SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2019~~2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Commission file number 1-278

Registrant's telephone number, including area code: (314) 553-2000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common stock of $0.50 par value per share outstanding at July 31, ~~2019:~~ ~~615,101,462~~2020: ~~shares.~~597,591,921 shares.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Statements of Earnings

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three and nine months ended June 30, ~~2018~~2019 and ~~2019~~2020

(Dollars in millions, except per share amounts; unaudited)


	Three Months Ended June 30,			Nine Months Ended June 30,			Three Months Ended June 30,				Nine Months Ended June 30,
	2018		2019	2018	2019		2019		2020	2019	2020
Net sales	$	4,456	4,684	12,520	13,401	Net sales	$	4,684	3,914	13,401	12,227

Costs and expenses:						Costs and expenses:
Cost of sales	2,514		2,683	7,147	7,714	Cost of sales	2,683		2,296	7,714	7,100
Selling, general and administrative expenses	1,058		1,126	3,088	3,348	Selling, general and administrative expenses	1,126		934	3,348	3,040
Other deductions, net	77		65	243	172	Other deductions, net	65		181	172	401
Interest expense (net of interest income of $10, $7, $35 and $19, respectively)	39		43	113	134
Interest expense (net of interest income of $7, $4, $19 and $16, respectively)						Interest expense (net of interest income of $7, $4, $19 and $16, respectively)	43		45	134	116

Earnings before income taxes	768		767	1,929	2,033	Earnings before income taxes	767		458	2,033	1,570

Income taxes	49		155	327	429	Income taxes	155		51	429	310


Net earnings	719		612	1,602	1,604	Net earnings	612		407	1,604	1,260

Less: Noncontrolling interests in earnings of subsidiaries	7		8	16	15	Less: Noncontrolling interests in earnings of subsidiaries	8		8	15	18

Net earnings common stockholders	$	712	604	1,586	1,589	Net earnings common stockholders	$	604	399	1,589	1,242

Basic earnings per share common stockholders	$	1.13	0.98	2.50	2.57

Diluted earnings per share common stockholders	$	1.12	0.97	2.49	2.55

Cash dividends per common share	$	0.485	0.49	1.455	1.47









Basic earnings per share common stockholders						Basic earnings per share common stockholders	$	0.98	0.67	2.57	2.05




Diluted earnings per share common stockholders						Diluted earnings per share common stockholders	$	0.97	0.67	2.55	2.04

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three and nine months ended June 30, ~~2018~~2019 and ~~2019~~2020

(Dollars in millions; unaudited)


	Three Months Ended June 30,					Nine Months Ended June 30,
		2019		2020	2019	2020
Net earnings		$	612	407	1,604	1,260

Other comprehensive income (loss), net of tax:
Foreign currency translation		(93)		134	(40)	(48)
Pension and postretirement		13		29	38	87
Cash flow hedges		(8)		40	2	(16)
Total other comprehensive income (loss)		(88)		203	—	23

Comprehensive income		524		610	1,604	1,283

Less: Noncontrolling interests in comprehensive income of subsidiaries		8		7	16	18
Comprehensive income common stockholders		$	516	603	1,588	1,265

Three Months Ended June 30, Nine Months Ended June 30,
2018

2019
2018
2019
Net earnings $ 719
612
1,602
1,604

Other comprehensive income (loss), net of tax:
Foreign currency translation (273 ) (93 ) (118 ) (40 )
Pension and postretirement 22
13
67
38
Cash flow hedges (14 ) (8 ) (22 ) 2
Total other comprehensive income (loss) (265 ) (88 ) (73 ) —

Comprehensive income 454
524
1,529
1,604

Less: Noncontrolling interests in comprehensive
income of subsidiaries
7
8
16
16
Comprehensive income common stockholders $ 447
516
1,513
1,588

See accompanying Notes to Consolidated Financial Statements.

Consolidated Balance Sheets

EMERSON ELECTRIC CO. & SUBSIDIARIES

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


	Sept 30, 2018			June 30, 2019			Sept 30, 2019		June 30, 2020
ASSETS						ASSETS
Current assets						Current assets
Cash and equivalents	$	1,093		1,603		Cash and equivalents	$	1,494	2,450
Receivables, less allowances of $113 and $100, respectively	3,023			2,901
Receivables, less allowances of $112 and $109, respectively						Receivables, less allowances of $112 and $109, respectively	2,985		2,512
Inventories	1,813			2,061		Inventories	1,880		2,102
Other current assets	690			785		Other current assets	780		815

Total current assets	6,619			7,350		Total current assets	7,139		7,879

Property, plant and equipment, net	3,562			3,614		Property, plant and equipment, net	3,642		3,565
Other assets						Other assets
Goodwill	6,455			6,544		Goodwill	6,536		6,624
Other intangible assets	2,751			2,691		Other intangible assets	2,615		2,488
Other	1,003			1,118		Other	565		1,174

Total other assets	10,209			10,353		Total other assets	9,716		10,286
Total assets	$	20,390		21,317		Total assets	$	20,497	21,730

LIABILITIES AND EQUITY						LIABILITIES AND EQUITY
Current liabilities						Current liabilities
Short-term borrowings and current maturities of long-term debt	$	1,623		1,877		Short-term borrowings and current maturities of long-term debt	$	1,444	1,725
Accounts payable	1,943			1,785		Accounts payable	1,874		1,426
Accrued expenses	2,534			2,453		Accrued expenses	2,658		2,834
Income taxes	64			103

Total current liabilities	6,164			6,218		Total current liabilities	5,976		5,985

Long-term debt	3,137			4,336		Long-term debt	4,277		5,500

Other liabilities	2,099			1,959		Other liabilities	1,971		2,367


Equity						Equity
Common stock, $0.50 par value; authorized, 1,200.0 shares; issued, 953.4 shares; outstanding, 629.2 shares and 615.1 shares, respectively	477			477
Common stock, $0.50 par value; authorized, 1,200.0 shares; issued, 953.4 shares; outstanding, 611.0 shares and 597.6 shares, respectively						Common stock, $0.50 par value; authorized, 1,200.0 shares; issued, 953.4 shares; outstanding, 611.0 shares and 597.6 shares, respectively	477		477
Additional paid-in-capital	348			387		Additional paid-in-capital	393		459
Retained earnings	23,072			23,777		Retained earnings	24,199		24,531
Accumulated other comprehensive income (loss)	(1,015		)	(1,016	)	Accumulated other comprehensive income (loss)	(1,722)		(1,699)
Cost of common stock in treasury, 324.2 shares and 338.3 shares, respectively	(13,935		)	(14,870	)
Cost of common stock in treasury, 342.4 shares and 355.8 shares, respectively						Cost of common stock in treasury, 342.4 shares and 355.8 shares, respectively	(15,114)		(15,937)
Common stockholders’ equity	8,947			8,755		Common stockholders’ equity	8,233		7,831
Noncontrolling interests in subsidiaries	43			49		Noncontrolling interests in subsidiaries	40		47
Total equity	8,990			8,804		Total equity	8,273		7,878
Total liabilities and equity	$	20,390		21,317		Total liabilities and equity	$	20,497	21,730

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Equity

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three and nine months ended June 30, 2019 and 2020

(Dollars in millions; unaudited)


	Three Months Ended June 30,				Nine Months Ended June 30,
	2019		2020	2019	2020

Common stock	$	477	477	477	477

Additional paid-in-capital
Beginning balance	380		453	348	393
Stock plans	7		6	39	66

Ending balance	387		459	387	459

Retained earnings
Beginning balance	23,475		24,431	23,072	24,199
Net earnings common stockholders	604		399	1,589	1,242
Dividends paid (per share: $0.49, $0.50, $1.47, and $1.50, respectively)	(302)		(299)	(909)	(910)
Adoption of accounting standard updates	—		—	25	—
Ending balance	23,777		24,531	23,777	24,531

Accumulated other comprehensive income (loss)
Beginning balance	(928)		(1,903)	(1,015)	(1,722)
Foreign currency translation	(93)		135	(41)	(48)
Pension and postretirement	13		29	38	87
Cash flow hedges	(8)		40	2	(16)
Ending balance	(1,016)		(1,699)	(1,016)	(1,699)

Treasury stock
Beginning balance	(14,878)		(15,941)	(13,935)	(15,114)
Purchases	—		—	(1,000)	(942)
Issued under stock plans	8		4	65	119
Ending balance	(14,870)		(15,937)	(14,870)	(15,937)

Common stockholders' equity	8,755		7,831	8,755	7,831

Noncontrolling interests in subsidiaries
Beginning balance	46		46	43	40
Net earnings	8		8	15	18
Other comprehensive income	—		(1)	1	—
Dividends paid	(5)		(6)	(10)	(11)

Ending balance	49		47	49	47

Total equity	$	8,804	7,878	8,804	7,878

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Cash Flows

EMERSON ELECTRIC CO. & SUBSIDIARIES

Nine Months Ended June 30, ~~2018~~2019 and ~~2019~~2020

(Dollars in millions; unaudited)

Nine Months Ended
June 30,
2018
2019
Operating activities
Net earnings $ 1,602
1,604
Adjustments to reconcile net earnings to net cash provided by operating activities:
        Depreciation and amortization 557
609
        Changes in operating working capital (286 ) (352 )
        Other, net (5 ) (59 )
            Cash provided by operating activities 1,868
1,802

Investing activities
Capital expenditures (314 ) (395 )
Purchases of businesses, net of cash and equivalents acquired (770 ) (385 )
Divestitures of businesses 223
10
Other, net (71 ) (91 )
    Cash used in investing activities (932 ) (861 )

Financing activities
Net increase in short-term borrowings 1,581
427
Proceeds from long-term debt —
1,691
Payments of long-term debt (251 ) (655 )
Dividends paid (924 ) (909 )
Purchases of common stock (1,000 ) (1,000 )
Other, net 34
21
    Cash used in financing activities (560 ) (425 )

Effect of exchange rate changes on cash and equivalents (27 ) (6 )
Increase in cash and equivalents 349
510
Beginning cash and equivalents 3,062
1,093
Ending cash and equivalents $ 3,411
1,603

Changes in operating working capital
Receivables $ 27
178
Inventories (133 ) (217 )
Other current assets (15 ) (74 )
Accounts payable (97 ) (156 )
Accrued expenses (83 ) (116 )
Income taxes 15
33
Total changes in operating working capital $ (286 ) (352 )


	Nine Months Ended
	June 30,
	2019		2020
Operating activities
Net earnings	$	1,604	1,260

Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	609		631
Stock compensation	83		69
Pension expense	(1)		50
Changes in operating working capital	(352)		(86)


Other, net	(141)		(70)


Cash provided by operating activities	1,802		1,854

Investing activities
Capital expenditures	(395)		(329)
Purchases of businesses, net of cash and equivalents acquired	(385)		(114)
Divestitures of businesses	10		—
Other, net	(91)		(65)


Cash used in investing activities	(861)		(508)

Financing activities
Net increase in short-term borrowings	427		269
Proceeds from short-term borrowings greater than three months	—		546
Payments of short-term borrowings greater than three months	—		(340)
Proceeds from long-term debt	1,691		1,488
Payments of long-term debt	(655)		(502)
Dividends paid	(909)		(910)
Purchases of common stock	(1,000)		(942)
Other, net	21		28
Cash used in financing activities	(425)		(363)

Effect of exchange rate changes on cash and equivalents	(6)		(27)
Increase in cash and equivalents	510		956
Beginning cash and equivalents	1,093		1,494
Ending cash and equivalents	$	1,603	2,450

Changes in operating working capital
Receivables	$	178	456
Inventories	(217)		(218)
Other current assets	(74)		40
Accounts payable	(156)		(439)
Accrued expenses	(83)		75

Total changes in operating working capital	$	(352)	(86)

See accompanying Notes to Consolidated Financial Statements.

Notes to Consolidated Financial Statements

EMERSON ELECTRIC CO. & SUBSIDIARIES

(Dollars ~~euros~~ and shares in millions, except per share amounts or where noted)

(1) BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary for a fair presentation of operating results for the interim periods presented. Adjustments consist of normal and recurring accruals. The consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required for annual financial statements presented in conformity with U.S. generally accepted accounting principles (GAAP). For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, ~~2018.~~2019. Certain prior year amounts have been reclassified to conform to current year presentation.

