Emerson 2009 Annual Report Download - page 4

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Emerson 20092
From left: Edward L. Monser, Chief Operating Ofcer; Charles A. Peters, Senior Executive Vice President; David N. Farr,
Chairman, Chief Executive Ofcer, and President; Craig W. Ashmore, Executive Vice President Planning and
Development; Walter J. Galvin, Vice Chairman and Chief Financial Ofcer; Charles A. Peters, David N. Farr.
we responded quickly, rapidly falling customer demand and signicant inventory reductions
negatively impacted prot margins. As a result, scal 2009 net earnings per share declined
26 percent to $2.27 on a 16 percent decline in net sales.
Underlying sales (excluding the impact of acquisitions and foreign currency translation)
declined 13 percent, impacted heavily by the global recession. This compares with a decline
in global G7 gross xed investment (GFI) of 12 percent during the same time period. GFI is
an economic indicator reecting demand for many of our products and services, and while it is
showing encouraging signs of stabilization, we expect continued challenging end-market
demand – and lower sales – in the rst half of scal 2010.
Because the sales decline and our aggressive inventory reduction created underutilized capacity,
our operating prot margin declined to 15.1 percent, down from 16.5 percent in 2008, which
was our highest level in more than 30 years. Our after-tax return on total capital was 16.2 percent,
down from 21.8 percent in scal 2008.
Cash ow from operations was strong at $3.1 billion. Strong cash ow remains a high priority,
enabling us to pursue acquisitions, develop new technologies, and return cash to shareholders
through stock repurchases and dividends. I am pleased to note that 2009 marked Emerson’s 53rd
consecutive annual dividend increase, and the board of directors has acted to increase the dividend
again by 1.5 percent, to an annual rate of $1.34.