UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________

FORM 10-Q

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

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2022~~2023

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

EXCHANGE ACT OF 1934

For the transition period from ____________________ to __________________

Commission file number 1-278

EMERSON ELECTRIC CO.

(Exact name of registrant as specified in its charter)


Missouri		43-0259330
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

8000 W. Florissant Ave.
P.O. Box 4100
St. Louis,	Missouri	63136
(Address of principal executive offices)		(Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:


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
		NYSE Chicago
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

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 ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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, 2022:~~June 30, 2023: ~~591.3~~571.5 million shares.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Statements of Earnings

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three and nine months ended June 30, ~~2021~~2022 and ~~2022~~2023

(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,
		2021		2022	2021	2022		2022		2023	2022	2023
Net sales	Net sales	$	4,697	5,005	13,289	14,269	Net sales	$	3,465	3,946	9,912	11,075

Cost of sales	Cost of sales	2,715		2,908	7,722	8,398	Cost of sales	1,879		1,952	5,435	5,660
Selling, general and administrative expenses	Selling, general and administrative expenses	1,073		1,052	3,125	3,112	Selling, general and administrative expenses	894		1,042	2,631	3,072
Gain on subordinated interest	Gain on subordinated interest	—		—	—	(453)	Gain on subordinated interest	—		—	(453)	—
Gain on sale of business		—		(483)	—	(483)
Other deductions, net	Other deductions, net	88		283	243	374	Other deductions, net	264		191	330	420
Interest expense (net of interest income of $3, $11, $9, and $18, respectively)		37		50	115	140
Interest expense (net of interest income of $11, $58, $18 and $96, respectively)							Interest expense (net of interest income of $11, $58, $18 and $96, respectively)	50		10	140	111
Interest income from related party							Interest income from related party	—		(10)	—	(10)

Earnings before income taxes		784		1,195	2,084	3,181
Earnings from continuing operations before income taxes							Earnings from continuing operations before income taxes	378		761	1,829	1,822

Income taxes	Income taxes	151		243	431	659	Income taxes	123		158	399	390

Earnings from continuing operations							Earnings from continuing operations	255		603	1,430	1,432

Discontinued operations, net of tax: $120, $2,014, $260 and $3,019, respectively							Discontinued operations, net of tax: $120, $2,014, $260 and $3,019, respectively	697		8,763	1,092	11,030

Net earnings	Net earnings	633		952	1,653	2,522	Net earnings	952		9,366	2,522	12,462

Less: Noncontrolling interests in subsidiaries	Less: Noncontrolling interests in subsidiaries	6		31	20	31	Less: Noncontrolling interests in subsidiaries	31		14	31	(13)

Net earnings common stockholders	Net earnings common stockholders	$	627	921	1,633	2,491	Net earnings common stockholders	$	921	9,352	2,491	12,475

Earnings common stockholders:							Earnings common stockholders:
Earnings from continuing operations							Earnings from continuing operations	226		592	1,400	1,451
Discontinued operations							Discontinued operations	695		8,760	1,091	11,024
Net earnings common stockholders							Net earnings common stockholders	$	921	9,352	2,491	12,475

Basic earnings per share common stockholders:							Basic earnings per share common stockholders:
Earnings from continuing operations							Earnings from continuing operations	$	0.38	1.04	2.36	2.52
Discontinued operations							Discontinued operations	1.17		15.32	1.83	19.15
Basic earnings per common share							Basic earnings per common share	$	1.55	16.36	4.19	21.67

Earnings per share:
Basic		$	1.05	1.55	2.73	4.19
Diluted		$	1.04	1.54	2.71	4.17
Diluted earnings per share common stockholders:							Diluted earnings per share common stockholders:
Earnings from continuing operations							Earnings from continuing operations	$	0.38	1.03	2.34	2.51
Discontinued operations							Discontinued operations	1.16		15.25	1.83	19.05
Diluted earnings per common share							Diluted earnings per common share	$	1.54	16.28	4.17	21.56

Weighted average outstanding shares:	Weighted average outstanding shares:						Weighted average outstanding shares:
Basic	Basic	598.2		592.8	598.7	593.6	Basic	592.8		570.9	593.6	575.1
Diluted	Diluted	602.1		596.2	602.3	596.9	Diluted	596.2		574.0	596.9	578.1

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three and nine months ended June 30, ~~2021~~2022 and ~~2022~~2023

(Dollars in millions; unaudited)


		Three Months Ended June 30,			Nine Months Ended June 30,				Three Months Ended June 30,			Nine Months Ended June 30,
		2021		2022		2021	2022		2022		2023		2022	2023
Net earnings	Net earnings	$	633	952		1,653	2,522	Net earnings	$	952	9,366		2,522	12,462

Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:							Other comprehensive income (loss), net of tax:
Foreign currency translation	Foreign currency translation	(5)		(187)		163	(319)	Foreign currency translation	(187)		86		(319)	437
Pension and postretirement	Pension and postretirement	27		18		81	54	Pension and postretirement	18		10		54	(23)
Cash flow hedges	Cash flow hedges	(6)		(27)		26	(17)	Cash flow hedges	(27)		(19)		(17)	4
Total other comprehensive income (loss)	Total other comprehensive income (loss)	16		(196)		270	(282)	Total other comprehensive income (loss)	(196)		77		(282)	418

Comprehensive income	Comprehensive income	649		756		1,923	2,240	Comprehensive income	756		9,443		2,240	12,880

Less: Noncontrolling interests in subsidiaries	Less: Noncontrolling interests in subsidiaries	7		30		20	29	Less: Noncontrolling interests in subsidiaries	30		15		29	(8)
Comprehensive income common stockholders	Comprehensive income common stockholders	$	642	726		1,903	2,211	Comprehensive income common stockholders	$	726	9,428		2,211	12,888

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, 2021 June 30, 2022
ASSETS
Current assets
Cash and equivalents $ 2,354 2,529
Receivables, less allowances of $116 and $112, respectively 2,971 2,957
Inventories 2,050 2,319
Other current assets 1,057 1,570
Total current assets 8,432 9,375
Property, plant and equipment, net 3,738 3,359
Other assets
Goodwill 7,723 14,748
Other intangible assets 2,877 6,930
Other 1,945 2,630
Total other assets 12,545 24,308
Total assets $ 24,715 37,042
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings and current maturities of long-term debt $ 872 3,227
Accounts payable 2,108 2,040
Accrued expenses 3,266 3,545
Total current liabilities 6,246 8,812
Long-term debt 5,793 8,367
Other liabilities 2,753 3,576
Equity
Common stock, $0.50 par value; authorized, 1,200.0 shares; issued, 953.4 shares; outstanding, 595.8 shares and 592.2 shares, respectively 477 477
Additional paid-in-capital 522 42
Retained earnings 26,047 27,618
Accumulated other comprehensive income (loss) (872) (1,152)
Cost of common stock in treasury, 357.6 shares and 361.2 shares, respectively (16,291) (16,670)
Common stockholders’ equity 9,883 10,315
Noncontrolling interests in subsidiaries 40 5,972
Total equity 9,923 16,287
Total liabilities and equity $ 24,715 37,042


	Sept 30, 2022		June 30, 2023
ASSETS
Current assets
Cash and equivalents	$	1,804	9,957
Receivables, less allowances of $100 and $100, respectively	2,261		2,491
Inventories	1,742		2,085
Other current assets	1,301		1,227
Current assets held-for-sale	1,398		—
Total current assets	8,506		15,760

Property, plant and equipment, net	2,239		2,268
Other assets
Goodwill	13,946		14,131
Other intangible assets	6,572		6,147
Copeland note receivable and equity investment	—		3,359
Other	2,151		2,508
Noncurrent assets held-for-sale	2,258		—
Total other assets	24,927		26,145
Total assets	$	35,672	44,173

LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings and current maturities of long-term debt	$	2,115	667
Accounts payable	1,276		1,218
Accrued expenses	3,038		4,729
Current liabilities held-for-sale	1,348		—
Total current liabilities	7,777		6,614

Long-term debt	8,259		7,642

Other liabilities	3,153		3,504

Noncurrent liabilities held-for-sale	167		—

Equity
Common stock, $0.50 par value; authorized, 1,200.0 shares; issued, 953.4 shares; outstanding, 591.4 shares and 571.5 shares, respectively	477		477
Additional paid-in-capital	57		112
Retained earnings	28,053		39,624
Accumulated other comprehensive income (loss)	(1,485)		(1,072)
Cost of common stock in treasury, 362.0 shares and 381.9 shares, respectively	(16,738)		(18,677)
Common stockholders’ equity	10,364		20,464
Noncontrolling interests in subsidiaries	5,952		5,949
Total equity	16,316		26,413
Total liabilities and equity	$	35,672	44,173

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Equity

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three and nine months ended June 30, ~~2021~~2022 and ~~2022~~2023

(Dollars in millions; unaudited)

Three Months Ended June 30, Nine Months Ended June 30,
2021 2022 2021 2022
Common stock $ 477 477 477 477
Additional paid-in-capital
     Beginning balance 511 579 470 522
     Stock plans 7 13 48 70
     AspenTech acquisition — (550) — (550)
        Ending balance 518 42 518 42
Retained earnings
     Beginning balance 25,354 27,003 24,955 26,047
     Net earnings common stockholders 627 921 1,633 2,491
Dividends paid (per share: $0.505, $0.515, $1.515 and $1.545, respectively) (303) (306) (909) (920)
     Adoption of accounting standard — — (1) —
        Ending balance 25,678 27,618 25,678 27,618
Accumulated other comprehensive income (loss)
     Beginning balance (1,322) (957) (1,577) (872)
     Foreign currency translation (6) (186) 163 (317)
     Pension and postretirement 27 18 81 54
     Cash flow hedges (6) (27) 26 (17)
        Ending balance (1,307) (1,152) (1,307) (1,152)
Treasury stock
     Beginning balance (15,890) (16,527) (15,920) (16,291)
     Purchases (193) (145) (275) (430)
     Issued under stock plans 8 2 120 51
        Ending balance (16,075) (16,670) (16,075) (16,670)
Common stockholders' equity 9,291 10,315 9,291 10,315
Noncontrolling interests in subsidiaries
     Beginning balance 50 39 42 40
     Net earnings 6 31 20 31
     Stock plans — 15 — 15
     Other comprehensive income 1 (1) — (2)
     Dividends paid (9) (2) (14) (2)
     AspenTech acquisition — 5,890 — 5,890
        Ending balance 48 5,972 48 5,972
Total equity $ 9,339 16,287 9,339 16,287


	Three Months Ended June 30,			Nine Months Ended June 30,
	2022		2023	2022	2023

Common stock	$	477	477	477	477

Additional paid-in-capital
Beginning balance	579		138	522	57
Stock plans	13		30	70	111
AspenTech purchases of common stock	—		(56)	—	(56)
AspenTech acquisition	(550)		—	(550)	—
Ending balance	42		112	42	112

Retained earnings
Beginning balance	27,003		30,571	26,047	28,053
Net earnings common stockholders	921		9,352	2,491	12,475
Dividends paid (per share: $0.515, $0.52 $1.545 and $1.56, respectively)	(306)		(299)	(920)	(904)
Ending balance	27,618		39,624	27,618	39,624

Accumulated other comprehensive income (loss)
Beginning balance	(957)		(1,148)	(872)	(1,485)
Foreign currency translation	(186)		85	(317)	432
Pension and postretirement	18		10	54	(23)
Cash flow hedges	(27)		(19)	(17)	4
Ending balance	(1,152)		(1,072)	(1,152)	(1,072)

Treasury stock
Beginning balance	(16,527)		(18,678)	(16,291)	(16,738)
Purchases	(145)		—	(430)	(2,000)
Issued under stock plans	2		1	51	61
Ending balance	(16,670)		(18,677)	(16,670)	(18,677)

Common stockholders' equity	10,315		20,464	10,315	20,464

Noncontrolling interests in subsidiaries
Beginning balance	39		5,987	40	5,952
Net earnings (loss)	31		14	31	(13)
Stock plans	15		21	15	79
AspenTech purchases of common stock	—		(44)	—	(44)
Other comprehensive income	(1)		1	(2)	5
Dividends paid	(2)		(1)	(2)	(1)
AspenTech acquisition	5,890		—	5,890	—
Climate Technologies divestiture	—		(29)	—	(29)
Ending balance	5,972		5,949	5,972	5,949

Total equity	$	16,287	26,413	16,287	26,413

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Cash Flows

EMERSON ELECTRIC CO. & SUBSIDIARIES

Nine Months Ended June 30, ~~2021~~2022 and ~~2022~~2023

(Dollars in millions; unaudited)
Nine Months Ended
June 30,
2021 2022
Operating activities
Net earnings $ 1,653 2,522
Adjustments to reconcile net earnings to net cash provided by operating activities:
        Depreciation and amortization 720 722
        Stock compensation 191 107
        Pension expense 23 2
        Changes in operating working capital 246 (706)
        Gain on subordinated interest — (453)
        Gain on sale of business — (428)
        Other, net (113) (61)
            Cash provided by operating activities 2,720 1,705
Investing activities
Capital expenditures (350) (335)
Purchases of businesses, net of cash and equivalents acquired (1,611) (5,615)
Divestitures of businesses — 578
Proceeds from subordinated interest — 438
Other, net 53 (41)
    Cash used in investing activities (1,908) (4,975)
Financing activities
Net increase in short-term borrowings 31 1,633
Proceeds from short-term borrowings greater than three months 71 1,162
Payments of short-term borrowings greater than three months — (445)
Proceeds from long-term debt — 2,975
Payments of long-term debt (305) (512)
Dividends paid (909) (918)
Purchases of common stock (268) (418)
Other, net 89 80
    Cash provided by (used in) financing activities (1,291) 3,557
Effect of exchange rate changes on cash and equivalents 24 (112)
Increase (Decrease) in cash and equivalents (455) 175
Beginning cash and equivalents 3,315 2,354
Ending cash and equivalents $ 2,860 2,529
Changes in operating working capital
Receivables $ 76 (118)
Inventories (160) (513)
Other current assets (69) (86)
Accounts payable 216 80
Accrued expenses 183 (69)
Total changes in operating working capital $ 246 (706)


	Nine Months Ended
	June 30,
	2022		2023
Operating activities
Net earnings	$	2,522	12,462
Earnings from discontinued operations, net of tax	(1,092)		(11,030)
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	571		780
Stock compensation	91		198
Changes in operating working capital	(361)		(369)
Gain on subordinated interest	(453)		—
Other, net	(43)		(322)
Cash from continuing operations	1,235		1,719
Cash from discontinued operations	470		(439)
Cash provided by operating activities	1,705		1,280

Investing activities
Capital expenditures	(199)		(194)
Purchases of businesses, net of cash and equivalents acquired	(5,615)		—
Proceeds from subordinated interest	438		15
Proceeds from related party note receivable	—		918
Other, net	(38)		(124)
Cash from continuing operations	(5,414)		615
Cash from discontinued operations	439		12,485
Cash provided by (used in) investing activities	(4,975)		13,100

Financing activities
Net increase (decrease) in short-term borrowings	1,633		(1,476)
Proceeds from short-term borrowings greater than three months	1,162		395
Payments of short-term borrowings greater than three months	(445)		(400)
Proceeds from long-term debt	2,975		—
Payments of long-term debt	(512)		(744)
Dividends paid	(918)		(900)
Purchases of common stock	(418)		(2,000)
AspenTech purchases of common stock	—		(100)
Payment of related party note payable	—		(918)
Other, net	80		(159)
Cash provided by (used in) financing activities	3,557		(6,302)

Effect of exchange rate changes on cash and equivalents	(112)		75
Increase in cash and equivalents	175		8,153
Beginning cash and equivalents	2,354		1,804
Ending cash and equivalents	$	2,529	9,957

Changes in operating working capital
Receivables	$	31	(114)
Inventories	(353)		(259)
Other current assets	(75)		27
Accounts payable	64		(71)
Accrued expenses	(28)		48
Total changes in operating working capital	$	(361)	(369)

See accompanying Notes to Consolidated Financial Statements.

Notes to Consolidated Financial Statements

EMERSON ELECTRIC CO. & SUBSIDIARIES

(Dollars 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, ~~2021.~~ 2022.