On October 1, ~~2018,~~2019, the Company adopted ASC ~~606,~~ ~~Revenue from Contracts with Customers~~, which updated and consolidated revenue recognition guidance from multiple sources into a single, comprehensive standard to be applied for all contracts with customers. The fundamental principle of the revised standard is to recognize revenue based on the transfer of goods and services to customers at the amount the Company expects to be entitled to in exchange for those goods and services. The Company adopted the new standard using the modified retrospective approach and applied the guidance to open contracts which were not completed at the date of adoption. The cumulative effect of adoption resulted in a $25 increase to beginning retained earnings as of October 1, 2018. This increase primarily related to contracts where a portion of revenue for delivered goods or services was previously deferred due to contingent payment terms. The adoption of ASC 606 did not materially impact the Company's consolidated financial statements as of and for the three and nine months ended~~June 30, 2019.~~

~~In the first quarter of fiscal 2019, the Company adopted updates to ASC 715,~~ ~~Compensation - Retirement Benefits~~, which permit only the service cost component of net periodic pension and postretirement expense to be reported with compensation costs, while all other components are required to be reported separately in other deductions. These updates were adopted retrospectively and resulted in the reclassification of income for the three and nine months ended June 30, 2018 of $11 and $32, respectively, from cost of sales and SG&A to other deductions, net. Segment earnings were not impacted by the updates to ASC 715.

~~In February 2016, the FASB issued ASC~~ 842, Leases,, which requires rights and obligations related to lease arrangements to be recognized on the balance sheet. Also required are additional disclosures regarding the amount, timing and uncertainty of cash flows resulting from lease arrangements. Currently, obligations classified as operating leases are not recorded on the balance sheet, ~~but must be disclosed. The Company is required to adopt the new standard on October 1, 2019 and expects to use~~using the optional transition method under which prior periods ~~will~~were not be adjusted. ~~As previously disclosed,~~The Company elected the package of practical expedients for leases that commenced prior to the adoption date, which included carrying forward the historical lease classification as operating or finance. The adoption of ASC 842 ~~is expected to impact the Company’s balance sheet due to~~resulted in the recognition of operating lease right-of-use assets and related lease liabilities of approximately $500 as of October 1, 2019, but isdid not ~~expected to~~ materially impact ~~its~~the Company's earnings or cash ~~flows.~~flows for the three and nine months ended June 30, 2020.

On October 1, 2019, the Company adopted updates to ASC 815, Derivatives and Hedging, which permit hedging certain contractually specified risk components. Additionally, the updates eliminate the requirement to separately measure and report hedge ineffectiveness and simplify hedge documentation and effectiveness assessment requirements. These updates were adopted using a modified retrospective approach and were immaterial to the Company's financial statements for the three and nine months ended June 30, 2020.

In June 2016, the FASB issued ASC 326, Financial Instruments - Credit Losses, which amends the impairment model by requiring entities to use a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The ~~Company~~new standard is effective in the ~~process~~first quarter of ~~implementing changes~~fiscal 2021 and is expected to ~~its business processes, systems, controls and accounting policies to support recognition and disclosure under~~have an immaterial impact on the ~~new guidance.~~Company's financial statements.

(2) REVENUE RECOGNITION

Emerson is a global manufacturer that combines technology and engineering to provide innovative solutions to its customers, largely in the form of tangible products. The Company evaluates its contracts with customers to identify the promised goods or services and recognizes revenue for the identified performance obligations at the amount the Company expects to be entitled to in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. Revenue is recognized when, or as, performance obligations are satisfied and control has transferred to the customer, typically when products are shipped or delivered, title and risk of loss pass to the customer, and the Company has a present right to payment. The vast majority of the Company's revenues relate to a broad offering of manufactured products which are recognized at the point in time when control transfers, ~~generally in accordance with shipping terms. A~~while a smaller portion of the Company's revenues relate to the sale of software and post-contract customer support, parts and labor for repairs, and engineering services. In limited circumstances, contracts include multiple performance obligations, where

~~revenue is recognized separately for each good or service, as well as contracts where revenue~~ is recognized over time ~~as control transfers to the customer.~~

Revenue is recognized over time for approximately 5 percent of the Company's revenues. These contracts largely relate to projects in the Process Control Systems & Solutions product offering within the Automation Solutions segment where revenue is recognized using the percentage-of-completion method to reflect the transfer of control over time, while a small amount is attributable to long-term maintenance and service contracts where revenue is typically recognized on a straight-line basis as the services are provided. Approximately 5 percent of revenues relateor relates to sales arrangements with multiple performance ~~obligations, principally in~~obligations. See Note 14 for additional information about the Automation Solutions segment. Tangible products represent a large majority of the delivered items in contracts with multiple performance obligations or where revenue is recognized over time, while a smaller portion is attributable to installation, service and maintenance.

For revenues recognized over time, the Company typically uses an input method to determine progress and recognize revenue, based on costs incurred. The Company believes costs incurred closely correspond with its performance under the contract and the transfer of control to the customer.

In sales arrangements that involve multiple performance obligations, revenue is allocated based on the relative standalone selling price for each performance obligation. Observable selling prices from actual transactions are used whenever possible. In other instances, the Company determines the standalone selling price based on third-party pricing or management's best estimate. Generally, contract duration is short-term, and cancellation, termination or refund provisions apply only in the event of contract breach and are rarely invoked.

~~Payment terms vary but are generally short-term in nature. The~~ Company's long-term contracts, where revenue is generally recognized over time, are typically billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones. The timing of revenue recognition and billings under these contracts results in either unbilled receivables (contract assets) when revenue recognized exceeds billings, or customer advances (contract liabilities) when billings exceed revenue recognized. Unbilled receivables are reclassified to accounts receivable when an unconditional right to consideration exists, typically when a milestone in the contract is achieved. The Company does not evaluate whether the transaction price includes a significant financing component for contracts where the time between cash collection and performance is less than one year.

Certain arrangements with customers include variable consideration, typically in the form of rebates, cash discounts or penalties. In limited circumstances, the Company sells products with a general right of return. In most instances, returns are limited to product quality issues. The Company records a reduction to revenue at the time of sale to reflect the ultimate amount of consideration it expects to receive. The Company's estimates are updated quarterly based on historical experience, trend analysis, and expected market conditions. Variable consideration is typically not constrained at the time revenue is recognized.

The Company offers warranties, which vary by product line and are competitive for the markets in which the Company operates. Warranties are largely offered to provide assurance that the product will function as intended and generally extend for a period of one to two years from the date of sale or installation. Provisions for warranty expense are estimated at the time of sale based on historical experience and adjusted quarterly for any known issues that may arise. Product warranty expense is less than one percent of sales.

~~Capitalized amounts related to incremental costs to obtain customer contracts and costs to fulfill contracts are immaterial.~~

revenues.

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

Sept 30, 2018 June 30, 2019
Unbilled receivables (contract assets) $ 321
438
Customer advances (contract liabilities) (510 ) (539 )
Net contract liabilities $ (189 ) (101 )


	Sept 30, 2019			June 30, 2020
Unbilled receivables (contract assets)		$	456	409
Customer advances (contract liabilities)		(519)		(613)
Net contract liabilities		$	(63)	(204)

The majority of the Company's contract balances relate to arrangements where revenue is recognized over time and payments from customers are made according to a contractual billing schedule. The ~~decrease~~increase in net contract liabilities was due to customer billings which exceeded revenue recognized for performance completed during the ~~period which exceeded customer billings.~~period. Revenue recognized for the three and nine months endedJune 30, ~~2019~~2020 included approximately ~~$45~~$37 and ~~$370,~~$363, respectively, that was included in the beginning contract liability balance. Other factors that impacted the change in

net contract liabilities were immaterial. Revenue recognized for the nine months ended June 30, ~~2018~~2020 for performance obligations that were ~~fully~~ satisfied in previous periods, including cumulative catchup adjustments on the Company's long-term contracts, was not material.

As of June 30, ~~2019,~~2020, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately ~~$5.5~~$5.6 billion. The Company expects to recognize approximately 85 percent of its remaining performance obligations as revenue over the next 12 months, with the remainder substantially over the subsequent two years thereafter.

~~See Note 12 for additional information about the Company's revenues.~~

(3) WEIGHTED-AVERAGE COMMON SHARES

Reconciliations of weighted-average shares for basic and diluted earnings per common share follow. Earnings allocated to participating securities were inconsequential.


	Three Months Ended June 30,		Nine Months Ended June 30,			Three Months Ended June 30,			Nine Months Ended June 30,
	2018	2019	2018	2019		2019	2020	2019	2020

Basic shares outstanding	629.4	614.3	633.4	617.4	Basic shares outstanding	614.3	596.9	617.4	604.8
Dilutive shares	3.5	4.7	3.1	4.2	Dilutive shares	4.7	3.1	4.2	3.6
Diluted shares outstanding	632.9	619.0	636.5	621.6	Diluted shares outstanding	619.0	600.0	621.6	608.4

(4) ACQUISITIONS AND DIVESTITURES

During the first nine months of 2020, the Company's acquisition spending totaled $114, net of cash acquired.

~~(4)~~

The Company acquired 8 businesses in 2019, all in the Automation Solutions segment, for $469, net of cash acquired. These eight businesses had combined annual sales of approximately $300. The Company recognized goodwill of $213 ($158 of which is expected to be tax deductible) and other identifiable intangible assets of $155, primarily customer relationships and intellectual property with a weighted-average life of approximately nine years.

Valuations of certain acquired assets and liabilities are in-process and subject to refinement for transactions completed after June 30, 2019.

(5) PENSION & POSTRETIREMENT PLANS

Total periodic pension and postretirement (income) expense is summarized below:


	Three Months Ended June 30,					Nine Months Ended June 30,
		2019		2020	2019	2020
Service cost		$	18	21	54	65
Interest cost		49		40	149	120
Expected return on plan assets		(88)		(84)	(264)	(252)
Net amortization		17		38	50	113
Total		$	(4)	15	(11)	46

(6) OTHER DEDUCTIONS, NET

Other deductions, net are summarized below:


	Three Months Ended June 30,							Nine Months Ended June 30,
	2019				2020		2019		2020

Amortization of intangibles (intellectual property and customer relationships)		$	60	60		177		178
Restructuring costs		20		88		40		216
Special advisory fees		—		—		—		13
Other		(15)		33		(45)		(6)
Total		$	65	181		172		401

In the third quarter of fiscal 2020, the change in Other included unfavorable impacts from foreign currency transactions of $25 and pensions of $16. On a year-to-date basis, the change in Other reflects an unfavorable impact from pensions of $46, partially offset by lower litigation costs.

(7) RESTRUCTURING COSTS

Restructuring expense reflects costs associated with the Company’s ongoing efforts to improve operational efficiency and deploy assets globally in order to remain competitive on a worldwide basis. The costs incurred in the first nine months of fiscal 2020 largely relate to the Company's initiatives to improve operating margins that began in the third quarter of fiscal 2019 and include workforce reductions of approximately 3,300 employees. The Company expects fiscal 2020 restructuring expense and related costs to be approximately $300, an increase of $20 compared to its previous estimate, including costs to complete actions initiated in the first nine months of the year.

Restructuring expense by business segment follows:


	Three Months Ended June 30,						Nine Months Ended June 30,
	2019			2020		2019		2020

Automation Solutions		$	15	76	26		182

Climate Technologies		4		5	8		14
Tools & Home Products		1		4	5		12
Commercial & Residential Solutions		5		9	13		26

Corporate		—		3	1		8

Total		$	20	88	40		216

Details of the change in the liability for restructuring costs during the nine months ended June 30, 2020 follow:


	Sept 30, 2019			Expense		Utilized/Paid		June 30, 2020

Severance and benefits		$	62	184	92		154




Other		7		32	34		5
Total		$	69	216	126		159

The tables above do not include $6 and $15 of costs related to these restructuring actions incurred in the three and nine months ended June 30, 2020, respectively, that are required to be reported in cost of sales.

