What changed in this filing

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Item 1. Financial Statements

2026-08-04 compared with 2026-05-05 · 218 added, 193 removed, 662 unchanged (38% of the section changed)

3 unchanged sentences

& SUBSIDIARIES

Three and six months ended March 31, 2025 and 2026

Three and nine months ended June 30, 2025 and 2026

(Dollars in millions, except per share amounts;

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2025 2026 2025 2026

4 unchanged sentences

Interest expense (net of interest income of $ 31 , $ 25 , $ 120 and $ 77 , respectively)

Earnings before income taxes 629 793 1,404 1,568

95 85 145 258

Earnings from continuing operations before income taxes 734 916 2,138 2,484

Income taxes 154 198 536 542

Earnings from continuing operations 580 718 1,602 1,942

Discontinued operations, net of tax of $ 2 , $ — , $ 2 , and $ — , respectively

Net earnings 586 718 1,609 1,942

1 unchanged sentence

Net earnings common stockholders $ 586 718 $ 1,657 1,941

Earnings per share:

Basic $ 0.86 1.10 $ 1.89 2.18

Diluted $ 0.86 1.10 $ 1.88 2.17

Earnings common stockholders:

Earnings from continuing operations $ 580 718 $ 1,650 1,941

Discontinued operations 6 — 7 —

Net earnings common stockholders $ 586 718 $ 1,657 1,941

Basic earnings per share common stockholders

Earnings from continuing operations $ 1.03 1.28 $ 2.92 3.46

Discontinued operations 0.01 — 0.01 —

Basic earnings per common share $ 1.04 1.28 $ 2.93 3.46

Diluted earnings per share common stockholders:

Earnings from continuing operations $ 1.03 1.28 $ 2.91 3.45

Discontinued operations 0.01 — 0.01 —

Diluted earnings per common share $ 1.04 1.28 $ 2.92 3.45

Weighted average outstanding shares:

5 unchanged sentences

& SUBSIDIARIES

Three and six months ended March 31, 2025 and 2026

Three and nine months ended June 30, 2025 and 2026

(Dollars in millions;

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

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

2025 2026 2025 2026

13 unchanged sentences

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

Sept 30, 2025 Mar 31, 2026

Sept 30, 2025 June 30, 2026

Current assets

35 unchanged sentences

& SUBSIDIARIES

Three and six months ended March 31, 2025 and 2026

Three and nine months ended June 30, 2025 and 2026

(Dollars in millions;

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

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

2025 2026 2025 2026

40 unchanged sentences

& SUBSIDIARIES

Six Months Ended March 31, 2025 and 2026

Nine Months Ended June 30, 2025 and 2026

(Dollars in millions;

Six Months Ended

Nine Months Ended

Operating activities

Net earnings $ 1,609 1,942

Earnings from discontinued operations, net of tax ( 7 ) —

Adjustments to reconcile net earnings to net cash provided by operating activities:

58 unchanged sentences

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

Sept 30, 2025 Mar 31, 2026

Sept 30, 2025 June 30, 2026

Unbilled receivables (contract assets) $ 1,891 2,011

2 unchanged sentences

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

The decrease in net contract assets was due to customer billings exceeding revenue recognized for performance completed during the period.

Revenue recognized for the three and six months ended March 31, 2026 included $ 162 and $ 590 , respectively, that was included in the beginning contract liability balance.

The change in net contract assets was immaterial during the period.

Revenue recognized for the three and nine months ended June 30, 2026 included $ 119 and $ 709 , 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 and six months ended March 31, 2026 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, 2026, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately $ 9.5 billion .

Revenue recognized for the three and nine months ended June 30, 2026 for performance obligations that were satisfied in previous periods, including cumulative catchup adjustments on the Company's long- term contracts, was immaterial.

As of June 30, 2026, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately $ 9.6 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 .

3 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2025 2026 2025 2026

15 unchanged sentences

Subsequently, in August of 2024, the Company sold its 40 percent non-controlling common equity interest in Copeland to private equity funds managed by Blackstone for $ 1.5 billion.

Cash from discontinued operating activities of $ 585 for t he 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.

Earnings before income taxes from discontinued operations for the three and nine months ended June 30, 2025 were $ 4 and $ 5 , respectively.

Earnings from discontinued operations, net of tax for the three and nine months ended June 30, 2025 were $ 6 and $ 7 , respectively.

Cash from discontinued operating activities of $ 576 for t he nine months ended June 30, 2025 primarily 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 March 31, Six Months Ended March 31,

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

2025 2026 2025 2026

8 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2025 2026 2025 2026

5 unchanged sentences

Total $ 298 311 $ 944 744

For the three and six months ended March 31, 2026, the decreases in acquisition/divestiture costs and intangibles amortization are primarily related to the AspenTech transaction, including backlog amortization of $ 26 and $ 52 , respectively, in the prior year.

For the three and nine months ended June 30, 2026, the decreases in acquisition/divestiture costs and intangibles amortization are primarily related to the AspenTech transaction, including backlog amortization of $ 13 and $ 65 , respectively, in the prior year.

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

1 unchanged sentence

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 2026 restructuring expense and related costs to be approximatel y $ 130 , including costs to complete actions initiated in the first six months of the year.

The Company expects fiscal 2026 restructuring expense and related costs to be approximatel y $ 185 , including costs to complete actions initiated in the first nine months of the year.

Restructuring expense by business segment follows:

Three Months Ended March 31, Six Months Ended

Three Months Ended June 30, Nine Months Ended

2025 2026 2025 2026

8 unchanged sentences

Total $ 37 87 $ 70 141

Details of the change in the liability for restructuring costs during the six months ended March 31, 2026 follow:

Sept 30, 2025 Expense Utilized/Paid Mar 31, 2026

Details of the change in the liability for restructuring costs during the nine months ended June 30, 2026 follow:

Sept 30, 2025 Expense Utilized/Paid June 30, 2026

Severance and benefits $ 116 123 83 156

1 unchanged sentence

Total $ 120 141 103 158

The tables above do not include $ 8 and $ 6 of costs related to restructuring actions incurred for the three months ended March 31, 2026 and 2025, respectively, that are required to be reported in cost of sales and selling, general and administrative expenses;

The tables above do not include $ 12 and $ 4 of costs related to restructuring actions incurred for the three months ended June 30, 2026 and 2025, respectively, that are required to be reported in cost of sales and selling, general and administrative expenses;

year-to-date amounts are $ 23 and $ 11 , respectively .

