Emerson 2009 Annual Report Download - page 24

Emerson 200922
amortized in future periods. While management believes
that the assumptions used are appropriate, differences
versus actual experience or changes in assumptions may
affect the Company’s retirement plan obligations and
future expense.
As of September 30, 2009, U.S. and non-U.S. retire-
ment plans were underfunded by $380 million and
$230 million, respectively, with the increase in under-
funding primarily due to a decline in the discount rate
for U.S. plans from 6.5 percent in 2008 to 5.5 percent
in 2009, and the decline in asset values during scal
2009. Deferred actuarial losses, which will be recognized
in earnings in future years, were $1,692 million as of
September 30, 2009. The Company contributed
$303 million to dened benet plans in 2009 and expects
to contribute approximately $250 million in 2010.
Dened benet pension plan expense for scal 2010 is
expected to be approximately $130 million, versus
$94 million in 2009. See Notes 10 and 11.

Income tax expense and deferred tax assets and liabili-
ties reect management’s assessment of future taxes
expected to be paid on items reected in the nancial
statements. Uncertainty exists regarding tax positions
taken in previously led tax returns still under examina-
tion and positions expected to be taken in future returns.
Deferred tax assets and liabilities arise because of
temporary differences between the consolidated nancial
statement carrying amounts of existing assets and liabili-
ties and their respective tax bases, and operating loss
and tax credit carryforwards. Deferred income taxes are
measured using enacted tax rates in effect for the year
in which the temporary differences are expected to be
recovered or settled. The impact on deferred tax assets
and liabilities of a change in tax rates is recognized in the
period that includes the enactment date. Generally, no
provision is made for U.S. income taxes on the undistrib-
uted earnings of non-U.S. subsidiaries, as these earnings
are considered permanently invested or otherwise inde-
nitely retained for continuing international operations.
Determination of the amount of taxes that might be paid
on these undistributed earnings if eventually remitted is
not practicable. See Note 13.

Effective October 1, 2009, the Company adopted ASC
805, Business Combinations (formerly FAS No. 141(R),
“Business Combinations”). ASC 805 requires assets
acquired and liabilities assumed to be measured at fair
value as of the acquisition date, all acquisition costs to be
expensed as incurred and contractual contingencies to
be recognized at fair value as of the acquisition date. The
impact of adoption, if any, will depend on acquisitions
completed in the future.
Effective October 1, 2009, the Company adopted
updates to ASC 810, Consolidation (formerly FAS No.
160, “Noncontrolling Interests in Consolidated Financial
Statements”). The updated portion of ASC 810 requires
an entity to separately disclose noncontrolling interests
as a separate component of equity in the balance sheet
and clearly identify on the face of the income statement
net income related to noncontrolling interests.
Adoption is not expected to have a material impact
on the Company’s nancial statements.
Effective October 1, 2009, the Company adopted updates
to ASC 260, Earnings per Share (formerly FASB Staff
Position No. EITF 03-6-1, “Determining Whether Instru-
ments Granted in Share-Based Payment Transactions Are
Participating Securities”). The updated portion of ASC
260 claries whether instruments granted in share-based
payment transactions should be included in the computa-
tion of EPS using the two-class method prior to vesting.
Adoption is not expected to have a material impact on
the Company’s nancial statements.
In December 2008, the FASB issued Staff Position No. FAS
132 (R)-1, “Employers’ Disclosures about Postretirement
Benet Plan Assets” (now part of ASC 715, Compensation
- Retirement Benets). This portion of ASC 715 is effective
for scal 2010 annual disclosure, and expands disclosure
about an entity’s investment policies and strategies for
assets held by dened benet pension or postretirement
plans, including information regarding major categories
of plan assets, inputs and valuation techniques used to
measure the fair value of assets, and signicant concen-
trations of risk within the plans. Adoption is not expected
to have a material impact on the Company’s nancial
statements.

Net earnings per share were $2.27 in 2009, a 9 percent
compound annual growth rate since 2004.
2004 2009
$1.49
$2.24 $2.27
$2.66
$3.06
$1.70