Emerson 2015 Annual Report Download - page 5

Download and view the complete annual report

Please find page 5 of the 2015 Emerson annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 66

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66

Emerson generated approximately $2.5 billion in
operating cash flow (approximately $3 billion adjusted
for income taxes paid on divestiture gains). We continued
our commitment to delivering value to shareholders
by returning $3.8 billion in cash through $2.5 billion in
share repurchase and $1.3 billion in dividends. Also,
the Board of Directors voted to raise the first quarter
2016 dividend to an annualized rate of $1.90 per share,
which would make 2016 our 60th consecutive year of
increased dividends, an impressive record that can be
matched by few corporations. We expect to generate
over $3 billion in operating cash flow in 2016, and we
intend to return $1.8 billion to $2.5 billion to shareholders.
Our performance in fiscal 2015 and shifting end market
dynamics brought into focus for the management
team and the Board that we had reached an inflection
point and serious strategic action was needed to best
serve our customers and shareholders. Throughout
the Company’s 125-year history, we have periodically
undertaken this type of strategic repositioning and
emerged stronger from it. Therefore, we began to
take the necessary steps this past June to once again
transform Emerson to adapt to what we see on the
global horizon and strengthen the company in order
to accelerate growth and value creation. In June, we
initiated the spinoff of the network power business
and the evaluation of the potential sale of the motors
and drives, power generation and remaining storage
businesses, which together represent $6.7 billion in
sales. We accomplished a portion of this task in 2015
with the divestiture of the InterMetro business, and
the remaining strategic repositioning actions are
expected to be completed in 2016. After completing
this transformation, Emerson sales will be around
$15 billion, from a peak of $25 billion in 2013. We
intend to aggressively pursue acquisitions and organic
growth programs around our core businesses in order
to accelerate growth and profitability to once again
exceed the $20 billion sales threshold.
As we complete this strategic repositioning, we will
have a highly focused portfolio with leadership positions
in stronger growth-end markets. Going forward,
our portfolio will have two core business platforms:
Automation Solutions and Commercial & Residential
David N. Farr
Chairman and
Chief Executive Officer