & Africa, partially offset by modest growth in the Americas.

Safety & Productivity sales decreased $26, or 7 percent, reflecting softness in all geographies.

Earnings for Intelligent Devices were $725 , a decrease of $7 , or 1 percent , while margin remained at 23.9 percent, reflecting favorable price less net material inflation, offset by unfavorable foreign currency transactions of $13.

Adjusted EBITA margin was 25.8 percent, an increase of 0.2 percentage points.

SOFTWARE AND CONTROL

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

2024 2025 Change FX Acq/Div U/L

Control Systems & Software $ 965 1,062 10 % 1 % — % 11 %

Test & Measurement 367 359 (2) % 1 % — % (1) %

AspenTech 257 303 18 % — % — % 18 %

Total $ 1,332 1,421 7 % — % — % 7 %

1 unchanged sentence

Test & Measurement (79) (24) 69 %

AspenTech (35) 15 141 %

Total $ 64 215 240 %

3 unchanged sentences

Test & Measurement 141 105

AspenTech 122 122

Total $ 273 232

2 unchanged sentences

Test & Measurement 16 6

AspenTech — —

Total $ 19 12

Adjusted EBITA $ 356 459 29 %

Adjusted EBITA Margin 26.7 % 32.3 % 5.6 pts

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.

Software and Control sales were $1,421 in the second quarter of 2025, an increase of $89, or 7 percent compared to the prior year, reflecting strong growth in Control Systems & Software.

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

Underlying sales increased 8 percent in the Americas, 4 percent in Europe and 10 percent in Asia, Middle East & Africa (China down 7 percent).

Control Systems & Software sales increased $97, or 10 percent, reflecting robust growth at AspenTech and moderate demand in process end markets in Europe and Asia, Middle East & Africa.

Test & Measurement sales decreased $8 or 2 percent, reflecting softness in the Americas and Europe, partially offset by strong growth in Asia, Middle East & Africa.

Earnings for Software and Control increased $151, up 240 percent, and margin increased 10.4 percentage points, reflecting strong leverage on higher Control Systems & Software sales, higher price, savings from cost reduction actions (primarily at Test & Measurement), and lower intangibles amortization compared to the prior year.

Adjusted EBITA margin increased 5.6 percentage points.

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, 2025, compared with the six months ended March 31, 2024.

2024 2025 Change

(dollars in millions, except per share amounts)

Net sales $ 8,493 8,608 1 %

Gross profit $ 4,200 4,606 10 %

Percent of sales 49.5 % 53.5 % 4.0 pts

SG&A $ 2,573 2,506 (3) %

Percent of sales 30.3 % 29.1 % (1.2) pts

Gain on subordinated interest $ (79) —

Other deductions, net $ 781 646

Amortization of intangibles $ 547 457

Restructuring costs $ 113 32

Interest expense, net $ 101 50

Interest income from related party $ (62) —

Earnings from continuing operations before income taxes $ 886 1,404 58 %

Percent of sales 10.4 % 16.3 % 5.9 pts

Earnings from continuing operations common stockholders $ 716 1,070 50 %

Percent of sales 8.4 % 12.4 % 4.0 pts

Net earnings common stockholders $ 643 1,070 67 %

Diluted EPS - Earnings from continuing operations $ 1.24 1.88 52 %

Diluted EPS - Net earnings $ 1.12 1.88 68 %

Adjusted Diluted EPS - Earnings from continuing operations $ 2.58 2.86 11 %

Net sales for the first six months of 2025 were $8.6 billion, up 1 percent compared with 2024.

Intelligent Devices sales were flat, while Software and Control sales were up 5 percent.

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

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.

Foreign currency translation had a 1 percent unfavorable impact .

Underlying sales increased 1 percent in the U.S.

and increased 3 percent internationally.

The Americas was up 3 percent, Europe was down 2 percent and Asia, Middle East & Africa was up 3 percent (China was down 6 percent).

