What changed in this filing

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Item 1A. Risk Factors

2025-11-10 compared with 2024-11-12 · 25 added, 18 removed, 132 unchanged (25% of the section changed)

33 unchanged sentences

These activities require favorable environments to execute these transactions, and we may encounter difficulties in obtaining the necessary regulatory approvals in both domestic and foreign jurisdictions.

In 2024 and in past years, we have made various acquisitions and divestitures, including our acquisition of National Instruments, our divestiture of the Climate Technologies business (now renamed Copeland), and our majority stake in Aspen

Technology, Inc., and entered into joint venture arrangements intended to complement or expand our business, and may continue to do so in the future.

In 2025 and in past years, we have made various acquisitions and divestitures, including our purchase of the remaining outstanding shares of common stock of AspenTech not already owned by the Company, our acquisition of National Instruments, and our

divestiture of the Climate Technologies business (now renamed Copeland), and entered into joint venture arrangements intended to complement or expand our business, and may continue to do so in the future.

As a result of these transactions, the Company has a narrower business which is focused on higher growth markets including software, innovation and disruptive technologies, and may encounter more volatility and be more vulnerable to changing market conditions.

3 unchanged sentences

Any of the foregoing could adversely affect our business and results of operations.

Our Portfolio Actions Including the Proposed Acquisition of the Remaining Interest in AspenTech Not Already Owned by the Company and the Process to Explore Strategic Alternatives for the Company's Safety & Productivity Segment May Not Be Completed or Completed on the Terms and Conditions Contemplated, or With the Expected Benefits

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, 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.

We can make no assurance as to the completion, terms, timing, costs or benefits anticipated from any such transactions.

Unforeseen developments, including delays in obtaining various tax, regulatory and other approvals, could delay any such transactions, or cause one or more of them to occur on terms and conditions that are less favorable, or at a higher cost, than expected.

We Use a Variety of Raw Materials and Components in Our Businesses, and Significant Shortages or Price Increases Could Increase Our Operating Costs and Adversely Impact the Competitive Positions of Our P roducts

19 unchanged sentences

Their skills, experience and industry knowledge significantly benefit our operations and performance.

The failure to attract, develop and retain highly qualified personnel could adversely affect our ability to succeed in our human capital goals and priorities as well as negatively impact our business and operating results.

The failure to attract,

develop and retain highly qualified personnel could adversely affect our ability to succeed in our human capital goals and priorities as well as negatively impact our business and operating results.

Security and/or Data Privacy Breaches, or Disruptions of Our Information Technology Systems Could Adversely Affect Our Business

22 unchanged sentences

As a result, the impact of a catastrophic product failure or similar event could be significant.

failures and other problems, including through manufacturing or design defects, process or other failures of contractors or third-party suppliers, cybersecurity incidents or other intentional acts, that could result in potential product, safety, regulatory or environmental risks.

While we have built operational processes to ensure that our product design, manufacture, performance and servicing meet rigorous quality standards, there can be no assurance that we or our customers or other third parties will not experience operational process or product failures and other problems, including through manufacturing or design defects, process or other failures of contractors or third-party suppliers, cybersecurity incidents or other intentional acts, that could result in potential product, safety, regulatory or environmental risks.

Cybersecurity incidents aimed at the software embedded in our products could lead to third-party claims resulting from damages caused by our product failures, and this risk is enhanced by the increasingly connected nature of our products.

The potential consequences of a material cybersecurity incident include financial loss, reputational damage, litigation with third parties, diminution in the value of our investment in research, development and engineering, and increased cybersecurity protection and remediation costs due to the increasing sophistication and proliferation of threats, which in turn could adversely affect our competitiveness and results of operations.

We May Use Artificial Intelligence in Our Businesses and in Our Products and Services, and Challenges With Managing its Use Could Result in Reputational Harm, Competitive Harm, and Legal Liability, and Adversely Affect Our Results of Operations

Our businesses increasingly rely on artificial intelligence solutions to optimize our operations, improve customer experiences, and enhance our products and services.

While the use of artificial intelligence presents significant

opportunities, it also introduces a range of risks that could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.

Our artificial intelligence efforts subject us to risks related to accuracy, intellectual property infringement or misappropriation, data privacy, and cybersecurity, among others, and if our use of artificial intelligence becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability.

Additionally, our competitors or other third parties may incorporate artificial intelligence into their products, services or operations more quickly or successfully than us, or develop superior products and services with the aid of artificial intelligence, which could impair our ability to compete effectively and adversely affect our results of operations.

Finally, the regulatory landscape surrounding artificial intelligence is rapidly evolving and the use of artificial intelligence may be subject to new legal or regulatory requirements, the impact of which may be prohibitive or pose further risks from a legal or regulatory perspective.

