UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2010
OR
¨ 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 (State or other jurisdiction of incorporation or organization) | 43-0259330 (I.R.S. Employer Identification No.) | |
8000 W. Florissant Ave. P.O. Box 4100 St. Louis, Missouri (Address of principal executive offices) | 63136 (Zip Code) |
Registrant's telephone number, including area code: (314) 553-2000
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x | Accelerated filer ¨ |
Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
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, 2010: 752,408,780 shares.
1
FORM 10-Q |
Three Months | Nine Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Net sales | $ | 5,091 | 5,641 | 15,593 | 15,796 | |||||||||||
Costs and expenses: | ||||||||||||||||
Cost of sales | 3,253 | 3,430 | 9,922 | 9,682 | ||||||||||||
Selling, general and administrative expenses | 1,089 | 1,194 | 3,401 | 3,585 | ||||||||||||
Other deductions, net | 131 | 70 | 321 | 255 | ||||||||||||
Interest expense (net of interest income of $3, $5, $19 and $14, respectively) | 65 | 64 | 157 | 196 | ||||||||||||
Earnings from continuing operations before income taxes | 553 | 883 | 1,792 | 2,078 | ||||||||||||
Income taxes | 155 | 273 | 541 | 607 | ||||||||||||
Earnings from continuing operations | 398 | 610 | 1,251 | 1,471 | ||||||||||||
Discontinued operations, net of tax | - | (9 | ) | - | (15 | ) | ||||||||||
Net earnings | 398 | 601 | 1,251 | 1,456 | ||||||||||||
Less: Noncontrolling interests in earnings of subsidiaries | 11 | 16 | 33 | 41 | ||||||||||||
Net earnings attributable to Emerson | $ | 387 | 585 | 1,218 | 1,415 | |||||||||||
Basic earnings per share attributable to Emerson: | ||||||||||||||||
Earnings from continuing operations | $ | 0.52 | 0.79 | 1.61 | 1.90 | |||||||||||
Discontinued operations | - | (0.01 | ) | - | (0.02 | ) | ||||||||||
Basic earnings per common share | $ | 0.52 | 0.78 | 1.61 | 1.88 | |||||||||||
Diluted earnings per share attributable to Emerson: | ||||||||||||||||
Earnings from continuing operations | $ | 0.51 | 0.78 | 1.60 | 1.88 | |||||||||||
Discontinued operations | - | (0.01 | ) | - | (0.02 | ) | ||||||||||
Diluted earnings per common share | $ | 0.51 | 0.77 | 1.60 | 1.86 | |||||||||||
Earnings attributable to Emerson: | ||||||||||||||||
Earnings from continuing operations | $ | 387 | 594 | 1,218 | 1,430 | |||||||||||
Discontinued operations, net of tax | - | (9 | ) | - | (15 | ) | ||||||||||
Net earnings attributable to Emerson | $ | 387 | 585 | 1,218 | 1,415 | |||||||||||
Cash dividends per common share | $ | 0.33 | 0.335 | 0.99 | 1.005 |
FORM 10-Q |
September 30, | June 30, | |||||||
2009 | 2010 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and equivalents | $ | 1,560 | 3,424 | |||||
Receivables, less allowances of $93 and $97, respectively | 3,623 | 3,793 | ||||||
Inventories | 1,855 | 2,114 | ||||||
Other current assets | 615 | 627 | ||||||
Total current assets | 7,653 | 9,958 | ||||||
Property, plant and equipment, net | 3,500 | 3,289 | ||||||
Other assets | ||||||||
Goodwill | 7,078 | 7,596 | ||||||
Other | 1,532 | 2,115 | ||||||
Total other assets | 8,610 | 9,711 | ||||||
$ | 19,763 | 22,958 | ||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Short-term borrowings and current maturities of long-term debt | $ | 577 | 2,290 | |||||
Accounts payable | 1,949 | 2,228 | ||||||
Accrued expenses | 2,378 | 2,616 | ||||||