Over the past two years, Emerson Electric Co. ("Emerson" or the "Company") has taken significant actions to accelerate the transformation of its portfolio through the completion of strategic acquisitions and divestitures of non-core businesses. The Company's recent portfolio actions include the combination of its industrial software businesses with Aspen Technology, Inc., with the Company owning 55 percent of the outstanding shares of the combined entity on a fully diluted basis upon closing of the transaction on May 16, 2022, the sale of its Therm-O-Disc business, which was completed on May 31, 2022, the sale of its InSinkErator business, which was completed on October 31, 2022, the sale of a majority stake in its Climate Technologies business, which was completed on May 31, 2023, and the pending acquisition of National Instruments Corporation ("NI"), which was approved by NI shareholders on June 29, 2023 and is expected to close in the first half of Emerson’s fiscal 2024, subject to the completion of customary closing conditions and regulatory approvals.

Certain prior year amounts have been reclassified to conform to the current year ~~presentation to reflect the business combination with AspenTech (see Note 4), which is reported~~presentation. This includes reporting financial results for Climate Technologies, InSinkErator and Therm-O-Disc as ~~a new segment and includes the historical results of Open Systems International, Inc.~~discontinued operations for all periods presented, and the ~~Geological Simulation Software business. These businesses were previously reported in the Automation Solutions segment (see Note 13).~~

Effective October 1, 2021, the Company adopted three accounting standard updates which had an immaterial or no impact on the Company's financial statements as of and for the nine months ended June 30, 2022. These included:

•~~Updates to ASC 805,~~ ~~Business Combinations, which clarify the accounting for contract~~ assets and liabilities ~~assumed in a business combination.~~of Climate Technologies and InSinkErator (prior to completion of the divestitures) as held-for-sale (see Note 5). In ~~general, this will result in contract liabilities being recognized at their historical amounts under ASC 606, rather than at fair value in accordance with the general requirements of ASC 805.~~

•~~Updates to ASC 740,~~ ~~Income Taxes, which require the recognition of a franchise tax that is partially based on income as an income-based tax with any incremental amount~~addition, as a ~~non-income based tax. These updates also make certain changes to intra-period tax allocation principles~~result of its portfolio transformation, the Company now reports six segments and ~~interim tax calculations.~~

•~~Updates to ASC 321,~~ ~~Equity Securities, ASC 323~~ ~~Investments - Equity Method and Joint Ventures, and ASC 815,~~ ~~Derivatives and Hedging, which clarify how to account for the transition into and out of the equity method of accounting when evaluating observable transactions.~~two business groups (see Note 14).

(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 ~~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, while a smaller portion is recognized over time or relates to sales arrangements with multiple performance obligations. See Note 1314 for additional information about the Company's revenues.

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


		Sept 30, 2021			June 30, 2022			Sept 30, 2022			June 30, 2023
Unbilled receivables (contract assets)	Unbilled receivables (contract assets)		$	528		1,323	Unbilled receivables (contract assets)		$	1,390		1,385
Customer advances (contract liabilities)	Customer advances (contract liabilities)		(730)			(917)	Customer advances (contract liabilities)		(776)			(985)
Net contract assets (liabilities)	Net contract assets (liabilities)		$	(202)		406	Net contract assets (liabilities)		$	614		400

The majority of the Company's contract balances relate to (1) arrangements where revenue is recognized over time and payments from customers are made according to a contractual billing schedule, and (2) revenue from term software license arrangements sold by AspenTech where the license revenue is recognized upfront upon delivery. The ~~change~~decrease in ~~the net contract balance was due to the AspenTech acquisition, which added~~ net contract assets ~~of approximately $700, partially offset by an increase in net contract liabilities for the Company's existing businesses~~was due to customer billings exceeding revenue recognized for performance completed during the period. Revenue recognized for the three and nine months ended June 30, 2023 included $59 and $500, respectively, that was included in the beginning contract liability balance. Other factors that impacted the change in net contract assets were immaterial. Revenue recognized for the three and nine months ended June 30,

Revenue recognized for the three and nine months ended June 30, 2022 included $63 and $519 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 three and nine months ended June 30, 20222023 for performance obligations that were satisfied in previous periods, including cumulative catchup adjustments on the Company's long-term contracts, was not material.

As of June 30, ~~2022,~~2023, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately ~~$8.5~~$8.2 billion (of which ~~includes approximately $700 related~~$1.3 billion was attributable to ~~the AspenTech acquisition. AspenTech's remaining perform~~AspenTech)~~ance obligations primarily relate to software maintenance in long-term contracts for unspecified future software updates provided on a when-and-if available basis.~~. The Company expects to recognize ~~approximately~~approximately 80 percent of its remaining performance obligations as revenue over the next 12 months, with the remainder substantially over the following two years.

(3) COMMON SHARES ~~AND SHARE-BASED COMPENSATION~~

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,
		2021	2022	2021	2022		2022	2023	2022	2023

Basic shares outstanding	Basic shares outstanding	598.2	592.8	598.7	593.6	Basic shares outstanding	592.8	570.9	593.6	575.1
Dilutive shares	Dilutive shares	3.9	3.4	3.6	3.3	Dilutive shares	3.4	3.1	3.3	3.0
Diluted shares outstanding	Diluted shares outstanding	602.1	596.2	602.3	596.9	Diluted shares outstanding	596.2	574.0	596.9	578.1

~~The Company changed the terms of its annual performance share awards issued in the first quarter of fiscal 2022. The new terms meet the criteria for equity classification in accordance with ASC 718,~~ ~~Compensation - Stock Compensation~~, and therefore expense will be recognized on a fixed basis over the three-year performance period. The terms of the performance share awards issued in fiscal 2020 and 2021 are unchanged and will therefore continue to be accounted for as liability awards and marked-to-market each period based on changes in the stock price.

As discussed in Note 4, Emerson completed the acquisition of AspenTech in the third quarter of fiscal 2022. New AspenTech, as defined in Note 4, operates as a separate publicly traded company and has various stock-based compensation plans, including stock options and restricted stock units, which are settled in their own common stock and are accounted for as equity awards. Stock compensation expense for New AspenTech was $15 for the three and nine months ended June 30, 2022.

(4) ACQUISITIONS AND DIVESTITURES

Aspen Technology

On May 16, 2022, the Company completed the transactions contemplated by its definitive agreement with Aspen Technology, Inc. ("Heritage AspenTech") to contribute two of Emerson's stand-alone industrial software businesses, Open Systems International, Inc. and the Geological Simulation Software business (collectively, the “Emerson Industrial Software Business”), along with approximately $6.0 billion in cash to Heritage AspenTech stockholders, to create "New AspenTech", a diversified, high-performance industrial software leader with greater scale, capabilities and ~~technologies.~~technologies (defined as "AspenTech" herein). Upon closing of the transaction, Emerson ~~beneficially~~ owned 55 percent of the outstanding shares of ~~New~~ AspenTech common stock (on a fully diluted basis) and former Heritage AspenTech stockholders owned the remaining outstanding shares of ~~New~~ AspenTech common stock. ~~New~~ AspenTech and its subsidiaries now operate under Heritage AspenTech’s previous name “Aspen Technology, Inc.” and ~~New~~ AspenTech common stock is traded on NASDAQ under AspenTech’s previous stock ticker symbol “AZPN.”

The business combination has been accounted for using the acquisition method of accounting with Emerson considered the accounting acquirer of Heritage AspenTech. The net assets of Heritage AspenTech were recorded at their estimated fair value and for the Emerson Industrial Software Business ~~continues~~continue at ~~its~~their historical basis. The Company recorded a noncontrolling interest of $5.9 billion for the 45 percent ownership interest of former Heritage AspenTech stockholders in ~~New~~ AspenTech. The noncontrolling interest associated with the Heritage AspenTech acquired net assets was recorded at fair value determined using the closing market price per share of Heritage AspenTech as of May 16, 2022, while the portion attributable

to the Emerson Industrial Software business was recorded at its historical carrying amount. The impact of recognizing the noncontrolling interest in the Emerson Industrial Software Business resulted in a decrease to additional paid-in-capital of $550.

The following table summarizes the components of the purchase consideration reflected in the acquisition accounting using Heritage AspenTech's shares outstanding and closing market price per share as of May 16, 2022 (in millions except share and per share data):


Heritage AspenTech shares outstanding	66,662,482
Heritage AspenTech share price	$	166.30
Purchase price	$	11,086
Value of stock-based compensation awards attributable to pre-combination service	102
Total purchase consideration	$	11,188

The total purchase consideration for Heritage AspenTech was ~~preliminarily~~ allocated to assets and liabilities as follows. ~~Valuations of acquired assets and liabilities are in-process and subject to refinement.~~


Cash and equivalents	$	274
Receivables	6143
Other current assets	~~262~~280
Property, plant equipment	4
Goodwill ($34 expected to be tax-deductible)	~~7,223~~7,225
Other intangible assets	4,390
Other assets	~~511~~513
Total assets	~~12,725~~12,729

Short-term borrowings	27
Accounts payable	8
Accrued expenses	~~113~~115
Long-term debt	~~253~~255
Deferred taxes and other liabilities	1,136
Total purchase consideration	$	11,188

Emerson's cash contribution of approximately $6.0 billion was paid out at approximately $87.69 per share (on a fully diluted basis) to holders of issued and outstanding shares of Heritage AspenTech common stock as of the closing of the transactions, with $168 of cash remaining on ~~New~~ AspenTech's balance sheet as of the closing which is not included in the allocation of purchase consideration above.

The estimated intangible assets attributable to the transaction are comprised of the following (in millions):


	Amount		Estimated Weighted Average Life (Years)
Developed technology	$	1,350	10
Customer relationships	2,300		15
Trade names	430		Indefinite-lived
Backlog	310		3
Total	$	4,390

Results of operations for the ~~third quarter of 2022~~three and nine months ended June 30, 2023 attributable to the Heritage AspenTech acquisition include sales of $257 and $576, respectively, compared to $173 for the three and nine months ended June 30, 2022, while the impact to GAAP net earnings was not ~~material.~~

material in both years.

Pro Forma Financial Information

The following unaudited proforma consolidated condensed financial results of operations are presented as if the acquisition of Heritage AspenTech occurred on October 1, 2020. The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved had the acquisition occurred as of that time ($ in millions, except per share amounts).

Three Months Ended June 30, Nine Months Ended June 30,
2021 2022 2021 2022
Net Sales $ 4,895 5,060 13,884 14,683
Net earnings common stockholders $ 614 964 1,480 2,517
Diluted earnings per share $ 1.02 1.62 2.46 4.21


	Three Months Ended June 30,			Nine Months Ended June 30,
		2022			2022
Net Sales		$	3,520		$	10,326
Net earnings from continuing operations common stockholders		$	268		$	1,426
Diluted earnings per share from continuing operations		$	0.45		$	2.39

The pro forma results for the nine months ended June 30, ~~2021~~2022 include $159 of transaction costs which were assumed to be incurred in the first fiscal quarter of 2021.Of these transaction costs, $61 and $91 were included in the Company's reported results for the three and nine months ended June 30, 2022, respectively, but have been excluded from the fiscal 2022 pro forma results above. In addition, Heritage AspenTech incurred $68 of transaction costs prior to the completion of the acquisition that were not included in Emerson's reported results. The pro forma results for the ~~three and~~ nine months ended June 30, ~~2021~~2022 include estimated interest ~~expense~~expense of ~~$37 and $110, respectively,~~ $56 related to the issuance of $3 billion of term debt and increased commercial paper borrowings to fund the acquisition, while results for the nine months ended June 30, 2022 include additional interest expense of $56 to reflect the increased borrowings as if they were outstanding for the entire fiscal year.acquisition.

Other Transactions

On ~~August 8, 2022 the Company~~April 12, 2023, Emerson announced an agreement to ~~sell its InSinkErator business,~~acquire National Instruments Corporation ("NI") for $60 per share in cash at an equity value of $8.2 billion. The effective price per share is $59.61 considering shares previously acquired by Emerson, see Note 12. NI, which ~~manufactures food waste disposers~~provides software-connected automated test and ~~is reported~~measurement systems that enable enterprises to bring products to market faster and at a lower cost, had revenues of $1.66 billion in 2022. On June 29, 2023, NI's shareholders voted to approve the ~~Tools & Home Products segment, to Whirlpool Corporation for $3.0 billion. This business had sales~~proposed transaction and pretax earnings of $565 and $143 in fiscal 2021 and $480 and $117 for the nine months ended June 30, 2022. The assets and liabilities of InSinkErator were classified as held-for-sale as of June 30, 2022 and are included in other current assets, other assets, accrued expenses and other liabilities in the consolidated balance sheet. The transactionit is expected to close in the first half of Emerson’s fiscal ~~2023,~~2024, subject to ~~regulatory approvals and other~~the completion of customary closing ~~conditions.~~conditions and regulatory approvals.

On July 27, 2022, ~~New~~ AspenTech entered into an agreement to acquire Micromine, a global leader in design and operational solutions for the mining industry, for AU$900 (approximately $623 ~~USD)~~USD based on exchange rates when the transaction was announced). ~~The transaction is expected~~On August 1, 2023, AspenTech announced the termination of the agreement to ~~close by~~purchase Micromine. AspenTech, along with the ~~end~~sellers of ~~calendar 2022, subject~~Micromine, had been waiting to ~~various~~secure a final Russian regulatory ~~approvals.~~approval as a condition to the closing of the transaction. As this process continued, the timing and requirements necessary to get this approval became increasingly unclear. This lack of clarity on the potential for, and timing of, a successful review led AspenTech and the sellers of Micromine to this mutual course of action. AspenTech will not pay any termination fee as part of this arrangement.

On ~~May~~March 31, ~~2022 the Company~~2023, Emerson completed the divestiture of Metran, its ~~Therm-O-Disc sensing and protection technologies business, which was reported in~~Russia-based manufacturing subsidiary. In the ~~Climate Technologies segment, to an affiliate~~first quarter of ~~One Rock Capital Partners, LLC. The~~fiscal 2023, the Company recognized a pretax ~~gain~~loss of ~~$483~~$47 in Other deductions ($~~428~~47 after-tax, ~~$0.72~~in total $0.08 per share).

~~On May 4,~~ related to its exit of business operations in Russia. In the third quarter of fiscal 2022, ~~Emerson~~the Company announced its intention to exit business operations in Russia and divest Metran, its Russia-based manufacturing subsidiary. Emerson's historical net sales in Russia were principally in the Automation Solutions segment and in total, represented approximately 1.5 percent of consolidated annual sales. In the third quarter of fiscal 2022, the Company recognized a pretax loss of $162 ($174 after-tax, in total $0.29 per share) ~~related to its exit of business operations in Russia.~~. This charge ~~which~~ included a loss of $32 in operations and $130 reported in Other deductions ($9 of which is reported in restructuring costs)~~, is~~ and was primarily non-cash. ~~Emerson is committed to an orderly transfer of these assets and will support its employees through this process.~~

On October 1, 2020, the Company completed the acquisition of Open Systems International, Inc. ("OSI"), a leading operations technology software provider in the global power industry, for approximately $1.6 billion, net of cash acquired. This business, which had net sales of $191 in fiscal 2021 and is now reported in the AspenTech segment, expanded the Company's offerings in the power industry to include the digitization and modernization of the electric grid. The Company recognized goodwill of $967 (none of which is expected to be tax deductible), identifiable intangible assets of $783, primarily intellectual property and customer relationships with a weighted-average useful life

of approximately 11 years, and deferred tax liabilities of approximately $193. Results of operations for the three months ended June 30, 2021 included first year pre-tax acquisition accounting charges related to backlog amortization and deferred revenue of $7 and $3, respectively, while year-to-date results included $24 and $11, respectively.

As previously disclosed, the Company sold its network power systems business (rebranded as Vertiv, now a publicly traded company, symbol VRT) in 2017 and retained a subordinated interest contingent upon the equity holders first receiving a threshold cash return on their initial investment. In the first quarter of fiscal 2022, the ~~equity holders' cumulative cash return exceeded the threshold and as a result, the~~ Company received a distribution of $438 related to its subordinated interest in ~~November 2021~~Vertiv (in total, a pretax gain of $453 was recognized in the first ~~quarter).~~ quarter of fiscal 2022, $358 after-tax, $0.60 per share) and received the remaining $15 related to the pretax gain in the first quarter of fiscal 2023. Based on the terms of the agreement and the current calculation, the Company could receive additional distributions of approximately ~~$75~~$150 which are expected to be received over the next two~~-to-three~~-to-three years. However, the distributions are contingent on the timing and price at which Vertiv shares are sold by the equity holders and therefore, there can be no assurance as to the amount or timing of the remaining distributions to the Company.

