Emerson 2008 Annual Report Download - page 25

[ 18 ] Emerson 2008
Net sales for scal 2007 were $22.1 billion, an increase
of approximately $2.4 billion, or 12 percent, over scal
2006, with international sales leading the overall growth.
The consolidated results reect increases in all ve
business segments with an approximate 7 percent
($1,349 million) increase in underlying sales, a nearly
3 percent ($566 million) contribution from acquisitions,
net of divestitures, and a more than 2 percent
($482 million) favorable impact from foreign currency
translation. The underlying sales increase for scal 2007
was driven by international sales growth of 13 percent
and a 2 percent increase in the United States. The U.S.
results reect a modest decline in the rst quarter with
moderate growth during the remainder of the year. The
international sales increase primarily reects growth in
Asia (16 percent) and Europe (9 percent). The Company
estimates that the underlying sales growth of approxi-
mately 7 percent primarily reects an approximate
5 percent gain from volume, which includes an approxi-
mate 2 percent impact from penetration gains, and an
approximate 2 percent impact from higher sales prices.

n United States n Asia
n Europe n Other
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International destination sales, including U.S. exports,
increased approximately 20 percent, to $13.5 billion in
2008, representing 54 percent of the Company’s total
sales. U.S. exports of $1,537 million were up 20 percent
compared with 2007, reecting strong growth in the
Network Power, Process Management and Climate
Technologies businesses aided by the weaker U.S. dollar,
as well as the benet from acquisitions. International
subsidiary sales, including shipments to the United
States, were $12.0 billion in 2008, up 19 percent over
2007. Excluding the net 8 percent favorable impact from
acquisitions, divestitures and foreign currency transla-
tion, international subsidiary sales increased 11 percent
compared with 2007. Underlying destination sales grew
17 percent in Asia during the year, driven mainly by
21 percent growth in China, while sales grew 18 percent
in Latin America, 17 percent in Middle East/Africa and
3 percent in Europe.
International destination sales, including U.S. exports,
increased approximately 22 percent including acquisitions,
to $11.2 billion in 2007, representing 51 percent of the
Company’s total sales. U.S. exports of $1,277 million
were up 13 percent compared with 2006, aided by
the weaker U.S. dollar. International subsidiary sales,
including shipments to the United States, were
$10.1 billion in 2007, up 22 percent over 2006. Excluding
the net 6 percent favorable impact from acquisitions,
divestitures and foreign currency translation, international
subsidiary sales increased 16 percent compared with
2006. Underlying destination sales grew 16 percent in
Asia during the year, driven mainly by 11 percent growth
in China, while sales grew 44 percent in the Middle East,
11 percent in Latin America and 9 percent in Europe.

The Company acquired Motorola Inc.’s Embedded
Computing business (Embedded Computing) and several
smaller businesses during 2008. Embedded Computing
provides communication platforms and enabling
software used by manufacturers of equipment for
telecommunications, medical imaging, defense and
aerospace, and industrial automation markets. Total cash
paid for these businesses (net of cash and equivalents
acquired of approximately $2 million) was approximately
$561 million. Annualized sales for acquired businesses
were $665 million in 2008.
In the rst quarter of scal 2008, the Company divested
the Brooks Instrument ow meters and ow controls unit
(Brooks), which had sales for the rst quarter of 2008 of
$21 million and net earnings of $1 million. The Company
received $100 million from the sale of Brooks, resulting
in a pretax gain of $63 million ($42 million after-tax). The
net gain and results of operations for scal 2008 were
classied as discontinued operations; prior year results
of operations were inconsequential. In scal 2008, the
Company received approximately $101 million from the
divestiture of the European appliance motor and pump
business, resulting in a loss of $92 million. The European
appliance motor and pump business had total annual
sales of $453 million, $441 million and $399 million and
net earnings, excluding the loss, of $7 million, $7 million
and $6 million in 2008, 2007 and 2006, respectively. The
loss and results of operations were classied as discon-
tinued operations for all periods presented.
The Company acquired Damcos Holding AS (Damcos)
and Stratos International, Inc. (Stratos), as well as several
smaller businesses during 2007. Damcos supplies valve
remote control systems and tank monitoring equipment
to the marine and shipbuilding industries. Stratos is a
designer and manufacturer of radio-frequency and
microwave interconnect products. Total cash paid for
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