Income taxes were $ 175 in the second quarter of fiscal 2026 and $ 199 in 2025, resulting in effective tax rates of 22 percent and 32 percent, respectively.

In the current year, the One Big Beautiful Bill Act (the "OBBBA") increased the effective tax rate by approxima tely 1 per centage point due to a lower tax deduction for foreign derived intangible income from the change to domestic research and development in fiscal 2026.

Corporate restructuring for the three and nine months ended June 30, 2025 includes $ 20 and $ 21 , respectively, of integration-related stock compensation expense attributable to the AspenTech transaction.

Income taxes were $ 198 in the third quarter of fiscal 2026 and $ 154 in 2025, resulting in effective tax rates of 22 percent and 21 percent, respectively.

In the current year, the One Big Beautiful Bill Act (the "OBBBA") increased the effective tax rate by approximately 1 percentage point due to a lower tax deduction for foreign-derived intangible income from the change to domestic research and development in fiscal 2026.

Income taxes were $ 542 in the first nine months of fiscal 2026 and $ 536 in 2025 , resulting in effective tax rates of 22 percent and 25 percent, respectively.

The current year rate was negatively impacted by approximately 1 percentage point due to the OBBBA impact discussed above.

Excluding the impact related to the OBBBA, the lower rate in the current year reflected favorable tax items that reduced the rate by approximately 2 percentage points.

1 unchanged sentence

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.

Income taxes were $ 344 in the first six months of fiscal 2026 and $ 382 in 2025 , resulting in effective tax rates of 22 percent and 27 percent, respectively.

The current year rate was negatively impacted by approximately 1 percent due to the OBBBA impact discussed above.

Excluding the impact related to the OBBBA, the lower rate in the current year reflected favorable tax items that reduced the rate by approximately 2 percentage points.

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

In total, the net impact of these items increased the prior year rate by approximately 3 percentage points.

(10) OTHER FINANCIAL INFORMATION

Sept 30, 2025 Mar 31, 2026

Sept 30, 2025 June 30, 2026

Finished products $ 520 596

14 unchanged sentences

Total $ 18,193 18,122

Sept 30, 2025 Mar 31, 2026

Sept 30, 2025 June 30, 2026

Other intangible assets

2 unchanged sentences

Net carrying amount $ 9,458 8,686

Other intangible assets include customer relationships, net, of $ 5,518 and $ 5,801 and intellectual property, net, of $ 3,172 and $ 3,411 as of March 31, 2026 and September 30, 2025, respectively.

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

Other intangible assets include customer relationships, net, of $ 5,375 and $ 5,801 and intellectual property, net, of $ 3,052 and $ 3,411 as of June 30, 2026 and September 30, 2025, respectively.

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

2025 2026 2025 2026

5 unchanged sentences

Total $ 372 377 $ 1,139 1,105

Sept 30, 2025 Mar 31, 2026

Sept 30, 2025 June 30, 2026

Other assets include the following:

7 unchanged sentences

Employee compensation 740 713

Income taxes 130 57

Operating lease liabilities (current) 138 142

Product warranty 90 75

Sept 30, 2025 Mar 31, 2026

Income taxes 130 69

Sept 30, 2025 June 30, 2026

Other liabilities include the following:

11 unchanged sentences

(12) FINANCIAL INSTRUMENTS

Hedging Activities – As of March 31, 2026, the notional amount of foreign currency hedge positions was approximately $ 4.3 billion.

Hedging Activities – As of June 30, 2026, the notional amount of foreign currency hedge positions was approximately $ 3.9 billion.

All derivatives receiving hedge accounting are cash flow hedges.

The majority of hedging gains and losses deferred as of March 31, 2026 are expected to be recognized over the next 12 months as the underl ying forecasted transactions occur.

The majority of hedging gains and losses deferred as of June 30, 2026 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.

6 unchanged sentences

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 and six months ended March 31, 2025 and 2026:

The following gains and losses are included in earnings and other comprehensive income (OCI) for the three and nine months ended June 30, 2025 and 2026:

Into Earnings Into OCI

2nd Quarter Six Months 2nd Quarter Six Months

3rd Quarter Nine Months 3rd Quarter Nine Months

Gains (Losses) Location 2025 2026 2025 2026 2025 2026 2025 2026

14 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 March 31, 2026, the fair value of long-term debt was approximately $ 7.5 billion, which was lower than the carrying value by $ 798 .

As of June 30, 2026, the fair value of long-term debt was approximately $ 7.5 billion, which was lower than the carrying value by $ 762 .

The fair value of foreign currency contracts, which are reported in Other current assets and Accrued expenses, did not materially change since September 30, 2025.

4 unchanged sentences

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

No collateral was posted with counterparties and none was held by the Company as of March 31, 2026.

No collateral was posted with counterparties and none was held by the Company as of June 30, 2026.

(13) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Activity in Accumulated other comprehensive income (loss) for the three and six months ended March 31, 2026 and 2025 is shown below, net of income taxes:

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

Activity in Accumulated other comprehensive income (loss) for the three and nine months ended June 30, 2026 and 2025 is shown below, net of income taxes:

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

2025 2026 2025 2026

48 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30,

Control Systems & Software Test & Measurement Software & Systems Sensors Final Control Intelligent Devices Safety & Productivity

4 unchanged sentences

Earnings (Loss) $ 271 ( 26 ) 245 246 351 597 103

Three Months Ended March 31,

Three Months Ended June 30,

Control Systems & Software Test & Measurement Software & Systems Sensors Final Control Intelligent Devices Safety & Productivity

4 unchanged sentences

Earnings (Loss) $ 285 11 296 303 349 652 93

Six Months Ended March 31,

Nine Months Ended June 30,

Control Systems & Software Test & Measurement Software & Systems Sensors Final Control Intelligent Devices Safety & Productivity

4 unchanged sentences

Earnings (Loss) $ 717 ( 64 ) 653 795 1,012 1,807 305

Six Months Ended March 31,

Nine Months Ended June 30,

Control Systems & Software Test & Measurement Software & Systems Sensors Final Control Intelligent Devices Safety & Productivity

6 unchanged sentences

Earnings (Loss)

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

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

2025 2026 2025 2026

6 unchanged sentences

Total $ 734 916 $ 2,138 2,484

S tock compensation for the three and six months ended March 31, 2026 included integration-related stock compensation expense of $ 4 and $ 9 , respectively (of which $ 1 was reported as restructuring costs for the six months ended March 31, 2026);

prior year amounts were $ 9 and $ 11 , respectively (of which $ 1 was reported as restructuring costs).

