EMR 10-K & 10-Q changes, risk factors and insider trading

We regularly seek growth through strategic acquisitions as well as evaluate our portfolio for potential divestitures. These activities require favorable environments to execute these transactions, and we may encounter difficulties in obtaining the necessary regulatory approvals in both domestic and foreign jurisdictions. In 20242025 and in past years, we have made various acquisitions and divestitures, including our purchase of the remaining outstanding shares of common stock of AspenTech not already owned by the Company, our acquisition of National Instruments, and our divestiture of the Climate Technologies business (now renamed Copeland), and our majority stake in Aspen Technology, Inc., and entered into joint venture arrangements intended to complement or expand our business, and may continue to do so in the future. As a result of these transactions, the Company has a narrower business which is focused on higher growth markets including software, innovation and disruptive technologies, and may encounter more volatility and be more vulnerable to changing market conditions. The success of these transactions will depend on our ability to achieve higher rates of growth, integrate assets and personnel acquired in these transactions and to cooperate with our strategic partners. We may encounter difficulties in integrating acquisitions with our operations as well as separating divested businesses, and in managing strategic investments. Furthermore, we may not realize the degree, or timing, of anticipated benefits including, among others, increasing rates of profitability and growth. Any of the foregoing could adversely affect our business and results of operations.

We are, and may in the future be, a party to a number of legal proceedings and claims, including those involving intellectual property, commercial transactions, government contracts, the integration of emerging technologies (for example, artificial intelligence and machine learning, among others), M&A, employment, employee benefit plans, antitrust, anti-corruption, accounting, import and export, health and safety matters, product liability (including asbestos) and environmental matters, several of which claim, or may in the future claim, significant damages. Given the inherent uncertainty of litigation, we can offer no assurance that existing litigation or a future adverse development will not have a material adverse impact. We also are subject to various laws and regulations relating to environmental protection and the discharge of materials into the environment, and we could incur substantial costs as a result of the noncompliance with or liability for cleanup or other costs or damages under environmental laws. In addition, increased public awareness and concern regarding global climate change may result in more international, federal, and/or state or other stakeholder requirements or expectations that could result in more restrictive or expansive standards, such as stricter limits on greenhouse gas emissions or more prescriptive reporting of environmental, social, and governance metrics. There continues to be a lack of consistent climate change legislation and standards, which creates economic and regulatory uncertainty. While the Company has adopted certain voluntary goals or targets, environmental laws, regulations or standards may be changed, accelerated or adopted and impose significant operational restrictions and compliance requirements upon the Company, its products or customers, which could negatively impact the Company’s business, capital expenditures, results of operations, financial condition and competitive position.

In response to growing customer, investor, employee, governmental, and other stakeholder interest in our ESG practices, we have increased reporting of our ESG programs and performance and have established and announced our aspirational purpose, causes, values, and related commitments, goals or targets, including those regarding sustainability, greenhouse gas emissions, and our net zero ambition, and diversity, equity and inclusion.ambition. Our ability to achieve such goals and aspirations is subject to numerous risks and uncertainties, many of which rely on the collective efforts of others or may be outside of our control. Such risks include, among others, the availability and adoption of new or additional technologies that reduce carbon or eliminate energy sources on a commercially reasonable basis, competing and evolving economic, policy and regulatory factors, the ability of suppliers and others to meet our sustainability, diversitysustainability and other goals, the availability of qualified candidates in our labor markets and our ability to recruit and retain diverse talent, and customer engagement in our goals. There may be times where actual outcomes vary from those aimed for or expected and sometimes challenges may delay or block progress. As a result, we cannot offer assurances that the results reflected or implied by any such statements will be realized or achieved. Moreover, standards and expectations for ESG matters continue to evolve and may be subject to varying interpretations, which may result in significant revisions to our goals or progress. In addition, certain of our product offerings may become less attractive as standards evolve. A failure or perceived failure to meet our aspirational purpose, causes, values, and related commitments, goals or targets within the timelines we announce, or at all, or a failure or perceived failure to meet evolving stakeholders expectations and standards, could damage our reputation, adversely affect employee retention or engagement or support from our various stakeholders and could subject us to government enforcement actions or penalties and private litigation. Such outcomes could negatively impact the Company’s business, capital expenditures, results of operations, financial condition and competitive position.

