What changed in this filing

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Item 1. Business

2025-11-10 compared with 2024-11-12 · 33 added, 67 removed, 117 unchanged (46% of the section changed)

ITEM 1 - BUSINESS

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

Emerson Electric Co.

("Emerson", "we", "us", "our" or the "Company”) is a global technology and software company that provides innovative solutions for customers in a wide range of end markets around the world.

Through its leading automation portfolio, Emerson helps process, hybrid and discrete manufacturers optimize operations, protect personnel, reduce emissions and achieve their sustainability goals.

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Over the past three years, the Company has taken significant actions to accelerate the transformation of its portfolio through the completion of strategic acquisitions and divestitures of non-core businesses.

These actions were undertaken to create a cohesive, higher growth and higher margin industrial technology portfolio as a global automation leader serving a diversified set of end markets.

These actions were undertaken to create a cohesive, higher growth, higher margin industrial technology portfolio, and the Company is now a global automation leader serving a diversified set of end markets.

The Company’s recent portfolio actions include the following transactions (note that all d ollars in Item 1 are in millions, except where noted) :

• 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.

• On October 11, 2023, the Company completed the acquisition of National Instruments Corporation ("NI") at an equity value of $8.2 billion.

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• 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.

• On May 31, 2022 the Company completed the divestiture of its Therm-O-Disc sensing and protection technologies business to an affiliate of One Rock Capital Partners, LLC.

• On May 16, 2022, the Company completed the transactions contemplated by its definitive agreement with Aspen Technology, Inc.

("Heritage AspenTech") to contribute two of Emerson's stand-alone industrial software businesses, Open Systems International, Inc.

and the Geological Simulation Software business (collectively, the “Emerson Industrial Software Business”), along with approximately $6.0 billion in cash to Heritage AspenTech stockholders, to create "New AspenTech", a diversified, high-performance industrial software leader with greater scale, capabilities and technologies (defined as "AspenTech" herein).

Upon closing of the transaction, Emerson owned 55 percent of the outstanding shares of AspenTech common stock (on a fully diluted basis).

AspenTech had 2023 net sales of $1.04 billion.

• On November 5, 2024, the Company announced a proposal to acquire all outstanding shares of common stock of AspenTech not already owned by Emerson for $240 per share in cash, which implies a fully diluted market capitalization for AspenTech of $15.3 billion and an enterprise value of $15.1 billion.

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

The proposal is not subject to any financing condition and would be financed from cash on hand, committed lines of credit and/or other available sources of financing.

Also on November 5, 2024, the Company announced that it is exploring strategic alternatives, including a cash sale, for its Safety & Productivity segment.

No assurance can be given whether the proposal or the review will lead to one or more transactions or as to any of the terms or conditions of such transactions.

See Item 1A - "Risk Factors" for additional information.

Further information regarding acquisition and divestiture activity is set forth in Notes 4 and 5.

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

This includes 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, and have now been reclassified and reported as discontinued operations for all periods presented (see Note 5).

Beginning in 2024, the Company reports NI (which is now referred to as Test & Measurement) as a new segment in the Software and Control business group.

As a result of its portfolio transformation discussed above, the Company now reports seven segments and two business groups, which are highlighted in the table below (see Note 20 for further details).

As a result of its portfolio transformation discussed above, the Company now reports six segments and two business groups, which are highlighted in the table below (see Note 20 for further details).

INTELLIGENT DEVICES SOFTWARE AND CONTROL

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Discrete Automation

solutions, programmable automation control systems and software, electrical distribution equipment, and materials joining solutions used primarily in discrete industries.

The Discrete Automation segment includes solenoid valves, pneumatic valves, valve position indicators, pneumatic cylinders and actuators, air preparation equipment, pressure and temperature switches, electric linear motion solutions, programmable automation control systems and software, electrical distribution equipment, and materials joining solutions used primarily in discrete industries.

Products within our Discrete Automation segment are marketed under a variety of brands including:

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Control Systems & Software solutions are predominantly used by process and hybrid manufacturers.

Products within our Control Systems & Software segment are marketed under a variety of brands including:

AMS, DeltaV and Ovation.

This segment also includes the AspenTech business, which is a global leader in asset optimization software that enables industrial manufacturers to design, operate and maintain their operations for maximum performance.

AspenTech combines decades of modeling, simulation and optimization capabilities with industrial operations expertise and applies advanced analytics to improve the profitability and sustainability of production assets.

The purpose-built software drives value for customers by improving operational efficiency and maximizing productivity, reducing unplanned downtime and safety risks, and minimizing energy consumption and emissions.