Corporate and other for the three and six months ended March 31, 2026 included acquisition/divestiture fees and related costs of $ 7 and $ 14 , respectively;

Stock compensation for the three and nine months ended June 30, 2026 included integration-related stock compensation expense of $ 4 and $ 13 , respectively;

prior year amounts were $ 26 and $ 37 , respectively (of which $ 20 and $ 21 was reported as restructuring costs).

Corporate and other for the three and nine months ended June 30, 2026 included acquisition/divestiture fees and related costs of $ 28 and $ 41 , respectively;

prior year amounts were $ 38 and $ 216 , respectively.

In February 2026, the U.S.

Supreme Court ruled that the International Emergency Economic Powers Act ("IEEPA") does not authorize the imposition of tariffs.

Subsequently, on April 20, 2026, U.S.

Customs and Border Protection launched an administrative portal through which eligible importers could submit claims for refunds.

During the three months ended June 30, 2026, the Company filed certain claims and received tariff refunds of $ 82 ($ 0.11 per share), and the benefit was recorded in Cost of sales.

This benefit is reflected in Corporate and Other in the table above.

The timing and amount of any further tariff refunds remain uncertain, and, accordingly, no benefit was recognized as of June 30, 2026 for any additional potential refunds related to IEEPA tariffs previously paid.

Additional segment financial information is presented in the tables below:

Total Assets Depreciation and Amortization

30, As of March 31, Three Months Ended March 31, Six Months Ended March 31,

30, As of June 30, Three Months Ended June 30, Nine Months Ended June 30,

2025 2026 2025 2026 2025 2026

9 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30,

Americas AMEA Europe Total Americas AMEA Europe Total

7 unchanged sentences

Total $ 2,341 1,356 856 4,553 2,537 1,475 861 4,873

Six Months Ended March 31,

Nine Months Ended June 30,

Americas AMEA Europe Total Americas AMEA Europe Total

10 unchanged sentences

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

For the second quarter of fiscal 2026, net sales were $4.6 billion, up 3 percent compared with the prior year.

Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, were up 0.5 percent, including a negative 1 percent impact related to the conflict in the Middle East.

The conflict remains dynamic and continuation or escalation of the conflict could adversely impact our business or results of operations in future periods.

For the third quarter of fiscal 2026, net sales were $4.9 billion , up 7 percent compared with the prior year.

Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, were up 6 percent.

Foreign currency translation had a 1 percent favorable impact.

Earnings attributable to common stockholders were $618, up 27 percent, and diluted earnings per share were $1.10, up 28 percent compared with $0.86 in the prior year, reflecting the impact of higher acquisition/divestiture fees and related costs in the prior year primarily related to the AspenTech transaction.

Adjusted diluted earnings per share were $1.54, up 4 percent compared with $1.48 in the prior year, despite a negative impact related to the timing of software renewals of $(0.09).

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.

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

Three Months Ended March 31, 2025 2026

Diluted earnings per share $ 0.86 1.10

Earnings from continuing operations attributable to common stockholders were $718, up 24 percent, and diluted earnings per share from continuing operations were $1.28, up 24 percent compared with $1.03 in the prior year.

Adjusted diluted earnings per share from continuing operations were $1.71, up 13 percent compared with $1.52 in the prior year.

Overall, results reflected sales growth and strong operating performance.

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

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

Three Months Ended June 30, 2025 2026

Diluted earnings from continuing operations per share $ 1.03 1.28

Amortization of intangibles 0.37 0.35

2 unchanged sentences

Discrete taxes — 0.01

Adjusted diluted earnings per share $ 1.48 1.54

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

IEEPA tariff refunds — (0.11)

Adjusted diluted earnings from continuing operations per share $ 1.52 1.71

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

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

Three Months Ended

Adjusted diluted earnings per share - March 31, 2025

Adjusted diluted earnings from continuing operations per share - June 30, 2025

Operations 0.19

Impact of software renewals (0.09)

Foreign currency 0.03

Share count 0.01

Adjusted diluted earnings per share - March 31, 2026

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, 2026, compared with the second quarter ended March 31, 2025.

Stock compensation (0.03)

Adjusted diluted earnings from continuing operations per share - June 30, 2026

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30

Following is an analysis of the Company’s operating results for the third quarter ended June 30, 2026, compared with the third quarter ended June 30, 2025.

2025 2026 Change

4 unchanged sentences

SG&A $ 1,266 1,343 6 %

Percent of sales 28.9 % 28.9 % — %

Percent of sales 27.8 % 27.6 % (0.2) pts

Other deductions, net $ 298 311

2 unchanged sentences

Interest expense, net $ 95 85

Earnings before income taxes $ 629 793 26 %

Earnings from continuing operations before income taxes $ 734 916 25 %

Percent of sales 16.1 % 18.8 % 2.7 pts

Net earnings common stockholders $ 485 618 27 %

Earnings from continuing operations common stockholders $ 580 718 24 %

Percent of sales 12.7 % 14.7 % 2.0 pts

Diluted EPS $ 0.86 1.10 28 %

Adjusted Diluted EPS $ 1.48 1.54 4 %

Net sales for the second quarter of fiscal 2026 were $4.6 billion, up 3 percent compared with 2025.

Software and System sales were up 4 percent, Intelligent Devices sales were up 2 percent, and Safety & Productivity sales were up 5 percent .