To supplement the Company’s financial information presented in accordance with U.S. generally accepted accounting principles (U.S. GAAP), management periodically uses certain “non-GAAP financial measures,” as such term is defined in Regulation G under SEC rules, to clarify and enhance understanding of past performance and prospects for the future. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in or excluded from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. For example, non-GAAP measures may exclude the impact of certain items such as acquisitions or divestitures, amortization of intangibles, restructuring costs, discrete taxes, changes in reporting segments, gains, losses and impairments, or items outside of management’s control, such as foreign currency exchange rate fluctuations. Management believes that the following non-GAAP financial measures provide investors and analysts useful insight into the Company’s financial position and operating performance. Any non-GAAP measure provided should be viewed in addition to, and not as an alternative to, the most directly comparable measure determined in accordance with U.S. GAAP, as identified in italics below. Further, the calculation of these non-GAAP financial measures may differ from the calculation of similarly titled financial measures presented by other companies and therefore may not be comparable among companies.

EarningsAdjusted earnings and earnings per shareshare, excludingwhich exclude certain gains and losses, impairments, restructuring costs, impacts of acquisitions or divestitures, amortization of intangibles, discrete taxes, or other items provide additional insight into the underlying, ongoing operating performance of the Company and facilitate period-to-period comparisons by excluding the earnings impact of these items. Management believes that presenting adjusted earnings and earnings per share excluding these items is more representative of the Company’s operational performance and may be more useful for investors (U.S. GAAP measures: earnings, earnings per share).

On October 11, 2023, the Company completed the acquisition of National Instruments Corporation ("NI"), which is now referred to as Test & Measurement and reported as a new segment in the Software and Control business group. NI provides software-connected automated test and measurement systems that enable enterprises to bring products to market faster and at a lower cost, and had revenues of approximately $1.7 billion for the 12 months ended September 30, 2023. See Note 4.

Overall, in 20242025 sales were $17.5$18.0 billion, up 153 percent compared with the prior year. Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, were also up 63 percent. The Test & Measurement acquisition added 9.5 percent and the divestiture of Metran, Emerson's Russia-based manufacturing subsidiary, deducted 0.5 percent.

Net earnings from continuing operations attributable to common stockholders were $1,618$2,285 in 2024,2025, downup 2941 percent compared with prior year earnings of $2,286,$1,618, and diluted earnings per share from continuing operations were $2.82,$4.03, downup 2943 percent versus $3.96$2.82 in 2023.2024. The decreaseprior wasyear primarily due toincluded purchase accounting related impacts from the NI acquisition and higher associated restructuring charges, and thea pretax loss onof $279 ($217 after-tax, $0.38 per share) related to the saleCompany's ofdefinitive theagreement to sell its Copeland note receivable.receivable for $1.9 billion. Adjusted diluted earnings per share from continuing operations were $5.49$6.00 compared with $4.44$5.49 in the prior year, reflecting sales growth and strong operating performance, as well as a $0.45 contribution from Test & Measurement.performance.

The Company generated operating cash flow from continuing operations of $3.3$3.7 billion in 2024,2025, an increase of $607,$359, or 2211 percent, reflecting higher earnings (excluding the impact of non-cash items related to the NI acquisition and thefavorable losschanges onin theworking Copeland note receivable).capital.

The table below presents the Company's diluted earnings per share from continuing operations on an adjusted basis to facilitate period-to-period comparisons and provide additional insight into the underlying, ongoing operating performance of the Company. Adjusted diluted earnings per share from continuing operations excludes intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction-related costs, interest income on undeployed proceeds related to the Copeland transaction, gains or losses on the Copeland equity method investment, and certain gains, losses or impairments.

Net sales for 20242025 were $17.5$18.0 billion, an increase of $2.3$0.5 billion, or 153 percent compared with 2023.2024. Intelligent Devices sales increased 52 percent, while Software and Control sales increased 48 percent, which included the impact of the Test & Measurement acquisition. Underlying sales were up 6 percent on 4 percent higher volume and 2 percent higher price. The Test & Measurement acquisition added 9.5 percent and the divestiture of Metran deducted 0.55 percent. Underlying sales were up 23 percent on 2.5 percent higher price and 0.5 percent higher volume. Underlying sales were up 5 percent in the U.S. and up 91 percent internationally.

