Emerson 2009 Annual Report Download - page 20

Emerson 200918
markets; while the temperature sensors and ow controls
businesses declined. The growth in refrigeration was
driven by the transport container market. The under-
lying sales increase reects a 2 percent increase in the
United States and 4 percent growth internationally, with
Asia growing 9 percent and Europe declining 6 percent.
Earnings increased 2 percent to $551 million in 2008
compared with $538 million in 2007. The margin was
diluted as higher sales prices were more than offset by
material ination and higher restructuring costs of
$13 million.

    C h A n G e c h a n g e 
(d o l l A R s in m i l l i o n s ) 2007 2008 2009 ‘07-‘08 ‘08 - ‘09
Sales $4,006 3,861  (4)% 
Earnings $ 564 527  (7)% 
Margin 14.1% 13.6% 
 Sales for the Appliance and Tools
segment were $3.0 billion in 2009, a 22 percent decrease
from 2008. Declines in the storage, tools and appli-
ance businesses were due to the continued downturn
in the U.S. residential and nonresidential markets, while
declines in the motors and appliance and solutions busi-
nesses reect major customers reducing inventory and
production levels due to the difcult economic condi-
tions. The sales decrease reects a 21 percent decline in
underlying sales and an unfavorable impact from foreign
currency translation of 1 percent ($41 million). Underlying
sales in the United States were down 21 percent while
underlying international sales decreased 17 percent.
The underlying sales decrease reects an estimated
23 percent decline in volume and an approximate
2 percent positive impact from pricing. Earnings for 2009
were $365 million, a 31 percent decrease from 2008,
reecting deleverage on lower sales volume and higher
rationalization costs of $16 million, which were partially
offset by savings from cost reductions, higher selling
prices and a 2008 impairment charge of $31 million in the
appliance control business (see Note 4).
 Sales in the Appliance and Tools
segment were $3.9 billion in 2008, a 4 percent decrease
from 2007. Results for 2008 were mixed, reecting
the different sectors served by these businesses. The
professional tools, commercial storage and hermetic
motor businesses showed increases, while the residen-
tial storage, appliance components, and appliance and
commercial motors businesses declined. The growth in
the professional tools business was driven by U.S. and
Latin American markets. The declines in the residential
storage and appliance-related businesses primarily reect
the downturn in the U.S. consumer appliance and resi-
dential end-markets, as the U.S. markets represented
more than 80 percent of sales for this segment. Under-
lying sales in the United States were down 6 percent
from the prior year, while international underlying sales
increased 13 percent in total. The decrease in total sales
reects a 3 percent decline in underlying sales, an
unfavorable impact from divestitures of 2 percent
($65 million) and a favorable impact from foreign
currency translation of 1 percent ($40 million). The
underlying sales decrease reects an estimated 7 percent
decline in volume and an approximate 4 percent posi-
tive impact from higher pricing. Earnings for 2008 were
$527 million, a 7 percent decrease from 2007. Earnings
decreased because of deleverage on lower sales volume
and the $31 million impairment charge in the appliance
control business (see Note 4), which was partially offset
by savings from cost reduction actions. The increase in
sales prices was substantially offset by higher material
(copper and other commodities) and wage costs. The
2007 sale of the consumer hand tools product line favor-
ably impacted the margin.


The Company continues to generate substantial cash
from operations, is in a strong nancial position with
total assets of $20 billion and stockholders’ equity of
$9 billion and has the resources available for reinvest-
ment in existing businesses, strategic acquisitions and
managing its capital structure on a short- and
long-term basis.

Annual dividends increased to a record $1.32 per share in
2009, representing the 53rd consecutive year of increases.
2004 2009
$0.80
$1.32
$0.83 $0.89
$1.05
$1.20