(8) INCOME TAXES

Income taxes were $51 in the third quarter of fiscal 2020 and $155 in 2019, resulting in effective tax rates of 11 percent and 20 percent, respectively. The current year rate included $57 ($0.10 per share) of discrete benefits, which decreased the rate 12 percentage points, related to updates to estimates for the prior year U.S. income tax return and the impact of a research and development tax credit study. The prior year rate included favorable discrete tax items, which reduced the rate 3 percentage points, largely due to a tax benefit of $21 ($0.03 per share) from restructuring a foreign subsidiary.

Income taxes were $310 for the first nine months of 2020 and $429 for 2019, resulting in effective tax rates of 20 percent and 21 percent, respectively. The current year and prior year rates included favorable discrete items, including the items discussed above, which reduced both years' rates approximately 3 percentage points.

On March 27, 2020, the CARES Act (the "Act") was enacted in response to the COVID-19 pandemic, and among other things, provides tax relief to businesses. Tax provisions of the Act include the deferral of certain payroll taxes, relief for retaining employees, and other provisions. The Company expects to defer $75 of certain payroll taxes through the end of calendar year 2020.

(9) LEASES

The Company leases offices; manufacturing facilities and equipment; and transportation, information technology and office equipment under operating lease arrangements. Finance lease arrangements are immaterial. The Company determines whether an arrangement is, or contains, a lease at contract inception. An arrangement contains a lease if the Company has the right to direct the use of and obtain substantially all of the economic benefits of an identified asset. Right-of-use assets and lease liabilities are recognized at lease commencement based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recognized on the balance sheet and are recorded as short-term lease expense. The discount rate used to calculate present value is the Company's incremental borrowing rate based on the lease term and the economic environment of the applicable country or region.

Certain leases contain renewal options or options to terminate prior to lease expiration, which are included in the measurement of right-of-use assets and lease liabilities when it is reasonably certain they will be exercised. The Company has elected to account for lease and non-lease components as a single lease component for its offices and manufacturing facilities. Some lease arrangements include payments that are adjusted periodically based on actual charges incurred for common area maintenance, utilities, taxes and insurance, or changes in an index or rate referenced in the lease. The fixed portion of these payments is included in the measurement of right-of-use assets and lease liabilities at lease commencement, while the variable portion is recorded as variable lease expense. The Company's leases typically do not contain material residual value guarantees or restrictive covenants.

The components of lease expense for the three and nine months ended June 30, 2020 were as follows:


	Three Months Ended			Nine Months Ended
	June 30, 2020

Operating lease expense		$	50	156
Variable lease expense		$	4	14

Short-term lease expense and sublease income were immaterial for the three and nine months ended June 30, 2020. Cash paid for operating leases is classified within operating cash flows and was $155 for the nine months ended June 30, 2020. Operating lease right-of-use asset additions were $172 for the nine months ended June 30, 2020.

The following table summarizes the balances of the Company's operating lease right-of-use assets and operating lease liabilities as of June 30, 2020, the vast majority of which relates to offices and manufacturing facilities:


	June 30, 2020
Right-of-use assets (Other assets)	$	500
Current lease liabilities (Accrued expenses)	$	149
Noncurrent lease liabilities (Other liabilities)	$	359

The weighted-average remaining lease term for operating leases was 5.2 years and the weighted-average discount rate was 3.0 percent as of June 30, 2020.

Future maturities of operating lease liabilities as of June 30, 2020 are summarized below:


	June 30, 2020
Remainder of 2020		$	44
2021		143
2022		110
2023		83
2024		58
Thereafter		115
Total lease payments		553
Less: Interest		45
Total lease liabilities		$	508

Lease commitments that have not yet commenced were immaterial as of June 30, 2020.

The future minimum annual rentals under noncancelable long-term leases as of September 30, 2019 were as follows: $159 in 2020, $112 in 2021, $82 in 2022, $57 in 2023, $38 in 2024 and $63 thereafter.

(10) OTHER FINANCIAL INFORMATION

Sept 30, 2018 June 30, 2019
Inventories
Finished products $ 592
636
Raw materials and work in process 1,221
1,425
Total $ 1,813
2,061

Property, plant and equipment, net
Property, plant and equipment, at cost $ 8,370
8,687
Less: Accumulated depreciation 4,808
5,073
Total $ 3,562
3,614


	Sept 30, 2019			June 30, 2020
Inventories
Finished products		$	578	624
Raw materials and work in process		1,302		1,478
Total		$	1,880	2,102



Property, plant and equipment, net
Property, plant and equipment, at cost	$	8,671	8,835
Less: Accumulated depreciation	5,029		5,270
Total	$	3,642	3,565



Goodwill by business segment
Automation Solutions	$	5,467	5,492

Climate Technologies	668		727
Tools & Home Products	401		405
Commercial & Residential Solutions	1,069		1,132

Total	$	6,536	6,624

910

Sept 30, 2018 June 30, 2019
Goodwill by business segment
Automation Solutions $ 5,355
5,462

Climate Technologies 670
670
Tools & Home Products 430
412
Commercial & Residential Solutions 1,100
1,082

Total $ 6,455
6,544

Other intangible assets
Gross carrying amount $ 4,667
4,854
Less: Accumulated amortization 1,916
2,163
Net carrying amount $ 2,751
2,691


	Sept 30, 2019			June 30, 2020
Other intangible assets
Gross carrying amount		$	4,872	5,019
Less: Accumulated amortization		2,257		2,531
Net carrying amount		$	2,615	2,488

Other intangible assets include customer relationships, net of ~~$1,423~~$1,391 and ~~$1,517~~$1,298 as of ~~June~~September 30, 2019 and ~~September~~June 30, ~~2018,~~2020, respectively.


Other assets include the following:				Other assets include the following:
Operating lease right-of-use assets				Operating lease right-of-use assets	$	—	500
Pension assets	$	591	701	Pension assets	164		294
Asbestos-related insurance receivables	$	124	117	Asbestos-related insurance receivables	115		102
Deferred income taxes	$	74	87	Deferred income taxes	97		96

Accrued expenses include the following:
Employee compensation $ 629
598
Customer advances (contract liabilities) $ 510
539
Product warranty $ 124
127

Other liabilities
Pension and postretirement liabilities $ 625
627
Deferred income taxes 484
435
Asbestos litigation 334
324
Other 656
573
Total $ 2,099
1,959



Accrued expenses include the following:
Customer advances (contract liabilities)	$	519	613
Employee compensation	606		570
Operating lease liabilities (current)	—		149
Product warranty	140		138

~~(5)~~


Other liabilities include the following:
Pension and postretirement liabilities	$	775	781
Operating lease liabilities (noncurrent)	—		359
Deferred income taxes	327		361
Asbestos litigation	313		302

(11) LONG-TERM DEBT

In April 2020, the Company issued $500 of 1.8% notes due October 2027, $500 of 1.95% notes due October 2030 and $500 of 2.75% notes due October 2050.

(12) FINANCIAL INSTRUMENTS

Following is a discussion regarding the Company’s use of financial instruments:

Hedging Activities – As of June 30, ~~2019,~~2020, the notional amount of foreign currency hedge positions was approximately $2.2 billion, and commodity hedge contracts totaled approximately ~~$117~~$96 (primarily 4539 million pounds of copper and aluminum). All derivatives receiving hedge accounting are cash flow hedges. The majority of hedging gains and losses deferred as of June 30, ~~2019~~2020 are expected to be recognized over the next 12 months as the underlying forecasted transactions occur. Gains and losses on foreign currency derivatives reported in Other deductions, net reflect hedges of balance sheet exposures that do not receive hedge accounting.

Net Investment Hedge – In fiscal 2019, the Company issued euro-denominated debt of €1.5 billion. The euro notes reduce foreign currency risk associated with the Company's international subsidiaries that use the euro as their functional currency and have been designated as a hedge of a portion of the investment in these operations. Foreign currency gains or losses associated with the euro-denominated debt are deferred in accumulated other comprehensive income (loss) and will remain until the hedged investment is sold or substantially liquidated.

The following gains and losses are included in earnings and other comprehensive income (OCI) for the three and nine months ended June 30, ~~2019~~2020 and ~~2018:~~2019:


		Into Earnings									Into OCI										Into Earnings								Into OCI
		3rd Quarter					Nine Months				3rd Quarter				Nine Months						3rd Quarter				Nine Months			3rd Quarter		Nine Months
Gains (Losses)	Location	2018			2019		2018		2019		2018		2019		2018		2019		Gains (Losses)	Location	2019		2020	2019	2020	2019	2020	2019	2020
Commodity	Cost of sales	$	2		(2	)	13		(8	)	(3	)	(8	)	1		(5	)	Commodity	Cost of sales	$	(2)	(4)	(8)	(8)	(8)	17	(5)	1
Foreign currency	Sales, cost of sales	(1		)	4		(1	)	10		(15	)	—		(19	)	10		Foreign currency	Sales	(2)		(2)	(5)	(5)	(3)	6	(5)	1
Foreign currency	Other deductions, net	28			3		16		43										Foreign currency	Cost of sales	6		(3)	15	8	3	21	15	(28)
Foreign currency																			Foreign currency	Other deductions, net	3		(26)	43	(5)

Net Investment Hedges																			Net Investment Hedges
Euro denominated debt																			Euro denominated debt							6	(72)	12	(41)
Total		$	29		5		28		45		(18	)	(8	)	(18	)	5		Total		$	5	(35)	45	(10)	(2)	(28)	17	(67)

Regardless of whether derivatives and non-derivative financial instruments receive hedge accounting, the Company expects hedging gains or losses to be essentially offset by losses or gains on the related underlying exposures. The amounts ultimately recognized will differ from those presented above for open positions, which remain subject to ongoing market price fluctuations until settlement. Derivatives receiving hedge accounting are highly effective and no amounts were excluded from the assessment of hedge ~~effectiveness, including for the net investment hedge described below. Hedge ineffectiveness was immaterial for the three and nine months ended June 30, 2019and 2018.~~effectiveness.

~~Net Investment Hedge~~ – In January 2019, the Company issued €500 of 1.25% notes due October 2025 and €500 of 2.0% notes due October 2029. In May 2019, the Company issued €500 of 0.375% notes due May 2024. The net proceeds from the sale of the notes were used to repay commercial paper borrowings and for general corporate purposes. The euro notes reduce foreign currency risk associated with the Company's international subsidiaries that use the euro as their functional currency and have been designated as a hedge of a portion of the investment in these operations. Pretax gains of $6 ($4 after-tax) and $12 ($9 after-tax) were recognized in other comprehensive income (loss) related to the net investment hedge for the three and nine months ended June 30, 2019, respectively. Amounts deferred in accumulated other comprehensive income (loss) will remain until the hedged investment is sold or substantially liquidated.

Fair Value Measurement – Valuations for all derivatives and the Company's long-term debt fall within Level 2 of the GAAP valuation hierarchy. As of June 30, ~~2019,~~2020, the fair value of long-term debt was ~~$5.3~~$6.4 billion, which exceeded the carrying value by ~~$411.~~

$596. The fair values of commodity and foreign currency contracts were reported in ~~other~~Other current assets and ~~accrued~~Accrued expenses ~~as summarized below:~~

September 30, 2018 June 30, 2019
Assets Liabilities Assets Liabilities
Commodity $ 1
10
1
7
Foreign Currency $ 35
11
35
9

and did not materially change since September 30, 2019.

Counterparties to derivatives arrangements are companies with investment-grade credit ratings. The Company has bilateral collateral arrangements with counterparties with credit rating-based posting thresholds that vary depending on the arrangement. If credit ratings on the Company's debt fall below pre-established levels, counterparties can require immediate full collateralization of all derivatives in net liability positions. The maximum amount that could potentially have been required was ~~$6.~~$11. The Company also can demand full collateralization of derivatives in net asset positions should any counterparty credit ratings fall below certain thresholds. NoNaN collateral was posted with counterparties and ~~none~~NaN was held by the Company as of June 30, ~~2019.~~2020.

