Emerson 2010 Annual Report Download - page 22

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sales include a 10 percent decline in the first half of 2010,
compared with strong growth of 9 percent in the second
half as capital goods markets began to recover. For the
year, underlying sales reflect a decline in volume as sales
decreased 2 percent internationally, including Europe
(7 percent), Middle East/Africa (10 percent), Canada
(9 percent) and Latin America (2 percent), partially
offset by an increase in Asia (7 percent). Underlying
sales increased 1 percent in the United States.
Net sales for 2009 were $20.1 billion, a decrease of
approximately $3.6 billion, or 15 percent, from 2008.
Sales declined across all segments as the Company’s
businesses were impacted by the broad slowdown in
consumer and capital goods markets. Consolidated
results reflect an approximate 13 percent ($2,864 million)
decrease in underlying sales, a 3 percent ($923 million)
unfavorable impact from foreign currency translation
and a 1 percent ($138 million) contribution from acquisi-
tions. The underlying sales decrease for 2009 included a
17 percent decrease in the United States and a 9 percent
decrease internationally, composed of Europe (16 percent),
Latin America (6 percent), Middle East/Africa (6 percent),
Asia (2 percent) and Canada (5 percent). The underlying
sales decline primarily reflects an approximate 14 percent
decline from volume and an approximate 1 percent
impact from higher pricing.
SALES BY GEOGRAPHIC DESTINATION
n United States n Asia
n Europe n Other
INTERNATIONAL SALES
Emerson is a global business for which international sales
have grown over the years and now represent 57 percent
of the Company’s total sales. The Company expects
this trend to continue due to faster economic growth
in emerging markets in Asia, Latin America and
Middle East/Africa.
International destination sales, including U.S. exports,
increased approximately 5 percent, to $11.9 billion
in 2010, reflecting increases in Climate Technologies,
Network Power and Industrial Automation as well as a
benefit from acquisitions and the weaker U.S. dollar. U.S.
exports of $1,317 million were up 9 percent compared
with 2009. Underlying destination sales decreased
7 percent in Europe, 10 percent in Middle East/Africa and
2 percent in Latin America, partially offset by a 7 percent
increase in Asia that includes 13 percent growth in China.
International subsidiary sales, including shipments to the
United States, were $10.7 billion in 2010, up 4 percent
from 2009. Excluding a 7 percent net favorable impact
from acquisitions and foreign currency translation, inter-
national subsidiary sales decreased 3 percent compared
with 2009.
International destination sales, including U.S. exports,
decreased approximately 15 percent, to $11.4 billion
in 2009, reflecting declines in Industrial Automation,
Network Power, Climate Technologies and Process
Management as these businesses were impacted by
lower volume and the stronger U.S. dollar. U.S. exports
of $1,211 million were down 16 percent compared with
2008. Underlying destination sales declined 16 percent
in Europe; 2 percent overall in Asia, including 2 percent
growth in China; 6 percent in Latin America and 6 percent
in Middle East/Africa. International subsidiary sales,
including shipments to the United States, were
$10.2 billion in 2009, down 14 percent from 2008.
Excluding a 6 percent net unfavorable impact from foreign
currency translation and acquisitions, international
subsidiary sales decreased 8 percent compared with 2008.
ACQUISITIONS
The Company acquired Avocent Corporation, Chloride
Group PLC, SSB Group GmbH and several smaller busi-
nesses during 2010. Avocent is a leader in delivering
solutions that enhance companies’ integrated data center
management capabilities and the acquisition strongly
positioned the Company to benefit from the growing
importance of infrastructure management in data centers
worldwide. Chloride provides commercial and industrial
uninterruptible power supply systems and services, which
significantly strengthens the Company’s Network Power
business in Europe and together with Avocent and the
Company’s other existing offerings, creates a global
leader in providing integrated data center management
solutions. SSB designs and manufactures electrical pitch
systems and control technology used in wind turbine
generators for the growing alternative energy market.
Total cash paid, net of cash acquired of $150 million, for
all businesses in 2010 was approximately $2,843 million.
Additionally, the Company assumed debt of $169 million.
Annualized sales for businesses acquired in 2010 were
approximately $1,100 million. See Note 3 for
additional information.
13%
43%
21%
23%