Products within our Control Systems & Software segment are marketed under a variety of brands including DeltaV and Ovation.

Test & Measurement

As discussed above, Emerson completed the acquisition of NI on October 11, 2023.

This business is now referred to as Test & Measurement and is reported as a new segment in the Software and Control business group in 2024.

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

Test & Measurement provides software-connected automated test and measurement systems that enable enterprises to bring products to market faster and at a lower cost.

The Test & Measurement business spans the full range of customer needs including modular instrumentation, data acquisition and control solutions, and general-purpose development software.

AspenTech is a global leader in asset optimization software that enables industrial manufacturers to design, operate and maintain their operations for maximum performance.

RESEARCH & DEVELOPMENT

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These initiatives include disruptive measurement technologies, software-defined automation systems, self-optimizing asset software and sustainability solutions.

Total spending for R&D, engineering expense and customer-funded engineering and development was 8.1 percent of sales in 2024 compared to 6.9 percent in 2023 and 6.3 percent in 2022.

Total spending for R&D, engineering expense and customer-funded engineering and development w as 8.1 percent of sales in 2025 and in 2024, compared to 6.9 percent in 2023.

The principal worldwide distribution channel for a majority of the Company's product offerings is through a direct sales forc e, while a network of independent sales representatives, and to a lesser extent independent distributors purchasing products for resale, are also utilized.

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New patent applications are continuously filed to protect the Company’s ongoing research and development activities and the Company periodically reviews the continued utility of patent assets.

The Company’s trademark registrations may be renewed and their duration is dependent upon national laws and trademark use.

The Company’s

trademark registrations may be renewed and their duration is dependent upon national laws and trademark use.

While this proprietary intellectual property portfolio is important to the Company in the aggregate, management does not regard any of its segments as being dependent on any single patent, trademark registration or license.

The Company’s estimated consolidated order backlog was $8.4 billion and $7.8 billion at September 30, 2024 and 2023, respectively, of which approximately $1.3 billion and $1.2 billion related to AspenTech, while approximately $400 was attributable to Test & Measurement.

Approximately 75 percent of the Company’s consolidated backlog is expected to be recognized as revenue over the next 12 months, with the remainder substantially over the subsequent two years thereafter.

The Company’s estimated consolidated order backlog was $8.6 billion and $8.4 billion at September 30, 2025 and 2024 .

Approximately 75 percent of the Company’s consolidated backlog is expected to be recogniz ed as revenue over the next 12 months, with the remainder substantially over the subsequent two years thereafter.

Backlog by business group at September 30, 2025 and 2024 follows (dollars in millions):

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federal, state, foreign and/or local laws and regulations relating to protection of the environment.

The Company continually works to minimize the environmental impact of its operations through safe

technologies, facility design and operating procedures.

The Company continually works to minimize the environmental impact of its operations through safe technologies, facility design and operating procedures.

Compliance with government regulations, including environmental regulations, has not had, and based on current information and the applicable laws and regulations currently in effect, is not expected to have a material effect on the Company's capital expenditures (including expenditures for environmental control facilities), earnings or competitive position.

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In 2022, Emerson introduced Let's Go , the Company's first-ever employee value proposition (EVP), inviting our global workforce and potential hires to join in making the world healthier, safer, smarter and more sustainable.

Building on this momentum, Emerson in 2024 focused on activating its EVP among employees by further defining it across five key cultural areas:

Legacy of Innovation;

Challenging, Purposeful Work;

Diverse People, Working Together;

Limitless Growth;

and Global and Local Impact.

Collectively, these five areas form Emerson's differentiated employee experience.

By substantiating progress and achievements in each of these areas, the Company is strengthening its culture and enabling its EVP to be considered at every touchpoint of the employee lifecycle and experience - from HR programs to the actions of leaders, behavioral norms and physical work environment.

The skills, experience and industry knowledge of key employees significantly benefit Emerson's operations and performance.

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Leadership development programs include intensive learning programs for new leaders as well as more established leaders.

The Company also partners with educational institutions and nonprofit organizations to help prepare current and future workers with the knowledge and skills they need to succeed.

To assess and improve employee retention and engagement, Emerson implemented a globally consistent, digital continuous listening strategy in 2023 through which all employees across the Company are surveyed annually and their feedback is used to drive actions that address areas of employee interest and concern.

In 2024, 89 percent of employees participated (up from 85 percent in 2023) and Emerson's overall engagement score increased to 79 percent (up from 78 percent).

In addition, Emerson's inclusion index score increased by 3.5 percentage points to 79 percent.

The Company also partners with educational institutions to help prepare current and future workers with the knowledge and skills they need to succeed.

their feedback is used to drive actions that address areas of employee interest and concern.

