Emerson 2013 Annual Report Download - page 53

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The total fair value of shares vested under incentive shares plans was $19, $15 and $276, respectively, in 2013, 2012 and
2011, of which $8, $6 and $113, respectively, was paid in cash, primarily for tax withholding. As of September 30, 2013,
5.0 million shares remained available for award under incentive shares plans.
Total compensation expense for stock options and incentive shares was $221, $100 and $121, for 2013, 2012 and 2011,
respectively. The increase from 2012 to 2013 reflects overlap of two performance shares programs during the year
(2010 awards for performance through 2013 and 2013 awards for performance through 2016) and a higher stock price
in the current year. The decrease from 2011 to 2012 reflects a stock option award in 2011 and no performance shares
program overlap in 2012. Income tax benefits recognized in the income statement for these compensation arrangements
during 2013, 2012 and 2011 were $68, $28 and $32, respectively. As of September 30, 2013, there was $316 of total
unrecognized compensation expense related to unvested shares awarded under these plans, which is expected to be
recognized over a weighted-average period of 2.7 years.
In addition to the employee stock option and incentive shares plans, in 2013 the Company awarded 18,864 shares of
restricted stock and 4,398 restricted stock units under the restricted stock plan for nonmanagement directors. As of
September 30, 2013, 269,750 shares remained available for issuance under this plan.
(15) Common Stock
At September 30, 2013, 46 million shares of common stock were reserved for issuance under the Company’s stock-based
compensation plans. During 2013, 20.3 million common shares were repurchased and 2.9 million treasury shares
were reissued.
At September 30, 2013 and 2012, the Company had 5.4 million shares of $2.50 par value preferred stock authorized, with
none issued.
(16) Business Segments Information
The Company designs and supplies products and technology and delivers engineering services in a wide range of industrial,
commercial and consumer end markets around the world. The business segments of the Company are organized primarily by
the nature of the products and services they sell.
The Process Management segment provides systems and software, measurement and analytical instrumentation, valves,
actuators and regulators, and services and solutions, including digital plant architecture that allows communication of devices
with centralized systems, to provide precision measurement, control, monitoring and asset optimization for plants that
produce power or process fluids or items such as petroleum, chemicals, food and beverages, pulp and paper, pharmaceuticals,
and municipal water supplies. The Industrial Automation segment provides low, medium and high voltage alternators
and other power generation equipment, commercial and industrial motors and drives, power transmission and materials
handling equipment, materials joining and precision cleaning products, fluid power and control mechanisms, and electrical
distribution equipment which are used in a wide variety of manufacturing operations to provide integrated manufacturing
solutions to customers. The Network Power segment designs, manufactures, installs and maintains power systems for
telecommunications networks, data centers and other critical applications, including power conditioning and uninterruptible
AC and DC power supplies, precision cooling systems, electrical switching equipment, integrated data center infrastructure
monitoring, management systems, and embedded power supplies and computing systems. The Climate Technologies
segment supplies compressors, temperature sensors and controls, thermostats, flow controls and remote monitoring
technology and services to all elements of the climate control industry, including residential heating and cooling, commercial
air conditioning, commercial and industrial refrigeration, and marine controls. The Commercial & Residential Solutions
segment provides tools for professionals and homeowners, home and commercial storage systems, and appliance solutions.
The principal distribution method for each segment is direct sales forces, although the Company also uses independent sales
representatives and distributors. Due to its global presence, certain of the Company’s international operations are subject
to risks such as significant currency exchange rate fluctuations and restrictions on the movement of funds and potential
nationalization of operations.
The primary income measure used for assessing segment performance and making operating decisions is earnings before
interest and income taxes. Intersegment selling prices approximate market prices. Accounting method differences between
segment reporting and the consolidated financial statements are primarily management fees allocated to segments based
on a percentage of sales and the accounting for pension and other retirement plans. Corporate and other includes goodwill
impairment charges when applicable. Corporate assets are primarily comprised of cash and equivalents, investments
and certain fixed assets. Summarized below is information about the Company’s operations by business segment and by
geography (also see Notes 3 through 6).