Income taxes | 52 | 123 | ||||||
Total current liabilities | 4,956 | 7,257 | ||||||
Long-term debt | 3,998 | 4,586 | ||||||
Other liabilities | 2,103 | 2,026 | ||||||
Stockholders’ equity | ||||||||
Preferred stock, $2.50 par value per share; | ||||||||
authorized, 5,400,000 shares; issued, none | - | - | ||||||
Common stock, $0.50 par value per share; | ||||||||
authorized, 1,200,000,000 shares; issued, 953,354,012 shares; | ||||||||
outstanding, 751,872,857 shares and 752,629,414 shares, respectively | 477 | 477 | ||||||
Additional paid-in capital | 157 | 174 | ||||||
Retained earnings | 14,714 | 15,373 | ||||||
Accumulated other comprehensive income | (496 | ) | (792 | ) | ||||
Cost of common stock in treasury, 201,481,155 shares and | ||||||||
200,724,598 shares, respectively | (6,297 | ) | (6,307 | ) | ||||
Emerson stockholders’ equity | 8,555 | 8,925 | ||||||
Noncontrolling interests in subsidiaries | 151 | 164 | ||||||
Total equity | 8,706 | 9,089 | ||||||
$ | 19,763 | 22,958 |
FORM 10-Q |
Nine Months Ended | ||||||||
June 30, | ||||||||
2009 | 2010 | |||||||
Operating activities | ||||||||
Net earnings | $ | 1,251 | 1,456 | |||||
Adjustments to reconcile net earnings to net cash | ||||||||
provided by operating activities: | ||||||||
Depreciation and amortization | 542 | 605 | ||||||
Changes in operating working capital | 69 | 28 | ||||||
Pension funding | (263 | ) | (209 | ) | ||||
Other | 135 | 142 | ||||||
Net cash provided by operating activities | 1,734 | 2,022 | ||||||
Investing activities | ||||||||
Capital expenditures | (388 | ) | (300 | ) | ||||
Purchases of businesses, net of cash and equivalents acquired | (735 | ) | (1,372 | ) | ||||
Other | 18 | 17 | ||||||
Net cash used in investing activities | (1,105 | ) | (1,655 | ) | ||||
Financing activities | ||||||||
Net increase in short-term borrowings | 40 | 1,747 | ||||||
Proceeds from long-term debt | 1,254 | 601 | ||||||
Principal payments on long-term debt | (680 | ) | (50 | ) | ||||
Dividends paid | (749 | ) | (756 | ) | ||||
Purchases of treasury stock | (718 | ) | (71 | ) | ||||
Other | (94 | ) | 109 | |||||
Net cash provided by (used in) financing activities | (947 | ) | 1,580 | |||||
Effect of exchange rate changes on cash and equivalents | (77 | ) | (83 | ) | ||||
Increase (decrease) in cash and equivalents | (395 | ) | 1,864 | |||||
Beginning cash and equivalents | 1,777 | 1,560 | ||||||
Ending cash and equivalents | $ | 1,382 | 3,424 | |||||
Changes in operating working capital | ||||||||
Receivables | $ | 839 | (228 | ) | ||||
Inventories | 328 | (235 | ) | |||||
Other current assets | 16 | (67 | ) | |||||
Accounts payable | (800 | ) | 307 | |||||
Accrued expenses | (148 | ) | 115 | |||||
Income taxes | (166 | ) | 136 | |||||
$ | 69 | 28 |
1. | 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, 2009. Certain prior year amounts have been recast to conform to the current year presentation. |
2. | In the first quarter 2010, the Company adopted updates to ASC 260, Earnings per Share, regarding the two-class method of computing earnings per share (EPS). This method requires earnings to be allocated to participating securities (for Emerson, certain employee stock awards) in the EPS computation based on each security’s respective dividend rate. This change had an inconsequential impact on EPS for all periods presented. |
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Basic shares outstanding | 749.6 | 751.1 | 755.0 | 750.8 | ||||||||||||