~~The change in equity for the three and nine months ended June 30, 2018 and 2019 is shown below:~~

Three Months Ended June 30, Nine Months Ended June 30,
2018
2019
2018
2019

Common stock $ 477
477
477
477

Additional paid-in-capital
     Beginning balance 323
380
297
348
     Stock plans 9
7
35
39
        Ending balance 332
387
332
387

Retained earnings
     Beginning balance 22,254
23,475
21,995
23,072
     Net earnings common stockholders 712
604
1,586
1,589
     Dividends paid (306 ) (302 ) (924 ) (909 )
     Adoption of accounting standard updates —
—
3
25
        Ending balance 22,660
23,777
22,660
23,777

Accumulated other comprehensive income (loss)
     Beginning balance (827 ) (928 ) (1,019 ) (1,015 )
     Foreign currency translation (273 ) (93 ) (118 ) (41 )
     Pension and postretirement 22
13
67
38
     Cash flow hedges (14 ) (8 ) (22 ) 2
        Ending balance (1,092 ) (1,016 ) (1,092 ) (1,016 )

Treasury stock
     Beginning balance (13,735 ) (14,878 ) (13,032 ) (13,935 )
     Purchases (250 ) —
(1,000 ) (1,000 )
     Issued under stock plans 21
8
68
65
        Ending balance (13,964 ) (14,870 ) (13,964 ) (14,870 )

Common stockholders' equity 8,413
8,755
8,413
8,755

Noncontrolling interests in subsidiaries
     Beginning balance 45
46
52
43
     Net earnings 7
8
16
15
     Other comprehensive income —
—
—
1
     Dividends paid (5 ) (5 ) (21 ) (10 )
        Ending balance 47
49
47
49

Total equity $ 8,460
8,804
8,460
8,804

~~(7)~~(13) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Activity in Accumulated other comprehensive income (loss) for the three and nine months ended June 30, ~~2018~~2020 and 2019 is shown ~~below:~~below, net of income taxes:


	Three Months Ended June 30,					Nine Months Ended June 30,
		2019		2020	2019	2020
Foreign currency translation
Beginning balance		$	(548)	(977)	(600)	(794)
Other comprehensive income (loss), net of tax of $(2), $17, $(3) and $10, respectively		(93)		135	(41)	(48)


Ending balance		(641)		(842)	(641)	(842)

Pension and postretirement
Beginning balance		(395)		(870)	(420)	(928)
Amortization of deferred actuarial losses into earnings, net of tax of $(4), $(9), $(12) and $(26), respectively		13		29	38	87

Ending balance		(382)		(841)	(382)	(841)

Cash flow hedges
Beginning balance		15		(56)	5	—
Deferral of gains (losses) arising during the period, net of tax of $2, $(11), $(1) and $6, respectively		(6)		33	4	(20)
Reclassification of realized (gains) losses to sales and cost of sales, net of tax of $0, $(2), $0 and $(1), respectively		(2)		7	(2)	4
Ending balance		7		(16)	7	(16)

Accumulated other comprehensive income (loss)		$	(1,016)	(1,699)	(1,016)	(1,699)

Three Months Ended June 30, Nine Months Ended June 30,
2018
2019
2018
2019
Foreign currency translation
   Beginning balance $ (214 ) (548 ) (369 ) (600 )
   Other comprehensive income (loss) before reclassifications (273 ) (93 ) (101 ) (41 )
   Reclassified to gain/loss on sale of business —
—
(17 ) —
   Ending balance (487 ) (641 ) (487 ) (641 )

Pension and postretirement
   Beginning balance (617 ) (395 ) (662 ) (420 )
   Amortization of deferred actuarial losses into earnings 22
13
67
38
   Ending balance (595 ) (382 ) (595 ) (382 )

Cash flow hedges
   Beginning balance 4
15
12
5
   Deferral of gains (losses) arising during the period (13 ) (6 ) (13 ) 4
   Reclassification of realized (gains) losses to sales and cost of sales (1 ) (2 ) (9 ) (2 )
   Ending balance (10 ) 7
(10 ) 7

Accumulated other comprehensive income (loss) $ (1,092 ) (1,016 ) (1,092 ) (1,016 )

Activity above is shown net of income taxes for the three and nine months ended June 30, 2019 and 2018, respectively, as follows: foreign currency translation: $(2), $-, $(3), and $-; amortization of pension and postretirement deferred actuarial losses: $(4), $(8), $(12), and $(24); deferral of cash flow hedging gains (losses): $2, $5, $(1), and $5; reclassification of realized cash flow hedging (gains) losses: $-, $-, $-, and $3.

~~(8) PENSION & POSTRETIREMENT PLANS~~

~~Total periodic pension and postretirement (income) expense is summarized below:~~

Three Months Ended June 30, Nine Months Ended June 30,
2018 2019 2018
2019
Service cost $ 19
18
57
54
Interest cost 46
49
139
149
Expected return on plan assets (87 ) (88 ) (262 ) (264 )
Net amortization 30
17
91
50
Total $ 8
(4 ) 25
(11 )

~~(9) OTHER DEDUCTIONS, NET~~

~~Other deductions, net are summarized below:~~

Three Months Ended
June 30, Nine Months Ended
June 30,
2018 2019
2018
2019

Amortization of intangibles $ 47
60
154
177
Restructuring costs 14
20
38
40
Other 16
(15 ) 51
(45 )
Total $ 77
65
243
172

The increase in amortization for the nine months ended June 30, 2019 is due to higher intangibles amortization of $42, which largely relates to acquisitions completed in 2018, partially offset by backlog amortization of $19 incurred in the prior year related to the valves & controls acquisition. In the third quarter of 2019, Other included lower acquisition/divestiture-related costs of $7 and a favorable impact on comparisons from pensions of $11. On a year-to-date basis, Other reflects lower acquisition/divestiture-related costs of $42, pension expenses of $33 and foreign currency transactions of $9.

~~(10) RESTRUCTURING COSTS~~

Restructuring expense reflects costs associated with the Company’s ongoing efforts to improve operational efficiency and deploy assets globally in order to remain competitive on a worldwide basis. Costs for the three and nine months ended~~June 30, 2019 largely relate to restructuring of the global cost structure consistent with the current level of economic activity, as well as the redeployment of resources for future growth.~~

~~Restructuring expense by business segment follows:~~

Three Months Ended
June 30, Nine Months Ended
June 30,
2018 2019 2018 2019

Automation Solutions $ 9
15
26
26

Climate Technologies 4
4
11
8
Tools & Home Products —
1
—
5
Commercial & Residential Solutions 4
5
11
13

Corporate 1
—
1
1

Total $ 14
20
38
40

~~Details of the change in the liability for restructuring costs during the nine months ended June 30, 2019 follow:~~

Sept 30, 2018 Expense Utilized/Paid June 30, 2019

Severance and benefits $ 46
25
35
36
Lease and other contract terminations 3
—
1
2
Asset write-downs —
2
2
—
Vacant facility and other shutdown costs 3
6
8
1
Start-up and moving costs —
7
7
—
Total $ 52
40
53
39

~~(11) INCOME TAXES~~

On December 22, 2017, the U.S. government enacted tax reform, the Tax Cuts and Jobs Act (the "Act"), which made comprehensive changes to U.S. federal income tax laws by moving from a global to a modified territorial tax regime. The Act includes a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent in calendar year 2018 along with the elimination of certain deductions and credits, and a one-time "deemed repatriation" of accumulated foreign earnings. The Company recognized a net tax benefit of $43 ($0.07 per share) in the first quarter of fiscal 2018, and in the third quarter recognized a benefit of $150 ($0.24 per share) due to additional guidance issued by the U.S. Treasury Department and the Internal Revenue Service and as a result of actions taken by the Company. The Company completed its accounting for the Act in the first quarter of fiscal 2019.

Effective in fiscal 2019, the Act also subjects the Company to U.S. tax on global intangible low-taxed income earned by certain of its foreign subsidiaries. The Company elected to recognize this tax as a period expense when it is incurred.

In the second quarter of fiscal 2019, the Company recorded a $13 tax benefit due to the issuance of final regulations related to the one-time tax on deemed repatriation. In the third quarter of fiscal 2019, final regulations related to the calculation of global intangible low-taxed income were issued, which resulted in the Company reversing a $100 benefit and related reserve associated with the one-time tax on deemed repatriation, originally recorded in the first quarter of fiscal 2019. This change had no impact on the Company's results of operations for the three and nine months ended June 30, 2019.

~~The Company will include the effects of any final regulations, as well as any additional guidance or legislative changes, in the period they are issued.~~

Income taxes were $155 in the third quarter of 2019 and $49 in 2018, resulting in effective tax rates of 20 percent and 6 percent, respectively. The effective tax rates in both years reflect the lower U.S. corporate income tax rate as a result of the Act. The current year rate also included a tax benefit of $21 ($0.03 per share) from restructuring a foreign subsidiary, while the prior year rate included the $150 ($0.24 per share) tax benefit related to the Act discussed above.

Income taxes were $429 for the first nine months of 2019 and $327 for 2018, resulting in effective tax rates of 21 percent and 17 percent, respectively. The effective tax rates in both years reflect the lower U.S. corporate income tax rate as a result of the Act. The current year rate also included favorable discrete items which reduced the rate approximately 3 percentage points, while the prior year rate included a net tax benefit of $193 due to impacts of the Act.

~~(12)~~(14) BUSINESS SEGMENTS

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


	Three Months Ended June 30,								Nine Months Ended June 30,
	Sales				Earnings			Sales		Earnings
	2019		2020	2019	2020	2019	2020	2019	2020

Automation Solutions	$	3,025	2,589	477	311	8,834	8,150	1,328	1,012

Climate Technologies	1,199		970	278	195	3,171	2,869	650	563
Tools & Home Products	463		357	93	58	1,390	1,219	286	233
Commercial & Residential Solutions	1,662		1,327	371	253	4,561	4,088	936	796

Stock compensation				(31)	(51)			(83)	(69)
Unallocated pension and postretirement costs				27	12			81	37
Corporate and other				(34)	(22)			(95)	(90)
Eliminations/Interest	(3)		(2)	(43)	(45)	6	(11)	(134)	(116)
Total	$	4,684	3,914	767	458	13,401	12,227	2,033	1,570

Three Months Ended June 30, Nine Months Ended June 30,
Sales Earnings Sales Earnings
2018
2019
2018
2019
2018
2019
2018
2019

Automation Solutions $ 2,870
3,025
494
477
8,213
8,834
1,316
1,328

Climate Technologies 1,236
1,199
294
278
3,286
3,171
712
650
Tools & Home Products 356
463
93
93
1,041
1,390
276
286
Commercial & Residential Solutions 1,592
1,662
387
371
4,327
4,561
988
936

Differences in accounting methods 57
64
163
188
Corporate and other (131 ) (102 ) (425 ) (285 )
Eliminations/Interest (6 ) (3 ) (39 ) (43 ) (20 ) 6
(113 ) (134 )
Total $ 4,456
4,684
768
767
12,520
13,401
1,929
2,033

The ~~decrease~~increase in ~~Corporate and other~~stock compensation expense for the three ~~and nine~~ months ended June 30, ~~2019~~2020 was ~~primarily~~ due to ~~lower acquisition/divestiture-related costs of $7 and $42, respectively, and lower incentive stock compensation of $12 and $61, respectively, reflecting a decreasing stock price~~an increase in the ~~current year compared to an increasing~~Company's stock ~~price in the prior year. On a year-to-date basis, the prior year also included valves & controls first year acquisition accounting charges of $10 related to inventory and $19 for backlog amortization.~~price.

Automation Solutions sales by major product offering are summarized below:


	Three Months Ended June 30,					Nine Months Ended June 30,
		2019		2020	2019	2020

Measurement & Analytical Instrumentation		$	945	735	2,730	2,381
Valves, Actuators & Regulators		941		842	2,752	2,609
Industrial Solutions		548		469	1,664	1,470
Process Control Systems & Solutions		591		543	1,688	1,690
Automation Solutions		$	3,025	2,589	8,834	8,150

Three Months Ended June 30, Nine Months Ended June 30,
2018
2019
2018
2019

Measurement & Analytical Instrumentation $ 932
945
2,564
2,730
Valves, Actuators & Regulators 948
941
2,732
2,752
Industrial Solutions 470
548
1,382
1,664
Process Control Systems & Solutions 520
591
1,535
1,688
Automation Solutions $ 2,870
3,025
8,213
8,834

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


	Three Months Ended June 30,					Nine Months Ended June 30,
		2019		2020	2019	2020
Automation Solutions		$	133	137	393	414

Climate Technologies		42		44	132	133
Tools & Home Products		18		20	54	58
Commercial & Residential Solutions		60		64	186	191

Corporate and other		10		8	30	26
Total		$	203	209	609	631

Sales by geographic destination are summarized below:

~~(13) ACQUISITIONS AND DIVESTITURES~~

During the first nine months of 2019, the Company acquired seven businesses in the Automation Solutions segment for $385, net of cash acquired, which included the acquisition of Machine Automation Solutions (General Electric's former Intelligent Platforms business). These seven businesses had combined annual sales of approximately $280.