Cost of sales for 2025 were $4,002, a decrease of $291 compared with 2024, and gross margin of 53.5 percent increased 4.0 percentage points, 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 2.7 percent.

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

SG&A expenses of $2,506 decreased $67 and SG&A as a percent of sales decreased 1.2 percentage points to 29.1 percent, reflecting savings from cost reduction actions and the impact of Test & Measurement acquisition-related costs incurred in the prior year which are reported in Corporate and other (see Note 15).

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 $646 in 2025, a decrease of $135 compared with the prior year, reflecting lower restructuring expense of $81 and lower intangibles amortization expense of $90 (including $68 of backlog amortization related to the Test & Measurement acquisition in the prior year), partially offset by higher acquisition/divestiture fees and related costs.

The prior year also included a divestiture loss of $39.

Pretax earnings from continuing operations of $1,404 increased $518 compared with prior year.

Earnings increased $86 in Intelligent Devices and $309 in Software and Control, see the Business Segments discussion that follows and Note 15.

Income taxes were $382 in the first six months of fiscal 2025 and $178 in 2024 , resulting in effective tax rates of 27 percent and 20 percent, respectively.

The current year rate was negatively impacted by $ 49 ($ 0.09 per share) of discrete tax items related to the AspenTech transaction.

In addition, the fees incurred by AspenTech were not fully deductible.

Overall, these items increased the current year rate by approximately 5 percentage points.

The prior 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 $1,070, up 50 percent compared with the prior year, and diluted earnings per share from continuing operations were $1.88, up 52 percent compared with $1.24 in 2024.

Adjusted diluted earnings per share from continuing operations were $2.86 compared with $2.58 in the prior year, reflecting strong operating results.

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

Loss from discontinued operations was $73 ($0.12 per share) in the prior year.

Net earnings common stockholders were $1,070 ($1.88 per share) compared with $643 ($1.12 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, 2024 2025

Diluted earnings from continuing operations per share $ 1.24 1.88

Amortization of intangibles 0.73 0.63

Restructuring and related costs 0.17 0.06

Discrete taxes (0.10) 0.09

Amortization of acquisition-related inventory step-up 0.38 —

Acquisition/divestiture fees and related costs 0.19 0.20

Loss on divestiture of business 0.07 —

Gain on subordinated interest (0.10) —

Adjusted diluted earnings from continuing operations per share $ 2.58 2.86

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, 2024

Operations 0.30

Benefit from full ownership of AspenTech 0.07

Stock compensation (0.02)

Foreign currency (0.01)

Pensions (0.03)

Interest expense, net (0.02)

Adjusted diluted earnings from continuing operations per share - March 31, 2025

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, 2024 2025 Change

Earnings from continuing operations before income taxes $ 886 1,404 58 %

Percent of sales 10.4 % 16.3 % 5.9 pts

Interest expense, net 101 50

Interest income from related party (62) —

Amortization of intangibles 645 556

Restructuring and related costs 120 40

Acquisition/divestiture fees and related costs 154 189

Loss on divestiture of business 39 —

Amortization of acquisition-related inventory step-up 231 —

Gain on subordinated interest (79) —

Adjusted EBITA from continuing operations $ 2,035 2,239 10 %

Percent of sales 24.0 % 26.0 % 2.0 pts

Business Segments

Following is an analysis of operating results for the Company’s business segments for the six months ended March 31, 2025, 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 five segments and two business groups.

INTELLIGENT DEVICES

2024 2025 Change FX Acq/Div U/L

Final Control $ 1,991 2,049 3 % 1 % — % 4 %

Measurement & Analytical 1,960 1,977 1 % 1 % — % 2 %

Discrete Automation 1,245 1,195 (4) % 1 % — % (3) %

Safety & Productivity 687 651 (5) % — % — % (5) %

Total $ 5,883 5,872 — % 1 % — % 1 %

Final Control $ 453 503 11 %

Measurement & Analytical 509 551 8 %

Discrete Automation 213 215 1 %

Safety & Productivity 151 143 (5) %

Total $ 1,326 1,412 6 %

Margin 22.5 % 24.0 % 1.5 pts

Amortization of intangibles:

