Emerson 2004 Annual Report Download - page 20

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Financial Review
18 Emerson 2004
Emerson maintains a conservative
financial structure to provide the
strength and flexibility necessary to
achieve our strategic objectives.
Walter J. Galvin, Senior Executive Vice President and Chief Financial Officer
Our long-term financial objective is to create
value through stock price appreciation and
cash distribution to our shareholders. This is
accomplished through a disciplined manage-
ment process that is focused on growing cash
flow and making investments with returns
that exceed our cost of capital.
In 2004 we invested $414 million in acquisi-
tions and $400 million in capital expendi-
tures while paying $675 million in dividends
and buying back $157 million in stock.
We also improved our capital efficiency
by reducing operating working capital to
11 percent of sales from 13 percent of
sales in 2003, and return on total capital
increased to 14.2 percent from 12.7 percent
last year. Operating cash flow improved
28 percent to $2.2 billion in 2004.
We are proud of these achievements,
highlighted by record sales and strong
earnings. We understand that these
financials are our report card to the
shareholders. Our goal throughout the
following pages, as in all financial reporting,
is to present results in a complete,
accurate, and transparent manner.