~~On July 17, 2018, the Company completed the acquisition of Aventics, a global provider of smart pneumatics technologies that power machine and factory automation applications, for $622, net of cash acquired. This business, which has annual sales of approximately $425, is reported in the Industrial Solutions product offering in the Automation Solutions segment. T~~he Company recognized goodwill of $354 ($20 of which is expected to be tax deductible), and identifiable intangible assets of $278, primarily intellectual property and customer relationships with a weighted-average useful life of approximately 12 years.

On July 2, 2018, the Company completed the acquisition of Textron's tools and test equipment business for $810, net of cash acquired. This business, with annual sales of approximately $470, is a manufacturer of electrical and utility tools, diagnostics, and test and measurement instruments, and is reported in the Tools & Home products

~~segment.~~ The Company recognized goodwill of $365 ($17 of which is expected to be tax deductible), and identifiable intangible assets of $358, primarily intellectual property and customer relationships with a weighted-average useful life of approximately 14 years.

~~Valuations of acquired assets and liabilities are in process and subject to refinement for transactions completed after June 30, 2018.~~

On December 1, 2017, the Company acquired Paradigm, a provider of software solutions for the oil and gas industry, for $505, net of cash acquired. This business had annual sales of approximately $140 and is included in the Measurement & Analytical Instrumentation product offering within Automation Solutions. The Company recognized goodwill of $309 ($170 of which is expected to be tax deductible), and identifiable intangible assets of $238, primarily intellectual property and customer relationships with a weighted-average useful life of approximately 11 years.

~~During 2018, the Company also acquired four smaller businesses, two in the Automation Solutions segment and two in the Climate Technologies segment.~~

On October 2, 2017, the Company sold its residential storage business for $200 in cash, and recognized a small pretax gain and an after-tax loss of $24 ($0.04 per share) in the first quarter of 2018 due to income taxes resulting from nondeductible goodwill. The Company realized $150 in after-tax cash proceeds from the sale.

~~Pro Forma Financial Information~~

The following unaudited pro forma consolidated condensed financial results of operations are presented as if the 2018 acquisitions occurred on October 1, 2016 and the acquisition of the valves & controls business occurred on October 1, 2015. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisitions occurred as of that time.

Three Months Ended Nine Months Ended
June 30, 2018

Net sales $ 4,693
$ 13,281
Net earnings common stockholders $ 716
$ 1,619
Diluted earnings per share $ 1.13
$ 2.54

Management's Discussion and Analysis of Financial Condition and Results of Operations

~~Net sales~~The Company's results for the third quarter of ~~2019~~fiscal 2020 were ~~$4.7~~negatively impacted by the global outbreak and rapid spread of the novel coronavirus (COVID-19). The outbreak began in the Company's second fiscal quarter and as expected, resulted in a rapid decline in demand which impacted most of the Company's end markets and geographies in the third quarter, particularly in North America. These conditions are expected to negatively impact many of our end markets for the remainder of the fiscal year, but demand has stabilized and the Company has taken actions to protect its operating results and support its financial condition and liquidity. See the "Financial Condition", "Outlook" and "Part II - Other Information, Item 1A, Risk Factors" sections below for additional details.

For the third quarter of fiscal 2020, consolidated net sales were $3.9 billion, ~~up 5~~down 16 percent ~~supported by acquisitions, which added 5 percent, and~~compared with the prior year, adversely affected by foreign currency translation which deducted 21 percent. Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, ~~increased 2 percent, reflecting strong project activity and maintenance and repair spending in Automation Solutions, partially offset by lower demand in air conditioning markets in Asia.~~were down 15 percent.

Net earnings common stockholders were ~~$604~~$399 million, down 1534 percent, and diluted earnings per share were ~~$0.97,~~$0.67, down 1331 percent ~~primarily due to an income tax benefit of $150 million ($0.24 per share) from the impacts of U.S. tax reform~~compared with $0.97 in the prior year. Operating results declined $0.20 per share, reflecting the sharp decline in sales volume from the negative effects of COVID-19 and general decline in economic activity. Higher stock compensation (due to an increase in the Company's stock price) and pension expense of $0.05 per share and unfavorable foreign currency transactions of $0.04 per share also contributed to the decline. Discrete tax benefits ($0.10 per share) and share repurchases ($0.02 per share) favorably impacted results, while restructuring charges related to the Company's initiatives to improve operating margins reduced earnings $0.13 per share in the current quarter.

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, ~~2019,~~2020, compared with the third quarter ended June 30, ~~2018.~~2019.


	2019			2020		Change
(dollars in millions, except per share amounts)

Net sales	$	4,684		3,914		(16)	%
Gross profit	$	2,001		1,618		(19)	%
Percent of sales	42.7		%	41.3	%

SG&A	$	1,126		934		(17)	%
Percent of sales	24.0		%	23.8	%


Other deductions, net	$	65		181
Interest expense, net	$	43		45

Earnings before income taxes	$	767		458		(40)	%
Percent of sales	16.4		%	11.7	%

Net earnings common stockholders	$	604		399		(34)	%
Percent of sales	12.9		%	10.2	%


Diluted earnings per share	$	0.97		0.67		(31)	%

2018 2019 Change
(dollars in millions, except per share amounts)

Net sales $ 4,456
4,684
5 %
Gross profit $ 1,942
2,001
3 %
Percent of sales 43.6 % 42.7 %

SG&A $ 1,058
1,126
6 %
Percent of sales 23.8 % 24.0 %
Other deductions, net $ 77
65

Interest expense, net $ 39
43

Earnings before income taxes $ 768
767
— %
Percent of sales 17.2 % 16.4 %
Net earnings common stockholders $ 712
604
(15 )%
Percent of sales 16.0 % 12.9 %

Diluted earnings per share $ 1.12
0.97
(13 )%

Net sales for the third quarter of ~~2019~~fiscal 2020 were ~~$4.7~~$3.9 billion, ~~an increase~~a decrease of ~~$228~~$770 million, or 516 percent compared with ~~$4.5 billion in 2018.~~2019. Underlying sales ~~increased 2~~were down 15 percent ($72691 million) on ~~higher price~~lower volume, as COVID-19 negatively impacted nearly all end markets and ~~slightly higher volume. Acquisitions added 5 percent ($243 million) and foreign~~geographies. Foreign currency translation subtracted 21 percent ($8770 million). and divestitures subtracted $9 million. Underlying sales were ~~flat~~down 20 percent in the U.S. and ~~increased 3~~10 percent internationally. The Americas was ~~up 1~~down 20 percent, Europe was ~~up 1~~down 9 percent and Asia, Middle East & Africa was ~~up 3~~down 9 percent (China up 3 ~~percent, versus up 15 percent in 2018)~~percent). Sales increased $155 million in Automation Solutions, supported by acquisitions, strong project activity, and maintenance and repair spending. Commercial & Residential Solutions sales increased $70 million due to acquisitions, partially offset by lower demand in Asia, Middle East & Africa.

Cost of sales for the third quarter of ~~2019~~fiscal 2020 were ~~$2.7~~$2.3 billion, ~~an increase~~a decrease of ~~$169~~$387 million compared with ~~$2.5 billion in 2018,~~2019, primarily due to ~~acquisitions.~~lower volume. Gross margin of ~~42.7~~41.3 percent decreased ~~0.9~~1.4 percentage points compared with the prior year, reflecting ~~a negative impact from acquisitions of 0.4 percentage points~~deleverage on lower sales volume and unfavorable ~~mix.~~

mix primarily within Automation Solutions, offset by favorable price-cost.

Selling, general and administrative (SG&A) expenses of ~~$1.1 billion increased $68~~$934 million decreased $192 million compared with the prior year ~~primarily due to acquisitions.~~and SG&A as a percent of sales ~~increased~~decreased 0.2 percentage points to ~~24.0~~23.8 percent, primarily due to ~~acquisitions,~~significant savings from the Company's restructuring and cost reset actions, which ~~negatively impacted comparisons by 0.5 percentage points, partially~~ offset bydeleverage on the lower ~~incentive stock~~sales volume. The Company's ongoing restructuring initiatives are expected to yield improved operating margins as sales volumes recover. The Company also benefited from further actions taken in response to the effects of COVID-19 on profitability, including the impact of curtailed travel, meetings and discretionary spending, a salary and hiring freeze, furloughs, and compensation reductions for the Board of ~~$12 million.~~

Directors and key executives across Emerson.

Other deductions, net were ~~$65~~$181 million in ~~2019, a decrease~~2020, an increase of ~~$12~~$116 million compared with the prior year, reflecting ~~lower acquisition/divestiture-related~~increased restructuring costs of $7$68 million and ~~a favorable impact~~unfavorable impacts on comparisons from foreign currency transactions of $25 million and pensions of ~~$11 million, partially offset by higher intangibles amortization of $13~~$16 million. See ~~Note 9.~~Notes 6 and 7.

Pretax earnings of ~~$767~~$458 million decreased $1$309 million, ~~flat~~or 40 percent compared towith the prior year. Earnings decreased ~~$17~~$166 million in Automation Solutions and ~~decreased $16~~$118 million in ~~Commercial~~Commercial & Residential ~~Solutions, while~~Solutions. Costs reported at Corporate increased $23 million due to higher stock compensation (reflecting an increase in the Company's stock price) and unallocated pension and postretirement costs which together increased $35 million, offset by a decline of $12 million for all other corporate costs. Pretax earnings margin decreased 4.7 percentage points to 11.7 percent. The decline reflected increased restructuring costs, which negatively impacted comparisons by 2.0 percentage points. Higher stock compensation and pension expense ~~decreased $29 million.~~and unfavorable foreign currency transactions also impacted comparisons by 1.8 percentage points. See the Business discussion that follows and Note ~~12 and the following Business Segments discussion.~~14.

~~Income~~Income taxes were $51 million for 2020 and $155 million for 2019, ~~and $49 million for 2018,~~ resulting in effective tax rates of 11 percent and 20 percent, ~~and 6 percent,~~ respectively. ~~The effective tax rates in both years reflect the lower U.S. corporate income tax rate as a result of the Tax Cuts and Jobs Act (the "Act").~~ The current year rate ~~also~~ included $57 million ($0.10 per share) of discrete benefits, which decreased the rate 12 percentage points, related to updates to estimates for the prior year U.S. income tax return and the impact of a research and development tax credit study. The prior year rate included favorable discrete tax items, which reduced the rate 3 percentage points, largely due to a tax benefit of $21 million ($0.03 per share) from restructuring a foreign ~~subsidiary, while~~subsidiary.

On March 27, 2020, the ~~prior year rate included a tax benefit of $150 million ($0.24 per share), reflecting updates~~CARES Act (the "Act") was enacted in response to the ~~Company's initial estimates related~~COVID-19 pandemic, and among other things, provides tax relief to ~~the impact~~businesses. Tax provisions of the Act ~~due~~include the deferral of certain payroll taxes, relief for retaining employees, and other provisions. The Company expects to ~~additional guidance issued by~~defer $75 million of certain payroll taxes through the ~~U.S. Treasury Department and the Internal Revenue Service and as a result~~end of ~~actions taken by the Company. The effective tax rate for full~~calendar year ~~2019 is currently expected to be approximately 21 percent. See Note 11.~~2020.

Net earnings common stockholders in the third quarter of ~~2019~~fiscal 2020 were ~~$604~~$399 million, down 1534 percent, compared with ~~$712~~$604 million in the prior year, and earnings per share were ~~$0.97,~~$0.67, down 1331 percent compared with ~~$1.12~~$0.97 in ~~2018.~~the prior year. See discussion in the Overview above for further details.