Final Control $ 44 42

Measurement & Analytical 32 21

Discrete Automation 17 16

Safety & Productivity 13 13

Total $ 106 92

Restructuring and related costs:

Final Control $ — 4

Measurement & Analytical 4 3

Discrete Automation 17 11

Safety & Productivity 1 1

Total $ 22 19

Adjusted EBITA $ 1,454 1,523 5 %

Adjusted EBITA Margin 24.7 % 25.9 % 1.2 pts

Intelligent Devices sales were $5.9 billion in the first six months of 2025, flat compared to the prior year.

Underlying sales increased 1 percent as higher price was partially offset by slightly lower volume.

Underlying sales increased 2 percent in the Americas, Europe decreased 4 percent, and Asia, Middle East & Africa was up 1 percent (China down 5 percent).

Final Control sales increased $58, or 3 percent, reflecting strength in power end markets.

Sales for Measurement & Analytical increased $17, or 1 percent, reflecting growth in Asia, Middle East & Africa partially offset by softness in Europe.

Discrete Automation sales decreased $50, or 4 percent, reflecting softness in Asia, Middle East & Africa and Europe, partially offset by slight growth in the Americas.

Safety & Productivity sales decreased $36, or 5 percent, reflecting softness in all geographies.

Earnings for Intelligent Devices were $1,412, an increase of $86, or 6 percent, and margin increased 1.5 percentage points to 24.0 percent, reflecting favorable price less net material inflation and favorable foreign currency transactions of $19.

Adjusted EBITA margin was 25.9 percent, an increase of 1.2 percentage points.

SOFTWARE AND CONTROL

2024 2025 Change FX Acq/Div U/L

Control Systems & Software $ 1,897 2,055 8 % 1 % — % 9 %

Test & Measurement 749 718 (4) % 1 % — (3) %

Total $ 2,646 2,773 5 % 1 % — % 6 %

Control Systems & Software $ 257 446 74 %

Test & Measurement (157) (37) 76 %

Total $ 100 409 311 %

Margin 3.8 % 14.7 % 10.9 pts

Amortization of intangibles:

Control Systems & Software $ 259 253

Test & Measurement 280 211

Total $ 539 464

Restructuring and related costs:

Control Systems & Software $ 4 8

Test & Measurement 56 5

Total $ 60 13

Adjusted EBITA $ 699 886 27 %

Adjusted EBITA Margin 26.4 % 32.0 % 5.6 pts

Software and Control sales were $2,773 in the first six months of 2025, an increase of $127, or 5 percent compared to the prior year.

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

Underlying sales increased 7 percent in the Americas, 2 percent in Europe and 7 percent in Asia, Middle East & Africa (China down 9 percent).

Control Systems & Software sales increased $158, or 8 percent, reflecting robust growth at AspenTech, favorable demand in process end markets across all geographies, and strong demand in power end markets in Asia, Middle East & Africa.

Test & Measurement sales decreased $31 or 4 percent, reflecting softness in Europe partially offset by modest growth in the Americas.

Earnings for Software and Control increased $309, up 311 percent, and margin increased 10.9 percentage points, reflecting strong leverage on higher Control Systems & Software sales, higher price, savings from cost reduction actions (primarily at Test & Measurement), and lower intangibles amortization and lower restructuring and related costs compared to the prior year.

Adjusted EBITA margin increased 5.6 percentage points.

FINANCIAL CONDITION

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

Key elements of the Company's financial conditi on as of and for the six months ended March 31, 2025 as compared to the year ended September 30, 2024 and the six months ended March 31, 2024 follow.

Mar 31, 2024 Sept 30, 2024 Mar 31, 2025

Operating working capital $ 2,182 $ 1,394 $ 2,081

3 unchanged sentences

Interest coverage ratio 10.2 X 7.2 X 9.8 X

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.

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.