(5) ~~PENSION & POSTRETIREMENT PLANS~~DISCONTINUED OPERATIONS

On May 31, 2023, the Company completed the previously announced sale of a majority stake in its Climate Technologies business (which constitutes the former Climate Technologies segment, excluding Therm-O-Disc which was divested earlier in fiscal 2022) to private equity funds managed by Blackstone in a $14.0 billion transaction. Emerson received upfront, pre-tax cash proceeds of approximately $9.7 billion (an increase of $0.2 billion from when the transaction was announced due to Blackstone's decision to purchase an additional 5 percent of the common equity) and a note receivable with a face value of $2.25 billion (which will accrue 5 percent interest payable in kind by capitalizing interest), while retaining a 40 percent non-controlling common equity interest (down from 45 percent when the transaction was announced) in a new standalone joint venture between Emerson and Blackstone. The Climate Technologies business, which includes the Copeland compressor business and the entire portfolio of products and services across all residential and commercial HVAC and refrigeration end-markets, had fiscal 2022 net sales of approximately $5.0 billion and pretax earnings of $1.0 billion. The Company recognized a pretax gain of approximately $10.6 billion (approximately $8.4 billion after-tax including tax expense recognized in prior quarters related to subsidiary restructurings). The new standalone business is named Copeland. See Note 10 for further details.

~~Total periodic pension and postretirement (income) expense is summarized below:~~
Three Months Ended June 30, Nine Months Ended June 30,
2021 2022 2021 2022
Service cost $ 21 19 63 57
Interest cost 32 34 96 102
Expected return on plan assets (84) (78) (252) (234)
Net amortization 35 23 105 69
Total $ 4 (2) 12 (6)

~~(6) OTHER DEDUCTIONS, NET~~

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

Three Months Ended
June 30, Nine Months Ended
June 30,
2021 2022 2021 2022
Amortization of intangibles (intellectual property and
customer relationships) $ 71 98 223 223
Restructuring costs 28 31 111 50
Acquisition/divestiture costs 2 61 11 97
Foreign currency transaction (gains) losses 1 (13) 7 (41)
Investment-related gains & gains from sales of capital
assets
— — (69) (15)
Russia business exit — 121 — 121
Other (14) (15) (40) (61)
Total $ 88 283 243 374

On October 31, 2022, the ~~third~~Company completed the divestiture of its InSinkErator business, which manufactures food waste disposers, to Whirlpool Corporation for $3.0 billion. This business had net sales of $630 and pretax earnings of $152 in fiscal 2022. The Company recognized a pretax gain of approximately $2.8 billion (approximately $2.1 billion after-tax) in the first quarter of fiscal 2023.

On May 31, 2022 ~~intangibles amortization~~the Company completed the divestiture of its Therm-O-Disc sensing and protection technologies business to an affiliate of One Rock Capital Partners, LLC. The Company recognized a pretax gain of $486 ($429 after-tax) in the third fiscal quarter of 2022.

The financial results of Climate Technologies, InSinkErator ("ISE") and Therm-O-Disc ("TOD") (through the completion of the divestitures), are reported as discontinued operations for the three and nine months ended June 30, 2023 and 2022 and were as follows:


	Climate Technologies				ISE and TOD				Total
	Three Months Ended June 30,				Three Months Ended June 30,			Three Months Ended June 30,
		2022		2023		2022	2023		2022	2023
Net sales		$	1,325	847		215	—		1,540	847
Cost of sales		892		516		137	—		1,029	516
SG&A		129		122		29	—		158	122
Gain on sale of business		—		(10,576)		—	—		—	(10,576)
Other deductions, net		14		8		(478)	—		(464)	8
Earnings before income taxes		290		10,777		527	—		817	10,777
Income taxes		63		2,014		57	—		120	2,014
Earnings, net of tax		$	227	8,763		470	—		697	8,763

	Climate Technologies				ISE and TOD				Total
	Nine Months Ended June 30,				Nine Months Ended June 30,			Nine Months Ended June 30,
		2022		2023		2022	2023		2022	2023
Net sales		$	3,659	3,156		698	49		4,357	3,205
Cost of sales		2,520		2,000		443	29		2,963	2,029
SG&A		383		391		98	8		481	399
Gain on sale of business		—		(10,576)		—	(2,783)		—	(13,359)
Other deductions, net		26		75		(465)	12		(439)	87
Earnings before income taxes		730		11,266		622	2,783		1,352	14,049
Income taxes		158		2,366		102	653		260	3,019
Earnings, net of tax		$	572	8,900		520	2,130		1,092	11,030

Climate Technologies' results for the three and nine months ended June 30, 2023 include lower expense of $26 and $96, respectively, due to ceasing depreciation and amortization upon the held-for-sale classification. Other deductions, net for Climate Technologies included ~~$32~~$57 of transaction-related costs for the nine months ended June 30, 2023. Income taxes for the nine months ended June 30, 2023 included approximately $2.2 billion for the gain on the Copeland transaction and subsidiary restructurings in prior quarters, and approximately $660 related to the ~~AspenTech acquisition, while~~gain on the prior year included backlog amortization related to the OSI acquisition of $7 and $24, respectively. Other is composed of several items, including pension expense, litigation costs, provision for bad debt and other items, none of which is individually significant.

InSinkErator divestiture.

The aggregate carrying amounts of the major classes of assets and liabilities classified as held-for-sale as of June 30, 2023 and September 30, 2022 are summarized as follows:


	Climate Technologies				ISE			Total
		Sept. 30,		June 30,		Sept. 30,	June 30,		Sept. 30,	June 30,
Assets		2022		2023		2022	2023		2022	2023
Receivables		$	747	—		68	—		815	—
Inventories		449		—		81	—		530	—
Other current assets		49		—		4	—		53	—
Property, plant & equipment, net		1,122		—		141	—		1,263	—
Goodwill		716		—		2	—		718	—
Other noncurrent assets		265		—		12	—		277	—
Total assets held-for-sale		$	3,348	—		308	—		3,656	—

Liabilities
Accounts payable		$	752	—		60	—		812	—
Other current liabilities		475		—		61	—		536	—
Deferred taxes and other noncurrent liabilities		154		—		13	—		167	—
Total liabilities held-for-sale		$	1,381	—		134	—		1,515	—

Net cash from operating and investing activities for Climate Technologies, InSinkErator and Therm-O-Disc for the nine months ended June 30, 2023 and 2022 were as follows:


	Climate Technologies				ISE and TOD				Total
	Nine Months Ended June 30,				Nine Months Ended June 30,			Nine Months Ended June 30,
		2022		2023		2022	2023		2022	2023
Cash from operating activities		$	486	156		(16)	(595)		470	(439)
Cash from investing activities		$	(112)	9,430		551	3,055		439	12,485

Cash from operating activities for the nine months ended June 30, 2023 reflects approximately $750 of income taxes paid related to the gain on the InSinkErator divestiture and the Climate Technologies subsidiary restructurings and the impact from transaction fees. Cash from investing activities for the nine months ended June 30, 2023 reflects the proceeds of approximately $9.7 billion related to the Copeland transaction and approximately $3.0 billion related to the InSinkErator divestiture.

(6) PENSION & POSTRETIREMENT PLANS

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


	Three Months Ended June 30,				Nine Months Ended June 30,
		2022		2023		2022		2023
Service cost		$	19	12		$	57	36
Interest cost		34		54		102		162
Expected return on plan assets		(78)		(71)		(234)		(213)
Net amortization		23		(18)		69		(58)
Total		$	(2)	(23)		$	(6)	(73)

(7) OTHER DEDUCTIONS, NET

Other deductions, net are summarized below:


	Three Months Ended June 30,				Nine Months Ended June 30,
	2022			2023		2022	2023

Amortization of intangibles (intellectual property and customer relationships)		$	93	120		207	357
Restructuring costs		29		12		44	41
Acquisition/divestiture costs		61		38		91	48
Foreign currency transaction (gains) losses		(11)		22		(38)	41
Investment-related gains & gains from sales of capital assets		—		(26)		(16)	(63)
Loss on Copeland equity method investment		—		61		—	61
Russia business exit		121		—		121	47
Other		(29)		(36)		(79)	(112)
Total		$	264	191		330	420

Intangibles amortization for the three and nine months ended June 30, 2023 included $65 and $193, respectively, related to the Heritage AspenTech acquisition, compared to $32 for the three and nine months ended June 30, 2022. Foreign currency transaction gains/losses for the three and nine months ended June 30, 2023 included a mark-to-market gain of $3 and $24, respectively, related to foreign currency forward contracts entered into by AspenTech to mitigate the impact of foreign currency exchange associated with the Micromine purchase price. On June 21, 2023, AspenTech terminated all outstanding foreign currency forward contracts. The Company recognized a mark-to-market gain of $12 and $47 for the three and nine months ended June 30, 2023, respectively, related to its equity investment in National Instruments Corporation (see Note 12 for further information). Other is composed of several items, including pension expense, litigation costs, provision for bad debt and other items, none of which is individually significant.

(8) RESTRUCTURING COSTS

Restructuring expense reflects costs associated with the Company’s ongoing efforts to improve operational efficiency and deploy assets globally in order to remain competitive on a worldwide basis. ~~Expenses incurred in the first nine months of fiscal 2022 included costs related to workforce reductions of approximately 1,400 employees.~~ The Company expects fiscal ~~2022~~2023 restructuring expense and related costs to be approximately ~~$150,~~$110, 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,
2021 2022 2021 2022
Automation Solutions $ 20 20 92 33
AspenTech (2) 1 2 1
Climate Technologies 4 2 8 5
Tools & Home Products 2 (1) 4 1
Commercial & Residential Solutions 6 1 12 6
Corporate 4 9 5 10
Total $ 28 31 111 50


	Three Months Ended June 30,					Nine Months Ended June 30,
	2022			2023		2022		2023

Final Control		$	8		(2)		12		(1)
Measurement & Analytical		4			1		9		2
Discrete Automation		1			12		4		20
Safety & Productivity		(1)			(1)		—		1
Intelligent Devices		12			10		25		22

Control Systems & Software		7			1		8		7
AspenTech		1			—		1		—
Software and Control		8			1		9		7

Corporate		9			1		10		12

Total		$	29		12		44		41

Details of the change in the liability for restructuring costs during the nine months ended June 30, ~~2022~~2023 follow:
Sept 30, 2021 Expense Utilized/Paid June 30, 2022
Severance and benefits $ 172 20 52 140
Other 4 30 29 5
Total $ 176 50 81 145


	Sept 30, 2022			Expense		Utilized/Paid		June 30, 2023

Severance and benefits		$	117		18		49		86




Other		5			23		26		2
Total		$	122		41		75		88

The tables above do not include $4$11 and ~~$12~~$1 of costs related to restructuring actions incurred for the three months ended June 30, ~~2021~~2022 and ~~2022,~~2023, respectively, that are required to be reported in cost of sales and selling, general and administrative expenses; year-to-date amounts are ~~$11~~$24 and ~~$26,~~$13, respectively.

~~(8)~~(9) TAXES

Income taxes were $243 in the third quarter of fiscal 2022 and $151 in 2021, resulting in effective tax rates of 20 percent and 19 percent, respectively. Favorable net discrete tax items decreased the tax rates by 2 and 3 percentage points, respectively.

Income taxes were ~~$659 for~~$158 in the ~~first nine months~~third quarter of ~~2022~~fiscal 2023 and ~~$431 for 2021,~~$123 in 2022, resulting in effective tax rates of 21 percent and 33 percent, respectively. The prior year rate reflected a 12 percentage point impact from the Russia business exit.

Income taxes were $390 in the first nine of months of fiscal 2023 and $399 in 2022, resulting in effective tax rates of 21 percent and 22 percent, respectively. The ~~current~~prior year rate ~~included~~reflected the impact of the Russia business exit which was essentially offset by a ~~2 percentage point~~ benefit related to the completion of tax ~~examinations, partially offset by portfolio restructuring activities which negatively impacted the rate by 1 percentage points, while the prior year had favorable net~~examinations. ~~discrete items which reduced the rate 1 percentage point.~~

On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic, and among other things, provides tax relief to businesses. Tax provisions of the CARES Act include the deferral of certain payroll taxes, relief for retaining employees, and other provisions. The Company deferred $73 of certain payroll taxes through the end of calendar year 2020, of which approximately $37 was paid in December 2021 ~~with~~ andthe ~~remaining amount due~~remainder was paid in December 2022.

1113

(10) EQUITY METHOD INVESTMENT AND NOTE RECEIVABLE

As discussed in Note 5, the Company completed the divestiture of a majority stake in Copeland on May 31, 2023, and received upfront, pre-tax cash proceeds of approximately $9.7 billion and a note receivable with a face value of $2.25 billion, while retaining a 40 percent non-controlling common equity interest in Copeland. As a result of the transaction, the Company deconsolidated Copeland from its financial statements, as it no longer has a controlling interest, and initially recognized its common equity investment and note receivable at fair values of $1,359 and $2,052, respectively. The fair value of the common equity investment was determined using a discounted cash flow model, which included estimating financial projections for Copeland and applying an appropriate discount rate, and an option pricing model based on various assumptions. Fair value for the note receivable was determined using a market approach primarily based on interest rates for companies with similar credit quality and the expected duration of the note.

The Company records its share of Copeland's income or loss using the equity method of accounting. For the three and nine months ended June 30, 2023 the Company recorded a loss of $61 in Other deductions to reflect its share of Copeland's reported GAAP losses and a tax benefit of $10 in Income taxes related to Copeland's U.S. business, which is taxed as a partnership (in total, $0.09 per share). The Company recognized non-cash interest income on the note receivable of $10, which is reported in Interest income from related party and capitalized to the carrying value of the note.

As of June 30, 2023, the carrying values of the retained equity investment and note receivable were $1,296 and $2,063, respectively. During the three months ended June 30, 2023, the Company settled a note receivable and note payable with Copeland of $918, which is reported in Investing and Financing cash flows, respectively.

Summarized financial information for Copeland for the three and nine months ended June 30, 2023 is as follows. Copeland's results only reflect activity subsequent to the Company's divestiture of its majority stake.


	Three and Nine Months Ended June 30,
	2023
Net sales	$	435
Gross profit	$	108
Income (loss) from continuing operations	$	(150)
Net income (loss)	$	(150)
Net income (loss) attributable to shareholders	$	(153)

~~(9)~~(11) OTHER FINANCIAL INFORMATION


		Sept 30, 2021			June 30, 2022			Sept 30, 2022			June 30, 2023
Inventories	Inventories						Inventories
Finished products	Finished products		$	616		681	Finished products		$	417		486
Raw materials and work in process	Raw materials and work in process		1,434			1,638	Raw materials and work in process		1,325			1,599
Total	Total		$	2,050		2,319	Total		$	1,742		2,085


Property, plant and equipment, net	Property, plant and equipment, net				Property, plant and equipment, net
Property, plant and equipment, at cost	Property, plant and equipment, at cost	$	9,427	8,824	Property, plant and equipment, at cost	$	5,390	5,486
Less: Accumulated depreciation	Less: Accumulated depreciation	5,689		5,465	Less: Accumulated depreciation	3,151		3,218
Total	Total	$	3,738	3,359	Total	$	2,239	2,268




Goodwill by business segment
Final Control	$	2,605	2,689
Measurement & Analytical	1,112		1,191
Discrete Automation	807		851
Safety & Productivity	364		398
Intelligent Devices	4,888		5,129


Control Systems & Software	732		672
AspenTech	8,326		8,330
Software and Control	9,058		9,002

Total	$	13,946	14,131

Goodwill by business segment
Automation Solutions $ 5,508 5,378
AspenTech 1,044 8,266
Climate Technologies 753 719
Tools & Home Products 418 385
Commercial & Residential Solutions 1,171 1,104
Total $ 7,723 14,748


Other intangible assets	Other intangible assets				Other intangible assets
Gross carrying amount	Gross carrying amount	$	5,911	10,215	Gross carrying amount	$	9,671	9,839
Less: Accumulated amortization	Less: Accumulated amortization	3,034		3,285	Less: Accumulated amortization	3,099		3,692
Net carrying amount	Net carrying amount	$	2,877	6,930	Net carrying amount	$	6,572	6,147

Other intangible assets include customer relationships, net, of ~~$1,495~~$3,436 and ~~$3,614~~$3,261 and intellectual property, net, of $2,934 and $2,685 as of September 30, ~~2021~~2022 and June 30, ~~2022,~~2023, respectively.

