Emerson 2010 Annual Report Download - page 42

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and $8, in 2010, 2009 and 2008, respectively. Results of operations for Motors have been reclassified into discontinued
operations for all periods presented.
The Company acquired one-hundred percent of Roxar ASA during the third quarter of 2009, Trident Powercraft Private
Limited during the second quarter of 2009 and System Plast S.p.A. during the first quarter of 2009. Roxar is a leading
global supplier of measurement solutions and software for reservoir production optimization, enhanced oil and gas
recovery and flow assurance and is included in the Process Management segment. Trident Power is a manufacturer
and supplier of power generating alternators and other products and is included in the Industrial Automation segment.
System Plast is a manufacturer of engineered modular belts and custom conveyer components for the food processing
and packaging industries and is included in the Industrial Automation segment. In addition to Roxar, Trident Power
and System Plast, the Company acquired other smaller businesses during 2009, mainly in the Climate Technologies,
Tools and Storage and Process Management segments. Total cash paid for all businesses was approximately $776, net
of cash acquired of $31. Additionally, the Company assumed debt of $230. Annualized sales for businesses acquired
in 2009 were approximately $530. Goodwill of $541 ($34 of which is expected to be deductible for tax purposes) and
identifiable intangible assets of $365, primarily customer relationships and patents and technology with a weighted-
average life of 12 years, were recognized from these transactions in 2009.
The Company acquired one-hundred percent of Motorola Inc.’s Embedded Computing business during the first quarter
of 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
and is included in the Network Power segment. In addition to Embedded Computing, the Company acquired several
smaller businesses during 2008, mainly in the Process Management and Network Power segments. Total cash paid for
these businesses was approximately $561, net of cash acquired of $2. Annualized sales for businesses acquired in 2008
were approximately $665. Goodwill of $273 ($214 of which is expected to be deductible for tax purposes) and identifi-
able intangible assets of $191, primarily technology and customer relationships with a weighted-average life of eight
years, were recognized from these transactions.
In the first quarter 2008, the Company sold the Brooks Instrument flow meters and controls unit, which was previously
included in the Process Management segment, for $100, resulting in an after-tax gain of $42 ($21 of income taxes).
Brooks had 2008 sales of $21 and net earnings of $1. Both the gain on divestiture and operating results for Brooks are
classified as discontinued operations. Also in 2008, the Company received approximately $101 from the divestiture of
its European appliance motor and pump business, resulting in a loss of $92, including goodwill impairment of $83.
This business had total sales of $453 and net earnings of $7, excluding the divestiture loss. The divestiture loss and
results of operations are classified as discontinued operations. This business was previously included in the Tools and
Storage segment.
The results of operations of the businesses discussed above have been included in the Company’s consolidated results
of operations since the respective dates of acquisition.
(4) Other Deductions, Net
Other deductions, net are summarized as follows:
2008 2009 2010
Rationalization of operations $ 89 284 126
Amortization of intangibles (intellectual property and customer relationships) 80 108 176
Gains, net (64) (39) (4)
Other 85 121 71
Total $190 474 369
Other deductions, net decreased for 2010, primarily due to lower rationalization expense partially offset by higher
amortization expense on acquired intangible assets and lower one-time gains. Other is composed of several items that
are individually immaterial, including foreign currency gains and losses, bad debt expense, equity investment income
and losses, as well as one-time items such as litigation and disputed matters and insurance recoveries. Other decreased
in 2010 primarily because of $45 of lower losses on foreign exchange transactions compared with 2009, while other
increased in 2009 primarily because of $30 of incremental losses on foreign currency exchange transactions compared
with 2008. Gains, net for 2009 included the sale of an asset for which the Company received $41 and recognized a gain
of $25 ($17 after-tax). In 2008, the Company received $54 and recognized a gain of $39 ($20 after-tax) on the sale of
an equity investment in Industrial Motion Control Holdings, a manufacturer of motion control components for automa-
tion equipment, and also recorded a pretax gain of $18 related to the sale of a facility.