Net sales for 20232024 were $15.2$17.5 billion, an increase of $1.4$2.3 billion, or 1015 percent compared with 2022.2023. Intelligent Devices sales increased 75 percent, while Software and Control sales increased 2048 percent, which included the impact of the HeritageTest AspenTech& Measurement acquisition. Underlying sales increased 106 percent on 64 percent higher volume and 42 percent higher price. ForeignThe currencyTest translation& subtracted 2 percent, the Heritage AspenTechMeasurement acquisition added 39.5 percent and the divestiture of Metran deducted 10.5 percent. Underlying sales were up 112 percent in the U.S. and up 9 percent internationally.

Emerson is a global business with international sales representing 6059 percent of total sales in 2024,2025, including U.S. exports. The Company generally expects faster economic growth in emerging markets in Asia, Latin America, Eastern Europe and Middle East/Africa.

Subsequently, on June 6, 2024, the Company entered into definitive agreements to sell its 40 percent non-controlling common equity interest in Copeland to private equity funds managed by Blackstone for $1.5 billion and its note receivable to Copeland for $1.9 billion and the transactions were completed in August 2024. See Notes 5 and 8 and the discussion below for further details.

On June 6, 2024, the Company entered into definitive agreements to sell its 40 percent non-controlling common equity interest in Copeland to private equity funds managed by Blackstone for $1.5 billion and its note receivable to Copeland for $1.9 billion, and the transactions were subsequently completed in August 2024. Upon entering into the note agreement, the Company recorded a pretax loss in continuing operations of $279 ($217 after-tax, $0.38 per share) to adjust the carrying value of the note to $1.9 billion to reflect the transaction price, while the Company recognized a gain of $539 ($435 after-tax) in discontinued operations upon the sale of the common equity interest. In addition, the equity method losses related to the Company's non-controlling common equity interest in Copeland, which were reported since May 2023 in Other deductions, net, have been reclassified and are now reported as discontinued operations for all periods presented.

In the first quarter of 2022,2023, the Company received a distribution of $438distributions related to its subordinated interest in Vertiv (in total, a pretax gain of $453 was recognized in the first quarter of 2022, $358 after-tax, $0.60 per share) and received the remaining $15 related to the pretax gain in the first quarter of 2023. In 2023, the Company received additional distributions totaling $161 ($122 after-tax, $0.21 per share) and received $15 related to gains recognized in 2022. In 2024, the Company received its final distribution of $79 ($60 after-tax, $0.10 per share).

Other deductions, net were $1,434$1,245 in 2024,2025, ana increasedecrease of $928$189 compared with 2023.2024, Thereflecting current year includedlower intangibles amortization of $193 (including $136 of backlog amortization in the prior year related to the Test & Measurement acquisition) and lower restructuring expense of $560,$92, whilepartially restructuringoffset by higher acquisition/divestiture fees and related costs which increased by $156 and acquisition/divestiture costs increased by $27.$118. The Companyprior year also incurredincluded divestiture losses of $48 ($50 after-tax, $0.09 per share).$48.

Interest expense, net was $175,$237, $175 and $34 in 2025, 2024 and $1942023, respectively. The increase in 2024,2025 2023reflects andhigher 2022,levels respectively.of debt to support the AspenTech transaction. Results in 2023 included interest income on undeployed proceeds from the Copeland transaction of $141 ($108 after-tax, $0.19 per share).

Pretax earnings from continuing operations of $2,903$2,934 increased $471$914 in 2023,2025, up 1945 percent compared with 2022.2024. Earnings increased $447$146 in Intelligent Devices and decreasedincreased $27$545 in Software and Control. See the Business Segments discussion that follows and Note 20.