In 2025, 91 percent of employees participated (up from 89 percent in 2024) and Emerson's overall engagement score held steady at 79 percent.

In addition, Emerson's inclusion index score increased by approximately 1 percentage point to 80 percent.

Employee health and safety in the workplace is also one of the Company’s core values.

The Corporate Safety Council is led by our Chief Sustainability Officer and oversees our safety efforts, supported by health and safety committees and leaders that operate at the local site level.

Hazards in the workplace are actively identified and management tracks incidents so remedial actions can be taken to improve workplace safety.

The Emerson Safety Council is led by our Chief Sustainability Officer and oversees our safety efforts, supported by health and safety leaders and committees that operate in our businesses and at local sites.

Hazardous risks are actively identified in the workplace and management tracks both safety-related incidents and corrective actions.

Driving safety culture and accountability to improve workplace safety remains a high priority across the Company.

In 2025, the Company's total recordable rate of injuries was 0.25, and its lost or restricted workday case rate was 0.20 (both measured as the number of incidents per 100 employees).

We have identified other human capital priorities, including, among other things, providing competitive wages and benefits and promoting an inclusive culture.

The Company is committed to efforts to build diverse teams and foster a work environment that supports our large global workforce and helps us innovate for our customers.

Overall, women represent 33 percent of our global workforce and 24 percent of leadership positions are held by women.

In the U.S., minorities represent 36 percent of our workforce and 23 percent of our leadership positions.

Our global Employee Resource Groups support our diverse workforce and have grown to over 13,000 members.

We are proud to have been named to Fortune Magazine's "America's Most Innovative Companies" list for 2023 and as a "Best Employer for Diversity" by Forbes in 2022.

Employee levels are managed to align with the pace of busin ess and management believes it has sufficient human capital to operate its business successfully.

The Company and its subsidiaries had approximately 73,000 employees at September 30, 2024.

Employee levels are managed to align with the pace of business and management believes it has sufficient human capital to operate its business successfully.

The Company and its subsidiaries had approximatel y 71,000 e mployees at September 30, 2025.

Management believes that the Company's employee relations are favorable.

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Emerson’s global purpose is to drive innovation that makes the world healthier, safer, smarter and more sustainable.

Our environmental sustainability strategy is focused on driving progress within our facilities and helping our customers achieve their ESG objectives.

In 2021, we appointed Mike Train as Chief Sustainability Officer.

This role, part of our Office of the Chief Executive, reflects our focus on sustainability across our company.

Under his leadership, Emerson has made significant strides, and we are strengthening our leadership position as our customers and suppliers work to deliver their environmental targets.

In 2022, we set an ambitious target to achieve net zero greenhouse gas (GHG) emissions across our value chain by 2045 compared to a 2021 baseline.

To set us on the right pathway, we will target net zero operations and a 25 percent reduction of our value chain emissions by 2030, also compared to a 2021 baseline.

In 2023, we established a goal to achieve zero waste to landfill in our manufacturing facilities by 2032, from a 2022 fiscal year baseline, wherever this is compatible with local conditions and regulations.

We also introduced a new Technology and Environmental Sustainability Board committee, which is tasked with overseeing strategy related to technology and R&D, the Company’s product cybersecurity practices and Emerson’s environmental sustainability goals and programs.

Our environmental sustainability strategy is summarized by our “Greening Of, Greening By, Greening With” framework.

Greening Of Emerson demonstrates our efforts to improve our internal environmental sustainability performance, including reducing our GHG emissions and energy and water consumption as well as engaging suppliers and other value chain partners.

Greening By Emerson is our approach to delivering hardware and software technology, solutions and expertise that support and enable our customers’ decarbonization and environmental sustainability efforts.

Greening With Emerson reflects how we foster collaboration among stakeholders by participating in environmental sustainability industry forums, partnering to develop innovative solutions, and engaging with governments globally to support sustainability-related policies and regulations.

Our environmental sustainability strategy is focused on driving progress within our operations and helping our customers achieve their environmental sustainability objectives.

The Technology and Environmental Sustainability Board committee is tasked with overseeing strategy related to technology and R&D, the Company's product cybersecurity practices and Emerson's environmental sustainability goals and programs.

Emerson’s environmental sustainability initiatives and strategy are discussed further in our 2024 Sustainability Report, which can be found on our website at www.Emerson.com;

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They may be accessed as follows:

www.Emerson.com, Investors, SEC Filings.

Information on the Company’s website does not constitute part of this Form 10-K.

ir.emerson.com/sec-filings.

The information set forth under Item 1A - “Risk Factors” is 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-K

Item 1. Business