Underlying sales were up 0.5 percent on 3.5 percent higher price, offset by 3 percent lower volume due to a negative impact of 2 percent related to the timing of software renewals and 1 percent related to the conflict in the Middle East.

Net earnings common stockholders $ 586 718 23 %

Diluted EPS - Earnings from continuing operations $ 1.03 1.28 24 %

Diluted EPS - Net earnings $ 1.04 1.28 23 %

Adjusted Diluted EPS - Earnings from continuing operations $ 1.52 1.71 13 %

Net sales for the third quarter of fiscal 2026 were $4.9 billion, up 7 percent compared with 2025.

Software & Systems sales were up 11 percent, Intelligent Devices sales were up 6 percent, and Safety & Productivity sales were up 3 percent .

Underlying sales were up 6 percent o n 3 percent higher volume and 3 percent higher price.

For eign currency translation had a 1 percent favorable impact .

Underlying sales were up 10 percent in the U.S.

and down 5 percent internationally.

The Americas was up 5 percent, Europe was down 4 percent, and Asia, Middle East & Africa was down 5 percent (China down 9 percent).

Cost of sales for the second quarter of fiscal 2026 were $2,140, an increase of $79 compared with 2025, and gross margin of 53.1 percent decreased 0.4 percentage po ints.

Gross margin was negatively impacted by tariffs, which were more than offset by targeted price actions but diluted margins, and the timing of software renewals.

In total, these items negatively impacted gross margin by approximately 0.8 percentage points.

and up 4 percent internationally.

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

In February 2026, the U.S.

Supreme Court ruled that the International Emergency Power Act ("IEEPA"), which the U.S.

administration had relied upon to impose certain tariffs, does not authorize the imposition of tariffs.

Following this decision, the U.S.

Court of International Trade directed U.S.

Customs and Border Protection ("CBP") to implement a process for refunding IEEPA tariffs.

On April 20, 2026, CBP launched an administrative portal through which eligible importers may submit claims for such refunds.

The amount and timing of any tariff refunds Emerson may be eligible for remains uncertain and accordingly, the Company did not record a benefit related to potential refunds of IEEPA tariffs paid as of March 31, 2026.

Selling, general and administrative (SG&A) expens es of $1,316 increased $33 and SG&A as a percent of sales was 28.9 percent, consistent with the prior year.

Other deductions, net were $229 for the second quarter of fiscal 2026, a decrease of $189 compared with the prior year, due to a $143 decrease in acquisition/divestiture fees and related costs primarily associated with the AspenTech acquisition in the prior year and lower amortization due to backlog amortization of $26 in the prior year related to the AspenTech acquisition.

Pretax earnings of $793 increased $164, up 26 percent compared with the prior year, reflecting the impact of the AspenTech acquisition-related costs in the prior year discussed above.

Earnings increased $5 in Software & Systems, $8 in Intelligent Devices, and $4 in Safety and Productivity.

Supreme Court ruled that the International Emergency Economic Powers Act ("IEEPA") does not authorize the imposition of tariffs.

Subsequently, on April 20, 2026, U.S.

Customs and Border Protection launched an administrative portal through which eligible importers could submit claims for refunds.

During the three months ended June 30, 2026, the Company filed certain claims and received tariff refunds of $82 ($0.11 per share), and the benefit was recorded in Cost of sales.

Cost of sales for the third quarter of fiscal 2026 were $2,218, an increase of $58 compared with 2025, and gross margin of 54.5 percent increased 1.9 percentage po ints.

Gross margin increased primarily due to the tariff refunds discussed above.

Selling, general and administrative (SG&A) expenses of $1,343 increased $77 and SG&A as a percent of sales was 27.6 percent, a decrease of 0.2 percentage points.

SG&A as a percent of sales decreased due to leverage on higher sales and savings from cost reduction actions.

Other deductions, net were $311 for the third quarter of fiscal 2026, an increase of $13 compared with the prior year, due to an increase in restructuring costs, partially offset by lower amortization.

Pretax earnings from continuing operations of $916 increased $182, up 25 percent compared with the prior year, reflecting strong operating results as well as the tariff refunds discussed above.

E arnings increased $51 in Software & Systems and $55 in Intelligent Devices, and decreased $10 in Safety and Productivity.

S ee the Business Segments discussion that follows and Note 15.

Income taxes were $ 175 in the second quarter of fiscal 2026 and $199 in 2025, resulting in effective tax rates of 22 percent and 32 percent, respectively.

Income taxes were $198 in the third quarter of fiscal 2026 and $154 in 2025, resulting in effective tax rates of 22 percent and 21 percent, respectivel y.

In the current year, the One Big Beautiful Bill Act (the "OBBBA") increased the effective tax rate by approximately 1 percentage point due to lower tax deduction for foreign-derived intangible income from the change to domestic research and development in fiscal 2026.

The Company expects the OBBBA to slightly benefit the effective tax rate beginning in fiscal 2027.

Excluding the impact related to the OBBBA, the lower rate in the current year reflected favorable tax items that reduced the rate by approximately 2 percentage points.

The prior 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.

Earnings attributable to common stockholders were $618, up 27 percent, and diluted earnings per share were $1.10, up 28 percent compared with $0.86 in the prior year.

Adjusted diluted earnings per share were $1.54 compared with $1.48 in the prior year.

Earnings from continuing operations attributable to common stockholders were $ 718 , up 24 percent, and diluted earnings per share from continuing operations were $1.28, up 24 percent compared with $1.03 in the prior year.

Adjusted diluted earnings per share from continuing operations were $1.71 compared with $1.52 in the prior year, up 13 percent.

Overall, the increase in earnings per share reflected strong operating results.

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

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.

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

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

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

Three Months Ended March 31, 2025 2026 Change

Earnings before income taxes $ 629 793 26 %

Three Months Ended June 30, 2025 2026 Change

Earnings from continuing operations before income taxes $ 734 916 25 %

Percent of sales 16.1 % 18.8 % 2.7 pts

3 unchanged sentences

Acquisition/divestiture fees and related costs 44 32

Adjusted EBITA $ 1,143 1,194 4 %

IEEPA tariff refunds — (82)

Adjusted EBITA from continuing operations $ 1,183 1,303 10 %

Percent of sales 26.0 % 26.7 % 0.7 pts

Business Segments

Following is an analysis of operating results for the Company’s business segments for the second quarter ended March 31, 2026, compared with the second quarter ended March 31, 2025.