Income taxes were $415,$696, $415 and $642 and $549 for 2024,2025, 20232024 and 2022,2023, respectively, resulting in effective tax rates of 24 percent, 21 percent,percent and 22 percent and 23 percent in 2024,2025, 20232024 and 2022,2023, respectively. The current year rate was negatively impacted by discrete tax items totaling $36 ($0.06 per share) and fees incurred by AspenTech which were not fully deductible (see Note 4). In total, the net impact of these items increased the rate by approximately 2 percentage points. The prior year rate included a $57 ($0.10 per share) benefit related to discrete tax items and a benefit from return-to-provision adjustments related to the filing of the prior year U.S. tax return, partially offset by unfavorable impacts from inventory step-up amortization and the divestiture losses (see Note 4), which were non-deductible for tax purposes. In total, the net impact of these items benefited the rate by approximately 1 percentage point. See Note 16.

Net earnings from continuing operations attributable to common stockholders in 20232025 were $2,286,$2,285, up 2141 percent compared with 2022,2024, and diluted earnings per share from continuing operations were $3.96,$4.03, up 2543 percent compared with $3.16$2.82 in 2022, reflecting strong operating results.2024. Adjusted diluted earnings per share from continuing operations were $4.44$6.00 compared with $3.64$5.49 in the prior year. See the analysis of adjusted earnings per share in the Overview section for further details. Earnings from discontinued operations attributable to common stockholders in 20232025 were $10,933$8 ($18.92$0.01 per share), compared to $350 ($0.61 per share) in 2024. Net earnings attributable to common stockholders were $2,293 ($4.04 per share) compared towith $1,345$1,968 ($2.25$3.43 per share) in 2022. See Note 5. Net earnings common stockholders were $13,219 ($22.88 per share) in 2022 compared with $3,231 ($5.41 per share) in 2022.2024.

20242025 vs. 20232024 - Software and Control sales were $5.4$5.7 billion in 2024,2025, an increase of $1,751,$292, or 485 percent compared to the prior year, reflecting the impact of the Test & Measurement acquisition.year. Underlying sales increased 85 percent on 52.5 percent higher volume and 32.5 percent higher price. Underlying sales increased 89 percent in the Americas (U.S. up 710 percent), increaseddecreased 91 percent in Europe and increased 84 percent in Asia, Middle East & Africa (China down 56 percent). Sales for Control Systems & Software increased $236,$270, or 97 percent, reflecting strong internationalgrowth at AspenTech (including a favorable impact related to the timing of contract renewals) and favorable demand in process and hybrid end markets while power end markets wereacross strongall globally.geographies. Test & Measurement sales were $1,464. Sales for AspenTech increased $51,$22, or 52 percent, reflecting higherstrong maintenancegrowth in the Americas, offset by softness in Europe and services revenue.China. Earnings for Software and Control were $282,$827, aan decreaseincrease of $140,$545, or 33193 percent, and margin decreasedincreased 6.49.3 percentage points to 5.214.5 percent, reflecting theleverage impacton fromhigher $560Control ofSystems incremental& intangiblesSoftware amortizationsales (including a benefit related to the timing of AspenTech contract renewals), higher price, savings from cost reduction actions (primarily at Test & Measurement acquisition.and AspenTech), lower intangibles amortization, and lower restructuring and related costs compared to the prior year. Adjusted EBITA margin was 27.031.0 percent, an increase of 1.24.0 percentage points, reflecting leverage on higher sales and higher price, partially offset by the impact of the Test & Measurement acquisition.points.

20232024 vs. 20222023 - Software and Control sales were $3.6$5.4 billion in 2023,2024, an increase of $594,$1,751, or 2048 percent compared to 2022,2023, reflecting the impact of the HeritageNI AspenTech acquisition and strong growth in Control Systems & Software.acquisition. Underlying sales increased 108 percent on 85 percent higher volume and 23 percent higher price. Underlying sales increased 78 percent in the Americas (U.S. up 67 percent), increased 119 percent in Europe and increased 138 percent in Asia, Middle East & Africa (China updown 165 percent). Sales for Control Systems & Software increased $208,$287, or 9 percent, and underlying sales increased 118 percent, reflecting globalstrong strengthinternational demand in process and hybrid end markets while power end markets were strong globally. AspenTech sales were up modestly. SalesTest for& AspenTechMeasurement increasedsales $386,were or 59 percent, due to the acquisition of Heritage AspenTech.$1,464. Earnings for Software and Control were $422,$282, a decrease of $27,$140, or 633 percent, and margin decreased 3.16.4 percentage points to 11.65.2 percent, reflecting the impact from $249$560 of incremental intangibles amortization related to the HeritageTest AspenTech& Measurement acquisition. Adjusted EBITA margin was 25.827.0 percent, an increase of 2.31.2 percentage points, reflecting leverage on higher sales,sales and higher price and favorable mix,price, partially offset by inflationthe andimpact unfavorableof foreignthe currencyTest transactions.& Measurement acquisition.