~~The increase in goodwill and intangibles was primarily due to the AspenTech acquisition. See Note 4.~~


		Three Months Ended June 30,			Nine Months Ended June 30,			Three Months Ended June 30,			Nine Months Ended June 30,
		2021		2022	2021	2022		2022		2023	2022	2023
Depreciation and amortization expense include the following:	Depreciation and amortization expense include the following:						Depreciation and amortization expense include the following:
Depreciation expense	Depreciation expense	$	123	117	369	366	Depreciation expense	$	77	67	240	213
Amortization of intangibles (includes $14, $31, $42, and $59 reported in Cost of Sales, respectively)		86		129	266	282
Amortization of intangibles (includes $31, $49, $59 and $147 reported in Cost of Sales, respectively)							Amortization of intangibles (includes $31, $49, $59 and $147 reported in Cost of Sales, respectively)	124		169	266	504
Amortization of capitalized software	Amortization of capitalized software	28		24	85	74	Amortization of capitalized software	21		21	65	63
Total	Total	$	237	270	720	722	Total	$	222	257	571	780

Amortization of intangibles included ~~$49~~$99 and $297, related to the Heritage AspenTech acquisition for the three and nine months ended June 30, ~~2021, while the prior year included backlog amortization of $7 and $24 related~~2023, respectively, compared to ~~the OSI acquisition~~$49 for the three and nine months ended June 30, ~~2021, respectively.~~2022. For the three and nine months ended June 30, 2022, $5 of amortization of intangibles included in the table above is reported as a restructuring related cost.

1215


		Sept 30, 2021			June 30, 2022			Sept 30, 2022			June 30, 2023
Other assets include the following:	Other assets include the following:						Other assets include the following:
Pension assets	Pension assets		$	1,015		1,083	Pension assets		$	865		998
Unbilled receivables (contract assets)							Unbilled receivables (contract assets)		428			536
Operating lease right-of-use assets	Operating lease right-of-use assets		558			531	Operating lease right-of-use assets		439			508
Unbilled receivables (contract assets)			—			475
Deferred income taxes	Deferred income taxes		115			98	Deferred income taxes		85			100
Asbestos-related insurance receivables	Asbestos-related insurance receivables		95			87	Asbestos-related insurance receivables		68			66

Accrued expenses include the following:
Customer advances (contract liabilities) $ 730 886
Employee compensation 690 574
Operating lease liabilities (current) 155 154
Product warranty 146 119

Other liabilities include the following:
Deferred income taxes $ 711 1,736
Pension and postretirement liabilities 676 656
Operating lease liabilities (noncurrent) 413 384
Asbestos litigation 256 230



Accrued expenses include the following:
Customer advances (contract liabilities)	$	751	946
Employee compensation	523		531
Income taxes	125		1,721
Operating lease liabilities (current)	128		146
Product warranty	84		90

The ~~increases~~increase in ~~Unbilled receivables and Deferred~~Income taxes was due to remaining income taxes ~~were primarily due~~payable of approximately $1.5 billion related to the ~~AspenTech acquisition. See Notes 2 and 4.~~

~~(10) DEBT~~

In December 2021, the Company issued $1 billion of 2.0% notes due December 2028, $1 billion of 2.2% notes due December 2031, and $1 billion of 2.8% notes due December 2051. The Company's commercial paper borrowings also increased by approximat~~ely $2.4 billion compared to September 30, 2021. The Company used the net proceeds from the sale of the notes~~Copeland transaction and the ~~increased commercial paper borrowings~~gain on the InSinkErator divestiture, which are largely expected to ~~fund~~be paid by the ~~majority~~end of ~~its contribution of approximately $6.0 billion to existing stockholders of AspenTech as part of the transaction discussed further in~~fiscal 2023. See Note 4.5.



Other liabilities include the following:
Deferred income taxes	$	1,714	2,006
Pension and postretirement liabilities	427		452
Operating lease liabilities (noncurrent)	312		360
Asbestos litigation	205		178

Deferred income taxes included approximately $540 related to the ~~first quarter~~Copeland transaction as of ~~fiscal 2022, the Company repaid $500 of 2.625% notes that matured.~~

~~In the third quarter of fiscal 2022, the acquisition of AspenTech increased the Company's long-term debt by approximately $250. See Note 4.~~June 30, 2023.

~~(11)~~(12) FINANCIAL INSTRUMENTS

Hedging Activities – As of June 30, ~~2022,~~2023, the notional amount of foreign currency hedge positions was approximately ~~$2.1 billion, and commodity hedge contracts totaled approximately $170 (primarily 45 million pounds of copper and aluminum).~~$2.3 billion. All derivatives receiving hedge accounting are cash flow hedges. The majority of hedging gains and losses deferred as of June 30, ~~2022~~2023 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.

1316

The following gains and losses are included in earnings and other comprehensive income (OCI) for the three and nine months ended June 30, ~~2021~~2022 and ~~2022:~~2023:


			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)	Gains (Losses)	Location	2021		2022	2021	2022	2021	2022	2021	2022	Gains (Losses)	Location	2022		2023	2022	2023	2022	2023	2022	2023
Commodity	Commodity	Cost of sales	$	13	5	24	18	8	(32)	34	(9)	Commodity	Cost of sales	$	5	(9)	18	(19)	(32)	(13)	(9)	6
Foreign currency	Foreign currency	Sales	—		(1)	2	—	—	(3)	3	(5)	Foreign currency	Sales	(1)		—	—	(2)	(3)	(2)	(5)	1
Foreign currency	Foreign currency	Cost of sales	3		10	5	21	1	15	28	32	Foreign currency	Cost of sales	10		42	21	60	15	24	32	38
Foreign currency	Foreign currency	Other deductions, net	8		56	33	108					Foreign currency	Other deductions, net	56		(91)	108	(108)

Net Investment Hedges	Net Investment Hedges											Net Investment Hedges
Euro denominated debt	Euro denominated debt							6	84	(21)	163	Euro denominated debt				16		16	84	(46)	163	(183)
Total	Total		$	24	70	64	147	15	64	44	181	Total		$	70	(42)	147	(53)	64	(37)	181	(138)

Regardless of whether derivatives and non-derivative financial instruments receive hedge accounting, the Company expects hedging gains or losses to be 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~~assessment of hedge effectiveness.

Equity Investment– The Company has an equity investment in National Instruments Corporation ("NI"), valued at $128 as of June 30, 2023 (reported in Other current assets), and recognized a mark-to-market gain of $12 and $47 for the three and nine months ended June 30, 2023, respectively. On April 12, 2023, Emerson announced an agreement to acquire NI for $60 per share in cash for the remaining shares not already owned by Emerson. See Note 4.

Fair Value Measurement – Valuations for all derivatives and the Company's long-term debt fall within Level 2 of the GAAP valuation ~~hierarch~~y.hierarchy. As of June 30, ~~2022,~~2023, the fair value of long-term debt was ~~$8.1~~approximately $7.2 billion, which was lower than the carrying value by ~~$816.~~$1,055. The fair ~~values~~value of ~~commodity and~~ foreign currency contracts, ~~were~~which are reported in Other current assets and Accrued expenses, ~~and~~ did not materially change since September 30, ~~2021.~~2022. Commodity contracts, which related to discontinued operations, were novated to Copeland upon the completion of the transaction and therefore no amounts are reported in the Company's balance sheet as of June 30, 2023. The fair value of the Company's equity investment in National Instruments falls within Level 1 and was based on the most recent quoted closing market price from its principal exchange for the period ended June 30, 2023.

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 immaterial. The Company also can demand full collateralization of derivatives in net asset positions should any counterparty credit ratings fall below certain thresholds. No collateral was posted with counterparties and none was held by the Company as of June 30, ~~2022.~~2023.

1417

~~(12)~~(13) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)


Activity in Accumulated other comprehensive income (loss) for the three and nine months ended June 30, 2021 and 2022 is shown below, net of income taxes:
Activity in Accumulated other comprehensive income (loss) for the three and nine months ended June 30, 2022 and 2023 is shown below, net of income taxes:									Activity in Accumulated other comprehensive income (loss) for the three and nine months ended June 30, 2022 and 2023 is shown below, net of income taxes:
		Three Months Ended June 30,				Nine Months Ended June 30,				Three Months Ended June 30,				Nine Months Ended June 30,
			2021		2022		2021	2022			2022		2023		2022	2023
Foreign currency translation	Foreign currency translation								Foreign currency translation
Beginning balance	Beginning balance		$	(542)	(760)		(711)	(629)	Beginning balance		$	(760)	(918)		(629)	(1,265)
Other comprehensive income (loss), net of tax of $(1), $(20), $5 and $(38), respectively			(6)		(186)		163	(317)

Other comprehensive income (loss), net of tax of $(8), $3, $(18) and $35, respectively									Other comprehensive income (loss), net of tax of $(8), $3, $(18) and $35, respectively		(186)		(10)		(317)	337
Reclassified to gain on sale of business									Reclassified to gain on sale of business		—		95		—	95
Ending balance	Ending balance		(548)		(946)		(548)	(946)	Ending balance		(946)		(833)		(946)	(833)

Pension and postretirement	Pension and postretirement								Pension and postretirement
Beginning balance	Beginning balance		(810)		(223)		(864)	(259)	Beginning balance		(223)		(255)		(259)	(222)
Amortization of deferred actuarial losses into earnings, net of tax of $(8), $(5), $(24) and $(15), respectively			27		18		81	54

Amortization of deferred actuarial losses into earnings, net of tax of $(5), $6, $(10) and $13, respectively									Amortization of deferred actuarial losses into earnings, net of tax of $(5), $6, $(10) and $13, respectively		18		(12)		54	(45)
Reclassified to gain on sale of business									Reclassified to gain on sale of business		—		22		—	22
Ending balance	Ending balance		(783)		(205)		(783)	(205)	Ending balance		(205)		(245)		(205)	(245)

Cash flow hedges	Cash flow hedges								Cash flow hedges
Beginning balance	Beginning balance		30		26		(2)	16	Beginning balance		26		25		16	2
Gains deferred during the period, net of taxes of $(2), $5, $(15) and $(4), respectively			7		(15)		50	14
Reclassification of realized (gains) losses to sales and cost of sales, net of tax of $3, $4, $7 and $10, respectively			(13)		(12)		(24)	(31)
Gains deferred during the period, net of taxes of $5, $(2), $(4) and $(11), respectively									Gains deferred during the period, net of taxes of $5, $(2), $(4) and $(11), respectively		(15)		7		14	34
Reclassification of realized (gains) losses to sales and cost of sales, net of tax of $4, $1, $10 and $3, respectively									Reclassification of realized (gains) losses to sales and cost of sales, net of tax of $4, $1, $10 and $3, respectively		(12)		(7)		(31)	(11)
Reclassified to gain on sale of business									Reclassified to gain on sale of business		—		(19)		—	(19)

Ending balance	Ending balance		24		(1)		24	(1)	Ending balance		(1)		6		(1)	6

Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)		$	(1,307)	(1,152)		(1,307)	(1,152)	Accumulated other comprehensive income (loss)		$	(1,152)	(1,072)		(1,152)	(1,072)

~~(13)~~(14) BUSINESS SEGMENTS

As disclosed in Note 5, the financial results of Climate Technologies, InSinkErator and Therm-O-Disc are reported as discontinued operations for all periods presented. As a result of ~~the AspenTech acquisition,~~these portfolio actions, the Company has realigned its business segments and now reports six segments and two business groups, which are highlighted in the table below. The Company also reclassified certain product sales that were previously reported in Control Systems & Software to Discrete Automation.

INTELLIGENT DEVICES

SOFTWARE AND CONTROL

•Final Control

•Control Systems & Software

•Measurement & Analytical

•AspenTech

•Discrete Automation

•Safety & Productivity

The new segments were previously described as follows: Final Control was the Valves, Actuators & Regulators product offering; Measurement & Analytical was the Measurement & Analytical instrumentation product offering; Discrete Automation was the Industrial Solutions product offering; Safety & Productivity was the Tools & Home Products segment, excluding the divested InSinkErator business; Control Systems & Software was the Systems & Software product offering; and, AspenTech remains unchanged. The AspenTech segment was identified ~~one additional segment~~ in the third quarter of fiscal ~~2022. The new segment, referred to~~2022 as ~~"AspenTech,"~~a result of the Heritage AspenTech acquisition and reflects the combined results of Heritage AspenTech and the Emerson Industrial Software Business (see Note 4 for further details). The results for this new segment include the historical results of the Emerson Industrial Software Business (which were previously reported in

the ~~Automation Solutions~~Control Systems & Software segment), while results related to the Heritage AspenTech business only include periods subsequent to the close of the transaction. Prior year amounts ~~for the Automation Solutions segment~~ have been reclassified to conform to the current year presentation.

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


		Three Months Ended June 30,					Nine Months Ended June 30,					Three Months Ended June 30,					Nine Months Ended June 30,
		Sales			Earnings		Sales		Earnings			Sales			Earnings		Sales		Earnings
		2021		2022	2021	2022	2021	2022	2021	2022		2022		2023	2022	2023	2022	2023	2022	2023

Automation Solutions		$	2,865	2,872	519	530	8,193	8,451	1,354	1,618
Final Control											Final Control	$	905	1,035	150	245	2,606	2,889	424	618
Measurement & Analytical											Measurement & Analytical	788		913	189	257	2,294	2,550	535	661
Discrete Automation											Discrete Automation	633		668	115	124	1,894	1,969	365	378
Safety & Productivity											Safety & Productivity	360		363	69	82	1,066	1,034	199	228
Intelligent Devices											Intelligent Devices	2,686		2,979	523	708	7,860	8,442	1,523	1,885

Control Systems & Software											Control Systems & Software	568		663	77	144	1,711	1,892	294	378
AspenTech	AspenTech	82		239	2	57	239	405	(1)	51	AspenTech	239		320	57	27	405	793	51	(60)

Climate Technologies		1,268		1,380	274	300	3,459	3,884	731	754
Tools & Home Products		489		522	101	107	1,419	1,546	311	317
Commercial & Residential Solutions		1,757		1,902	375	407	4,878	5,430	1,042	1,071
Software and Control											Software and Control	807		983	134	171	2,116	2,685	345	318

Stock compensation	Stock compensation				(66)	(16)			(191)	(107)	Stock compensation				(15)	(56)			(92)	(198)
Unallocated pension and postretirement costs	Unallocated pension and postretirement costs				24	25			71	76	Unallocated pension and postretirement costs				25	42			76	133
Corporate and other	Corporate and other				(33)	(241)			(76)	(324)	Corporate and other				(239)	(43)			(336)	(154)
Gain on subordinated interest	Gain on subordinated interest				—	—			—	453	Gain on subordinated interest				—	—			453	—
Gain on sale of business					—	483			—	483
Loss on Copeland equity method investment											Loss on Copeland equity method investment				—	(61)			—	(61)
Eliminations/Interest	Eliminations/Interest	(7)		(8)	(37)	(50)	(21)	(17)	(115)	(140)	Eliminations/Interest	(28)		(16)	(50)	(10)	(64)	(52)	(140)	(111)
Interest income from related party											Interest income from related party				—	10				10
Total	Total	$	4,697	5,005	784	1,195	13,289	14,269	2,084	3,181	Total	$	3,465	3,946	378	761	9,912	11,075	1,829	1,822

Corporate and other for the three and nine months ended June 30, 2022 ~~includes~~included a loss of $162 related to the Company's exit of business operations in Russia and ~~acquisition/divestiture costs~~a loss of ~~$61 and $97, respectively.~~$47 for the nine months ended June 30, 2023.