Following is an analysis of operating results for the Company’s business segments for the third quarter ended June 30, 2026, compared with the third quarter ended June 30, 2025.

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

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Test & Measurement — 13

Total $ 15 11

Adjusted EBITA $ 474 523 10 %

Adjusted EBITA Margin 32.1 % 31.8 % (0.3) pts

Software & Systems sales were $ 1,503 in the second quarter of 2026, an increase of $52, or 4 percent.

Underlying sales were up 1 percent on 3 percent higher price, while volume decreased 2 percent including a 4.5 percent negative percent impact related to the timing of software renewals.

Unde rlying sales increased 6 percent in the Americas, Europe decreased 5 percent, and Asia, Middle East & Africa was flat (China down 2 percent ).

Control Systems & Software sales decreased slightly and underlying sales decreased 2 percent, reflecting the negative impact related to the timing of software renewals, partially offset by strong demand in power and life sciences.

Sales for Test & Measurement increased $ 56 , or 16 percent , and underlying sales increased 12 percent in the second quarter, reflecting strength in aerospace & defense and semiconductor.

Earnings for Software & Systems were $ 219 , an increase of $ 5 , or 3 percent, while margin decreased slightly to 14.6 percent, reflecting t he negative impact related to the timing of software renewals offset by leverage on higher Test & Measurement sales, lower intangibles amortization and savings from cost reduction actions .

Adjusted EBITA margin was 29.2 percent, a decrease of 2.5 percentage points, which included a negative impact relating to the timing of software renewals of approximately 3 percentage points.

Software & Systems sales were $ 1,644 in the third quarter of 2026, an increase of $164, or 11 percent.

Underlying sales were up 11 percent on 7 percent higher volume and 4 percent higher price.

U nde rlying sales increased 13 percent in the Americas and 16 percent in Asia, Middle East & Africa (China up 14 percent ) , while Europe decreased 1 percent .

Control Systems & Software sales increased 7 percent, reflecting strong demand in power.

S ales for Test & Measurement increased $ 85 , or 23 percent , reflecting strength in semiconductor and aerospace & defense.

Earnings for Software & Systems were $ 296 , an increase of $ 51 , or 21 percent, while margin increased 1.4 percentage points to 18.0 percent, reflecting leverage on higher sales, lower intangibles amortization and savings from cost reduction actions .

Adjusted EBITA margin was 31.8 percent, a decrease of 0.3 percentage points.

INTELLIGENT DEVICES

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Final Control 8 48

Total $ 10 57

Adjusted EBITA $ 648 747 15 %

Adjusted EBITA Margin 25.5 % 27.9 % 2.4 pts

Intelligent Devices sales were $2,512 in the second quarter of 2026, an increase of $53, or 2 percent, compared to the prior year.

Underlying sales decreased 1 percent on 4 percent lower volume, including a 2 percent negative impact related to the conflict in the Middle East, offset by 3 percent higher price.

Underlying sales increased 5 percent in the Americas, while Europe decreased 4 percent and Asia, Middle East & Africa was down 7 percent (China down 13 percent).

Sensors sales increased $24, or 2 percent, and underlying sales were flat, reflecting the negative impact related to the conflict in the Middle East offset by strong growth in the Americas.

Final Control sales increased $29 or 2 percent, and underlying sales decreased 1 percent, reflecting the negative impact related to the conflict in the Middle East offset by solid growth in the Americas, including strength in power and LNG.

Earnings for Intelligent Devices increased $8, or 1 percent, while margin decreased 0.3 percentage points reflecting unfavorable mix and deleverage on lower volume, partially offset by favorable price less net material inflation.

Adjusted EBITA margin was 27.9 percent, an increase of 0.8 percentage points.

Intelligent Devices sales were $2,677 in the third quarter of 2026, an increase of $142, or 6 percent, compared to the prior year.

Underlying sales increased 5 percent on 3 percent higher price and 2 percent higher volume.

Underlying sales increased 6 percent in the Americas and 5 percent in Asia, Middle East & Africa (China down 8 percent), while Europe was flat.

Sensors sales increased $78, or 8 percent, and underlying sales increased 7 percent , reflecting strong growth in the Americas, including strength in power and LNG.

Final Control sales increased $64 or 4 percent, and underlying sales increased 3 percent, reflecting strong growth in Asia, Middle East & Africa and solid growth in the Americas, with strength in power.

Earnings for Intelligent Devices increased $55, or 9 percent, while margin increased 0.8 percentage points reflecting leverage on higher sales and favorable price less net material inflation, partially offset by unfavorable mix resulting from increased greenfield project activity and increased restructuring costs.

Adjusted EBITA margin was 27.9 percent, an increase of 2.4 percentage points, reflecting strong operating results.

SAFETY & PRODUCTIVITY

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Adjusted EBITA Margin 20.4 % 21.2 % 0.8 pts

Safety & Productivity sales were $547 in the second quarter of 2026, an increase of $25, or 5 percent compared to the prior year .

Safety & Productivity sales were $552 in the third quarter of 2026, an increase of $14, or 3 percent compared to the prior year .

Underlying sales were up 2 percent on 4 percent higher price offset by 2 percent lower volume.

Underlying sales increased 5 percent in the Americas, while Asia, Middle East & Africa decreased 7 percent and Europe was down 3 percent.

Earnings for Safety & Productivity increased $4, up 3 percent, while margin decreased 0.4 percent age points, reflecting deleverage on lower volume, offset by higher price less net material inflation and savings from cost reduction actions.

Adjusted EBITA margin decreased 0.1 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, 2026, compared with the six months ended March 31, 2025.

Underlying sales increased 4 percent in the Americas and increased 1 percent in Asia, Middle East & Africa, while Europe decreased 6 percent.