Dilutive shares | 5.1 | 6.6 | 4.8 | 6.1 | ||||||||||||
Diluted shares outstanding | 754.7 | 757.7 | 759.8 | 756.9 |
3. | The change in stockholders’ equity balances for the nine months ended June 30, 2010 follows (in millions): |
Emerson Stockholders’ Equity | Noncontrolling Interests in Subsidiaries | Total Equity | ||||||||||
September 30, 2009 | $ | 8,555 | 151 | 8,706 | ||||||||
Net earnings | 1,415 | 41 | 1,456 | |||||||||
Other comprehensive income | (296 | ) | (2 | ) | (298 | ) | ||||||
Cash dividends | (756 | ) | (38 | ) | (794 | ) | ||||||
Net treasury stock purchases and other | 7 | 12 | 19 | |||||||||
June 30, 2010 | $ | 8,925 | 164 | 9,089 |
Three Months Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Net earnings | $ | 398 | 601 | 1,251 | 1,456 | |||||||||||
Foreign currency translation | 238 | (214 | ) | (285 | ) | (308 | ) | |||||||||
Cash flow hedges and other | 60 | (23 | ) | 6 | 10 | |||||||||||
696 | 364 | 972 | 1,158 | |||||||||||||
Less: Noncontrolling interests | 12 | 13 | 28 | 39 | ||||||||||||
Amount attributable to Emerson | $ | 684 | 351 | 944 | 1,119 |
4. | Net periodic pension expense is summarized as follows (in millions): |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Service cost | $ | 16 | 18 | 51 | 56 | |||||||||||
Interest cost | 51 | 55 | 163 | 166 | ||||||||||||
Expected return on plan assets | (67 | ) | (76 | ) | (210 | ) | (229 | ) | ||||||||
Net amortization | 20 | 35 | 61 | 104 | ||||||||||||
$ | 20 | 32 | 65 | 97 |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Service cost | $ | 1 | 1 | 3 | 3 | |||||||||||
Interest cost | 8 | 6 | 22 | 18 | ||||||||||||
Net amortization | 1 | - | 5 | 1 | ||||||||||||
$ | 10 | 7 | 30 | 22 |
5. | Other deductions, net are summarized as follows (in millions): |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Other deductions, net | ||||||||||||||||
Rationalization of operations | $ | 83 | 27 | 190 | 101 | |||||||||||
Amortization of intangibles | 31 | 44 | 78 | 124 | ||||||||||||
Other | 23 | (1 | ) | 88 | 33 | |||||||||||
(Gains)/losses, net | (6 | ) | - | (35 | ) | (3 | ) | |||||||||
$ | 131 | 70 | 321 | 255 |
6. | Rationalization of operations expense reflects costs associated with the Company’s efforts to continuously improve operational efficiency and expand globally, in order to remain competitive on a worldwide basis. The change in the liability for rationalization costs during the nine months ended June 30, 2010 follows (in millions): |
September 30, | June 30, | |||||||||||||||
2009 | Expense | Paid/Utilized | 2010 | |||||||||||||
Severance and benefits | $ | 112 | 63 | 111 | 64 | |||||||||||
Lease/contract terminations | 7 | 5 | 6 | 6 | ||||||||||||
Fixed asset write-downs | - | 7 | 7 | - | ||||||||||||
Vacant facility and other shutdown costs | 2 | 10 | 10 | 2 | ||||||||||||
Start-up and moving costs | 1 | 16 | 16 | 1 | ||||||||||||
$ | 122 | 101 | 150 | 73 |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Process Management | $ | 18 | 6 | 26 | 22 | |||||||||||
Industrial Automation | 13 | 11 | 25 | 44 | ||||||||||||
Network Power | 32 | 5 | 82 | 21 | ||||||||||||
Climate Technologies | 14 | 4 | 36 | 9 | ||||||||||||
Appliance and Tools | 6 | 1 | 21 | 5 | ||||||||||||
$ | 83 | 27 | 190 | 101 |
EMERSON ELECTRIC CO. AND SUBSIDIARIES | FORM 10-Q |
7. | Other Financial Information (in millions): |
September 30, | June 30, | |||||||