~~Automation Solutions~~ ~~sales by major product offering are summarized below.~~
Three Months Ended June 30, Nine Months Ended June 30,
2021 2022 2021 2022
Measurement & Analytical Instrumentation $ 781 785 2,211 2,287
Valves, Actuators & Regulators 880 905 2,522 2,604
Industrial Solutions 593 575 1,656 1,743
Systems & Software 611 607 1,804 1,817
Automation Solutions $ 2,865 2,872 8,193 8,451

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,
2021 2022 2021 2022
Automation Solutions $ 128 127 393 383
AspenTech 24 73 71 119
Climate Technologies 48 43 144 136
Tools & Home Products 20 19 59 58
Commercial & Residential Solutions 68 62 203 194
Corporate and other 17 8 53 26
Total $ 237 270 720 722


	Three Months Ended June 30,				Nine Months Ended June 30,
		2022		2023		2022	2023
Final Control		$	53	39		156	129
Measurement & Analytical		27		26		88	84
Discrete Automation		22		20		67	63
Safety & Productivity		15		15		44	44
Intelligent Devices		117		100		355	320

Control Systems & Software		24		22		71	67
AspenTech		72		123		119	369
Software and Control		96		145		190	436

Corporate and other		9		12		26	24
Total		$	222	257		571	780

1619

Sales by geographic destination, Americas, Asia, Middle East & Africa ("AMEA") and Europe, are summarized below:
Three Months Ended June 30,
2021 2022
Automation Solutions Aspen Tech Commercial & Residential Solutions Total Automation Solutions Aspen Tech Commercial & Residential Solutions Total
Americas $ 1,269 52 1,190 2,511 1,418 131 1,362 2,911
Asia, Middle East & Africa 997 14 331 1,342 929 50 321 1,300
Europe 599 16 236 851 525 58 219 802
Total $ 2,865 82 1,757 4,704 2,872 239 1,902 5,013
Nine Months Ended June 30,
2021 2022
Automation Solutions Aspen Tech Commercial & Residential Solutions Total Automation Solutions Aspen Tech Commercial & Residential Solutions Total
Americas $ 3,561 150 3,290 7,001 3,942 234 3,789 7,965
Asia, Middle East & Africa 2,861 46 944 3,851 2,894 85 981 3,960
Europe 1,771 43 644 2,458 1,615 86 660 2,361
Total $ 8,193 239 4,878 13,310 8,451 405 5,430 14,286


	Three Months Ended June 30,						Three Months Ended June 30,
	2022						2023
		Americas		AMEA	Europe	Total	Americas	AMEA	Europe	Total
Final Control		$	434	338	133	905	498	399	138	1,035
Measurement & Analytical		397		274	117	788	482	303	128	913
Discrete Automation		320		150	163	633	312	180	176	668
Safety & Productivity		270		20	70	360	269	18	76	363
Intelligent Devices		1,421		782	483	2,686	1,561	900	518	2,979

Control Systems & Software		289		166	113	568	322	207	134	663
AspenTech		131		50	58	239	111	104	105	320
Software and Control		420		216	171	807	433	311	239	983


Total		$	1,841	998	654	3,493	1,994	1,211	757	3,962

	Nine Months Ended June 30,						Nine Months Ended June 30,
	2022						2023
		Americas		AMEA	Europe	Total	Americas	AMEA	Europe	Total
Final Control		$	1,197	1,012	397	2,606	1,438	1,069	382	2,889
Measurement & Analytical		1,069		865	360	2,294	1,333	853	364	2,550
Discrete Automation		890		504	500	1,894	914	539	516	1,969
Safety & Productivity		801		52	213	1,066	777	51	206	1,034
Intelligent Devices		3,957		2,433	1,470	7,860	4,462	2,512	1,468	8,442

Control Systems & Software		839		514	358	1,711	930	578	384	1,892
AspenTech		233		85	87	405	337	228	228	793
Software and Control		1,072		599	445	2,116	1,267	806	612	2,685


Total		$	5,029	3,032	1,915	9,976	5,729	3,318	2,080	11,127

1720

Items 2 and 3.

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

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

OVERVIEW

On April 12, 2023, Emerson announced an agreement to acquire National Instruments Corporation ("NI") for $60 per share in cash at an equity value of $8.2 billion. The effective price per share is $59.61 considering shares previously acquired by Emerson, see Note 12. NI, which provides software-connected automated test and measurement systems that enable enterprises to bring products to market faster and at a lower cost, had revenues of $1.66 billion in 2022. On June 29, 2023, NI's shareholders voted to approve the proposed transaction and it is expected to close in the first half of Emerson’s fiscal 2024, subject to the completion of customary closing conditions and regulatory approvals.

On October 31, 2022, the Company completed the divestiture of its InSinkErator business, which manufactures food waste disposers, to Whirlpool Corporation for $3.0 billion, and the Company recognized a pretax gain of approximately $2.8 billion (approximately $2.1 billion after-tax) in the first quarter of fiscal 2023.

Climate Technologies, Therm-O-Disc and InSinkErator are reported within discontinued operations for all periods presented. See Note 5.

For the third quarter of fiscal ~~2022,~~2023, net sales from continuing operations were ~~$5.0~~$3.9 billion, up 714 percent compared with the prior year. Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, were up 714 percent. ~~The AspenTech acquisition added 4 percent and divestitures deducted 1 percent, while foreign~~Foreign currency translation had a 31 percent unfavorable ~~impact.~~impact, the AspenTech acquisition added 2 percent and the divestiture of Metran, Emerson's Russia-based manufacturing subsidiary, deducted 1 percent. Sales growth ~~continued~~was strong across the majority of the Company's business segments and all geographies were up double digits.

Earnings from continuing operations attributable to ~~be strong in the quarter, benefiting from strong results in North America, despite headwinds due to the impact of lockdowns in China and supply chain and logistics constraints.~~

~~Net earnings~~ common stockholders were ~~$921,~~$592, up 47162 percent, and diluted earnings per share from continuing operations were ~~$1.54,~~$1.03, up 48171 percent compared with ~~$1.04~~$0.38 in the prior year. Adjusted diluted earnings per share from continuing operations were ~~$1.38~~$1.29 compared with ~~$1.19~~$0.92 in the prior year, reflecting the strong sales growth and operating ~~results and a $0.08 benefit related to the AspenTech acquisition.~~performance.

The table below presents the Company's diluted earnings per share from continuing operations on an adjusted basis to facilitate period-to-period comparisons and provide additional insight into the underlying, ongoing operating performance of the Company. Adjusted diluted earnings per share from continuing operations excludes intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction-related costs, interest income on undeployed proceeds related to the Copeland transaction, ~~and AspenTech pre-closing costs,~~gains or losses on the Copeland equity method investment, and certain gains, losses or impairments.

Three Months Ended June 30 2021 2022
Diluted earnings per share $ 1.04 1.54
    Restructuring and related costs 0.04 0.05
    Amortization of intangibles 0.10 0.13
    Gain on sale of business — (0.72)
    Russia business exit — 0.29
    Acquisition/divestiture costs and pre-acquisition interest on AspenTech debt — 0.09
    OSI first year acquisition accounting charges 0.01 —
Adjusted diluted earnings per share $ 1.19 1.38


Three Months Ended June 30	2022		2023

Diluted earnings from continuing operations per share	$	0.38	1.03

Amortization of intangibles	0.12		0.15
Restructuring and related costs	0.04		0.02
Acquisition/divestiture costs and pre-acquisition interest on AspenTech debt	0.09		0.07
National Instruments investment gain	—		(0.02)
Interest income on undeployed proceeds from Copeland transaction	—		(0.05)
Loss on Copeland equity method investment	—		0.09
Russia business exit	0.29		—

Adjusted diluted earnings from continuing operations per share	$	0.92	1.29

The table below summarizes the changes in adjusted diluted earnings per ~~share.~~share from continuing operations. The items identified below are discussed throughout MD&A, see further discussion above and in the Business Segments and Financial Position sections below.


	Three Months Ended
Adjusted diluted earnings from continuing operations per share - June 30, ~~2021~~2022	$	~~1.19~~0.92

Operations	~~0.09~~
~~AspenTech acquisition~~	~~0.08~~0.29
Corporate ~~and~~& other	~~(0.03)~~0.03
Stock compensation	~~0.08~~(0.06)
Pensions	0.02



~~Foreign currency~~	~~(0.02)~~
~~Higher effective~~Effective tax rate	~~(0.03)~~0.03


Share ~~repurchases~~count	0.04
Interest income on Copeland note receivable	0.02

Adjusted diluted earnings from continuing operations per share - June 30, ~~2022~~2023	$	~~1.38~~1.29

1822

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, ~~2021,~~2022, compared with the third quarter ended June 30, ~~2022.~~2023.


		2021			2022		Change			2022			2023		Change
(dollars in millions, except per share amounts)	(dollars in millions, except per share amounts)								(dollars in millions, except per share amounts)

Net sales	Net sales	$	4,697		5,005		7	%	Net sales	$	3,465		3,946		14	%
Gross profit	Gross profit	$	1,982		2,097		6	%	Gross profit	$	1,586		1,994		26	%
Percent of sales	Percent of sales	42.2		%	41.9	%	(0.3) pts		Percent of sales	45.8		%	50.5	%	4.7 pts

SG&A	SG&A	$	1,073		1,052		(2)	%	SG&A	$	894		1,042		16	%
Percent of sales	Percent of sales	22.9		%	21.0	%	(1.9) pts		Percent of sales	25.8		%	26.4	%	0.6 pts

Gain on sale of business		$	—		(483)

Other deductions, net	Other deductions, net	$	88		283				Other deductions, net	$	264		191
Amortization of intangibles	Amortization of intangibles	$	71		98				Amortization of intangibles	$	93		120
Restructuring costs	Restructuring costs	$	28		31				Restructuring costs	$	29		12

Interest expense, net	Interest expense, net	$	37		50				Interest expense, net	$	50		10
Interest income from related party									Interest income from related party	$	—		(10)

Earnings before income taxes		$	784		1,195		52	%
Earnings from continuing operations before income taxes									Earnings from continuing operations before income taxes	$	378		761		101	%
Percent of sales	Percent of sales	16.7		%	23.9	%	7.2 pts		Percent of sales	10.9		%	19.3	%	8.4 pts

Earnings from continuing operations common stockholders									Earnings from continuing operations common stockholders	$	226		592		162	%
Percent of sales									Percent of sales	6.5		%	15.1	%	8.6 pts
Net earnings common stockholders	Net earnings common stockholders	$	627		921		47	%	Net earnings common stockholders	$	921		9,352		914	%
Percent of sales		13.3		%	18.4	%	5.1 pts

Diluted earnings per share		$	1.04		1.54		48	%
Diluted EPS - Earnings from continuing operations									Diluted EPS - Earnings from continuing operations	$	0.38		1.03		171	%
Diluted EPS - Net earnings									Diluted EPS - Net earnings	$	1.54		16.28		957	%

Net sales for the third quarter of fiscal ~~2022~~2023 were ~~$5.0~~$3.9 billion, up 714 percent compared with ~~2021. Automation Solutions sales were flat, Commercial & Residential Solutions~~2022. Intelligent Devices sales were up 811 percent, while Software and ~~AspenTech~~Control sales were up ~~189 percent.~~22 percent, which included the impact of the Heritage AspenTech acquisition. Underlying sales were up 714 percent on 19 percent higher volume and 65 percent higher ~~price, while~~ forprice. Foreign currency translation had a 31 percent negative ~~impact. The~~impact, the Heritage AspenTech acquisition added 42 percent ~~while divestitures~~and the divestiture of Metran, Emerson's Russia-based manufacturing subsidiary, deducted 1 percent. Underlying sales were up 1510 percent in the U.S. and up 117 percent internationally. The Americas was up 1411 percent, Europe was ~~flat~~up 13 percent, and Asia, Middle East & Africa was ~~down 1~~up 20 percent (China ~~down 6 percent due to the impact of lockdowns)~~up 24 percent).

Cost of sales for the third quarter of fiscal ~~2022~~2023 were ~~$2,908,~~$1,952, an increase of ~~$193~~$73 compared with ~~2021, due to higher sales volume and higher materials costs.~~2022. Gross margin of ~~41.9~~50.5 percent ~~decreased 0.3~~increased 4.7 percentage points ~~as freight and other inflation negatively impacted margins, while~~due to favorable price less net material inflation, ~~was favorable but had a dilutive~~the impact ~~on margins. The~~of the Heritage AspenTech acquisition which benefited ~~gross margin~~margins by ~~1.6~~ 0.6 percentage points, ~~while the Russia business exit negatively impacted gross margin by 0.6 percentage points.~~and favorable mix.

Selling, general and administrative (SG&A) ~~expenses~~expenses of ~~$1,052 decreased $21~~$1,042 increased $148 and SG&A as a percent of sales ~~decreased 1.9~~increased 0.6 percentage points to ~~21.0~~26.4 percent compared with the prior year, reflecting higher stock compensation expense due to a higher share price and the impact of the Heritage AspenTech acquisition, partially offset by strong operating leverage on higher ~~sales and lower stock compensation expense of $50, partially offset by higher wage and other inflation.~~

On May 31, 2022, the Company completed the sale of its Therm-O-Disc sensing and protection technologies business to an affiliate of One Rock Capital Partners, LLC. The Company recognized a pretax gain o~~f $483 ($428 after-tax, $0.72 per share).~~ ~~See Note 4.~~

sales.

Other deductions, net were ~~$283~~$191 in ~~2022, an increase~~2023, a decrease of ~~$195~~$73 compared with the prior year. The prior year ~~reflecting~~ included a charge of $130 related to the Company exiting its business in Russia ($9 of which is reported in restructuring costs)~~. Acquisition/divestiture costs~~ ~~of $61~~ ~~and a favorable impact from foreign currency transactions of $14 also impacted comparisons.~~ ~~Intangibles amortization was higher by $27, as~~ while the current year included ~~$32 related to~~a loss of $61 on the ~~AspenTech acquisition, while~~Company's equity method investment in Copeland. See Note 7 and Note 10.

Pretax earnings from continuing operations of $761 increased $383, up 101 percent compared with the prior year, ~~included backlog amortization of $7 related to~~reflecting strong operating leverage on higher sales. Earnings increased $185 in Intelligent Devices and increased $37 in Software and Control, see the ~~OSI acquisition. See Notes 6~~Business Segments discussion that follows and 7.Note 14.

1923

Pretax earnings of $1,195 increased $411, up 52 percent compared with the prior year. Earnings increased $11 in Automation Solutions, $55 in AspenTech and $32 in Commercial & Residential Solutions, while costs reported at Corporate increased $157 largely due to the Russia business exit loss. See the Business Segments discussion that follows and Note 13.

Income taxes were ~~$243~~$158 in the third quarter of fiscal ~~2022~~2023 and ~~$151~~$123 in ~~2021,~~2022, resulting in effective tax rates of 2021 percent and 1933 percent, respectively. ~~Favorable net discrete tax items decreased~~The prior year rate reflected a 12 percentage point impact from the ~~tax rates by 2~~Russia business exit.

Earnings from continuing operations attributable to common stockholders were $592, up 162 percent, and ~~3 percentage points, respectively.~~diluted earnings per share from continuing operations were $1.03, up 171 percent compared with $0.38 in the prior year. Adjusted diluted earnings per share from continuing operations were $1.29 compared with $0.92 in the prior year, reflecting strong operating results. See the analysis above of adjusted earnings per share for further details.

Earnings from discontinued operations were $8,760 ($15.25 per share) compared to $695 ($1.16 per share) in the prior year, reflecting the gain on the Copeland transaction. See Note 5.

Net earnings common stockholders in the third quarter of fiscal ~~2022~~2023 were ~~$921, up 47 percent,~~$9,352 compared with ~~$627~~$921 in the prior year, and earnings per share were ~~$1.54, up 48 percent,~~$16.28 compared with ~~$1.04~~$1.54 in the prior year. ~~See discussion in the Overview above and the analysis below of adjusted earnings per share for further details.~~

The table below, which shows results from continuing operations on an adjusted EBITA basis, is intended to supplement the Company's discussion of its results of operations herein. The Company defines adjusted EBITA as earnings from continuing operations excluding interest expense, net, income taxes, intangibles amortization expense, restructuring expense, first year purchase accounting related items and ~~transaction fees,~~transaction-related costs, gains or losses on the Copeland equity method investment, and certain gains, losses or impairments. Adjusted EBITA and adjusted EBITA margin are measures used by management and may be useful for investors to evaluate the Company's operational performance.