Earnings for Safety & Productivity decreased $10, down 10 percent, while margin decreased 2.3 percent age points, reflecting increased restructuring costs and deleverage on lower volume, partially offset by favorable price less net material inflation and savings from cost reduction actions.

Adjusted EBITA margin increased 0.8 percentage points .

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30

Following is an analysis of the Company’s operating results for the nine months ended June 30, 2026, compared with the nine months ended June 30, 2025.

2025 2026 Change

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Interest expense, net $ 145 258

Earnings before income taxes $ 1,404 1,568 12 %

Earnings from continuing operations before income taxes $ 2,138 2,484 16 %

Percent of sales 16.2 % 18.0 % 1.8 pts

Net earnings common stockholders $ 1,070 1,223 14 %

Earnings from continuing operations common stockholders $ 1,650 1,941 18 %

Percent of sales 12.5 % 14.1 % 1.6 pts

Diluted EPS $ 1.88 2.17 15 %

Adjusted Diluted EPS $ 2.86 3.00 5 %

Net sales for the first six months of 2026 were $8.9 billion, up 3 percent compared with 2025.

Software & Systems sales were up 4 percent, Intelligent Device sales were up 3 percent, and Safety & Productivity sales were up 4 percent.

Underlying sales were up 1 percent on 3 percent higher price, offset by 2 percent lower volume d ue to a negative impact of 1.5 percent related to the timing of software renewals and 0.5 percent related to the conflict in the Middle East.

Net earnings common stockholders $ 1,657 1,941 17 %

Diluted EPS - Earnings from continuing operations $ 2.91 3.45 19 %

Diluted EPS - Net earnings $ 2.92 3.45 18 %

Adjusted Diluted EPS - Earnings from continuing operations $ 4.38 4.71 8 %

Net sales for the first nine months of 2026 were $13.8 billion, up 5 percent compared with 2025.

Software & Systems sales were up 7 percent, Intelligent Devices sales were up 4 percent, and Safety & Productivity sales were up 3 percent.

Underlying sales were up 3 percent on 3 percent higher price, while volume was negatively impacted by approximately 1.5 percent related to the timing of software renewals and the conflict in the Middle East.

Foreign currency translation had a 2 percent favorable impact.

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and decreased 1 percent internationally.

The Americas was up 4 percent, Europe was down 1 percent and Asia, Middle East & Africa was down 3 percent (China was down 7 percent).

Cost of sales for 2026 were $4,174, an increase of $172 compared with 2025, and gross margin of 53.1 percent decreased 0.4 percentage points.

Gross margin was negatively impacted by tariffs, which were more than offset by targeted price actions but diluted margins, and the timing of software renewals.

In total, these items negatively impacted gross margin by approximately 0.8 percentage points.

SG&A expenses of $2,559 increased $53 and SG&A as a percent of sales decreased 0.4 percentage points to 28.7 percent, reflecting savings from cost reduction actions and leverage on higher sales.

The Americas was up 6 percent, Europe was down 1 percent and Asia, Middle East & Africa was up 1 percent (China was down 5 percent).

Cost of sales for 2026 were $6,393, an increase of $232 compared with 2025, and gross margin of 53.6 percent increased 0.4 percentage points.

Gross margin increased primarily due to favorable price less net material inflation and tariff refunds of $82 ($0.11 per share), partially offset by the negative impact related to the timing of software renewals.

See Note 15 for further discussion of the tariff refunds.

SG&A expenses of $3,902 increased $129 and SG&A as a percent of sales decreased 0.4 percentage points to 28.3%, reflecting savings from cost reduction actions and leverage on higher sales.

Other deductions, net were $744 in 2026, a decrease of $200 compared with the prior year, due to a $175 decrease in acquisition/divestiture fees and related costs primarily associated with the AspenTech acquisition in the prior year and lower amortization due to backlog amortization of $65 in the prior year related to the AspenTech acquisition.

Pretax earnings of $1,568 increased $164 compared with prior year, reflecting the impact of the AspenTech acquisition-related costs in the prior year discussed above.

Earnings increased $59 in Software & Systems, $15 in Intelligent Devices, and $2 in Safety & Productivity, see the Business Segments discussion that follows and Note 15.

Income taxes were $344 in the first six months of fiscal 2026 and $382 in 2025 , resulting in effective tax rates of 22 percent and 27 percent, respectively.

Interest expense, net was $258, an increase of $113 compared with 2025, due to increased short-term borrowings and long-term debt to fund the AspenTech transaction in March 2025.

Pretax earnings of $2,484 increased $346 compared with prior year, reflecting the impact of the AspenTech acquisition-related costs in the prior year discussed above and leverage on higher sales.

Earnings increased $109 in Software & Systems and $71 in Intelligent Devices, and decreased $7 in Safety & Productivity, see the Business Segments discussion that follows and Note 15.

Income taxes were $542 in the first nine months of fiscal 2026 and $536 in 2025, resulting in effective tax rates of 22 percent and 25 percent, respectively.

The Company expects the OBBBA to slightly

benefit the effective tax rate beginning in fiscal 2027.

Excluding the impact related to the OBBBA, t he lower rate in the current year reflected favorable tax items that reduced the rate by approximately 2 percentage points.

The Company expects the OBBBA to slightly benefit the effective tax rate beginning in fiscal 2027.

Excluding the impact related to the OBBBA, the lower rate in the current year reflected favorable tax items that reduced the rate by approximately 2 percentage points.

The prior 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.

Earnings attributable to common stockholders were $1,223, up 14 percent compared with the prior year, and diluted earnings per share were $2.17, up 15 percent compared with $1.88 in 2025.

Adjusted diluted earnings per share were $3.00 compared with $2.86 in the prior year, reflecting strong operating results.

Overall, these items increased the prior year rate by approximately 3 percentage points.

Earnings from continuing operations attributable to common stockholders were $1,941, up 18 percent compared with the prior year, and diluted earnings per share from continuing operations were $3.45, up 19 percent compared with $2.91 in 2025.

Adjusted diluted earnings per share from continuing operations were $4.71 compared with $4.38 in the prior year, up 8 percent.

Overall, t he increase in earnings per share reflected strong operating results.