Following is an analysis of operating results for the Company’s business segments for the third quarter ended June 30, ~~2019,~~2020, compared with the third quarter ended June 30, ~~2018.~~2019. The Company defines segment earnings as earnings before interest and taxes. See Note 1214 for a discussion of the Company's business segments.


Three Months Ended June 30	2019			2020		Change
(dollars in millions)

Sales	$	3,025		2,589		(14)	%
Earnings	$	477		311		(35)	%
Margin	15.7		%	12.0	%

Three Months Ended June 30 2018 2019 Change
(dollars in millions)

Sales $ 2,870
3,025
5 %
Earnings $ 494
477
(4 )%
Margin 17.2 % 15.7 %





Sales by Major Product Offering
Measurement & Analytical Instrumentation	$	945	735	(22)	%
Valves, Actuators & Regulators	941		842	(11)	%
Industrial Solutions	548		469	(14)	%
Process Control Systems & Solutions	591		543	(8)	%
Total	$	3,025	2,589	(14)	%

Sales by Major Product Offering
Measurement & Analytical Instrumentation $ 932
945
1 %
Valves, Actuators & Regulators 948
941
(1 )%
Industrial Solutions 470
548
16 %
Process Control Systems & Solutions 520
591
14 %
Total $ 2,870
3,025
5 %

Automation Solutions sales were $3.0 billion in the third quarter, an increase of $155 million, or 5 percent. Underlying sales increased 3 percent ($80 million) on higher volume and slightly higher price. Acquisitions added 5 percent ($141 million) and foreign currency translation had a 3 percent ($66 million) unfavorable impact. Sales for Measurement & Analytical Instrumentation increased $13 million, or 1 percent, supported by favorable trends in most key end markets in Asia, Middle East & Africa, partially offset by a slowdown in upstream oil and gas spending in the Americas. Valves, Actuators & Regulators decreased $7 million, or less than 1 percent, due to currency translation. Industrial Solutions sales increased $78 million, or 16 percent, due to the Aventics acquisition ($95 million), partially offset by slow discrete manufacturing end markets in the U.S. and Europe, reflecting softer short-cycle demand and some rebalancing of channel inventory. Process Control Systems & Solutions increased $71 million, or 14 percent, due to strong project activity and maintenance and repair spending, as well as the Machine Automation Solutions acquisition which added $46 million. Underlying sales increased 1 percent in the Americas (U.S. down 1 percent), 1 percent in Europe and 7 percent in Asia, Middle East & Africa (China up 5 percent). Earnings were $477 million, a decrease of $17 million, or 4 percent, due to acquisitions, unfavorable mix and increased restructuring expense of $6 million. Margin decreased 1.5 percentage points to 15.7 percent, reflecting a dilutive impact from acquisitions of 1.4 percentage points.

~~COMMERCIAL & RESIDENTIAL SOLUTIONS~~

Commercial & Residential Solutions sales were $1.7 billion in the third quarter, up $70 million, or 4 percent compared to the prior year. Acquisitions added 6 percent ($100 million) and foreign currency translation subtracted 1 percent ($21 million). Underlying sales decreased 1 percent ($9 million) primarily due to lower volume partially offset by higher price. Climate Technologies sales were $1.2$2.6 billion in the third quarter, a decrease of ~~$37~~$436 million or 314 percent. ~~HVAC~~Underlying sales decreased 13 percent ($380 million) on lower volume. Foreign currency translation had a 1 percent ($56 million) unfavorable impact. All businesses were ~~down~~negatively impacted by the effects of COVID-19, which resulted in ~~Asia, Middle East & Africa due to lower demand, particularly outside of China, while the U.S. was up slightly, reflecting an unfavorable impact from cooler, wet weather conditions. Cold chain~~continued broad-based industrial weakness. Underlying sales were down slightly, reflecting stable global demand. Tools & Home Products sales were $463 million in the third quarter, an increase of $107 million, or 30 percent, due to the tools and test acquisition. Sales were robust for wet/dry vacuums and up slightly for professional tools, while food waste disposers were flat. Overall, underlying sales increased 1decreased 19 percent in the Americas (U.S. ~~up 1~~down 20 percent), Europe decreased 8 percent and ~~1 percent in Europe, while~~ Asia, Middle East & Africa decreased 6 percent (China ~~down 2~~up 9 percent). Sales for Measurement & Analytical Instrumentation decreased $210 million, or 22 percent, due to global weakness across most geographies, particularly in North American process industries, while China rebounded from a sharp decline in the previous quarter and was up moderately. Valves, Actuators & Regulators decreased $99 million, or 11 percent, reflecting weakness across most end markets, particularly in North America, partially offset by a sharp rebound in China sales. Industrial Solutions sales decreased $79 million, or 14 percent, on weakness in global discrete end markets, excluding China which was up low double-digits. Process Control Systems & Solutions decreased $48 million, or 8 percent, due to weakness in power end markets in Asia and process end markets in the U.S. Earnings were ~~$371~~$311 million, a decrease of ~~$16~~$166 million, ~~and margin declined 1.9 percentage points,~~or 35 percent, primarily due to lower volume, higher restructuring expenses of $65 million and an unfavorable impact on comparisons from foreign currency transactions of $18 million. Margin decreased 3.7 percentage points to 12.0 percent, reflecting a ~~dilutive~~negative impact from ~~the tools and test acquisition~~restructuring expenses of ~~1.2~~2.5 percentage points and unfavorable foreign currency transactions of 0.7 percentage points. Savings from the restructuring and cost reset actions were significant and largely offset deleverage on the lower sales volume, while favorable price-cost offset unfavorable mix.


Three Months Ended June 30	2019			2020		Change
(dollars in millions)

Sales:
Climate Technologies	$	1,199		970		(19)	%
Tools & Home Products	463			357		(23)	%
Total	$	1,662		1,327		(20)	%

Earnings:
Climate Technologies	$	278		195		(30)	%
Tools & Home Products	93			58		(38)	%
Total	$	371		253		(32)	%
Margin	22.4		%	19.1	%

Commercial & Residential Solutions sales were $1.3 billion in the third quarter, down $335 million, or 20 percent compared to the prior year. Underlying sales decreased 19 percent ($312 million) due to lower volume, reflecting sharply lower demand due to the effects of COVID-19, especially in North America. Foreign currency translation subtracted 1 percent ($14 million) and the divestiture of two small non-core businesses subtracted $9 million. Overall, underlying sales decreased 20 percent in the Americas (U.S. down 21 percent), Europe decreased 12 percent and Asia, Middle East & Africa was down 18 percent (China down 9 percent). Climate Technologies ~~segment.~~

sales were $970 million in the third quarter, a decrease of $229 million, or 19 percent. Air conditioning and heating sales were down sharply, reflecting significant declines in Asia and North America, with smaller declines in China and Europe. Cold chain sales were down sharply, driven by slower global market conditions. Tools & Home Products sales were $357 million in the third quarter, a decrease of $106 million, or 23 percent. Global professional tools end markets were down sharply, while food waste disposers and wet/dry vacuums decreased in the low-to-mid teens. Earnings were $253 million, down 32 percent compared with the prior year, and margin decreased 3.3 points to 19.1 percent. Significant deleverage on the lower sales volume negatively impacted margins and higher restructuring expenses deducted 0.6 percentage points, partially offset by savings from cost reduction actions and favorable price-cost.

Following is an analysis of the Company’s operating results for the nine months ended June 30, ~~2019,~~2020, compared with the nine months ended June 30, ~~2018.~~2019.


	2019			2020		Change
(dollars in millions, except per share amounts)

Net sales	$	13,401		12,227		(9)	%
Gross profit	$	5,687		5,127		(10)	%
Percent of sales	42.4		%	41.9	%

SG&A	$	3,348		3,040		(9)	%
Percent of sales	24.9		%	24.8	%

Other deductions, net	$	172		401
Interest expense, net	$	134		116

Earnings before income taxes	$	2,033		1,570		(23)	%
Percent of sales	15.2		%	12.8	%

Net earnings common stockholders	$	1,589		1,242		(22)	%
Percent of sales	11.9		%	10.2	%


Diluted earnings per share	$	2.55		2.04		(20)	%

2018 2019 Change
(dollars in millions, except per share amounts)

Net sales $ 12,520
13,401
7 %
Gross profit $ 5,373
5,687
6 %
Percent of sales 42.9 % 42.4 %

SG&A $ 3,088
3,348
8 %
Percent of sales 24.6 % 24.9 %
Other deductions, net $ 243
172

Interest expense, net $ 113
134

Earnings before income taxes $ 1,929
2,033
5 %
Percent of sales 15.4 % 15.2 %
Net earnings common stockholders $ 1,586
1,589
— %
Percent of sales 12.7 % 11.9 %

Diluted earnings per share $ 2.49

2.55

2 %

Net sales for the first nine months of ~~2019~~2020 were ~~$13.4~~$12.2 billion, ~~an increase~~a decrease of ~~$881 million,~~$1.2 billion, or 79 percent compared with ~~$12.5 billion in 2018.~~2019. Underlying sales were ~~up 3~~down 8 percent ($~~403~~993 million) on ~~higher volume and slightly higher price. Acquisitions added 6 percent ($731 million)~~lower volume. Divestitures net of acquisitions subtracted $3 million and foreign currency translation subtracted 21 percent ($~~253~~178 million). Underlying sales ~~increased 4~~decreased 11 percent in the U.S. and 35 percent internationally. The Americas was ~~up 5~~down 10 percent, Europe was ~~up 2~~down 4 percent and Asia, Middle East & Africa was up 1 percent (China up 1 percent). Sales increased $621 million in Automation Solutions, supported by acquisitions and broad-based demand across energy-related and general industrial markets. Commercial & Residential Solutions sales increased $234 million due to acquisitions, partially offset by slower demand in Asia, Middle East & Africa, particularly in China air conditioning and heating markets.down 4 percent.

Cost of sales for ~~2019~~2020 were $7.1 billion, a decrease of $614 million versus $7.7 billion ~~an increase of $567 million versus $7.1 billion~~ in ~~2018,~~2019, primarily due to ~~acquisitions and higher volume, partially offset by the impact of foreign currency translation.~~lower volume. Gross margin decreased 0.5 percentage points to ~~42.4~~41.9 percent, reflecting deleverage on lower sales volume and unfavorable mix ~~and the impact of acquisitions.~~primarily within Automation Solutions, partially offset by favorable price-cost.

SG&A expenses of ~~$3.3~~$3.0 billion ~~increased $260~~decreased $308 million ~~primarily due to acquisitions~~ and ~~higher volume.~~ SG&A as a percent of sales ~~increased~~decreased 0.1 percentage points to ~~24.9 percent due to~~24.8 percent. Significant savings from the ~~impact of acquisitions, which negatively impacted comparisons by 0.5 percentage points. Leverage~~Company's restructuring and cost reset actions offset deleverage on ~~higher volume and~~the lower incentive stock compensation of $61 million, reflecting a decreasing stock price in the current year compared to an increasing stock price in the prior year, were partially offset by higher investment spending.sales volume.

Other deductions, net were ~~$172~~$401 million in ~~2019, a decrease~~2020, an increase of ~~$71~~$229 million compared with the prior year, reflecting ~~lower acquisition/divestiture-related~~increased restructuring costs of ~~$42 million, pension expenses of $33~~$176 million and ~~foreign currency transactions~~an unfavorable impact on comparisons from pensions of $9$46 million, partially offset by ~~higher intangibles amortization of $23 million.~~lower litigation costs. See ~~Note 9.~~Notes 6 and 7.

Pretax earnings of ~~$2.0~~$1.6 billion ~~increased $104~~decreased $463 million, or 523 percent. Earnings ~~increased $12~~decreased $316 million in Automation Solutions and ~~decreased $52~~$140 million in Commercial & Residential ~~Solutions, while~~Solutions. Costs reported at Corporate increased $25 million due to higher unallocated pension and postretirement costs which increased $44 million, partially offset by lower stock compensation expense of $14 million and a decline of $5 million for all other corporate costs. Pretax earnings margin decreased 2.4 percentage points to 12.8 percent. The decline was largely due to higher restructuring costs, which negatively impacted comparisons by 1.6 percentage points. Higher pension expense ~~decreased $140 million.~~also impacted comparisons by 0.5 percentage points. See the Business discussion that follows and Note ~~12 and the following Business Segments discussion.~~14.