2009 | 2010 | |||||||
Inventories | ||||||||
Finished products | $ | 697 | 756 | |||||
Raw materials and work in process | 1,158 | 1,358 | ||||||
$ | 1,855 | 2,114 | ||||||
Property, plant and equipment, net | ||||||||
Property, plant and equipment, at cost | $ | 8,894 | 8,827 | |||||
Less: Accumulated depreciation | (5,394 | ) | (5,538 | ) | ||||
$ | 3,500 | 3,289 | ||||||
Goodwill by business segment | ||||||||
Process Management | $ | 2,242 | 2,230 | |||||
Industrial Automation | 1,304 | 1,330 | ||||||
Network Power | 2,454 | 2,973 | ||||||
Climate Technologies | 473 | 461 | ||||||
Appliance and Tools | 605 | 602 | ||||||
$ | 7,078 | 7,596 |
Other assets, other | ||||||||
Intellectual property and customer relationships | $ | 930 | 1,164 | |||||
Capitalized software | 214 | 206 | ||||||
LANDesk discontinued operations | - | 357 | ||||||
Other | 388 | 388 | ||||||
$ | 1,532 | 2,115 |
Accrued expenses include the following: | ||||||||
Employee compensation | $ | 536 | 712 | |||||
Customer advance payments | $ | 315 | 348 | |||||
Product warranty liability | $ | 199 | 216 |
September 30, | June 30, | |||||||
2009 | 2010 | |||||||
Other liabilities | ||||||||
Pension plans | $ | 613 | 461 | |||||
Postretirement plans, excluding current portion | 460 | 456 | ||||||
Deferred income taxes | 406 | 458 | ||||||
Other | 624 | 651 | ||||||
$ | 2,103 | 2,026 |
8. | Summarized information about the Company’s results of continuing operations by business segment follows (in millions): |
Three months ended June 30, | ||||||||||||||||
Sales | Earnings | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Process Management | $ | 1,481 | 1,511 | 220 | 311 | |||||||||||
Industrial Automation | 813 | 956 | 47 | 122 | ||||||||||||
Network Power | 1,330 | 1,418 | 137 | 182 | ||||||||||||
Climate Technologies | 859 | 1,106 | 135 | 221 | ||||||||||||
Appliance and Tools | 771 | 850 | 108 | 152 | ||||||||||||
5,254 | 5,841 | 647 | 988 | |||||||||||||
Differences in accounting methods | 48 | 52 | ||||||||||||||
Corporate and other | (77 | ) | (93 | ) | ||||||||||||
Eliminations/Interest | (163 | ) | (200 | ) | (65 | ) | (64 | ) | ||||||||
$ | 5,091 | 5,641 | 553 | 883 |
Nine months ended June 30, | ||||||||||||||||
Sales | Earnings | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Process Management | $ | 4,512 | 4,321 | 776 | 768 | |||||||||||
Industrial Automation | 2,876 | 2,699 | 313 | 301 | ||||||||||||
Network Power | 4,095 | 4,150 | 397 | 545 | ||||||||||||
Climate Technologies | 2,284 | 2,798 | 258 | 497 | ||||||||||||
Appliance and Tools | 2,269 | 2,341 | 248 | 396 | ||||||||||||
16,036 | 16,309 | 1,992 | 2,507 | |||||||||||||
Differences in accounting methods | 145 | 147 | ||||||||||||||
Corporate and other | (188 | ) | (380 | ) | ||||||||||||
Eliminations/Interest | (443 | ) | (513 | ) | (157 | ) | (196 | ) | ||||||||
$ | 15,593 | 15,796 | 1,792 | 2,078 |
9. | Following is a discussion regarding the Company’s use of financial instruments. |
Hedging Activities |
As of June 30, 2010, the notional amount of foreign currency which has been hedged totaled approximately $1.7 billion and commodity hedges outstanding included a combined total of approximately 87 million pounds of copper and aluminum. The majority of hedging gains and losses deferred as of June 30, 2010 will generally be recognized over the next 12 months as the underlying forecasted transactions occur. |
Derivatives Receiving Deferral Accounting | ||||||||||||||||||