Three Months Ended June 30 2021 2022 Change
Earnings before income taxes $ 784 1,195 52 %
      Percent of sales 16.7 % 23.9 % 7.2 pts
    Interest expense, net 37 50
    Restructuring and related costs 32 34
    Amortization of intangibles 79 124
    Gain on sale of business — (483)
    Russia business exit — 162
    Acquisition/divestiture costs — 61
    OSI first year acquisition accounting charges 10 —
Adjusted EBITA $ 942 1,143 21 %
      Percent of sales 20.1 % 22.8 % 2.7 pts


Three Months Ended June 30	2022			2023		Change

Earnings from continuing operations before income taxes	$	378		761		101	%
Percent of sales	10.9		%	19.3	%	8.4 pts
Interest expense, net	50			10
Interest income from related party	—			(10)
Amortization of intangibles	119			169
Restructuring and related costs	31			13
Acquisition/divestiture costs	61			38
National Instruments investment gain	—			(12)
Loss on Copeland equity method investment	—			61
Russia business exit	162			—
AspenTech Micromine purchase price hedge gain	—			(3)
Adjusted EBITA from continuing operations	$	801		1,027		28	%
Percent of sales	23.1		%	26.0	%	2.9 pts

2024

Business Segments

Following is an analysis of operating results for the Company’s business segments for the third quarter ended June 30, ~~2021,~~2022, compared with the third quarter ended June 30, ~~2022.~~2023. The Company defines segment earnings as earnings before interest and taxes. See Note 1314 for a discussion of the Company's business segments.

~~AUTOMATION SOLUTIONS~~INTELLIGENT DEVICES

Three Months Ended June 30 2021 2022 Change
Sales $ 2,865 2,872 — %
Earnings $ 519 530 2 %
     Margin 18.1 % 18.5 % 0.4 pts
   Restructuring and related costs $ 20 31
   Amortization of intangibles $ 44 41
Adjusted EBITA $ 583 602 3%
   Adjusted EBITA Margin 20.3 % 21.0 % 0.7 pts


	2022			2023		Change		FX		Acq/Div		U/L


Sales:
Final Control	$	905		1,035		14	%	1	%	1	%	16	%
Measurement & Analytical	788			913		16	%	1	%	3	%	20	%
Discrete Automation	633			668		6	%	—	%	—	%	6	%
Safety & Productivity	360			363		1	%	(1)	%	—	%	—	%
Total	$	2,686		2,979		11	%	1	%	1	%	13	%

Earnings:
Final Control	$	150		245		63	%
Measurement & Analytical	189			257		36	%
Discrete Automation	115			124		8	%
Safety & Productivity	69			82		18	%
Total	$	523		708		35	%
Margin	19.5		%	23.7	%	4.2 pts

Amortization of intangibles:
Final Control	$	23		22
Measurement & Analytical	4			5
Discrete Automation	8			8
Safety & Productivity	7			7
Total	$	42		42

Restructuring and related costs:
Final Control	$	18		(1)
Measurement & Analytical	4			1
Discrete Automation	1			12
Safety & Productivity	(1)			(1)
Total	$	22		11

Adjusted EBITA	$	587		761		29	%
Adjusted EBITA Margin	21.9		%	25.5	%	3.6 pts

Sales by Major Product Offering
Measurement & Analytical Instrumentation $ 781 785 1 %
Valves, Actuators & Regulators 880 905 3 %
Industrial Solutions 593 575 (3) %
Systems & Software 611 607 (1) %
Total $ 2,865 2,872 — %

~~Automation Solutions~~Intelligent Devices sales were ~~$2,872~~$3.0 billion in the third quarter ~~essentially flat compared with the prior year. Foreign currency translation had a 4 percent unfavorable impact.~~of 2023, an increase of $293, or 11 percent. Underlying sales increased 413 percent on 18 percent higher volume and 35 percent higher price, reflecting strength in North America partially offset by softness in Asia, Middle East & Africa. Overall, demand remained steady during the quarter, but lockdowns in China, electronic component shortages, and other supply chain and logistics constraints unfavorably impacted sales. Underlyingprice. Underlying sales increased 1210 percent in the Americas, ~~(U.S. up 14 percent), as process end markets remained strong, while~~ Europe ~~which was negatively impacted by the business exit from Russia, was down 2~~increased 11 percent and Asia, Middle East & Africa ~~decreased 3~~was up 19 percent (China ~~down 2 percent)~~up 20 percent).Final Control sales increased $130, or 14 percent, while underlying sales were up 16 percent, reflecting strength in energy and chemical end markets, with broad-based strength across geographies. Sales for Measurement & Analytical ~~Instrumentation~~ increased ~~$4,~~$125, or 16 percent, and underlying sales were up 20 percent, reflecting robust growth in all geographies due to strong demand across industries and backlog conversion. Discrete Automation sales increased $35, or 6 percent due to higher price and slightly higher volume, reflecting moderating demand, particularly in the Americas and Europe. Safety & Productivity sales increased $3, or 1 percent ~~as market conditions remained strong for North American process industries,~~, and underlying sales were flat, reflecting softening global demand offset by weakness in Asia, Middle East & Africa due to component shortages and other supply chain constraints. Valves, Actuators & Regulators increased $25, or 3 percent, reflecting strength in chemical end markets, partially offset by the impact of lockdowns in China. Industrial Solutions saleshigher price. Earnings for Intelligent Devices were down $18, or 3 percent, reflecting unfavorable currency translation and the impact of lockdowns in China, partially offset by strength in North America. Systems & Software decreased $4, or 1 percent, reflecting unfavorable currency translation and the impact of component shortages. Results were strong in North America, offset by weakness in Europe. Earnings were $530,$708, an increase of ~~$11,~~$185, or 235 percent, and margin increased ~~0.4~~4.2 percentage points to ~~18.5~~23.7 percent, reflecting ~~leverage on higher volume,~~ favorable ~~mix and savings from cost reduction actions. Price~~price less net material inflation ~~was slightly favorable, while freight~~and leverage on higher sales, partially offset by wage and other ~~inflation negatively impacted margin.~~inflation. Adjusted EBITA margin was 25.5 percent, an increase of 3.6 percentage points.

2125

~~ASPENTECH~~SOFTWARE AND CONTROL

Three Months Ended June 30 2021 2022 Change
Sales $ 82 239 189 %
Earnings $ 2 57 2,950 %
     Margin 2.2 % 23.7 % 21.5 pts
   Restructuring and related costs $ (2) 1
   Amortization of intangibles $ 22 71
Adjusted EBITA $ 22 129 483%
   Adjusted EBITA Margin 26.7 % 53.8 % 27.1 pts


	2022			2023		Change		FX		Acq/Div		U/L


Sales:
Control Systems & Software	$	568		663		17	%	1	%	1	%	19	%
AspenTech	239			320		34	%	—	%	34	%	—	%
Total	$	807		983		22	%	—	%	(3)	%	19	%

Earnings:
Control Systems & Software	$	77		144		89	%
AspenTech	57			27		(54)	%
Total	$	134		171		28	%
Margin	16.5		%	17.4	%	0.9 pts

Amortization of intangibles:
Control Systems & Software	$	6		6
AspenTech	71			121
Total	$	77		127

Restructuring and related costs:
Control Systems & Software	$	7		1
AspenTech	1			—
Total	$	8		1

Adjusted EBITA	$	219		299		38	%
Adjusted EBITA Margin	27.0		%	30.4	%	3.4 pts

Software and Control sales were $983 in t~~As a result of the AspenTech acquisition, the Company identified one additional segment in the~~he third quarter of fiscal 2022. The new segment, referred to as "AspenTech," reflects the combined results of AspenTech and the Emerson Industrial Software Business (see Note 4 for further details). The results for this new segment include the historical results of the Emerson Industrial Software Business (which were previously reported in the Automation Solutions segment), while results related to the AspenTech business include only periods subsequent to the close of the transaction on May 16, 2022.

~~AspenTech sales were $239 in the third quarter,~~2023, an increase of ~~$157~~$176, or ~~189% due~~22 percent compared to the ~~acquisition of AspenTech. Earnings were $57, an increase of $55, and margin improved to 23.7 percent,~~prior year, reflecting the impact of the ~~AspenTech acquisition. Results for the third quarter of fiscal 2022 included intangibles amortization of $49 related to the~~Heritage AspenTech acquisition ~~($17 of which was reported~~and strong growth in ~~Cost of sales). See Note 4.~~

~~COMMERCIAL~~Control Systems & ~~RESIDENTIAL SOLUTIONS~~

Three Months Ended June 30 2021 2022 Change
Sales:
  Climate Technologies $ 1,268 1,380 9 %
  Tools & Home Products 489 522 7 %
     Total $ 1,757 1,902 8 %
Earnings:
  Climate Technologies $ 274 300 10 %
  Tools & Home Products 101 107 5 %
     Total $ 375 407 8 %
     Margin 21.3 % 21.4 % 0.1 pts
   Restructuring and related costs $ 7 1
   Amortization of intangibles $ 13 12
Adjusted EBITA $ 395 420 6 %
   Adjusted EBITA Margin 22.5 % 22.0 % (0.5) pts

~~Commercial & Residential Solutions~~Software. Underlying sales were ~~$1.9 billion in the third quarter,~~ up ~~$145, or 8 percent compared to the prior year.~~ ~~Foreign currency translation had a 2 percent unfavorable impact and divestitures deducted 3 percent.~~ ~~Underlying sales increased 13~~19 percent on 116 percent higher volume and 123 percent higher price. U ~~Overall, underlying~~nderlying sales increased 1612 percent in the Americas, ~~(U.S. up 16 percent), 6~~23 percent in Europe and 528 percent in Asia, Middle East & Africa ~~(China down 18~~(China up 48 percent). ~~Climate Technologies~~Control Systems & Software sales ~~were $1.4 billion~~increased $95, or 17 percent, while underlying sales increased 19 percent, reflecting robust global demand in ~~the third quarter, an increase of $112,~~process end markets. AspenTech sales increased $81, or ~~9 percent. Air conditioning, heating and refrigeration sales were strong across all end markets except for China which was negatively impacted by lockdowns.~~ Tools & Home Products sales were $522 in the third quarter, an increase of $33, or 7 percent. Sales of food waste disposers and professional tools were strong while wet/dry vacuums sales decreased modestly34 percent, due to ~~difficult comparisons.~~the acquisition of Heritage AspenTech. Earnings ~~were $407,~~for Software and Control increased $37, up 828 percent, ~~compared with the prior year,~~ and margin increased ~~0.1~~0.9 percentage points, which included the impact from $50 of incremental intangibles amortization related to ~~21.4 percent, as~~the Heritage AspenTech acquisition. Adjusted EBITA margin increased 3.4 percentage points, reflecting leverage on higher sales and favorable ~~price less net material inflation and savings from cost reduction actions were mostly~~mix, partially offset by ~~freight and other~~ inflation and unfavorable ~~mix.~~foreign currency transactions.

2226

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30

Following is an analysis of the Company’s operating results for the nine months ended June 30, ~~2021,~~2022, compared with the nine months ended June 30, ~~2022.~~2023.


		2021			2022		Change			2022			2023		Change

(dollars in millions, except per share amounts)									(dollars in millions, except per share amounts)

Net sales	Net sales	$	13,289		14,269		7	%	Net sales	$	9,912		11,075		12	%
Gross profit	Gross profit	$	5,567		5,871		5	%	Gross profit	$	4,477		5,415		21	%
Percent of sales	Percent of sales	41.9		%	41.1	%	(0.8) pts		Percent of sales	45.2		%	48.9	%	3.7 pts

SG&A	SG&A	$	3,125		3,112		—	%	SG&A	$	2,631		3,072		17	%
Percent of sales	Percent of sales	23.5		%	21.8	%	(1.7) pts		Percent of sales	26.6		%	27.7	%	1.1 pts

Gain on subordinated interest	Gain on subordinated interest	$	—		(453)				Gain on subordinated interest	$	(453)		—
Gain on sale of business		$	—		(483)

Other deductions, net	Other deductions, net	$	243		374				Other deductions, net	$	330		420
Amortization of intangibles	Amortization of intangibles	$	223		223				Amortization of intangibles	$	207		357
Restructuring costs	Restructuring costs	$	111		50				Restructuring costs	$	44		41

Interest expense, net	Interest expense, net	$	115		140				Interest expense, net	$	140		111
Interest income from related party									Interest income from related party	$	—		(10)

Earnings before income taxes		$	2,084		3,181		53	%
Earnings from continuing operations before income taxes									Earnings from continuing operations before income taxes	$	1,829		1,822		—	%
Percent of sales	Percent of sales	15.7		%	22.3	%	6.6 pts		Percent of sales	18.5		%	16.5	%	(2.0) pts
Earnings from continuing operations common stockholders									Earnings from continuing operations common stockholders	$	1,400		1,451		4	%
Percent of sales									Percent of sales	14.1		%	13.1	%	(1.0) pts
Net earnings common stockholders									Net earnings common stockholders	$	2,491		12,475		401	%

Net earnings common stockholders		$	1,633		2,491		53	%
Percent of sales		12.3		%	17.5	%	5.2 pts

Diluted earnings per share		$	2.71		4.17		54	%

Diluted EPS - Earnings from continuing operations									Diluted EPS - Earnings from continuing operations	$	2.34		2.51		7	%
Diluted EPS - Net earnings									Diluted EPS - Net earnings	$	4.17		21.56		417	%

Net sales for the first nine months of ~~2022~~2023 were ~~$14.3~~$11.1 billion, up 12 percent compared with 2022. Intelligent Devices sales were up 7 percent, ~~compared with 2021. Automation Solutions~~while Software and Control sales were up 327 percent, ~~Commercial & Residential Solutions sales were up 11 percent and~~which included the impact of the Heritage AspenTech ~~sales were up 69 percent.~~acquisition. Underlying sales were up 912 percent on 57 percent higher volume and 45 percent higher ~~price, and foreign~~price. Foreign currency translation subtracted 23 percent, the Heritage AspenTech acquisition added 4 percent and the divestiture of Metran deducted 1 percent. Underlying sales increased 1413 percent in the U.S. and increased 111 percent internationally. The Americas was up 13 percent, Europe was up 110 percent and Asia, Middle East & Africa was up 411 percent (China was up 67 percent).

Cost of sales for ~~2022~~2023 were ~~$8,398,~~$5,660, an increase of ~~$676~~$225 versus ~~$7,722~~$5,435 in ~~2021, primarily due to higher sales volume and higher materials costs.~~2022. Gross margin of ~~41.1~~48.9 percent ~~decreased 0.8~~increased 3.7 percentage points ~~compared~~due to ~~the prior year, as~~favorable price less net material inflation, ~~was slightly favorable but had a dilutive~~the impact ~~on margins and higher freight and other inflation also negatively impacted margins, partially offset by favorable mix. The~~of the Heritage AspenTech acquisition which benefited ~~gross margin~~margins by ~~0.6~~0.9 percentage points, ~~while the Russia business exit negatively impacted gross margin by 0.2 percentage points.~~and favorable mix.

SG&A expenses of ~~$3,112 decreased $13 compared with the prior year, reflecting lower stock compensation expense of $84, partially offset by the impact of higher sales.~~$3,072 increased $441 and SG&A as a percent of sales increased ~~decreased 1.7~~1.1 percentage points to ~~21.8~~27.7 percent, reflecting the Heritage AspenTech acquisition and higher stock compensation expense of $106, of which $55 related to Emerson stock plans due to a decreasing stock price in the prior year compared to an increasing stock price in the current year, and $51 was attributable to AspenTech stock plans. These items were partially offset by strong operating leverage on higher ~~sales and lower stock compensation expense~~sales. .

As previously disclosed, the Company sold its network power systems business (rebranded as Vertiv, now a publicly traded company, symbol VRT) in 2017 and retained a subordinated interest contingent upon the equity holders first receiving a threshold cash return on their initial investment. In the first quarter of fiscal 2022, the ~~equity holders' cumulative cash return exceeded the threshold and as a result, the~~ Company received a distribution of $438 related to its subordinated interest in ~~November 2021~~Vertiv (in total, a pretax gain of $453 was recognized in the first ~~quarter).~~ quarter of fiscal 2022, $358 after-tax, $0.60 per share) and received the remaining $15 related to the pretax gain in the first quarter of fiscal 2023. Based on the terms of the agreement and the current calculation, the Company could receive additional distributions of approximately ~~$75~~$150 which are expected to be received over the next two-to-three years. However, the distributions are contingent on the timing and price at which Vertiv shares are sold by the equity holders and therefore, there can be no assurance as to the amount or timing of the remaining distributions to the Company.