The change in operating working capital compared to September 30,2024 was due to the payment of income taxes of approximately $585 related to the sale of the Company's 40 percent non-controlling common equity interest in Copeland.

The current ratio decreased compared to September 30, 2024, reflecting the decrease in cash and increase in short-term borrowing to support the AspenTech transaction.

The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 9.8X for the 12 months ended March 31, 2025 compares to 10.2X for the 12 months ended March 31, 2024.

The increase in the debt-to-capital ratios reflects increased short-term borrowings and long-term debt to fund the AspenTech transaction.

On February 11, 2025, the Company entered into a $3 billion 364-day revolving backup credit facility to support increased commercial paper borrowings in connection with the AspenTech transaction.

This facility is in addition to the Company's existing $3.5 billion revolving backup credit facility.

Both credit facilities are unsecured and may be accessed under various interest rate alternatives at the Company's option.

The fees to maintain the facilities are immaterial and the Company has not incurred any borrowings under either facility or previous facilities.

Overall, the Company's commercial paper borrowings increased to approximately $5.1 billion at March 31, 2025.

In March 2025, the Company issued €500 of 3.0% notes due March 2031, $500 of 5.0% notes due March 2035, and €500 of 3.5% notes due March 2037.

Although the Company's financial leverage and debt ratios are currently elevated, Emerson expects to retain its investment-grade long-term debt ratings.

Further, the Company expects its leverage and debt ratios to improve through its strong operating cash flows and disciplined capital allocation, including a targeted reduction in net debt of approximately $1 billion over the next 6-12 months.

Operating cash flow from continuing operations for the first six months of fiscal 2025 was $1,603, an increase of $426 compared with $1,177 in the prior year, reflecting higher earnings.

Free cas h flow from continuing operations of $1,433 in the first six months of fiscal 2025 (operating cash flow of $1,603 less capital expenditures of $170) increased $415 compared to free cash flow of $1,018 in 2024 (operating cash flow of $1,177 less capital expenditures of $159), reflecting the increase in operating cash flow.

Cash used in investing activities from continuing operations was $264.

Cash used in financing activities from continuing operations was $2,382, reflecting the purchase of the remaining outstanding shares of common stock of AspenTech not already owned by the Company for approximately $7.2 billion, share purchases of $1.1 billion and dividends, partially offset by the increase in short and long-term debt discussed above.

Total cash provided by operating activities was $1,018 including the impact of discontinued operations, and decreased $140 compared with $1,158 in the prior year.

The decrease reflected higher operating cash flow from continuing operations, offset by $585 of income taxes paid in the second quarter related to the sale of the Company's 40 percent non-controlling common equity interest in Copeland.

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.

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FISCAL 2025 OUTLOOK

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.

This past quarter marked the conclusion of Emerson's portfolio transformation with the completion of the purchase of the remaining outstanding shares of common stock of AspenTech not already owned by the Company on March 12, 2025.

In addition, following a review of strategic alternatives for the Safety & Productivity segment, the Company has concluded that the best value for its shareholders is to retain the business.

The outlook discussed below reflects full ownership of AspenTech subsequent to completion of the transaction and includes the Safety & Productivity segment.

For fiscal year 2025, consolidated net sales from continuing operations are expect ed to be up approximately 4 percent, with underlying sales also up approximately 4 percent.

Earnings per share are expected to be $4.05 to $4.20, while adjusted earnings per share are expected to be $5.90 to $6.05 (see the following reconciliation).

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Acquisition/divestiture fees and related costs ~ 0.22

Discrete taxes ~ 0.09

Adjusted diluted earnings from continuing operations per share $5.90- $6.05

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.

Operating cash flow is expected to be $3.5 to $3.6 billion and free cash flow, which excludes projected capital spending of approximately $0.4 billion, is expected to be $3.1 to $3.2 billion.

The fiscal 2025 outlook assumes returning approximately $2.3 billion to shareholders through approximately $1.1 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 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.

These risks and uncertainties include changes or increases in tariffs and the potential retaliatory measures against the United States, 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 March 31, 2025 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