Business Context and Reporting Period
Company: Emerson Electric Co.
Filing Type: Form 8-K (Current Report)
Date of Report: November 29, 2022
Reporting Period: Supplemental unaudited historical information provided for the years ended September 30, 2022, and 2021, and as of September 30, 2022.
Emerson is accelerating its portfolio transformation through strategic acquisitions and divestitures. Beginning in fiscal 2023, the Company will report Climate Technologies, InSinkErator, and Therm-O-Disc as discontinued operations. Climate Technologies assets and liabilities will be classified as held-for-sale.
Key Financial Metrics
This filing serves as a notification of reporting changes and does not contain specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity within the text provided. The filing references Exhibit 99.1 for supplemental unaudited historical results reflecting the impact of discontinued operations and new segment reporting. Investors must refer to the attached exhibit for specific financial figures.
Material Changes and Portfolio Actions
- Completed Divestitures:
- Therm-O-Disc business (completed May 31, 2022).
- InSinkErator business (completed October 31, 2022).
- Completed Acquisition/Combination:
- Industrial software businesses combined with Aspen Technology, Inc. (closed May 16, 2022); Emerson owns 55% of the combined entity on a fully diluted basis.
- Pending Transaction:
- Sale of a majority stake in Climate Technologies (announced October 31, 2022); expected to close in the first half of calendar year 2023, subject to regulatory approvals.
- Segment Restructuring:
- Effective fiscal 2023, the Company will report six segments and two business groups: Intelligent Devices (Measurement & Analytical, Final Control, Discrete Automation, Safety & Productivity) and Software and Control (AspenTech, Control Systems & Software).
- Certain product sales previously reported in Control Systems & Software are reclassified to Discrete Automation.
Guidance, Outlook, and Risks
Outlook: The Company is providing supplemental historical data to facilitate investor understanding of consolidated and segment results as they will be reported in fiscal 2023. This information is voluntary and does not represent a restatement of previously issued financial statements.
Risks and Uncertainties: Forward-looking statements are subject to risks including:
- Ability to successfully complete the Climate Technologies transaction on contemplated terms.
- Financial impact of the proposed sale and scope of the transaction.
- Impacts of the COVID-19 pandemic and the Russia-Ukraine conflict.
- Economic and currency conditions, market demand, oil and gas price volatility, inflation, tariffs, and cybersecurity threats.
Investor Verification Checklist
- Review Exhibit 99.1 for the specific supplemental unaudited historical financial results adjusted for discontinued operations.
- Verify the closing status and regulatory approval timeline for the Climate Technologies majority stake sale.
- Confirm the impact of the new six-segment reporting structure on year-over-year comparability for fiscal 2023.
- Assess the financial impact of the Aspen Technology combination (55% ownership) on consolidated earnings.