The Company continues to generate substantial operating cash flow, including overapproximately $3.3$3.7 billion from continuing operations in 2024.2025. Cash flows have been and are expected to be sufficient for at least the next 12 months to meet the Company’s operating requirements, including those related to salaries and wages, working capital, capital expenditures, and other liquidity requirements associated with operations. The Company also has certain contractual obligations, primarily long-term debt and operating leases (see Notes 9, 12 and 13). The Company has been able to readily meet all its funding requirements and currently believes that sufficient funds will be available to meet its needs for the foreseeable future through operating cash flow, existing resources, short- and long-term debt capacity, or its $3.5 billion revolving backup credit facilityfacilities under which it has not incurred any borrowings.

Operating cash flow from continuing operations for 2025 was $3.7 billion, an increase of $359, or 11 percent compared with 2024, reflecting higher earnings and favorable changes in working capital. Operating cash flow from continuing operations for 2024 was $3.3 billion, an increase of $607, or 22 percent compared withto $2.7 billion in 2023, reflecting higher earnings (excluding the impact of non-cash items related to the NI acquisition and the loss on the Copeland note receivable). Acquisition-related costs and integration activities negatively impacted operating cash flow in the current year by approximately $235. AspenTech generated2024 operating cash flow ofby approximately $320 compared to approximately $310 in the prior year. Operating cash flow from continuing operations for 2023 was $2.7 billion, an increase of 32 percent compared to $2.0 billion in 2022, reflecting higher earnings (excluding the impacts in both years from the Vertiv subordinated interest gains and higher Heritage AspenTech intangibles amortization in 2023).$235.

At September 30, 2024,2025, operating working capital as a percent of sales was 8.011.3 percent compared with 8.0 percent in 2024 and 8.5 percent in 20232023. andThe 7.2change in operating working capital compared to the prior year was due to the payment of income taxes of approximately $0.6 billion in 2025 related to the sale of the Company's 40 percent non-controlling common equity interest in 2022.Copeland. Total operating working capital increased in 2024 due to the NI acquisition, but improved as a percent of sales compared to 2023 due to improvements in inventory levels. Operating working capital was elevated in 2023 due to higher inventory levels to support sales growth and higher receivables.

Total cash provided by operating activities including the impact of discontinued operations was $3,332,$3,098, $3,332 and $637 and $2,922 in 2024,2025, 20232024 and 2022,2023, respectively. The decrease in 2025 reflected higher operating cash flow from continuing operations, offset by approximately $0.6 billion of income taxes paid related to the sale of the Company's 40 percent non-controlling common equity interest in Copeland. The lower cash flow in 2023 was due to approximately $2.3 billion of income taxes paid related to the gains on the Copeland transaction and InSinkErator divestiture and subsidiary restructurings related to the Copeland transaction. Investing cash flow from discontinued operations was $3.4 billion in 2024, reflecting the proceeds of approximately $1.5 billion related to the sale of the Company's 40 percent non-controlling common equity interest in Copeland and $1.9 billion related to the sale of the note receivable, while 2023 was $12.5 billion, reflecting the proceeds from the Copeland transaction and InSinkErator divestiture.

Purchases of Emerson common stock totaled $435,$1,167, $435 and $2,000 and $500 in 2024,2025, 20232024 and 2022,2023, respectively, at average per share prices of $99.04,$125.66, $94.09$99.04 and $87.64.$94.09. AspenTech repurchases were $208 in 2024 and $214 in 2023, and the Company's current common ownership percentage is approximately 57 percent.2024. In November 2015,2025, the Board of Directors authorized the purchase of up to 7050 million shares,shares. andThis duringis 2022,in addition to the remaining shares available under this authorization wereapproved purchased. In March 2020,by the Board ofin DirectorsMarch authorized2020 for the purchase of anup additionalto 60 million shares and a totalshares, of which approximately 28.919.6 million shares remain available.available at September 30, 2025. The Company purchased 9.3 million shares in 2025, 4.4 million shares in 2024,2024 and 21.3 million shares in 2023 and 5.7 million shares in 2022 under the authorizations.2023.

