Emerson 2015 Annual Report Download - page 56

54 | 2015 Annual Report
segment designs, manufactures, installs and maintains power systems for telecommunications networks, data
centers and other critical applications, including power conditioning and uninterruptible power systems, thermal
management, critical power systems, integrated data center control devices, software, monitoring and 24-hour
service. The Climate Technologies segment supplies compressors, temperature sensors and controls, thermostats,
flow controls and remote monitoring technology and services to all areas of the climate control industry, including
residential heating and cooling, commercial air conditioning, commercial and industrial refrigeration and marine
controls. The Commercial & Residential Solutions segment provides tools for professionals and homeowners,
home storage systems and appliance solutions. The principal distribution method for each segment is direct sales
forces, 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 significant currency
exchange rate fluctuations, restrictions on the movement of funds and potential nationalization of operations.
See Notes 3 through 6.
The primary income measure used for assessing segment performance and making operating decisions is earnings
before interest and income taxes. Intersegment selling prices approximate market prices. Accounting method
differences between segment reporting and the consolidated financial statements are primarily management fees
allocated to segments based on a percentage of sales and the accounting for pension and other retirement plans.
Corporate and other includes stock compensation expense, and goodwill impairment charges when applicable.
Corporate assets are primarily comprised of cash and equivalents, investments and certain fixed assets. Summarized
below is information about the Company’s operations by business segment and by geography.
BUSINESS SEGMENTS
SALES EARNINGS TOTAL ASSETS
2013 2014 2015 2013 2014 2015 2013 2014 2015
Process Management $ 8,610 9,189 8,516 $ 1,809 1,918 1,493 $ 6,878 7,771 7,704
Industrial Automation 4,885 4,990 4,121 777 802 600 3,606 3,574 2,808
Network Power 6,155 5,073 4,441 554 459 231 6,603 5,233 4,743
Climate Technologies 3,876 4,109 4,011 716 737 698 2,245 2,378 2,314
Commercial & Residential Solutions 1,865 1,924 1,924 404 424 403 1,153 1,152 817
25,391 25,285 23,013 4,260 4,340 3,425 20,485 20,108 18,386
Differences in accounting methods 221 252 223
Corporate and other (a) (1,067) (1,050) 684 4,226 4,069 3,702
Sales eliminations/Interest (722) (748) (709) (218) (194) (171)
Total $24,669 24,537 22,304 $ 3,196 3,348 4,161 $24,711 24,177 22,088
(a) Corporate and other in 2015 includes pretax gains on divestitures of $1,039 and $10 of costs related to the planned spinoff of the
network power systems business (see Note 3), and in 2014 and 2013 includes pretax goodwill impairment charges of $508 and $528,
respectively. Corporate and other also includes stock compensation expense, which decreased $113 and $78 in 2015 and 2014,
respectively. See Note 14.
DEPRECIATION AND
INTERSEGMENT SALES AMORTIZATION EXPENSE CAPITAL EXPENDITURES
2013 2014 2015 2013 2014 2015 2013 2014 2015
Process Management $6 8 5 $201 249 276 $276 300 244
Industrial Automation 631 664 633 145 145 122 124 123 128
Network Power 39 27 26 238 198 178 88 68 48
Climate Technologies 44 47 44 130 132 132 100 145 134
Commercial & Residential Solutions 2 2 1 53 52 51 40 49 52
Corporate and other 52 55 56 50 82 79
Total $722 748 709 $819 831 815 $678 767 685