Emerson 2013 Annual Report Download - page 25

Emerson > 2013 Annual Report 23
NET EARNINGS AND EARNINGS PER SHARE;
RETURNS ON EQUITY AND TOTAL CAPITAL
Net earnings attributable to common stockholders in 2013
were $2.0 billion, up 2 percent versus prior year and diluted
earnings per share were $2.76, up 3 percent, reflecting
the operating results discussed previously. The increase in
earnings per share also reflects the purchase of treasury
shares. Goodwill impairment and income tax charges
were $38 million and $0.06 per share higher than in 2012,
and reduced earnings and earnings per share growth
1 percentage point. Net earnings attributable to common
stockholders in 2012 were $2.0 billion and earnings per
share were $2.67, down 21 percent and 18 percent,
respectively, versus 2011. Net earnings and earnings per
share for 2012 were reduced 21 percent by the goodwill
impairment charges.
Return on common stockholders’ equity (net earnings
attributable to common stockholders divided by average
common stockholders’ equity) was 19.2 percent in 2013
compared with 19.0 percent in 2012 and 24.6 percent in
2011. Return on total capital was 16.4 percent in 2013
compared with 15.8 percent in 2012 and 19.6 percent
in 2011, and is computed as net earnings attributable to
common stockholders excluding after-tax net interest
expense, divided by average common stockholders’
equity plus short- and long-term debt less cash and
short-term investments. Goodwill impairments and
income tax charges reduced 2013 and 2012 return on
common stockholders’ equity 3.6 and 4.5 percentage
points, respectively, and return on total capital 3.2 and
3.6 percentage points, respectively.
Business Segments
Following is an analysis of segment results for 2013
compared with 2012, and 2012 compared with 2011.
The Company defines segment earnings as earnings
before interest and income taxes.
PROCESS MANAGEMENT
CHANGE CHANGE
(DOLLARS IN MILLIONS) 2011 2012 2013 ‘11 - ‘12 ‘12 - ‘13
Sales $7,000 7,899 8,610 13% 9%
Earnings $1,402 1,599 1,809 14% 13%
Margin 20.0% 20.2% 21.0%
2013 vs. 2012 – Process Management reported sales
of $8.6 billion in 2013, an increase of $711 million or
9 percent, on strong growth in the measurement devices,
final control and systems and solutions businesses,
reflecting continued global oil and gas investment and
demand in chemical and power end markets. Underlying
sales increased 9 percent on volume, while foreign
currency translation had a $23 million unfavorable impact.
Underlying sales growth was modest in the United States,
up 3 percent, while growth was strong internationally. Asia
was up 12 percent, Europe up 7 percent, Latin America up
22 percent, Middle East/Africa up 19 percent and Canada
up 10 percent. Earnings increased $210 million and margin
expanded 0.8 percentage points on higher volume,
leverage and lower materials costs, partially offset by higher
other costs. Benefits from cost reductions were offset by
unfavorable product mix. Foreign currency transactions
were $23 million favorable compared to prior year. The
comparison for 2013 includes incremental costs incurred
in the prior year related to Thailand flooding recovery.
2012 vs. 2011 – Process Management sales increased
$899 million to $7.9 billion as all businesses reported
higher sales. Strong growth in the measurement devices,
final control and systems and solutions businesses was
driven by solid global oil and gas investment and demand
in the chemical and power end markets. The supply chain
disruption from Thailand flooding that adversely affected
results of several businesses in the first half of the year was
resolved and nearly all of the volume was recovered in the
second half. Underlying sales increased 15 percent
on volume growth while foreign currency translation
had a 2 percent ($135 million) unfavorable impact.
Geographically, underlying sales increased in all regions,
including 18 percent in the United States, 13 percent in
Asia, 9 percent in Europe, 28 percent in Latin America,
16 percent in Middle East/Africa and 14 percent in Canada.
Earnings increased $197 million, to $1,599 million, on
higher volume and leverage. Margin increased slightly
as benefits from volume, leverage and cost reduction
actions were partially offset by approximately $30 million
of incremental costs related to Thailand flooding, a
$44 million unfavorable impact from foreign currency
transactions, and higher wages and other costs.
NET EARNINGS PER SHARE*
* Excludes goodwill impairment charges of $0.78 per share in 2013,
$0.72 per share in 2012 and $0.03 per share in 2011.
$2.27
09 13121110
$2.84
$3.30* $3.39* $3.54* 4%*
INCREASE
NET EARNINGS
PER SHARE
131211
$3.27
$2.67 $2.76