Income taxes were $310 million for 2020 and $429 million for 2019, ~~and $327 million for 2018,~~ resulting in effective tax rates of 2120 percent and 1721 percent, respectively. The ~~effective tax rates in both years reflect the lower U.S. corporate income tax rate as a result of the Tax Cuts and Jobs Act (the "Act"). The~~ current year ~~rate also~~and prior year rates included favorable discrete items, which reduced ~~the rate~~both years' rates approximately 3 percentage ~~points, while the prior year rate included a net tax benefit of $193 million ($0.30 per share) due to impacts of the Act.~~points. See Note 8.

Net earnings common stockholders in ~~2019~~2020 were ~~$1.6~~$1.2 billion, ~~flat~~down 22 percent compared with the prior year, and earnings per share were ~~$2.55, up 2~~$2.04, down 20 percent compared with ~~$2.49~~$2.55 in ~~2018.~~2019. The decline in sales volume, largely attributable to the negative effects of COVID-19 and oil price volatility, resulted in a decline in operating results of

$0.27 per share, while restructuring costs and special advisory fees reduced earnings by $0.32 per share in the current year. Higher pension expense partially offset by lower stock compensation expense negatively affected comparisons by $0.04 per share and unfavorable foreign currency deducted $0.03 per share. Results were favorably impacted by discrete tax items ($0.09 per share) and a combined benefit from share repurchases and lower interest expense of $0.06 per share.

Following is an analysis of operating results for the Company’s business segments for the nine months ended June 30, ~~2019,~~2020, compared with the nine months ended June 30, ~~2018.~~2019. The Company defines segment earnings as earnings before interest and taxes.


Nine Months Ended June 30	2018			2019		Change		Nine Months Ended June 30	2019			2020		Change
(dollars in millions)								(dollars in millions)
Sales	$	8,213		8,834		8	%	Sales	$	8,834		8,150		(8)	%
Earnings	$	1,316		1,328		1	%	Earnings	$	1,328		1,012		(24)	%
Margin	16.0		%	15.0	%			Margin	15.0		%	12.4	%

Sales by Major Product Offering
Measurement & Analytical Instrumentation $ 2,564
2,730
6 %
Valves, Actuators & Regulators 2,732
2,752
1 %
Industrial Solutions 1,382
1,664
20 %
Process Control Systems & Solutions 1,535
1,688
10 %
Total $ 8,213
8,834
8 %





Sales by Major Product Offering
Measurement & Analytical Instrumentation	$	2,730	2,381	(13)	%
Valves, Actuators & Regulators	2,752		2,609	(5)	%
Industrial Solutions	1,664		1,470	(12)	%
Process Control Systems & Solutions	1,688		1,690	—	%
Total	$	8,834	8,150	(8)	%

Automation Solutions sales were ~~$8.8~~$8.2 billion in the first nine months of ~~2019, an increase~~2020, a decrease of ~~$621~~$684 million, or 8 percent. Underlying sales ~~increased 5~~decreased 7 percent ($~~432~~591 million) on ~~higher volume and slightly higher price. Acquisitions~~lower volume. The Machine Automation Solutions acquisition added 51 percent ($~~382~~47 million) and foreign currency translation had a 2 percent ($~~193~~140 million) unfavorable impact. Sales for Measurement & Analytical Instrumentation increased $166 million, or 6 percent, on broad-based demand in global industrial markets. Valves, Actuators & Regulators increased $20 million, or 1 percent, on favorable global oil and gas demand. Industrial Solutions sales increased $282 million, or 20 percent, due to the Aventics acquisition ($292 million), while discrete manufacturing end markets were slow in the U.S. and Europe. Process Control Systems & Solutions increased $153 million, or 10 percent, due to the Machine Automation Solutions acquisition ($90 million), favorable demand for small and mid-sized projects focused on expansion and optimization of existing assets, and strong maintenance and repair demand. Underlying sales ~~increased 6~~decreased 11 percent in the Americas, ~~(U.S. up~~ 4 ~~percent), 2~~ percent in Europe and 72 percent in Asia, Middle East & Africa (China ~~up 10~~down 1 percent). Sales for Measurement & Analytical Instrumentation decreased $349 million, or 13 percent, due to weakness in process industries, primarily in North America. Valves, Actuators & Regulators decreased $143 million, or 5 percent, reflecting slower demand in most end markets. Industrial Solutions sales decreased $194 million, or 12 percent, on lower global demand in discrete end markets. Process Control Systems & Solutions increased $2 million due to the Machine Automation Solutions acquisition which added $47 million, largely offset by weakness in power end markets in China and process end markets in the U.S. Earnings were ~~$1.3~~$1.0 billion, ~~an increase~~a decrease of ~~$12~~$316 million, or 124 percent, ~~driven by~~primarily due to higher ~~volume~~restructuring expenses of $166 million and ~~price.~~lower volume. Margin decreased 2.6 percentage points to ~~15.0~~12.4 percent, reflecting a ~~dilutive~~negative impact from ~~acquisitions~~restructuring expenses of ~~1.0~~2.1 percentage ~~points.~~points and unfavorable mix. Savings from cost reduction actions offset deleverage on lower sales volume.


Nine Months Ended June 30	2019			2020		Change
(dollars in millions)

Sales:
Climate Technologies	$	3,171		2,869		(10)	%
Tools & Home Products	1,390			1,219		(12)	%
Total	$	4,561		4,088		(10)	%

Earnings:
Climate Technologies	$	650		563		(13)	%
Tools & Home Products	286			233		(19)	%
Total	$	936		796		(15)	%
Margin	20.5		%	19.5	%

Nine Months Ended June 30 2018 2019 Change
(dollars in millions)

Sales:
  Climate Technologies $ 3,286
3,171
(3 )%
  Tools & Home Products 1,041
1,390
33 %
     Total $ 4,327
4,561
5 %

Earnings:
  Climate Technologies $ 712
650
(9 )%
  Tools & Home Products 276
286
4 %
     Total $ 988
936
(5 )%
     Margin 22.8 % 20.5 %

Commercial & Residential Solutions sales were ~~$4.6~~$4.1 billion in the first nine months of ~~2019, an increase~~2020, a decrease of ~~$234~~$473 million, or 510 percent compared to the prior year. Underlying sales were down 19 percent ($31402 million) on lower ~~volume partially offset by higher price. Acquisitions added 8 percent ($325 million)~~volume. The divestiture of two small non-core businesses subtracted $33 million and foreign currency translation subtracted 2$38 million, a combined decrease of 1 percent. Overall, underlying sales decreased 10 percent ~~($60 million)~~in the Americas, 4 percent in Europe and 10 percent in Asia, Middle East & Africa (China down 11 percent). Climate Technologies sales were ~~$3.2~~$2.9 billion in the first nine months of ~~2019,~~2020, a decrease of ~~$115~~$302 million, or 310 percent. ~~HVAC~~Air conditioning and heating sales were down sharply, reflecting significant declines in Asia ~~Middle East & Africa, particularly in China air conditioning~~ and ~~heating markets, while growth in~~ the U.S. ~~was moderate.~~due to the effects of COVID-19. Global cold chain sales were ~~up slightly~~down sharply on ~~modest growth~~significant declines in ~~the U.S., partially offset by slower demand in Asia.~~Asia and Europe, while North America was down moderately. Tools & Home Products sales were ~~$1.4~~$1.2 billion in the first nine months of ~~2019, up $349~~2020, down $171 million, or 3312 percent compared to the prior year, reflecting ~~the tools and test acquisition and favorable trends~~sharp declines in global professional tools markets. Sales for wet/dry vacuums ~~were up moderately while~~and food waste disposers were ~~up slightly. Overall, underlying sales increased 4 percent in the Americas (U.S. up 3 percent) and 2 percent in Europe, while Asia, Middle East & Africa decreased 14 percent (China~~ down ~~17 percent).~~moderately. Earnings were ~~$936~~$796 million, down 515 percent compared to the prior year, and margin ~~declined 2.3~~decreased 1.0 percentage points, ~~primarily~~ due to ~~a dilutive impact from the tools and test acquisition of 1.1 percentage points and~~ deleverage on lower sales volume ~~in the Climate Technologies segment. Unfavorable mix also reduced margin, while comparisons benefited~~and higher restructuring expenses which negatively impacted margins by 0.4 percentage points, partially offset by savings from ~~higher warranty costs of $10 million in the prior year associated with a specific product issue.~~cost reduction actions and favorable price-cost.

Key elements of the Company's financial condition for the nine months ended June 30, ~~2019~~2020 as compared to the year ended September 30, ~~2018~~2019 follow.


	Sept 30, 2019			June 30, 2020
Working capital (in millions)	$	1,163		$	1,894
Current ratio	1.2			1.3
Total debt-to-total capital	41.0		%	48.0		%
Net debt-to-net capital	33.9		%	37.9		%
Interest coverage ratio	15.2		X	12.9		X

Emerson maintains a conservative financial structure to provide the strength and flexibility necessary to achieve our strategic objectives and has been successful in efficiently deploying cash where needed worldwide to fund operations, complete acquisitions and sustain long-term growth. During fiscal 2020, the Company increased its cash holdings to support liquidity in response to the potential effects of COVID-19. In April 2020, the Company issued $1.5 billion of long-term debt to further manage its liquidity and balance sheet. The net proceeds were used to reduce commercial paper borrowings and for general corporate purposes. The Company has also taken actions to conservatively manage its cash through planned reductions in capital expenditures for fiscal 2020 and by suspending its share repurchases for the remainder of the fiscal year. No changes have been made to the dividend plan for the year. The Company's long-term debt ratings, which are A2 by Moody's Investors Service and A by Standard and Poor's, remain unchanged. The Company currently believes that sufficient funds will be available to meet its needs for the foreseeable future through operating cash flow, existing resources, short- and long-term debt capacity, or its $3.5 billion revolving backup credit facility under which it has not incurred any borrowings.

Sept 30, 2018
June 30, 2019
Working capital (in millions) $ 455
1,132
Current ratio 1.1
1.2
Total debt-to-total capital 34.7 % 41.5 %
Net debt-to-net capital 29.1 % 34.5 %
Interest coverage ratio 14.2 X 14.3X
Emerson is in a strong financial position, with total assets of $22 billion and stockholders' equity of $8 billion, and has the resources available for reinvestment in existing businesses, strategic acquisitions and managing its capital structure on a short- and long-term basis. The Company continues to generate substantial operating cash flow, with a full-year outlook of approximately $2.8 billion.

The Company's ~~debt-to-capital ratios~~total working capital increased ~~primarily~~approximately $750 million compared to the same quarter last year, reflecting the net proceeds from the debt issuance in May, while operating working capital declined due to ~~increased borrowings to support accelerated share repurchases completed in the second quarter of 2019.~~lower business levels. The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of ~~14.3X~~12.9X for the first nine months of ~~2019~~fiscal 2020 compares to ~~14.0X~~14.3X for the nine months ended June 30, ~~2018.~~2019. The ~~increase~~decrease reflects ~~higher~~lower pretax earnings in the current ~~year.~~year, partially offset by lower interest expense.

In January 2019, the Company issued €500 million of 1.25% notes due October 2025 and €500 million of 2.0% notes due October 2029. In May 2019, the Company issued €500 million of 0.375% notes due May 2024. The net proceeds from the sale of the notes were used to reduce commercial paper borrowings and for general corporate purposes.