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

Six Months Ended March 31, 2025 2026

Diluted earnings per share $ 1.88 2.17

Nine Months Ended June 30, 2025 2026

Diluted earnings from continuing operations per share $ 2.91 3.45

Amortization of intangibles 1.00 1.04

Restructuring and related costs 0.12 0.22

Discrete taxes 0.09 0.02

Acquisition/divestiture fees and related costs 0.26 0.08

Adjusted diluted earnings per share $ 2.86 3.00

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

Discrete taxes 0.09 0.03

IEEPA tariff refunds — (0.11)

Adjusted diluted earnings from continuing operations per share $ 4.38 4.71

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

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 per share - March 31, 2025

Nine Months Ended

Adjusted diluted earnings from continuing operations per share - June 30, 2025

Operations 0.37

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Foreign currency 0.10

Effective tax rate 0.02

Share count 0.04

Adjusted diluted earnings per share - March 31, 2026

Adjusted diluted earnings from continuing operations per share - June 30, 2026

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, 2025 2026 Change

Earnings before income taxes $ 1,404 1,568 12 %

Nine Months Ended June 30, 2025 2026 Change

Earnings from continuing operations before income taxes $ 2,138 2,484 16 %

Percent of sales 16.2 % 18.0 % 1.8 pts

3 unchanged sentences

Acquisition/divestiture fees and related costs 232 54

Adjusted EBITA $ 2,239 2,335 4 %

IEEPA tariff refunds — (82)

Adjusted EBITA from continuing operations $ 3,422 3,639 6 %

Percent of sales 26.0 % 26.4 % 0.4 pts

Business Segments

Following is an analysis of operating results for the Company’s business segments for the six months ended March 31, 2026, compared with the six months ended March 31, 2025.

Following is an analysis of operating results for the Company’s business segments for the nine months ended June 30, 2026, compared with the nine months ended June 30, 2025.

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

19 unchanged sentences

Adjusted EBITA Margin 31.7 % 30.8 % (0.9) pts

Software & Systems sales were $2,956 in the first six months of 2026, an increase of 4 percent compared to the prior year.

Underlying sales increased 2 percent on 3 percent higher price while volume decreased 1 percent including a negative 4 percent impact related to the timing of software renewals.

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

Control Systems & Software sales increased $17, or 1 percent, and underlying sales decreased 1 percent reflecting the negative impact related to the timing of software renewals , partially offset by strong demand in power and life sciences.

Software & Systems sales were $4,600 in the first nine months of 2026, an increase of 7 percent compared to the prior year.

Underlying sales increased 5 percent on 3 percent higher price and 2 percent higher volume (despite a negative 3 percent impact related to the timing of software renewals).

Underlying sales increased 7 percent in the Americas, Europe decreased 1 percent , and Asia, Middle East & Africa increased 7 percent (China was up 4 percent).

Control Systems & Software sales increased $97, or 3 percent, and underlying sales increased 2 percent reflecting strong demand in power and life sciences, partially offset by the negative impact related to the timing of software renewals.

Sales for Test & Measurement increased $191, or 18 percent, and underlying sales increased 15 percent, reflecting strength in aerospace & defense and semiconductor.

Earnings for Software & Systems were $466, an increase of $59, or 14 percent, and margin increased 1.4 percentage points, reflecting leverage on higher sales, lower intangibles amortization and savings from cost reduction actions.

Earnings for Software & Systems were $762, an increase of $109, or 17 percent, and margin increased 1.4 percentage points, reflecting leverage on higher sales, savings from cost reduction actions and lower intangibles amortization, partially offset by the negative impact related to the timing of software renewals.

Adjusted EBITA margin was 30.8 percent, a decrease of 0.9 percentage points, which included a negative impact relating to the timing of software renewals of approximately 2 percentage points .

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Adjusted EBITA Margin 26.7 % 27.6 % 0.9 pts

Intelligent Devices sales were $4,902 in the first six months of 2026, an increase of $137, or 3 percent compared to the prior year.

Underlying sales were up slightly on 3 percent higher price offset by 3 percent lower volume, including a 1 percent negative impact related to the conflict in the Middle East.

Intelligent Devices sales were $7,580 in the first nine months of 2026, an increase of $279, or 4 percent compared to the prior year.

Underlying sales increased 2 percent on 3 percent higher price partially offset by 1 percent lower volume, including a 0.5 percent negative impact related to the conflict in the Middle East.

Underlying sales increased 5 percent in the Americas, decreased 1 percent in Europe, and decreased 2 percent in Asia, Middle East & Africa (China down 10 percent ).

Sensor sales increased $48, or 2 percent, and underlying sales increased slightly, reflecting solid growth in the Americas.

Final Control sales increased $89, or 3 percent, and underlying sales increased slightly, reflecting solid growth in the Americas, with strength in power and LNG.

Earnings for Intelligent Devices increased $15, up 1 percent percent, while margin decreased 0.4 percentage points, reflecting unfavorable mix, unfavorable foreign currency transaction comparisons and deleverage on lower volume, partially offset by favorable price less net material inflation.

Sensors sales increased $125, or 4 percent, and underlying sales increased 2 percent, reflecting solid growth in the Americas, with strength in power and LNG.

Final Control sales increased $154, or 4 percent, and underlying sales increased 2 percent, reflecting solid growth in the Americas, with strength in power.

Earnings for Intelligent Devices increased $71, up 4 percent, while margin was flat, reflecting favorable price less net material inflation and savings from cost reduction actions, offset by increased restructuring costs and unfavorable mix.

Adjusted EBITA margin increased 0.9 percentage points.

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Adjusted EBITA Margin 21.2 % 21.3 % 0.1 pts

Safety & Productivity sales were $1,050 in the first six months of 2026, an increase of $40, or 4 percent compared to the prior year .

Safety & Productivity sales were $1,601 in the first nine months of 2026, an increase of $53, or 3 percent compared to the prior year .

Underlying sales were up 2 percent on 5 percent higher price offset by 3 percent lower volume.

Underlying sales increased 4 percent in the Americas, Europe decreased 5 percent and Asia, Middle East & Africa decreased 1 percent.