2327

Other deductions, net were ~~$374~~$420 in ~~2022,~~2023, an increase of ~~$131~~$90 compared with the prior year, reflecting higher intangibles amortization of $150 primarily related to the Heritage AspenTech acquisition, a loss of $61 on the Company's equity method investment in Copeland, and an unfavorable impact from foreign currency transactions of $103 reflecting losses in the current year compared to gains in the prior year. The prior year included a charge of $130 related to the Company exiting its business in Russia ($9 of which is reported in restructuring costs) ~~and acquisition/divestiture costs~~compared to a charge of ~~$97. These items were partially offset by a~~ ~~favorable impact from foreign currency transactions of $48 and~~ ~~gains from the sales of capital assets of $15~~$47 in the ~~first quarter of fiscal 2022.~~ current year. The ~~prior~~current year also included ~~investment-related gains, including~~ a mark-to-market gain of ~~$21 from an investment sale, a $17 gain from~~$47 on the ~~acquisition of full ownership of an~~Company's equity investment in NI and a mark-to-market gain ~~of $31 on the sale of an equity investment. Intangibles amortization was flat as the current year included $32 related to the AspenTech acquisition, while the prior year included backlog amortization~~ of $24 related to foreign currency forward contracts entered into by AspenTech to mitigate the ~~OSI acquisition.~~ impact of foreign currency exchange associated with the Micromine purchase price. On June 21, 2023, AspenTech terminated all outstanding foreign currency forward contracts. See ~~Notes 6 and~~Note 7.

Pretax earnings from continuing operations of $3,181 increased $1,097, or 53 percent. Earnings increased $264 in Automation Solutions, $52 in AspenTech and $29 in Commercial & Residential Solutions, while costs reported at Corporate increased $159$1,822 decreased $7 largely due to the ~~Russia business exit loss. See~~Vertiv gain discussed above offset by strong operating results in the current year. Earnings increased $362 in Intelligent Devices and decreased $27 in Software and Control (reflecting the impact of higher intangibles amortization due to the Heritage AspenTech acquisition), see the Business Segments discussion that follows and Note ~~13.~~14.

Income taxes were ~~$659~~$390 for the first nine months of ~~2022~~2023 and ~~$431~~$399 for ~~2021,~~2022, resulting in effective tax rates of 21 percent and 2122 percent, respectively. The ~~current~~prior year rate ~~included~~reflected the impact of the Russia business exit which was essentially offset by a ~~2 percentage point~~ benefit related to the completion of tax ~~examinations, partially offset by portfolio restructuring activities which negatively impacted the rate by 1 percentage points, while the prior year had favora~~examinations.~~ble net discrete items which reduced the rate 1 percentage point.~~

~~Net earnings~~Earnings from continuing operations attributable to common stockholders ~~in 2022~~ were ~~$2,491,~~$1,451, up 534 percent compared with the prior year, and diluted earnings per share from continuing operations were ~~$4.17,~~$2.51, up 547 percent compared with ~~$2.71~~$2.34 in ~~2021. Results reflected strong operating results and~~2022. The prior year included a ~~pretax~~$0.60 gain ~~of $453 ($358 after-tax, $0.60 per share)~~ related to the Company's subordinated interest in ~~Vertiv and a pretax gain of $483 ($428 after-tax, $0.72~~Vertiv. Adjusted diluted earnings per ~~share) related to~~share from continuing operations were $3.15 compared with $2.57 in the ~~Therm-O-Disc divestiture.~~prior year, reflecting strong operating results. See the analysis below of adjusted earnings per share for further details.

~~The table below,~~Earnings from discontinued operations were $11,024 ($19.05 per share) which ~~shows results~~included the $8.4 billion after-tax gain on ~~an adjusted EBITA basis, is intended~~the Copeland transaction and the $2.1 billion after-tax gain on the divestiture of InSinkErator, compared to ~~supplement~~$1,091 ($1.83 per share) in the ~~Company's discussion of its results of operations herein.~~

Nine Months Ended June 30 2021 2022 Change
Earnings before income taxes $ 2,084 3,181 53 %
      Percent of sales 15.7 % 22.3 % 6.6 pts
    Interest expense, net 115 140
    Restructuring and related costs 122 67
    Amortization of intangibles 242 277
    Gain on subordinated interest — (453)
    Gain on sale of business — (483)
    Russia business exit — 162
    Acquisition/divestiture costs — 97
    Gain on acquisition of full ownership of equity investment (17) —
    OSI first year acquisition accounting charges and fees 41 —
Adjusted EBITA $ 2,587 2,988 16 %
      Percent of sales 19.5 % 20.9 % 1.4 pts

prior year. See Note 5.

Net earnings common stockholders were $12,475 ($21.56 per share) compared with $2,491 ($4.17 per share) in the prior year.

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

Nine Months Ended June 30 2021 2022
Diluted earnings per share $ 2.71 4.17
    Restructuring and related costs 0.16 0.09
    Amortization of intangibles 0.30 0.33
    Gain on subordinated interest — (0.60)
    Gain on sale of business — (0.72)
    Russia business exit — 0.29
    Acquisition/divestiture costs and pre-acquisition interest on AspenTech debt — 0.16
    Gain on acquisition of full ownership of equity investment (0.03) —
    OSI first year acquisition accounting charges and fees 0.05 —
Adjusted diluted earnings per share $ 3.19 3.72


Nine Months Ended June 30	2022		2023

Diluted earnings from continuing operations per share	$	2.34	2.51

Amortization of intangibles	0.30		0.46
Restructuring and related costs	0.08		0.07
Acquisition/divestiture costs and pre-acquisition interest on AspenTech debt	0.16		0.07
Gain on subordinated interest	(0.60)		—
National Instruments investment gain	—		(0.06)
AspenTech Micromine purchase price hedge gain	—		(0.02)
Interest income on undeployed proceeds from Copeland transaction	—		(0.05)
Loss on Copeland equity method investment	—		0.09
Russia business exit charge	0.29		0.08

Adjusted diluted earnings from continuing operations per share	$	2.57	3.15

The table below summarizes the changes in adjusted diluted earnings per share. The items identified below are discussed throughout MD&A, see further discussion above and in the Business Segments and Financial Position sections below.


	Nine Months Ended
Adjusted diluted earnings from continuing operations per share - June 30, ~~2021~~2022	$	~~3.19~~2.57

Operations	~~0.30~~
~~AspenTech acquisition~~	~~0.08~~0.68
Corporate and other	~~(0.03)~~0.03
Stock compensation	~~0.13~~(0.13)
Foreign currency	(0.10)
Pensions	~~0.04~~0.06
~~Gains on sales of investments - prior year~~Effective tax rate	~~(0.07)~~(0.03)
~~Gains~~Interest expense, net	(0.03)
Share count	0.08
Interest income on ~~sales of capital assets - current year~~Copeland note receivable	0.02




~~Share repurchases/other~~	~~0.06~~

Adjusted diluted earnings from continuing operations per share - June 30, ~~2022~~2023	$	~~3.72~~3.15

The table below, which shows results on an adjusted EBITA basis, is intended to supplement the Company's discussion of its results of operations herein.


Nine Months Ended June 30	2022			2023		Change

Earnings from continuing operations before income taxes	$	1,829		1,822		—	%
Percent of sales	18.5		%	16.5	%	(2.0) pts
Interest expense, net	140			111
Interest income from related party	—			(10)
Amortization of intangibles	261			504
Restructuring and related costs	59			54
Acquisition/divestiture costs	91			48
Gain on subordinated interest	(453)			—
National Instruments investment gain	—			(47)
AspenTech Micromine purchase price hedge gain	—			(24)
Loss on Copeland equity method investment	—			61
Russia business exit charge	162			47
Adjusted EBITA from continuing operations	$	2,089		2,566		23	%
Percent of sales	21.1		%	23.2	%	2.1 pts

Business Segments

Following is an analysis of operating results for the Company’s business segments for the nine months ended June 30, ~~2021,~~2022, compared with the nine months ended June 30, ~~2022.~~2023. The Company defines segment earnings as earnings before interest and taxes. As a result of the Company's portfolio transformation, the Company has realigned its business segments and now reports six segments and two business groups. See Note 14.

~~AUTOMATION SOLUTIONS~~

Nine Months Ended June 30 2021 2022 Change
Sales $ 8,193 8,451 3 %
Earnings $ 1,354 1,618 19 %
Margin 16.5 % 19.1 % 2.6 pts
Restructuring and related costs $ 94 54
Amortization of intangibles $ 136�� 125
Adjusted EBITA $ 1,584 1,797 14 %
Adjusted EBITA Margin 19.3 % 21.3 % 2.0 pts

Sales by Major Product Offering
Measurement & Analytical Instrumentation $ 2,211 2,287 3 %
Valves, Actuators & Regulators 2,522 2,604 3 %
Industrial Solutions 1,656 1,743 5 %
Systems & Software 1,804 1,817 1 %
Total $ 8,193 8,451 3 %

~~Automation Solutions~~

INTELLIGENT DEVICES


	2022			2023		Change		FX		Acq/Div		U/L


Sales:
Final Control	$	2,606		2,889		11	%	3	%	1	%	15	%
Measurement & Analytical	2,294			2,550		11	%	3	%	2	%	16	%
Discrete Automation	1,894			1,969		4	%	3	%	—	%	7	%
Safety & Productivity	1,066			1,034		(3)	%	1	%	—	%	(2)	%
Total	$	7,860		8,442		7	%	3	%	1	%	11	%

Earnings:
Final Control	$	424		618		46	%
Measurement & Analytical	535			661		24	%
Discrete Automation	365			378		4	%
Safety & Productivity	199			228		15	%
Total	$	1,523		1,885		24	%
Margin	19.4		%	22.3	%	2.9 pts

Amortization of intangibles:
Final Control	$	71		66
Measurement & Analytical	15			15
Discrete Automation	23			22
Safety & Productivity	20			20
Total	$	129		123

Restructuring and related costs:
Final Control	$	33		12
Measurement & Analytical	9			2
Discrete Automation	4			20
Safety & Productivity	—			1
Total	$	46		35


Adjusted EBITA	$	1,698		2,043		20	%
Adjusted EBITA Margin	21.6		%	24.2	%	2.6 pts

Intelligent Devices sales were ~~$8.5~~$8.4 billion in the first nine months of ~~2022,~~2023, an increase of ~~$258,~~$582, or 37 percent. ~~Foreign currency translation had a 2 percent unfavorable impact.~~ Underlying sales increased 511 percent on 36 percent higher volume and 25 percent higher price, reflecting strength in process end markets and sustained demand in discrete and hybrid end markets, despite supply chain and logistics constraints and the impact of lockdowns in China which unfavorably impacted sales. price. Unde~~Underlying~~rlying sales increased 1113 percent in the Americas, ~~while~~ Europe ~~which was negatively impacted by the business exit from Russia, decreased 2~~increased 9 percent, and Asia, Middle East & Africa was up 39 percent (China up ~~10 percent)~~5 percent).Final Control sales increased $283, or 11 percent. Underlying sales were up 15 percent, reflecting strength in energy and chemical end markets, particularly in the Americas and Asia, Middle East & Africa, while Europe was up moderately. Sales for Measurement & Analytical ~~Instrumentation~~ increased ~~$76,~~$256, or 311 percent. ~~Sales were strong in China and North America, while~~Underlying sales were ~~down moderately in Europe due to supply chain constraints. Valves, Actuators & Regulators increased~~ ~~$82, or 3~~up 16 percent,, reflecting ~~strong demand~~robust growth in the Americas and ~~China, partially offset by softness in the rest of~~Europe due to strong demand, while Asia, Middle East & ~~Africa. Industrial Solutions~~Africa was up moderately due to softness in China. Discrete Automation sales increased ~~$87,~~$75, or 54 percent, while underlying sales increased 7 percent, reflecting strong demand in ~~North America~~Asia, Middle East & Africa and ~~Europe. Systems & Software increased $13, or 1 percent, reflecting strength in process end markets in North America and China, partially offset by weakness in~~ Europe, while ~~power end markets~~the Americas was up modestly. Safety & Productivity sales decreased $32, or 3 percent, and underlying sales decreased 2 percent, reflecting softness in the Americas while Europe and Asia, Middle East & Africa were ~~solid in North America.~~up slightly. Earnings for Intelligent Devices were ~~$1,618,~~$1,885, an increase of ~~$264,~~$362, or 1924 percent, and margin increased ~~2.6~~2.9 percentage points to ~~19.1~~22.3 percent, reflecting ~~leverage on higher volume,~~ favorable ~~mix, lower restructuring expense which benefited margins 0.4 percentage points, and savings from cost reduction actions, partially offset by higher inflation. Price~~price less net material inflation, leverage on higher sales and favorable mix, partially offset by wage and other inflation. Adjusted EBITA margin was ~~slightly favorable and foreign currency transactions benefited margins by 0.3~~24.2 percent, an increase of 2.6 percentage points.

2630

~~ASPENTECH~~SOFTWARE AND CONTROL

Nine Months Ended June 30 2021 2022 Change
Sales $ 239 405 69 %
Earnings $ (1) 51 (3,687) %
Margin (0.6) % 12.5 % 13.1 pts
Restructuring and related costs $ 2 1
Amortization of intangibles $ 67 116
Adjusted EBITA $ 68 168 149 %
Adjusted EBITA Margin 28.0 % 41.2 % 13.2 pts


	2022			2023		Change		FX		Acq/Div		U/L


Sales:
Control Systems & Software	$	1,711		1,892		11	%	3	%	1	%	15	%
AspenTech	405			793		96	%	—	%	(96)	%	—	%
Total	$	2,116		2,685		27	%	3	%	(15)	%	15	%

Earnings:
Control Systems & Software	$	294		378		29	%
AspenTech	51			(60)		(220)	%
Total	$	345		318		(8)	%
Margin	16.3		%	11.8	%	(4.5) pts

Amortization of intangibles:
Control Systems & Software	$	16		17
AspenTech	116			364
Total	$	132		381

Restructuring and related costs:
Control Systems & Software	$	8		7
AspenTech	1			—
Total	$	9		7

Adjusted EBITA	$	486		706		46	%
Adjusted EBITA Margin	22.9		%	26.3	%	3.4 pts

~~AspenTech~~Software and Control sales were ~~$405~~$2,685 in ~~the~~the first nine months of ~~2022,~~2023, an increase of ~~$166,~~$569, or 6927 percent ~~due~~compared to the ~~acquisition of AspenTech. Earnings were~~ ~~$51, an increase of~~ ~~$52, and margin improved to~~ ~~12.5 percent~~,prior year, reflecting the impact of the ~~AspenTech acquisition. Results for fiscal 2022 included intangibles amortization of $49 related to the~~Heritage AspenTech acquisition ~~($17 of which was reported~~and strong growth in ~~Cost of sales). See Note 4.~~

~~COMMERCIAL~~Control Systems & ~~RESIDENTIAL SOLUTIONS~~

Nine Months Ended June 30 2021 2022 Change
Sales:
  Climate Technologies $ 3,459 3,884 12 %
  Tools & Home Products 1,419 1,546 9 %
     Total $ 4,878 5,430 11 %
Earnings:
  Climate Technologies $ 731 754 3 %
  Tools & Home Products 311 317 2 %
     Total $ 1,042 1,071 3 %
     Margin 21.4 % 19.7 % (1.7) pts
Restructuring and related costs $ 15 8
Amortization of intangibles $ 39 36
Adjusted EBITA $ 1,096 1,115 2 %
Adjusted EBITA Margin 22.5 % 20.5 % (2.0) pts

~~Commercial & Residential Solutions sales were $5.4 billion in the first nine months of 2022, an increase of $552, or 11 percent compared to the prior year.~~ ~~Foreign currency translation had a~~ ~~1 percent~~ ~~unfavorable impact and divestitures deducted~~ ~~2 percent~~. Software. Underlying sales were up 1415 percent on 613 percent higher volume and 82 percent higher price. U~~Overall, underlying~~nderlying sales increased 1612 percent in the Americas, 1117 percent in Europe and 718 percent in Asia, Middle East & Africa ~~(China down 7~~(China up 24 percent). ~~Climate Technologies~~Control Systems & Software sales ~~were $3.9 billion in the first nine months of 2022, an increase of $425,~~increased $181, or 1211 percent. ~~Air conditioning,~~ ~~heating and refrigeration~~Underlying sales ~~were strong,~~increased 15 percent, reflecting global ~~demand across all~~strength in process end ~~markets. Tools & Home Products~~markets while power end markets were up moderately. AspenTech sales ~~were $1.5 billion in the first nine months of 2022, up $127,~~increased $388, or ~~9 percent. Sales of professional tools and food waste disposers were both up low teens,~~ ~~while wet/dry vacuums were flat~~96 percent, due to ~~difficult comparisons~~.the acquisition of Heritage AspenTech. Earnings ~~were $1,071, up 3~~for Software and Control decreased $27, down 8 percent, and margin decreased ~~1.7~~4.5 percentage points, ~~as price less net material inflation was favorable but had a dilutive~~reflecting the impact ~~on margins and higher freight and other inflation also negatively impacted margins, partially offset by~~from $248 of incremental intangibles amortization related to the Heritage AspenTech acquisition. Adjusted EBITA margin increased 3.4 percentage points, reflecting leverage on higher sales and ~~savings from cost reduction actions.~~favorable mix, partially offset by inflation and unfavorable foreign currency transactions.