Gain (Loss) Reclassified into Earnings | Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||||
Location | ||||||||||||||||||
Foreign currency | Sales | $ | (6 | ) | (2 | ) | (21 | ) | (6 | ) | ||||||||
Foreign currency | Cost of sales | (6 | ) | 3 | (26 | ) | 2 | |||||||||||
Commodity | Cost of sales | (28 | ) | 17 | (85 | ) | 38 | |||||||||||
$ | (40 | ) | 18 | (132 | ) | 34 |
Gain (Loss) Recognized in | Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||
Other Comprehensive Income | 2009 | 2010 | 2009 | 2010 | ||||||||||||||
Foreign currency | $ | 34 | 14 | (59 | ) | 42 | ||||||||||||
Commodity | 20 | (33 | ) | (66 | ) | 8 | ||||||||||||
$ | 54 | (19 | ) | (125 | ) | 50 |
Derivatives Not Receiving Deferral Accounting | ||||||||||||||||||
Gain (Loss) Recognized in Earnings | Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||||
Location | ||||||||||||||||||
Foreign currency | Other income (deductions) | $ | (38 | ) | 50 | (62 | ) | 122 | ||||||||||
Commodity | Cost of sales | 1 | (2 | ) | (9 | ) | (1 | ) | ||||||||||
$ | (37 | ) | 48 | (71 | ) | 121 |
September 30, 2009 | June 30, 2010 | |||||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||
Derivatives Receiving Deferral Accounting | ||||||||||||||||
Foreign currency | $ | 15 | (33 | ) | 38 | (10 | ) | |||||||||
Commodity | $ | 30 | (4 | ) | 5 | (10 | ) | |||||||||
Derivatives Not Receiving Deferral Accounting | ||||||||||||||||
Foreign currency | $ | 6 | (7 | ) | 1 | (8 | ) | |||||||||
Commodity | $ | 2 | (2 | ) | - | - |
10. | On November 6, 2009, the Company acquired SSB Group GmbH (SSB), a designer and manufacturer of electrical pitch systems and control technology used in wind turbine generators, for approximately $145 million in cash. SSB had annual revenues in 2009 of approximately $115 million and is reported in the Industrial Automation business segment. |
On December 11, 2009, the Company acquired Avocent Corporation, a leader in enhancing companies’ datacenter solutions capability, which strongly positioned Emerson for the growth of energy management in datacenters worldwide, for $1.2 billion in cash. Avocent, excluding its LANDesk business, had annual revenues of $390 million in 2009 and is reported in the Network Power business segment. In connection with the acquisition, the Company immediately began pursuing the sale of the LANDesk business unit which is not a strategic fit with Emerson. LANDesk sells management and security software suites and had annual revenues of $150 million in 2009. Potential acquirers have evaluated the business and submitted proposals, which are under consideration. The Company expects to complete the sale in 2010. LANDesk results for the three and nine months ended June 30, 2010 are reported as discontinued operations, with assets totaling approximately $0.4 billion and liabilities of approximately $0.1 billion. The purchase price allocations for Avocent and LANDesk are preliminary, and may be adjusted based on valuations to be completed during 2010 (see Note 7). |
The Company is considering the sale of its appliance motors and U.S. commercial and industrial motors businesses, which have combined annual sales in excess of $800 million and are included in the Appliance and Tools business segment. Potential acquirers have submitted proposals, which are under consideration. The Company has not yet made a final decision. |