Earnings for Safety & Productivity increased $2, or 2 percent, while margin decreased 0.4 percent age points, reflecting deleverage on lower volume, offset by higher price less net material inflation and the impact of tariffs, and savings from cost reduction actions.

Adjusted EBITA margin decreased 0.3 percentage points.

Earnings for Safety & Productivity decreased $7, or 2 percent, while margin decreased 1.1 percent age points, reflecting increased restructuring costs and deleverage on lower volume, offset by favorable price less net material inflation and savings from cost reduction actions.

Adjusted EBITA margin increased 0.1 percentage points.

FINANCIAL CONDITION

Key elements of the Company's financial conditi on as of and for the six months ended March 31, 2026 as compared to the year ended September 30, 2025 and the six months ended March 31, 2025 follow.

Mar 31, 2025 Sept 30, 2025 Mar 31, 2026

Key elements of the Company's financial conditi on as of and for the nine months ended June 30, 2026 as compared to the year ended September 30, 2025 and the nine months ended June 30, 2025 follow.

June 30, 2025 Sept 30, 2025 June 30, 2026

Operating working capital $ 2,074 $ 2,039 $ 2,290

3 unchanged sentences

Interest coverage ratio 9.6 X 8.6 X 8.2 X

Operating working capital increased $571 compared to September 30, 2025, primarily reflecting an increase in inventory and a decrease in accrued expenses.

Operating working capital increased $251 compared to September 30, 2025, primarily reflecting an increase in inventory.

The current ratio remained flat compared to September 30, 2025.

The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 7.5X for the 6 months ended March 31, 2026 compares to 9.8X for the 6 months ended March 31, 2025.

The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 8.2X for the 12 months ended June 30, 2026 compares to 9.6X for the 12 months ended June 30, 2025.

The decrease reflects higher interest expense compared to the prior year.

Operating cash flow from continuing operations for the first six months of fiscal 2026 was $1,478, a decrease of $125 compared with $1,603 in the prior year, reflecting an increase in operating working capital, partially offset by higher earnings.

Free cas h flow of $1,296 in the first six months of fiscal 2026 (operating cash flow of $1,478 less capital expenditures of $182) decreased $137 compared to free cash flow of $1,433 in 2025 (operating cash flow of $1,603 less capital expenditures of $170), reflecting the decrease in operating cash flow.

Operating cash flow from continuing operations for the first nine months of fiscal 2026 was $2,902, an increase of $238 compared with $2,664 in the prior year, reflecting higher earnings, partially offset by an increase in operating working capital.

Free cas h flow of $2,618 in the first nine months of fiscal 2026 (operating cash flow of $2,902 less capital expenditures of $284) increased $217 compared to free cash flow of $2,401 in 2025 (operating cash flow of $2,664 less capital expenditures of $263), reflecting the increase in operating cash flow.

Cash used in investing activities was $322.

Cash used in financing activities was $1,013, reflecting share repurchases of $542 and dividends.

Cash used in financing activities was $1,920, reflecting share repurchases of $898 and dividends of $935.

During the first quarter, the Company repaid €500 of 1.25% euro notes that matured in October 2025.

Total cash provided by operating activities was $2,902, an increase of $814 compared with $2,088 in the prior year.

The increase reflects $585 of income taxes paid in the second quarter of fiscal 2025 related to the sale of the Company's 40 percent non-controlling common equity interest in Copeland, offset by lower operating cash flow from continuing operations.

The increase reflects $585 of income taxes paid in the second quarter of fiscal 2025 related to the sale of the Company's 40 percent non-controlling common equity interest in Copeland and higher operating cash flow from continuing operations.

On February 10, 2026, the Company entered into a $2 billion, 364-day revolving backup credit facility to support commercial paper borrowings.

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For fiscal year 2026, consolidated net sales are expected to be up approximately 5 percent, with underlying sales up approximately 3.5 percent, excluding a 1.5 percent favorable impact from foreign currency translation.

Earnings per share are expected to be $4.79 to $4.89, while adjusted earnings per share are expected to be $6.45 to $6.55 (see the following reconciliation).

Earnings per share are expected to be approximately $4.89, while adjusted earnings per share are expected to be approximately $6.55 (see the following reconciliation).

Outlook for Fiscal 2026 Earnings Per Share 2026

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Discrete taxes ~ 0.05

IEEPA tariff refunds ~ (0.11)

Adjusted diluted earnings per share ~ $6.55

Operating cash flow is expected to be $4.0 to $4.1 billion and free cash flow, which excludes projected capital spending of approximately $0.45 billion, is expected to be $3.5 to $3.6 billion.

Operating cash flow is expected to be approximately $4.1 billion and free cash flow, which excludes projected capital spending of approximately $0.45 billion, is expected to be approximately $3.6 billion.

The fiscal 2026 outlook assumes returning approximately $2.2 billion to shareholders through approximately $1.0 billion of share repurchases and approximately $1.2 billion of dividend payments.

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Emerson undertakes no obligation to update any such statements to reflect new information or later developments.

Examples of risks and uncertainties that may cause or actual results or performance to be materially different from those expressed or implied by forward looking statements include the scope, duration and ultimate impacts of the Russia-Ukraine, Middle East and other global conflicts, as well as economic and currency conditions, market demand, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, inflation, among others, which are set forth in the “Risk Factors” of Part I, Item 1A, and the "Safe Harbor Statement" of Part II, Item 7, to the Company's Annual Report on Form 10-K for the year ended September 30, 2025, and in subsequent reports filed with the SEC, which are hereby incorporated by reference.

Examples of risks and uncertainties that may cause our actual results or performance to be materially different from those expressed or implied by forward-looking statements include the scope, duration and ultimate impacts of the Russia-Ukraine, Middle East and other global conflicts, as well as economic and currency conditions, market demand, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, inflation, among others, which are set forth in the “Risk Factors” of Part I, Item 1A, and the "Safe Harbor Statement" of Part II, Item 7, to the Company's Annual Report on Form 10-K for the year ended September 30, 2025, and in subsequent reports filed with the SEC, which are hereby incorporated by reference.

The outlook contained herein represents the Company's expectation for its consolidated results, other than as noted herein.

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