Emerson 2015 Annual Report Download - page 29

2015 Annual Report | 27
CASH FLOW
(DOLLARS IN MILLIONS) 2013 2014 2015
Operating Cash Flow $3,649 3,692 2,529
Percent of sales 14.8% 15.0% 11.3%
Capital Expenditures $ 678 767 685
Percent of sales 2.7% 3.1% 3.1%
Free Cash Flow (Operating Cash
Flow less Capital Expenditures) $2,971 2,925 1,844
Percent of sales 12.0% 11.9% 8.3%
Operating Working Capital $1,686 1,729 1,748
Percent of sales 6.8% 7.0% 7.8%
The Company generated operating cash flow of
$2.5 billion in 2015, a $1,163 million or 32 percent
decrease compared to 2014 primarily due to decreased
earnings (excluding after-tax gains from divestitures
in 2015 and the goodwill impairment in 2014),
income taxes of $424 million paid on the gains from
divestitures, and an increase in operating working
capital. Operating cash flow of $3.7 billion in 2014 was
a 1 percent increase compared to $3.6 billion in 2013.
At September 30, 2015, operating working capital as
a percent of sales was 7.8 percent, compared with
7.0 percent and 6.8 percent in 2014 and 2013,
respectively. In addition to the tax payments for
divestiture gains, operating cash flow funded
capital expenditures of $685 million, dividends of
$1,269 million and acquisitions of $324 million in
2015. Common stock purchases of $2,487 million were
supported by after-tax proceeds from a divestiture and
increased borrowings. Contributions to pension plans
were $53 million in 2015, $130 million in 2014 and
$160 million in 2013. The Company has returned over
60 percent of operating cash flow to stockholders
through dividends and purchases of common stock in
each of the last five years.
Capital expenditures were $685 million, $767 million
and $678 million in 2015, 2014 and 2013, respectively.
Free cash flow was $1.8 billion in 2015, down 37 percent
and primarily reflecting lower operating cash flow.
Free cash flow was $2.9 billion in 2014, compared
with $3.0 billion in 2013, reflecting higher capital
expenditures. The Company is targeting capital
spending of approximately $625 million in 2016.
Net cash paid in connection with acquisitions was
$324 million, $610 million and $19 million in 2015,
2014 and 2013, respectively. In 2014, the Company
also purchased the noncontrolling interest in Appleton
Group for $574 million. Proceeds from divestitures in
2015, 2014 and 2013 were $1,812 million, $363 million
and $3 million, respectively.
Dividends were $1,269 million ($1.88 per share) in
2015, compared with $1,210 million ($1.72 per share)
in 2014 and $1,181 million ($1.64 per share) in 2013.
In November 2015, the Board of Directors voted to
increase the quarterly cash dividend 1 percent, to an
annualized rate of $1.90 per share.
Purchases of Emerson common stock totaled
$2,487 million, $971 million and $1,189 million in 2015,
2014 and 2013, respectively, at average per share prices
of $57.68, $65.54 and $58.51. The Board of Directors
authorized the purchase of up to 70 million common
shares in May 2013, and 6.0 million shares remain
available for purchase under this authorization. The
Company purchased 43.1 million shares in 2015 and
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 November 2015, the Board of Directors
authorized the purchase of an additional 70 million
common shares.
LEVERAGE/CAPITALIZATION
(DOLLARS IN MILLIONS) 2013 2014 2015
Total Assets $24,711 24,177 22,088
Long-term Debt $ 4,055 3,559 4,289
Common Stockholders’ Equity $10,585 10,119 8,081
Total Debt-to-Capital Ratio 34.8% 37.3% 45.8%
Net Debt-to-Net Capital Ratio 18.3% 22.1% 31.3%
Operating Cash Flow-to-Debt Ratio 64.7% 61.3% 37.0%
Interest Coverage Ratio 14.6X 16.3X 21.8X
Total debt, which includes long-term debt, current
maturities of long-term debt, commercial paper and
other short-term borrowings, was $6.8 billion, $6.0 billion
and $5.6 billion for 2015, 2014 and 2013, respectively.
During the year, the Company issued $500 million of
2.625% notes due December 2021 and $500 million of
3.150% notes due June 2025, and repaid $250 million
of 5.0% notes that matured in December 2014 and
$250 million of 4.125% notes that matured in April
2015. In 2014, 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.
DIVIDENDS PER SHARE
1514131211
$1.38
$1.60 $1.72
$1.64
$1.88
59th consecutive year of increased dividends per share.