Items 2 and 3. Management's Discussion and Analysis of Financial Condition and Results of Operations
Three months ended June 30, | 2009 | 2010 | Change | |||||||||
(dollars in millions, except per share amounts) | ||||||||||||
Net sales | $ | 5,091 | 5,641 | 11 | % | |||||||
Gross profit | $ | 1,838 | 2,211 | 20 | % | |||||||
Percent of sales | 36.1 | % | 39.2 | % | ||||||||
SG&A | $ | 1,089 | 1,194 | |||||||||
Percent of sales | 21.4 | % | 21.2 | % | ||||||||
Other deductions, net | $ | 131 | 70 | |||||||||
Interest expense, net | $ | 65 | 64 | |||||||||
Earnings from continuing operations before income taxes | $ | 553 | 883 | 59 | % | |||||||
Percent of sales | 10.9 | % | 15.7 | % | ||||||||
Earnings from continuing operations - Emerson | $ | 387 | 594 | 53 | % | |||||||
Net earnings - Emerson | $ | 387 | 585 | 51 | % | |||||||
Percent of sales | 7.6 | % | 10.4 | % | ||||||||
Diluted EPS – Earnings from continuing operations | $ | 0.51 | 0.78 | 53 | % | |||||||
Diluted EPS – Net earnings | $ | 0.51 | 0.77 | 51 | % |
EMERSON ELECTRIC CO. AND SUBSIDIARIES | FORM 10-Q |
Three months ended June 30, | 2009 | 2010 | Change | |||||||||
(dollars in millions) | ||||||||||||
Sales | $ | 1,481 | 1,511 | 2 | % | |||||||
Earnings | $ | 220 | 311 | 41 | % | |||||||
Margin | 14.8 | % | 20.6 | % |
Three months ended June 30, | 2009 | 2010 | Change | |||||||||
(dollars in millions) | ||||||||||||
Sales | $ | 813 | 956 | 18 | % | |||||||
Earnings | $ | 47 | 122 | 165 | % | |||||||
Margin | 5.7 | % | 12.8 | % |
EMERSON ELECTRIC CO. AND SUBSIDIARIES | FORM 10-Q |
Three months ended June 30, | 2009 | 2010 | Change | |||||||||
(dollars in millions) | ||||||||||||
Sales | $ | 1,330 | 1,418 | 7 | % | |||||||
Earnings | $ | 137 | 182 | 31 | % | |||||||
Margin | 10.4 | % | 12.8 | % |
Three months ended June 30, | 2009 | 2010 | Change | |||||||||
(dollars in millions) | ||||||||||||
Sales | $ | 859 | 1,106 | 29 | % | |||||||
Earnings | $ | 135 | 221 | 64 | % | |||||||
Margin | 15.7 | % | 20.1 | % |
Three months ended June 30, | 2009 | 2010 | Change | |||||||||
(dollars in millions) | ||||||||||||
Sales | $ | 771 | 850 | 10 | % | |||||||
Earnings | $ | 108 | 152 | 41 | % | |||||||
Margin | 14.0 | % | 18.0 | % |
Nine months ended June 30, | 2009 | 2010 | Change | |||||||||
(dollars in millions, except per share amounts) | ||||||||||||
Net sales | $ | 15,593 | 15,796 | 1 | % | |||||||
Gross profit | $ | 5,671 | 6,114 | 8 | % | |||||||
Percent of sales | 36.4 | % | 38.7 | % | ||||||||
SG&A | $ | 3,401 | 3,585 | |||||||||
Percent of sales | 21.8 | % | 22.7 | % | ||||||||
Other deductions, net | $ | 321 | 255 | |||||||||
Interest expense, net | $ | 157 | 196 | |||||||||
Earnings from continuing operations before income taxes | $ | 1,792 | 2,078 | 16 | % | |||||||
Percent of sales | 11.5 | % | 13.2 | % | ||||||||
Earnings from continuing operations - Emerson | $ | 1,218 | 1,430 | 17 | % | |||||||
Net earnings - Emerson | $ | 1,218 | 1,415 | 16 | % | |||||||
Percent of sales | 7.8 | % | 9.0 | % | ||||||||
Diluted EPS – Earnings from continuing operations | $ | 1.60 | 1.88 | 18 | % | |||||||
Diluted EPS – Net earnings | $ | 1.60 | 1.86 | 16 | % |
Nine months ended June 30, | 2009 | 2010 | Change | |||||||||
(dollars in millions) | ||||||||||||
Sales | $ | 4,512 | 4,321 | (4 | )% | |||||||
Earnings | $ | 776 | 768 | (1 | )% | |||||||
Margin | 17.2 | % | 17.8 | % |
EMERSON ELECTRIC CO. AND SUBSIDIARIES | FORM 10-Q |
Nine months ended June 30, | 2009 | 2010 | Change | |||||||||