2731

FINANCIAL CONDITION

Key elements of the Company's financial condition for the nine months ended June 30, ~~2022~~2023 as compared to the year ended September 30, ~~2021~~2022 and the nine months ended June 30, ~~2021~~2022 follow.
June 30, 2021 Sept 30, 2021 June 30, 2022
Operating working capital $ 714 $ 704 $ 1,261
Current ratio 1.3 1.3 1.1
Total debt-to-total capital 44.0 % 40.3 % 52.9 %
Net debt-to-net capital 32.4 % 30.4 % 46.8 %
Interest coverage ratio 17.8 X 18.6 X 21.1 X


	June 30, 2022			Sept 30, 2022			June 30, 2023
Operating working capital	$	1,081		$	990		$	(144)
Current ratio	1.1			1.1			2.4
Total debt-to-total capital	52.9		%	50.0		%	28.9		%
Net debt-to-net capital	46.8		%	45.3		%	(8.8)		%
Interest coverage ratio	12.6		X	11.7		X	9.8		X

The Company's operating working ~~capital increased compared~~capital as of June 30, 2023 includes remaining income taxes payable of approximately $1.5 billion related to the ~~same quarter last year~~Copeland transaction and ~~compared~~the gain on the InSinkErator divestiture, which is largely expected to ~~September 30, 2021~~be paid by the end of fiscal 2023. Excluding these income taxes payable related to discontinued operations, operating working capital remained elevated due to higher inventory levels to support sales growth and ~~reflecting ongoing supply chain and logistics constraints. In addition, the AspenTech acquisition increased operating working capital by approximately $250.~~higher receivables. As of June 30, ~~2022,~~2023, Emerson's cash and equivalents totaled ~~$2,529,~~$9,957, which ~~included $450~~reflected approximately $9.7 billion of proceeds related to the Copeland transaction which are expected to be used along with other available cash and liquidity to fund the proposed National Instruments transaction. Going forward, Copeland is not expected to issue dividends to the Company but will distribute cash for the Company to pay its share of U.S. taxes. The Company's cash also includes $289 attributable to ~~New AspenTech. The cash held by New~~ AspenTech which is intended to be used for its own purposes and is not a readily available source of liquidity for other Emerson general business purposes or to return to Emerson shareholders.

The ~~decrease in the~~ current ratio ~~reflects~~increased compared to September 30, 2022, reflecting the ~~increase in commercial paper borrowings discussed below.~~proceeds from the Copeland transaction. The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of ~~21.1X~~9.8X for the first nine months of fiscal ~~2022~~2023 compares to ~~17.8X~~12.6X for the nine months ended June 30, ~~2021. The increase reflects~~2022, reflecting higher ~~pretax~~interest expense. Pretax earnings in the ~~current~~prior year ~~which~~ included the Vertiv subordinated interest gain of $~~453,~~453. Excluding the gain, ~~on the Therm-O-Disc divestiture of $483, and the Russia business exit loss of $162.~~ ~~Excluding these items,~~ the interest coverage ratio was ~~16.2X, reflecting higher interest expense due to~~9.7X for the ~~increased long-term debt and commercial paper borrowings to fund the AspenTech acquisition.~~

In December 2021, the Company issued $1 billion of 2.0% notes due December 2028, $1 billion of 2.2% notes due December 2031, and $1 billion of 2.8% notes due December 2051. The Company's commercial paper borrowings also increased by approximate~~ly $2.4 billion compared to September~~nine months ended June 30, 2021. The Company used the net proceeds from the sale of the notes and the increased commercial paper borrowings to fund the majority of its contribution of approximately $6.0 billion to existing stockholders of AspenTech as part of the transaction. See Note 4 and Note 10.2022.

Operating cash flow from continuing operations for the first nine months of fiscal ~~2022~~2023 was ~~$1,705, a decrease~~$1,719, an increase of ~~$1,015~~$484 compared with ~~$2,720~~$1,235 in the prior year, reflecting higher ~~working capital due to increased sales and continued supply chain constraints. Operating cash flow was also negatively impacted by approximately $68~~earnings (excluding the prior year impact of ~~taxes paid on~~ the Vertiv subordinated interest ~~gain. The remaining taxes owed on~~gain and the ~~gain are~~current year impact from Heritage AspenTech intangibles amortization). Operating cash flow included approximately ~~$27 and are expected to be paid~~$295 generated by ~~the end of fiscal 2022.~~AspenTech. Free cash flow from continuing operations of ~~$1,370~~$1,525 in the first nine months of fiscal 2023 (operating cash flow of $1,719 less capital expenditures of $194) increased $489 compared to free cash flow of $1,036 in 2022 (operating cash flow of ~~$1,705~~$1,235 less capital expenditures of ~~$335) decreased $1,000 compared to free cash flow of $2,370 in 2021 (operating cash flow of $2,720 less capital expenditures of $350)~~$199), reflecting the ~~decrease~~increase in operating cash flow. Cash provided by investing activities from continuing operations was $615. Cash used in ~~investing~~financing activities from continuing operations was $6,302 and included Emerson share repurchases of $2.0 billion (and AspenTech repurchases of $100, which increased the Company's common ownership percentage to approximately 56 percent), a net reduction in short-term borrowings of approximately $1.5 billion, repayments of long-term debt of $744 (including $264 related to AspenTech's repayment of the outstanding balance on its existing term loan facility plus accrued interest), and dividend payments of $900.

Total cash provided by operating activities was ~~$4,975, reflecting $5.6 billion~~$1,280 including the impact of ~~cash~~discontinued operations, and decreased $425 compared with $1,705 in the prior year due to approximately $750 of incomes taxes paid ~~net of cash acquired~~ related to the ~~AspenTech acquisition, partially offset by~~gain on the ~~Vertiv gain~~InSinkErator divestiture and subsidiary restructurings related to the Copeland transaction. Investing cash flow from discontinued operations was $12.5 billion, reflecting proceeds from the ~~Therm-O-Disc~~Copeland transaction and InSinkErator divestiture. ~~Cash provided~~

As of June 30, 2023, goodwill attributable to AspenTech was approximately $8.3 billion. AspenTech conducted its annual impairment test as of May 31, 2023 and determined that the carrying value of its stockholders' equity exceeded its market capitalization. Accordingly, to further validate the reasonableness of the initial qualitative assessment and evaluation, a reconciliation of AspenTech's market capitalization was performed by ~~financing activities~~calculating an implied control premium. The Company concluded that the implied control premium was ~~$3,557, primarily due~~reasonable based on a comparison to ~~proceeds~~actual control premiums realized in recent comparable market transactions. If AspenTech's stock price declines and is sustained, further evaluation would be necessary and an impairment of ~~nearly $3~~goodwill attributable to AspenTech may result. No impairment of goodwill attributable to AspenTech was recorded in fiscal 2022 or for the nine months ended June 30, 2023.

In February 2023, the Company entered into a $3.5 billion ~~from~~five-year revolving backup credit facility with various banks, which replaced the ~~December 2021 debt issuance and increased~~May 2018 $3.5 billion facility. The credit facility is maintained to support general corporate purposes, including commercial paper borrowings. The Company has not incurred any borrowings under this or previous facilities. The credit facility contains no financial covenants and is not subject to termination based on a change of ~~$2.4 billion~~credit rating or material adverse changes. The facility is unsecured and may be accessed under various interest rate alternatives at the Company’s option. Fees to ~~fund~~maintain the ~~AspenTech transaction, partially offset by the repayment of $500 of long-term debt, dividend payments, and share repurchases.~~facility are immaterial.

On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic, and ~~among~~among other things, provides tax relief to businesses. Tax provisions of the CARES Act include the deferral of certain payroll taxes, relief for retaining employees, and other provisions. The Company deferred $73 of certain payroll taxes through the end of calendar year 2020, of which approximately $37 was paid in December 2021 ~~with~~and the ~~remaining amount due~~remainder paid in December 2022.

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. Emerson is in a strong financial position, with total assets of ~~$37~~$44 billion and common stockholders' equity of ~~$10~~$20 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.

FISCAL ~~2022~~2023 OUTLOOK

Emerson continues to see strong demand for the Company's technology, software and solutions. The outlook for fiscal 2022 reflects the impacts of the AspenTech and Therm-O-Disc transactions and write-offs associated with the Russia business exit, and considers continued macroeconomic and geopolitical uncertainty, supply chain constraints, exchange rate fluctuations and challenges related to COVID-19. For the full year, consolidated net sales from continuing operations are expected to be up ~~7 to 8~~approximately 10.5 percent, with underlying sales up ~~9 to~~approximately 10 percent excluding a 2 to 3 percent unfavorable impact from foreign currency translation, a 1 to 2 percent favorable impact from acquisitions and a 1 percent deduction from divestitures. Automation Solutions net sales are expected to be up 4 to 5 percent, with underlying sales up 6 to 7 percent excluding a 2 percent unfavorable impact from foreign currency translation. Commercial & Residential Solutions net sales are expected to be up 9 to 10 percent with underlying sales up 13 to 14 percent excluding a 11.5 percent unfavorable impact from foreign currency translation and a 32.0 percent ~~negative~~ impact from acquisitions net of divestitures. Earnings per share from continuing operations are expected to be ~~$5.25~~$3.54 to ~~$5.35,~~$3.59, while adjusted earnings per share from continuing operations are expected to be ~~$5.05~~$4.40 to ~~$5.15. Adjusted earnings per share exclude a $0.20 impact~~$4.45 (see the following reconciliation).


Outlook for Fiscal 2023 Earnings Per Share						2023

Diluted earnings from continuing operations per share						$3.54 - $3.59

Amortization of intangibles						0.61
Restructuring and related costs						0.16
Acquisition/divestiture costs						0.10
National Instruments investment gain						(0.07)
AspenTech Micromine purchase price hedge gain						(0.02)
Interest income on undeployed proceeds from Copeland transaction						(0.19)
Loss on Copeland equity method investment						0.19
Russia business exit charge						0.08

Adjusted diluted earnings from continuing operations per share						$4.40 - $4.45

Earnings from ~~restructuring actions, a $0.47 impact from amortization of intangibles, a $0.60 gain~~discontinued operations are not expected to change materially from the ~~Vertiv subordinated interest (see Note 4), a $0.72 gain from~~amount reported for the ~~sale of Therm-O-Disc (see Note 4), a $0.29 loss from~~nine months ended June 30, 2023 now that the ~~Company exiting business in Russia (see Note 4) and a $0.16 impact from~~Copeland transaction ~~and AspenTech pre-closing costs.~~has been completed. Operating cash flow from continuing operations is expected to be ~~approximately $3.0~~$2.5 to $2.6 billion and free cash flow from continuing operations, which excludes projected capital spending of ~~$525~~$300 million, is expected to be $2.2 to $2.3 billion. The fiscal 2023 outlook includes $2 billion returned to shareholders through share repurchases completed in the first quarter and approximately ~~$2.5 billion. Share repurchases are expected to be approximately $500 million in fiscal 2022.~~$1.2 billion of dividend payments.

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 the Company's ability to successfully complete on the terms and conditions contemplated, and the financial impact of, the proposed ~~sale of its InSinkErator food waste disposal business, the financial impact of the AspenTech acquisition,~~National Instruments transaction, the scope, duration and ultimate impacts of the COVID-19 pandemic and the Russia-Ukraine conflict, 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, inflation, among others, which are set forth in the “Risk Factors” of Part I, Item 1A, and the "Safe Harbor Statement" of Part II, Item 7, to the Company's Annual Report on Form 10-K for the year ended September 30, ~~2021~~2022 and in subsequent reports filed with the SEC, which are hereby incorporated by reference.

Item 4. Controls and Procedures

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

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

~~(c) Issuer Purchases~~Neither the Company nor any “affiliated purchaser” repurchased any shares of ~~Equity Securities (shares in 000s).~~
Period Total Number of Shares
Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 2022 17 $89.97 17 57,159
May 2022 845 $84.02 845 56,315
June 2022 891 $81.41 891 55,423
Total 1,753 $82.75 1,753 55,423

~~In November 2015,~~Company common stock during the ~~Board of Directors authorized the purchase of up to 70 million shares.~~three-month period ended June 30, 2023. In March 2020, the Board of Directors authorized the purchase of ~~an additional~~ 60 million shares and a total of approximately ~~55.4 million~~33.3 shares remain available for purchase under the ~~authorizations.~~authorization.

Item 5. Other Information

During the three-month period ended June 30, 2023, none of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement.

Item 6. Exhibits

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


















2.1**			Agreement and Plan of Merger, dated as of April 12, 2023, among Emerson Electric Co., Emersub CXIV, Inc., and National Instruments Corporation, incorporated by reference to the Company,s Form 8-K filed on April 12, 2023, File No. 1-278, Exhibit 2.1.

10.1			Letter Agreement dated May 2, 2023 between Emerson Electric Co. and Frank J. Dellaquila. Incorporated by reference to the Company's Form 8-K filed on May 3, 2023, File No. 1-278, Exhibit 10.1.

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, ~~2022~~2023 and ~~2021,~~2022, (ii) Consolidated Statements of Comprehensive Income for the three and nine months ended June 30, ~~2022~~2023 and ~~2021,~~2022, (iii) Consolidated Balance Sheets as of September 30, ~~2021~~2022 and June 30, ~~2022,~~2023, (iv) Consolidated Statements of Equity for the three and nine months ended June 30, ~~2022~~2023 and ~~2021,~~2022, (v) Consolidated Statements of Cash Flows for the nine months ended June 30, ~~2022~~2023 and ~~2021,~~2022, and (vi) Notes to Consolidated Financial Statements for the three and nine months ended June 30, ~~2022~~2023 and ~~2021.~~2022.

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

**			Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Emerson agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

3034

SIGNATURE

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.

EMERSON ELECTRIC CO.

/s/ F.M. J. ~~Dellaquila~~Baughman

~~Frank~~Mike J. ~~Dellaquila~~Baughman

~~Senior~~ Executive Vice President and Chief Financial Officer

(on behalf of the registrant and as Chief Financial Officer)

August ~~9, 2022~~2, 2023

3135




Goodwill by business segment
Automation Solutions	$	5,508	5,378

AspenTech	1,044		8,266


Climate Technologies	753		719
Tools & Home Products	418		385
Commercial & Residential Solutions	1,171		1,104

Total	$	7,723	14,748



Other liabilities include the following:
Deferred income taxes	$	711	1,736
Pension and postretirement liabilities	676		656
Operating lease liabilities (noncurrent)	413		384
Asbestos litigation	256		230





Sales by Major Product Offering
Measurement & Analytical Instrumentation	$	781	785	1	%
Valves, Actuators & Regulators	880		905	3	%
Industrial Solutions	593		575	(3)	%
Systems & Software	611		607	(1)	%
Total	$	2,865	2,872	—	%


	June 30, 2021			Sept 30, 2021			June 30, 2022
Operating working capital	$	714		$	704		$	1,261
Current ratio	1.3			1.3			1.1
Total debt-to-total capital	44.0		%	40.3		%	52.9		%
Net debt-to-net capital	32.4		%	30.4		%	46.8		%
Interest coverage ratio	17.8		X	18.6		X	21.1		X


Period	Total Number of Shares Purchased		Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 2022		17	$89.97		17	57,159
May 2022		845	$84.02		845	56,315
June 2022		891	$81.41		891	55,423
Total		1,753	$82.75		1,753	55,423