Emerson 2012 Annual Report Download - page 53

2012 Annual Report | 51
In 2012, 345,946 shares of restricted stock vested as a result of participants fulfilling the applicable service require-
ments and, accordingly, 209,168 shares were issued while 136,778 shares were withheld for income taxes in
accordance with minimum withholding requirements. As of September 30, 2012, there were 1,525,000 shares of
unvested restricted stock outstanding.
Changes in awards outstanding but not yet earned under the incentive shares plans during the year ended
September 30, 2012 follow:
aVerage grant date
(shares in thousands) shares Fair Value per share
Beginning of year 7,101 $39.38
Granted 340 $42.41
Earned/vested (346) $38.68
Canceled (296) $39.71
End of year 6,799 $39.55
The total fair value of shares vested under incentive shares plans was $15, $276 and $42, respectively, in 2012, 2011
and 2010, of which $6, $113 and $15, respectively, was paid in cash, primarily for tax withholding. As of September 30,
2012, 10 million shares remained available for award under the incentive shares plans.
Total compensation expense for the stock option and incentive shares plans was $100, $121 and $217, for 2012, 2011
and 2010, respectively. The decrease from 2011 to 2012 reflects a stock option award in 2011 and no incentive stock
plan overlap in 2012. The decrease from 2010 to 2011 reflects changes in the Company’s stock price and the vesting
and payment of a portion of the 2007 awards early in 2011. Income tax benefits recognized in the income statement
for these compensation arrangements during 2012, 2011 and 2010 were $28, $32 and $65, respectively. As of
September 30, 2012, there was $122 of total unrecognized compensation cost related to unvested awards granted
under these plans, which is expected to be recognized over a weighted-average period of 1.6 years.
In addition to the stock option and incentive shares plans, in 2012 the Company awarded 22,921 shares of restricted
stock and 4,818 restricted stock units under the restricted stock plan for nonmanagement directors. As of September 30,
2012, 290,813 shares remained available for issuance under this plan.
(15) Common Stock
At September 30, 2012, 50 million shares of common stock were reserved for issuance under the Company’s stock-
based compensation plans. During 2012,16.4 million common shares were repurchased and 1.6 million treasury shares
were reissued.
(16) Business Segments Information
The Company designs and supplies products and technology and delivers engineering services in a wide range of indus-
trial, commercial and consumer end markets around the world. The business segments of the Company are organized
primarily by the nature of the products and services they sell. The Process Management segment provides systems and
software, measurement and analytical instrumentation, valves, actuators and regulators, and services and solutions,
including digital plant architecture that allows communication of devices with centralized systems, to provide precision
measurement, control, monitoring and asset optimization for plants that produce power or process fluids or items
such as petroleum, chemicals, food and beverages, pulp and paper, pharmaceuticals, and municipal water supplies.
The Industrial Automation segment provides commercial and industrial motors and drives, power transmission and
materials handling equipment, low, medium and high voltage alternators and other power generation equipment,
materials joining and precision cleaning products, fluid power and control mechanisms, and electrical distribution
equipment which are used in a wide variety of manufacturing operations to provide integrated manufacturing solu-
tions to customers. The Network Power segment designs, manufactures, installs and maintains power systems for
telecommunications networks, data centers and other critical applications, including power conditioning and uninter-
ruptible AC and DC power supplies, embedded power supplies and computing systems, precision cooling systems,
electrical switching equipment, and integrated data center infrastructure monitoring and management systems. The
Climate Technologies segment supplies compressors, temperature sensors and controls, thermostats, flow controls
and remote monitoring technology and services to all elements of the climate control industry, including residential
heating and cooling, commercial air conditioning, and commercial and industrial refrigeration. The Commercial &
Residential Solutions (formerly Tools and Storage) segment provides tools for professionals and homeowners, home
and commercial storage systems, and appliance solutions. The principal distribution method for each segment is a
direct sales force, although the Company also uses independent sales representatives and distributors. Due to its global
presence, certain of the Company’s international operations are subject to risks such as nationalization of operations,
significant currency exchange rate fluctuations and restrictions on the movement of funds.