Emerson 2011 Annual Report Download - page 21

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2010 vs. 2009 – Sales for Network Power increased
$372 million to $5.8 billion in 2010, primarily from the
Avocent acquisition, a strong increase in the embedded
power business and a moderate increase in the network
power systems business in Asia, partially offset by
decreases in the uninterruptible power supply and preci-
sion cooling, energy systems, embedded computing and
inbound power systems businesses. Underlying sales
declined 2 percent on lower prices, acquisitions had a
7 percent ($370 million) favorable impact and foreign
currency translation had a 2 percent ($90 million) favor-
able impact. Geographically, underlying sales were flat
in the United States, while sales decreased in Europe
(13 percent), Latin America (5 percent), Canada
(17 percent) and Middle East/Africa (34 percent).
Sales increased in Asia (6 percent). Earnings increased
$221 million to $800 million, and margin increased over
3 percentage points largely as a result of cost savings
from aggressive restructuring actions taken in 2009,
particularly in the embedded computing and energy
systems businesses, as well as lower restructuring
expense of $93 million and a $17 million favorable impact
from foreign currency transactions. Lower selling prices
were partially offset by materials cost containment.
CLIMATE TECHNOLOGIES
CHANGE CHANGE
(DOLLARS IN MILLIONS) 2009 2010 2011 ‘09 - ‘10 ‘10 - ‘11
Sales $3,197 3,801 3,995 19% 5%
Earnings $ 411 691 709 68% 3%
Margin 12.9% 18.2% 17.8%
2011 vs. 2010 – Climate Technologies reported sales of
$4.0 billion for 2011, a $194 million increase that reflects
a strong increase in the compressor business, partially
offset by share loss in the temperature controls business
and a decrease in the temperature sensors business. The
North American refrigeration and air conditioning end
markets experienced solid growth while results in Asia
were strong despite prior year growth that benefited
from stimulus programs in China. Sales growth reflects
a 3 percent underlying increase, including an estimated
2 percent from higher selling prices and approximately
1 percent from higher volume, a 1 percent ($42 million)
favorable impact from foreign currency translation and
a 1 percent ($28 million) positive contribution from
acquisitions. Underlying sales increased 7 percent inter-
nationally, including 7 percent in Asia, 26 percent in Latin
America and 3 percent in Europe, while sales were flat in
the United States due to the decline in the temperature
controls business. Earnings increased 3 percent to
$709 million, due to savings from prior period cost reduc-
tions and higher sales volume in the compressor business.
The margin was diluted by higher materials and other
costs, which were partially offset by higher selling prices,
and deleverage in the temperature controls business.
2010 vs. 2009 – Climate Technologies reported sales of
$3.8 billion for 2010, a $604 million increase, reflecting
increases across all businesses, including compres-
sors, temperature sensors and heater controls. Sales
growth was strong in Asia and North America, aided
by stimulus programs in support of mandated higher
efficiency standards in China, growth in U.S. air condi-
tioning and refrigeration markets and a change in
refrigerant requirements in the U.S. Underlying sales
increased approximately 16 percent on higher volume,
which included slight new product penetration gains,
acquisitions added 2 percent ($55 million) and foreign
currency translation had a 1 percent ($22 million) favor-
able impact. The underlying sales increase reflected a
12 percent increase in the United States and 22 percent
internationally, including increases of 47 percent in
Asia and 21 percent in Latin America, partially offset
by a decline of 4 percent in Europe. Earnings increased
$280 million to $691 million, primarily due to higher
sales volume, savings from cost reduction actions, lower
restructuring expense of $35 million and a $15 million
commercial litigation charge included in 2009 costs.
The margin increase in excess of 5 percentage points
reflected leverage on higher sales volume, savings from
cost reduction actions in prior periods and materials
cost containment, partially offset by lower prices and
unfavorable product mix.
TOOLS AND STORAGE
CHANGE CHANGE
(DOLLARS IN MILLIONS) 2009 2010 2011 ‘09 - ‘10 ‘10 - ‘11
Sales $1,725 1,755 1,837 2% 5%
Earnings $ 276 357 375 29% 5%
Margin 16.0% 20.3% 20.4%
2011 vs. 2010 – Sales for Tools and Storage were
$1.8 billion in 2011, an $82 million increase. Sales growth
reflects an underlying increase of 5 percent, including
approximately 4 percent from higher volume and an
estimated 1 percent from higher selling prices, and
favorable foreign currency translation of 1 percent
($13 million), partially offset by a negative 1 percent
($21 million) impact from the heating elements unit
divestiture. The sales increase was led by very strong
growth in the professional tools and commercial storage
businesses and modest growth in the food waste
disposers business, partially offset by decreases in the
consumer-related wet/dry vacuums and residential
storage businesses due to continued weak U.S. residential
construction markets. Underlying sales increased
5 percent in the United States and 11 percent