Operating cash flow for the first nine months of ~~2019~~fiscal 2020 was ~~$1.8~~$1.9 billion, ~~a decrease~~an increase of ~~$66~~$52 million compared with ~~$1.9~~$1.8 billion in the prior year, as operating working capital declined due to ~~higher operating working capital. Other, net~~lower business levels, partially offset by lower earnings. Free cash flow of $1.5 billion in ~~2019 primarily consists~~the first nine months of ~~non-cash~~

~~items included in net earnings including deferred taxes, stock compensation and pension expense. Free~~fiscal 2020 (operating cash flow of $1.9 billion less capital expenditures of $329 million) increased $118 million compared to free cash flow of $1.4 billion in 2019 (operating cash flow of $1.8 billion less capital expenditures of $395 million) ~~decreased $147 million compared to free cash flow of $1.6 billion in 2018 (operating cash flow of $1.9 billion less capital expenditures of $314 million)~~, reflecting the ~~decrease~~increase in operating cash flow and ~~an increase in~~lower capital investment. Free cash flow along with increased short- and long-term borrowings were used to fund dividends of $909 million, common stock purchases of $1.0 billion, repayments of long-term debt of $655 million, and acquisitions of $385 million.

Emerson's ~~financial structure provides~~operations and supply chain stabilized during the ~~flexibility necessary~~quarter, with an emphasis on safety and productivity. The primary focus continues to ~~achieve its strategic objectives.~~be keeping employees safe and healthy, and serving customers in their essential industries with the vital technologies and services that they rely upon. The Company has ~~been successful in efficiently deploying cash where needed worldwide~~implemented recommended policies and practices to ~~fund operations, complete acquisitions~~protect its workforce so they can safely and ~~sustain long-term growth.~~effectively carry out their work. The Company ~~believes that sufficient funds will be available~~is following guidelines from global health experts and has taken stringent steps to ~~meet~~protect its employees.

Our outlook reflects the ~~Company’s needs~~dynamic demand environment associated with COVID-19 and significant savings from the Company's cost reduction and COVID-19 related cost containment actions. The guidance assumes, among other items, a continued challenging but steadily improving demand environment in the ~~foreseeable future through operating cash flow, existing resources, short- and long-term debt capacity or backup credit lines.~~

~~FISCAL 2019 OUTLOOK~~

Results for the first nine months of 2019 reflected solid trends in process and hybrid end markets and consistent demand for long-cycle projects, partially offset by slower global discrete manufacturing end markets, recent upstream oil and gas softness infourth quarter. North America and lower demand in air conditioning markets in Asia. The Company anticipates lower global growth in the near-term due to trade tensions and business investment uncertainty. Softness in North America upstream oil and gas markets and global discrete end markets is expected to ~~continue, while~~remain the key challenge from a demand perspective. The guidance also assumes no major operational or supply chain disruptions. Lastly, the outlook assumes no changes in discrete tax items and assumes oil prices remain in the $35 to $45 range for ~~residential~~the same time period. However, future developments related to COVID-19, including further actions taken by governmental authorities, potential shutdowns of our operations, or delays in the stabilization and ~~commercial air conditioning markets is favorable in North America~~recovery of economic conditions could further adversely affect our operations and financial results, as well as those of our customers and suppliers. See "Part II - Other Information, Item 1A, Risk Factors."

Consolidated fiscal 2020 net sales are expected to ~~improve in Asia. For the full year,~~be down 9 to 10 percent, with underlying sales down 7.5 to 9 percent excluding a 1 to 1.5 percent unfavorable impact from foreign currency translation. Automation Solutions net sales are expected to be ~~up approximately 7~~down 8 to 10 percent, with underlying sales ~~up approximately 5~~down 7 to 9 percent excluding a ~~positive~~1 percent unfavorable impact from ~~acquisitions~~foreign currency translation. The midpoint of ~~4 percent and unfavorable currency translation~~this outlook assumes a reduction of ~~2 percent.~~backlog of approximately $300 million by the end of the fiscal year. Commercial & Residential Solutions net sales are expected to be ~~up approximately 4~~down 9 to 11 percent, with underlying sales ~~flat excluding a positive~~down 8 to 10 percent excluding an impact from ~~acquisitions of 5 percent and~~ unfavorable foreign currency translation of 1 percent. Consolidated net sales are expected to be up approximately 6 percent, with underlying sales up approximately 3 percent excluding a positive impact from acquisitions of 5 percent and unfavorable currency translation of 2 percent. Segment EBIT margin is expected to be approximately 16 percent for Automation Solutions and approximately 21 percent for Commercial & Residential Solutions, including higher restructuring investments in the fourth quarter. Reported earningsEarnings per share are expected to be ~~$3.60~~$2.80 to ~~$3.70,~~$2.95, while adjusted earnings per share, which ~~includes an~~exclude a $0.40 per share impact from restructuring actions and related costs for the year, are expected ~~discrete tax benefit in the fourth quarter of approximately $0.05 per share.~~to be $3.20 to $3.35. Operating cash flow is expected to be approximately ~~$3.1~~$2.8 billion and free cash flow, which excludes targeted capital spending of ~~$600~~$550 million, is expected to be approximately ~~$2.5~~$2.25 billion. The Company's share repurchases for the nine months ended June 30, 2020 were $942 million and additional repurchases have been suspended for the remainder of the fiscal year. The Company has made no changes to its dividend plan for fiscal 2020.

Statements in this report that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later developments. These risks and uncertainties include the scope, duration and ultimate impact of the COVID-19 pandemic, as well as economic and currency conditions, market demand, including related to the pandemic and oil and gas price declines and volatility, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, 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, ~~2018~~2019, "Risk Factors" of Part II - Other Information, Item 1A of the Company's Quarterly Report on Form 10-Q for the three-month period ended June 30, 2020, and in subsequent reports filed with the SEC, which are hereby incorporated by reference.

The United ~~Kingdom~~Kingdom's (UK) ~~continues to negotiate its~~ withdrawal from the European Union (EU), commonly known as ~~"Brexit."~~"Brexit", was completed on January 31, 2020. The ~~EU agreed to postpone~~UK is now in a transition period and has begun negotiating the ~~withdrawal deadline to October 31, 2019.~~terms of a trade agreement and other laws and regulations with the EU. The Company's net sales in the UK are principally in the Automation Solutions segment and represent less than two percent of consolidated sales. Sales of products manufactured in the UK and sold within the EU are immaterial. The Company is evaluating several potential ~~Brexit scenarios~~outcomes of the UK's negotiations with the EU and believes the direct cost of incremental tariffs, logistics and other items would be immaterial.

The Company maintains a system of disclosure controls and procedures designed to ensure that information required to be disclosed in its reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported in a timely manner. This system also is designed to ensure information is accumulated and communicated to management, including the Company's certifying officers, to allow timely decisions regarding required disclosure. Based on an evaluation performed, the certifying officers have concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report.

Notwithstanding the foregoing, there can be no assurance that the Company's disclosure controls and procedures will detect or uncover all failures of persons within the Company and its consolidated subsidiaries to report material information otherwise required to be set forth in the Company's reports.

There was no change in the Company's internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

The following risk factor supplements the “Risk Factors” section in Part 1, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 (our “Form 10-K). The following risk factor disclosure should be read in conjunction with the other risk factors set out in our Form 10-K.

The Recent Coronavirus (COVID-19) Outbreak Has Adversely Impacted our Business and Could in the Future Have a Material Adverse Impact on our Business, Results of Operation, Financial Condition and Liquidity, the Nature and Extent of Which is Highly Uncertain

The global outbreak of the coronavirus (COVID-19) has significantly increased economic, demand and operational uncertainty. We have global operations, customers and suppliers, including in countries most impacted by COVID-19. Authorities around the world have taken a variety of measures to slow the spread of COVID-19, including travel bans or restrictions, increased border controls or closures, quarantines, shelter-in-place orders and business shutdowns and such authorities may impose additional restrictions. We have also taken actions to protect our employees and to mitigate the spread of COVID-19, including embracing guidelines set by the World Health Organization and the Centers for Disease Control and Prevention on social distancing, good hygiene, restrictions on employee travel and in-person meetings, and changes to employee work arrangements including remote work arrangements. The actions taken around the world to slow the spread of COVID-19 have also impacted our customers and suppliers, and future developments could cause further disruptions to Emerson due to the interconnected nature of our business relationships.

The impact of COVID-19 on the global economy and our customers, as well as recent volatility in commodity markets (including oil prices), has negatively impacted demand for our products and could continue to do so in the future. Its effects could also result in further disruptions to our manufacturing operations, including higher rates of employee absenteeism, and supply chain, which could continue to negatively impact our ability to meet customer demand. Additionally, the potential deterioration and volatility of credit and financial markets could limit our ability to obtain external financing. The extent to which COVID-19 will impact our business, results of operations, financial condition or liquidity is highly uncertain and will depend on future developments, including the spread and duration of the virus, potential actions taken by governmental authorities, and how quickly economic conditions stabilize and recover.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In November 2015, the Board of Directors authorized the purchase of up to 70 million shares. In March 2020, the Board of Directors authorized the purchase of an additional 60 million shares and a total of approximately ~~26.1~~65.5 million shares remain ~~available.~~available for purchase under the authorizations. No shares were ~~purchased~~repurchased in the third quarter of ~~2019.~~2020.

(a) Exhibits (Listed by numbers corresponding to the Exhibit Table of Item 601 in Regulation S-K).

Attached as Exhibit 101 to this report are the following documents formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Statements of Earnings for the three and nine months ended June 30, ~~2019~~2020 and ~~2018,~~2019, (ii) Consolidated Statements of Comprehensive Income for the three and nine months ended June 30, ~~2019~~2020 and ~~2018,~~2019, (iii) Consolidated Balance Sheets as of September 30, ~~2018~~2019 and June 30, 2020, (iv) Consolidated Statements of Equity for the three and nine months ended June 30, 2020 and 2019, ~~(iv)~~(v) Consolidated Statements of Cash Flows for the nine months ended June 30, 2020 and 2019, and ~~2018, and (v)~~(vi) Notes to Consolidated Financial Statements for the three and nine months ended ended June 30, 2020 and 2019.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock of $0.50 par value per share	EMR	New York Stock Exchange
		Chicago Stock Exchange
0.375% Notes due 2024	EMR 24	New York Stock Exchange
1.250% Notes due 2025	EMR 25A	New York Stock Exchange
2.000% Notes due 2029	EMR 29	New York Stock Exchange



Property, plant and equipment, net
Property, plant and equipment, at cost	$	8,370	8,687
Less: Accumulated depreciation	4,808		5,073
Total	$	3,562	3,614



Other intangible assets
Gross carrying amount	$	4,667	4,854
Less: Accumulated amortization	1,916		2,163
Net carrying amount	$	2,751	2,691



	September 30, 2018				June 30, 2019
	Assets			Liabilities	Assets	Liabilities
Commodity		$	1	10	1	7
Foreign Currency		$	35	11	35	9



	Three Months Ended			Nine Months Ended
	June 30, 2018

Net sales		$	4,693		$	13,281
Net earnings common stockholders		$	716		$	1,619
Diluted earnings per share		$	1.13		$	2.54



Sales by Major Product Offering
Measurement & Analytical Instrumentation	$	2,564	2,730	6	%
Valves, Actuators & Regulators	2,732		2,752	1	%
Industrial Solutions	1,382		1,664	20	%
Process Control Systems & Solutions	1,535		1,688	10	%
Total	$	8,213	8,834	8	%



4			Emerson agrees to furnish to the Securities and Exchange Commission, upon request, copies of any long-term debt instruments that authorize an amount of securities constituting 10 percent or less of the total assets of Emerson and its subsidiaries on a consolidated basis.

31			Certifications pursuant to Exchange Act Rule 13a-14(a).

32			Certifications pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350.

101			Attached as Exhibit 101 to this report are the following documents formatted in iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Statements of Earnings for the three and nine months ended June 30, ~~2019~~2020 and ~~2018,~~2019, (ii) Consolidated Statements of Comprehensive Income for the three and nine months ended June 30, ~~2019~~2020 and ~~2018,~~2019, (iii) Consolidated Balance Sheets as of September 30, ~~2018~~2019 and June 30, 2020, (iv) Consolidated Statements of Equity for the three and nine months ended June 30, 2020 and 2019, ~~(iv)~~(v) Consolidated Statements of Cash Flows for the nine months ended June 30, 2020 and 2019, and ~~2018, and (v)~~(vi) Notes to Consolidated Financial Statements for the three and nine months ended ended June 30, 2020 and 2019.

104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).