Industry and General Economic Risks

8 unchanged sentences

While we monitor our exchange rate exposures and attempt to mitigate this exposure through hedging activities, this risk could adversely affect our operating results.

The recent changes in U.S.

trade policy involving the application or increase of tariffs and the subsequent retaliatory measures against the U.S.

have created a dynamic environment that may have a material adverse impact on our business.

While we have deployed strategies to mitigate the impact of these dynamic trade policies, there is no assurance that we will be able to mitigate the full impact of all such tariffs, retaliatory tariffs or other trade policies that have or may develop in this rapidly changing environment.

Increasing trade tensions and changes in trade policies have the potential to adversely impact our costs, the demand for our products, our supply chain and the global economy, which may have an adverse impact on our business, including operating and financial results and conditions.

Recessions, Adverse Market Conditions or Downturns in End Markets We Serve May Negatively Affect Our Operations

9 unchanged sentences

Significant judgment is required to determine ou r consolidated income tax provision and related liabilities.

The Company’s effective tax rate, cash flows and operating results could be affected by changes in the mix of earnings in countries with different statutory tax rates, as well as by changes in the local tax laws and regulations, or the interpretations thereof, including multiple, overlapping tax regimes enacted as part of the Organization for Economic Cooperation and Development proposals that implement a global minimum tax.

The Company’s effective tax rate, cash flows and operating results could be affected by changes in the mix of earnings in countries

with different statutory tax rates, as well as by changes in the local tax laws and regulations, or the interpretations thereof, including multiple, overlapping tax regimes enacted as part of the Organization for Economic Cooperation and Development proposals that implement a global minimum tax.

In addition, the Company’s tax returns are subject to regular review and audit by U.S.

4 unchanged sentences

federal and state and non-U.S.

laws, regulations and policies, including laws related to anti-corruption, anti-bribery, export and import compliance, anti-trust and money

laundering, due to our global operations.

laws, regulations and policies, including laws related to anti-corruption, anti-bribery, export and import compliance, anti-trust and money laundering, due to our global operations.

In particular, the U.S.

10 unchanged sentences

There continues to be a lack of consistent climate change legislation and standards, which creates economic and regulatory uncertainty.

While the Company has adopted certain voluntary targets, environmental laws, regulations or standards may be changed, accelerated or adopted and impose significant operational restrictions and compliance requirements upon the Company, its products or customers, which could negatively impact the Company’s business, capital expenditures, results of operations, financial condition and competitive position.

While the Company has adopted certain voluntary goals or targets, environmental laws, regulations or standards may be changed, accelerated or adopted and impose significant operational restrictions and compliance requirements upon the Company, its products or customers, which could negatively impact the Company’s business, capital expenditures, results of operations, financial condition and competitive position.

Increasing Interest and Expectations with Respect to Environmental, Social, and Governance (ESG) Matters by Our Various Stakeholders Could Adversely Affect Our Business and Operating Results

In response to growing customer, investor, employee, governmental, and other stakeholder interest in our ESG practices, we have increased reporting of our ESG programs and performance and have established and announced our aspirational purpose, causes, values, and related commitments, goals or targets, including those regarding sustainability, greenhouse gas emissions, our net zero ambition, and diversity, equity and inclusion.

Our ability to achieve such goals and aspirations is subject to numerous risks and uncertainties, many of which rely on the collective efforts of others or may be outside of our control.

Such risks include, among others, the availability and adoption of new or additional technologies that reduce carbon or eliminate energy sources on a commercially reasonable basis, competing and evolving economic, policy and regulatory factors, the ability of suppliers and others to meet our sustainability, diversity and other goals, the availability of qualified candidates in our labor markets and our ability to recruit and retain diverse talent, and customer engagement in our goals.

Such risks include, among others, the availability and adoption of new or additional technologies that reduce carbon or eliminate energy sources on a commercially reasonable basis, competing and evolving economic, policy and regulatory factors, the ability of suppliers and others to meet our sustainability and other goals, the availability of qualified candidates in our labor markets and our ability to recruit and retain diverse talent, and customer engagement in our goals.

There may be times where actual outcomes vary from those aimed for or expected and sometimes challenges may delay or block progress.

As a result, we cannot offer assurances that the results reflected or implied by any such statements will be realized or achieved.

Moreover, standards and expectations for ESG matters continue to evolve and may be subject to varying interpretations, which may result in significant revisions to our goals or progress.

Moreover, standards and expectations for ESG matters continue to evolve and may be subject to varying interpretations, which may result in

significant revisions to our goals or progress.

In addition, certain of our product offerings may become less attractive as standards evolve.

2 unchanged sentences

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 1A. Risk Factors