The total debt-to-total capital ratio decreased slightly in 2024, reflecting repayments of long-term debt, while the net debt-to-net capital ratio increased reflecting the use of cash held on the balance sheet at September 30, 2023 that was used to complete the NI acquisition. These ratios decreased in 2023 compared to 2022 due to the proceeds and after-tax gains (which increased common stockholder's equity) on the Copeland transaction and InSinkErator divestiture. The interest coverage ratio is computed as earnings before income taxes plus interest expense, divided by interest expense. The decreaseinterest coverage ratio in 2025 reflects higher interest expense due to the increased short-term borrowings and long-term debt discussed above. The lower ratio in 2024 reflects lower GAAP pretax earnings largely due to the NI acquisition. Excluding the impact from acquisition-related inventory step-up amortization of $231, higher intangibles amortization of $595, acquisition/divestiture fees and related costs of $220, higher restructuring and related costs of $152, the loss of $279 on the Copeland note receivable and the gain on the subordinated interest of $79, the interest coverage ratio was 11.6X. The Company's earnings increased in 2023 which offset higher interest expense due to the increased long-term debt and commercial paper borrowings to fund the Heritage AspenTech acquisition.

InOn February 2023,11, 2025, the Company entered into a $3 billion, 364-day revolving backup credit facility to support increased commercial paper borrowings in connection with the AspenTech transaction. This facility is in addition to the Company's existing $3.5 billion five-year revolving backup credit facility with various banks, which replacedwas theentered Mayinto 2018in $3.5February billion facility.2023. The credit facilityfacilities isare maintained to support general corporate purposes, including commercial paper borrowings. The Company has not incurred any borrowings under thisthese or previous facilities. The credit facilityfacilities containscontain no financial covenants and isare not subject to termination based on a change of credit rating or material adverse changes. The facilityfacilities isare unsecured and may be accessed under various interest rate alternatives at the Company’s option. Fees to maintain the facilityfacilities 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.

Assets and liabilities acquired in business combinations, including intangible assets, are accounted for using the acquisition method and recorded at their respective fair values. In 2024, the Company completed the acquisition of National Instruments Corporation and inengaged 2022 completed the acquisition of Aspen Technology, Inc. and engagedan independent third-party valuation specialistsspecialist to assist in the determination of the fair value of intangible assets. This included the use of certain assumptions and estimates, including projected revenue for customer relationship and developed technology intangible assets, the attrition rate for customer relationship intangible assets, and the obsolescence rate for developed technology intangible assets. Although we believe the assumptions and estimates to be reasonable and appropriate, they require judgementjudgment and are based on experience and historical information obtained from National Instruments Corporation and Aspen Technology, Inc.Corporation.

The Company maintains a prudent long-term investment strategy consistent with the duration of pension obligations. The determination of defined benefit plan expense and liabilities is dependent on various assumptions, including the expected annual rate of return on plan assets, the discount rate and the rate of annual compensation increases. In accordance with U.S. generally accepted accounting principles, actual results that differ from the Company's assumptions are accumulated as deferred actuarial gains or losses and amortized to expense in future periods. The Company's principal U.S. defined benefit plan is closed to employees hired after January 1, 2016 while shorter-tenured employees ceased accruing benefits effective October 1, 2016. Effective January 1, 2025, the Company is implementingimplemented a new profit sharing retirement program for all U.S. non-union employees. Eligible employees will receive a base contribution to a cash balance account administered within the principal U.S. defined benefit plan, to be funded by surplus pension assets, as well as a potential profit sharing contribution to their defined contribution account. After December 31, 2024, future service forFor employees that had continued to accrue benefits in the principal U.S. defined benefit planplan, willfuture beservice after December 31, 2024 is frozen.

Cash repatriated to the U.S. is generally not subject to U.S. federal income taxes. No provision is made for withholding taxes and any other applicable U.S. income taxes on the undistributed earnings of non-U.S. subsidiaries where these earnings are considered indefinitely investedreinvested or otherwise retained for continuing international operations. Determination of the amount of taxes that might be paid on these undistributed earnings if eventually remitted is not practicable. See Notes 1 and 16.