(dollars in millions) | ||||||||||||
Sales | $ | 2,876 | 2,699 | (6 | )% | |||||||
Earnings | $ | 313 | 301 | (4 | )% | |||||||
Margin | 10.9 | % | 11.1 | % |
Nine months ended June 30, | 2009 | 2010 | Change | |||||||||
(dollars in millions) | ||||||||||||
Sales | $ | 4,095 | 4,150 | 1 | % | |||||||
Earnings | $ | 397 | 545 | 37 | % | |||||||
Margin | 9.7 | % | 13.1 | % |
Nine months ended June 30, | 2009 | 2010 | Change | |||||||||
(dollars in millions) | ||||||||||||
Sales | $ | 2,284 | 2,798 | 22 | % | |||||||
Earnings | $ | 258 | 497 | 93 | % | |||||||
Margin | 11.3 | % | 17.8 | % |
Nine months ended June 30, | 2009 | 2010 | Change | |||||||||
(dollars in millions) | ||||||||||||
Sales | $ | 2,269 | 2,341 | 3 | % | |||||||
Earnings | $ | 248 | 396 | 60 | % | |||||||
Margin | 10.9 | % | 16.9 | % |
September 30, 2009 | June 30, 2010 | |||||||
Working capital (in millions) | $ | 2,697 | 2,701 | |||||
Current ratio | 1.5 to 1 | 1.4 to 1 | ||||||
Total debt-to-total capital | 34.8 | % | 43.5 | % | ||||
Net debt-to-net capital | 25.7 | % | 27.9 | % | ||||
Interest coverage ratio | 10.9 | X | 10.9 | X |
Period | Total Number of Shares Purchased (000s) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (000s) | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (000s) | ||||||||||||
April 2010 | 315 | $51.64 | 315 | 50,522 | ||||||||||||
May 2010 | 300 | $48.38 | 300 | 50,222 | ||||||||||||
June 2010 | 330 | $45.72 | 330 | 49,892 | ||||||||||||
Total | 945 | $48.54 | 945 | 49,892 |
12 | Ratio of Earnings to Fixed Charges. | |
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 XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Earnings for the three and nine months ended June 30, 2009 and 2010, (ii) Consolidated Balance Sheets at September 30, 2009 and June 30, 2010, (iii) Consolidated Statements of Cash Flows for the nine months ended June 30, 2009 and 2010, and (iv) Notes to Consolidated Financial Statements for the three and nine months ended June 30, 2010. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed “filed” or part of any registration statement or prospectus for purposes of Section 11 or 12 under the Securities Act or the Exchange Act, or otherwise subject to liability under those sections, except as shall be expressly set forth by specific reference in such filing. |
EMERSON ELECTRIC CO. | |||
Date: August 4, 2010 | By | /s/ Frank J. Dellaquila | |
Frank J. Dellaquila | |||
Senior Vice President and Chief Financial Officer | |||
(On behalf of the registrant and as Chief Financial Officer) |
Exhibit No. | Exhibit | |
12 | Ratio of Earnings to Fixed Charges. | |
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 XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Earnings for the three and nine months ended June 30, 2009 and 2010, (ii) Consolidated Balance Sheets at September 30, 2009 and June 30, 2010, (iii) Consolidated Statements of Cash Flows for the nine months ended June 30, 2009 and 2010, and (iv) Notes to Consolidated Financial Statements for the three and nine months ended June 30, 2010. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, and shall not be deemed “filed” or part of any registration statement or prospectus for purposes of Section 11 or 12 under the Securities Act or the Exchange Act, or otherwise subject to liability under those sections, except as shall be expressly set forth by specific reference in such filing. |