Emerson 2014 Annual Report Download - page 29

2014 Emerson > 25
and 2012 were $363 million, $3 million and $125 million,
respectively.
Dividends were $1,210 million ($1.72 per share) in
2014, compared with $1,181 million ($1.64 per share)
in 2013 and $1,171 million ($1.60 per share) in 2012.
In November 2014, the Board of Directors voted to
increase the quarterly cash dividend 9 percent, to an
annualized rate of $1.88 per share.
Purchases of Emerson common stock totaled
$971 million, $1,189 million and $787 million in 2014,
2013 and 2012, respectively, at average per share prices
of $65.54, $58.51 and $47.94. The Board of Directors
authorized the purchase of up to 70 million common
shares in May 2013, and 49.1 million shares remain
available for purchase under this authorization. The
Company purchased 14.8 million shares in 2014. A total
of 20.3 million shares were purchased in 2013 under
a combination of the May 2013 authorization and the
remainder of a May 2008 authorization. In 2012,
16.4 million shares were purchased.
LEVERAGE/CAPITALIZATION
(DOLLARS IN MILLIONS) 2012 2013 2014
Total Assets $23,818 24,711 24,177
Long-term Debt $ 3,787 4,055 3,559
Common Stockholders’ Equity $10,295 10,585 10,119
Total Debt-to-Capital Ratio 34.0% 34.8% 37.3%
Net Debt-to-Net Capital Ratio 22.1% 18.3% 22.1%
Operating Cash Flow-to-Debt Ratio 57.7% 64.7% 61.3%
Interest Coverage Ratio 13.9X 14.6X 16.3X
Total debt, which includes long-term debt, current
maturities of long-term debt, commercial paper and
other short-term borrowings, was $6.0 billion, $5.6 billion
and $5.3 billion for 2014, 2013 and 2012, respectively.
The increase in 2014 is due to higher short-term
borrowings. During the year, the Company repaid
$250 million of 5.625% notes that matured in November
2013. In 2013, the Company repaid $250 million of
4.625% notes that matured in October 2012 and
$250 million of 4.5% notes that matured in May 2013,
and also issued $500 million of 2.625% notes due
February 2023.
The total debt-to-capital ratio and the net debt-to-net
capital ratio (less cash and short-term investments)
increased primarily due to higher total debt from short-
term borrowings during the year and lower common
stockholders’ equity. The operating cash flow-to-debt
ratio decreased in 2014 on higher total debt. The
interest coverage ratio is computed as earnings before
income taxes plus interest expense, divided by interest
expense. The increases in interest coverage in 2014 and
2013 reflect higher pretax earnings and lower interest
expense in both years.
In April 2014, the Company entered into a $3.5 billion
five-year revolving backup credit facility with various
banks, which replaced the December 2010 $2.75 billion
facility. The credit facility is maintained to support
general corporate purposes, including commercial
paper borrowing. The Company has not incurred any
borrowings under this or previous facilities. The credit
facility contains no financial covenants and is not subject
to termination based on a change of credit rating or
material adverse changes. The facility is unsecured
and may be accessed under various interest rate and
currency denomination alternatives at the Company’s
option. Fees to maintain the facility are immaterial. The
Company also maintains a universal shelf registration
statement on file with the SEC under which it can
issue debt securities, preferred stock, common stock,
warrants, share purchase contracts or share purchase
units without a predetermined limit. Securities can be
sold in one or more separate offerings with the size,
price and terms to be determined at the time of sale.
Emerson maintains a conservative financial structure
which provides the strength
and flexibility necessary
to achieve its strategic
objectives. The Company
has been successful in
efficiently deploying cash
where needed worldwide
to fund operations,
complete acquisitions
and sustain long-term
growth. Substantially all
of the Company’s cash
is held outside the U.S.,
primarily in Europe and
Asia, and is generally
available for repatriation
to the U.S. Under current
tax law, repatriated cash
may be subject to U.S.
federal income taxes,
net of available foreign
tax credits. The Company routinely repatriates a
portion of its non-U.S. cash from earnings each year, or
otherwise when it can be accomplished tax efficiently,
and provides for U.S. income taxes as appropriate. The
Company has been able to readily meet all its funding
requirements and currently believes that sufficient
funds will be available to meet the Company’s needs
in the foreseeable future through operating cash flow,
existing resources, short- and long-term debt capacity
or backup credit lines.
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58TH CONSECUTIVE YEAR
OF INCREASED
DIVIDENDS PER SHARE
$1.34 $1.38
$1.64
$1.60
$1.72