Emerson 2014 Annual Report Download - page 7

To our Shareholders,
As Emerson moves from 2014 into 2015, we will
celebrate 125 years in business – a milestone few
companies can claim. For a century and a quarter,
Emerson has been a leader and an innovator of
the important technologies of our times. We take
tremendous pride in that legacy, which fuels us to
grow and improve for generations to come. This
noteworthy anniversary offers us an opportunity
to celebrate the past, evaluate present challenges
and define our vision for the future.
As we enter our 125th year, I cannot help but reflect
on our long and rich history. Emerson has evolved from
a regional supplier of motors and fans, to a national
manufacturer of market-leading technologies, to a
global engineering and solutions provider that drives
innovation across the world’s most complex industries.
In a bygone era, Emerson helped consumers live and
work more comfortably. Today, Emerson enables
the production and processing of energy in ways
never before imagined; management of the digital
economy through state-of-the-art data centers;
automation of factories that drives productivity and
savings; and climate control for people and food,
providing unparalleled energy efficiency, reliability and
sustainability. It has been a challenging and rewarding
journey – and it is just getting started.
As we have experienced over the decades, the world
is unpredictable and fast-changing, and this past
year was no different. The rate of underlying sales
change in 2014 improved from the previous year, but
global macroeconomic expansion remained tepid,
limiting growth. Underlying sales increased in all five
segments, with growth in Network Power offset by
divestitures that will enhance our portfolio for future
growth and profitability. Overcoming the challenges
of this past year, gross profit margin expansion
Celebrate. Challenge. Consider It Solved.
ONE-YEAR PERFORMANCE
Years ended September 30 PERCENT
Dollars in millions, except per share amounts 2013 2014 CHANGE
Sales $24,669 $24,537 (1)%
Net earnings $ 2,004 $ 2,147 7%
Diluted earnings per share $ 2.76 $ 3.03 10 %
Diluted earnings per share
excluding charges* $ 3.54 $ 3.75 6%
Dividends per share $ 1.64 $ 1.72 5%
Operating cash flow $ 3,649 $ 3,692 1%
Return on total capital 16.4% 17.5%
Return on equity 19.2% 20.7%
* 2014 earnings per share excludes a $0.72 goodwill impairment charge and
2013 excludes $0.78 of goodwill impairment and income tax charges.
FIVE-YEAR PERFORMANCE
Years ended September 30 FIVE-YEAR
Dollars in millions, except per share amounts 2009 2014 CAGR
Sales $20,102 $24,537 4 %
Net earnings $ 1,724 $ 2,147 4%
Net earnings per share $ 2.27 $ 3.03 6%
Diluted earnings per share
excluding charges* $ 2.27 $ 3.75 11 %
Dividends per share $ 1.32 $ 1.72 5%
Operating cash flow $ 3,086 $ 3,692 4%
Return on total capital 16.2% 17.5%
Return on equity 19.5% 20.7%
* 2014 earnings per share excludes a $0.72 goodwill impairment charge.
continued, improving to 41.4 percent, exceeding last
year’s record performance. Excluding an impairment
charge related to the 2010 Chloride acquisition,
EBIT margin improved to 16.5 percent, even with
substantial investment acceleration to build upon our
technology leadership position, drive future growth
and enhance the value of our global franchises.
2014 Emerson > 03