For the secondthird quarter of fiscal 2026, net sales were $4.6$4.9 billion, up 37 percent compared with the prior year. Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, were up 0.56 percent, including a negative 1 percent impact related to the conflict in the Middle East. The conflict remains dynamic and continuation or escalation of the conflict could adversely impact our business or results of operations in future periods.percent. Foreign currency translation had a 2.51 percent favorable impact.

Earnings from continuing operations attributable to common stockholders were $618,$718, up 2724 percent, and diluted earnings per share from continuing operations were $1.10,$1.28, up 2824 percent compared with $0.86$1.03 in the prior year. Adjusted diluted earnings per share from continuing operations were $1.54$1.71, up 13 percent compared with $1.48$1.52 in the prior year. SeeOverall, theresults analysisreflected abovesales ofgrowth adjustedand earningsstrong peroperating share for further details.performance.

The table below, which shows results on an adjusted EBITA basis, is intended to supplement the Company's discussion of its results of operations herein. The Company defines adjusted EBITA as earnings from continuing operations excluding interest expense, net, income taxes, intangibles amortization expense, restructuring expense,and related costs, first year purchase accounting related items and transaction-related costs, and certain gains, losses or impairments. Adjusted EBITA and adjusted EBITA margin are measures used by management and may be useful for investors to evaluate the Company's operational performance.

Following is an analysis of operating results for the Company’s business segments for the secondthird quarter ended MarchJune 31,30, 2026, compared with the secondthird quarter ended MarchJune 31,30, 2025. The Company defines segment earnings as earnings before interest and taxes. See Note 15 for a discussion of the Company's business segments.

Software & Systems sales were $1,503$1,644 in the secondthird quarter of 2026, an increase of $52,$164, or 411 percent. Underlying sales were up 111 percent on 37 percent higher price, while volume decreasedand 24 percent includinghigher a 4.5 percent negative percent impact related to the timing of software renewals.price. Underlying sales increased 613 percent in the Americas, Europe decreased 5 percent,Americas and 16 percent in Asia, Middle East & Africa was flat (China downup 214 percent)., while Europe decreased 1 percent. Control Systems & Software sales decreasedincreased slightly and underlying sales decreased 27 percent, reflecting the negative impact related to the timing of software renewals, partially offset by strong demand in power and life sciences.power. Sales for Test & Measurement increased $56,$85, or 1623 percent, and underlying sales increased 12 percent in the second quarter, reflecting strength in semiconductor and aerospace & defense and semiconductor.defense. Earnings for Software & Systems were $219,$296, an increase of $5,$51, or 321 percent, while margin decreasedincreased slightly1.4 percentage points to 14.618.0 percent, reflecting the negative impact related to the timing of software renewals offset by leverage on higher Test & Measurement sales, lower intangibles amortization and savings from cost reduction actions. Adjusted EBITA margin was 29.231.8 percent, a decrease of 2.5 percentage points, which included a negative impact relating to the timing of software renewals of approximately 30.3 percentage points.

Intelligent Devices sales were $2,512$2,677 in the secondthird quarter of 2026, an increase of $53,$142, or 26 percent, compared to the prior year. Underlying sales decreasedincreased 15 percent on 4 percent lower volume, including a 2 percent negative impact related to the conflict in the Middle East, offset by 3 percent higher price.price and 2 percent higher volume. Underlying sales increased 56 percent in the Americas,Americas whileand Europe decreased 45 percent andin Asia, Middle East & Africa was down 7 percent (China down 138 percent)., while Europe was flat. Sensors sales increased $24,$78, or 28 percent, and underlying sales were flat, reflecting the negative impact related to the conflict in the Middle East offset by strong growth in the Americas. Final Control sales increased $29 or 2 percent, and underlying sales decreased 17 percent, reflecting the negative impact related to the conflict in the Middle East offset by solidstrong growth in the Americas, including strength in power and LNG. Final Control sales increased $64 or 4 percent, and underlying sales increased 3 percent, reflecting strong growth in Asia, Middle East & Africa and solid growth in the Americas, with strength in power. Earnings for Intelligent Devices increased $8,$55, or 19 percent, while margin decreasedincreased 0.30.8 percentage points reflecting unfavorable mix and deleverageleverage on lowerhigher volume,sales partially offset byand favorable price less net material inflation.inflation, partially offset by unfavorable mix resulting from increased greenfield project activity and increased restructuring costs. Adjusted EBITA margin was 27.9 percent, an increase of 0.82.4 percentage points.points, reflecting strong operating results.

