Emerson Business Summary:
2010E as of May 19th
2010E as of May 19th
2007
2008
2009
2007-09
CAGR
CAGR
2010E
2009-10
% Change
% Change
Sales
$22.1B
$24.8B
$20.9B
(2.8%)
$21.3 to $21.9B
2-5%
OP $*
$3.5B
$4.1B
$3.2B
(4.8%)
OP %*
15.8%
16.5%
15.1%
-
+60 to 100 bps
Operating
Cash Flow
Cash Flow
$3.0B
$3.3B
$3.1B
1.2%
$2.9 to $3.1B
Free Cash
Flow *
Flow *
$2.3B
$2.6B
$2.6B
4.6%
$2.5 to $2.6B
DPS
$1.05
$1.20
$1.32
12.1%
$1.34
1.5%
EPS
$2.66
$3.06
$2.27
(7.6%)
$2.40 to $2.60
6-15%
ROTC
20.1%
21.8%
16.2%
-
17-18%
Emerson Will Be Up on All Key Financial Measures in FY 2010 – We
Had Assumed Euro to USD Exchange Rate at 1.34, but Now It Has
Reduced to 1.25 – Will Hurt Sales in 2nd Half by ~$100M
Had Assumed Euro to USD Exchange Rate at 1.34, but Now It Has
Reduced to 1.25 – Will Hurt Sales in 2nd Half by ~$100M
(3%)-0% Underlying*
Reconciliation of Non-GAAP Financial
Measures
The following reconciles each non-GAAP measure (denoted with an *) with the most directly comparable GAAP measure ($ M):
2007
2008
2009
Operating Profit*
$3,496
$4,082
$3,167
% of sales*
15.8%
16.5%
15.1%
Other Deductions,
net
$105
$229
$483
EBIT
$3,391
$3,853
$2,684
% of sales
15.3%
15.5%
12.8%
Interest Expense, net
$227
$187
$220
Pretax Earnings
$3,164
$3,666
$2,464
% of sales
14.3%
14.8%
11.8%
2010E
Operating Profit*
~$3,345-$3,530
% of sales*
~15.7-16.1%
Interest Expense and
Other Deductions, Net
~$685-$660
Pretax Earnings
~$2,660-$2,870
% of sales
~12.5-13.1%
2010E
Underlying Sales*
(3%)-0%
Currency & Acquisitions
+5 pts
Net Sales
+2% to +5%
2007
2008
2009
2010E
Operating Cash Flow
$3,016
$3,293
$3,086
~$2.9B-$3.1B
Capital Expenditures
$681
$714
$531
~$0.4B-$0.5B
Free Cash Flow*
$2,335
$2,579
$2,555
~$2.5B-$2.6B