Safety & Productivity sales were $547$552 in the secondthird quarter of 2026, an increase of $25,$14, or 53 percent compared to the prior year. Underlying sales were up 2 percent on 54 percent higher price offset by 32 percent lower volume. Underlying sales increased 54 percent in the Americas,Americas whileand increased 1 percent in Asia, Middle East & AfricaAfrica, while Europe decreased 7 percent and Europe was down 36 percent. Earnings for Safety & Productivity increaseddecreased $4,$10, updown 310 percent, while margin decreased 0.42.3 percentage points, reflecting increased restructuring costs and deleverage on lower volume, partially offset by higherfavorable price less net material inflation and savings from cost reduction actions. Adjusted EBITA margin decreasedincreased 0.10.8 percentage points.

RESULTS OF OPERATIONS FOR THE SIXNINE MONTHS ENDED MARCHJUNE 3130

Following is an analysis of the Company’s operating results for the sixnine months ended MarchJune 31,30, 2026, compared with the sixnine months ended MarchJune 31,30, 2025.

Net sales for the first sixnine months of 2026 were $8.9$13.8 billion, up 35 percent compared with 2025. Software & Systems sales were up 47 percent, Intelligent DeviceDevices sales were up 34 percent, and Safety & Productivity sales were up 43 percent. Underlying sales were up 13 percent on 3 percent higher price, offsetwhile volume was negatively impacted by 2 percent lower volume due to a negative impact ofapproximately 1.5 percent related to the timing of software renewals and 0.5 percent related to the conflict in the Middle East. Foreign currency translation had a 2 percent favorable impact. Underlying sales increased 78 percent in the U.S. and decreased 31 percent internationally. The Americas was up 46 percent, Europe was down 1 percent and Asia, Middle East & Africa was downup 31 percent (China was down 75 percent).

Cost of sales for 2026 were $4,174,$6,393, an increase of $172$232 compared with 2025, and gross margin of 53.153.6 percent decreasedincreased 0.4 percentage points. Gross margin wasincreased negativelyprimarily impacteddue byto tariffs,favorable whichprice wereless morenet thanmaterial inflation and tariff refunds of $82 ($0.11 per share), partially offset by targetedthe pricenegative actionsimpact butrelated diluted margins, andto the timing of software renewals. InSee total,Note these15 itemsfor negativelyfurther impacteddiscussion grossof marginthe bytariff approximately 0.8 percentage points.refunds.

SG&A expenses of $2,559$3,902 increased $53$129 and SG&A as a percent of sales decreased 0.4 percentage points to 28.7 percent,28.3%, reflecting savings from cost reduction actions and leverage on higher sales.

Pretax earnings of $1,568$2,484 increased $164$346 compared with prior year, reflecting the impact of the AspenTech acquisition-related costs in the prior year discussed above.above and leverage on higher sales. Earnings increased $59$109 in Software & Systems,Systems $15and $71 in Intelligent Devices, and $2decreased $7 in Safety & Productivity, see the Business Segments discussion that follows and Note 15.

Income taxes were $344$542 in the first sixnine months of fiscal 2026 and $382$536 in 2025, resulting in effective tax rates of 22 percent and 2725 percent, respectively. In the current year, the One Big Beautiful Bill Act (the "OBBBA") increased the effective tax rate by approximately 1 percentage point due to lower tax deduction for foreign derivedforeign-derived intangible income from the change to domestic research and development in fiscal 2026. The Company expects the OBBBA to slightly benefit the effective tax rate beginning in fiscal 2027. Excluding the impact related to the OBBBA, the lower rate in the current year reflected favorable tax items that reduced the rate by approximately 2 percentage points. The prior year rate was negatively impacted by $49 ($0.09 per share) of discrete tax items related to the AspenTech transaction. In addition, the fees incurred by AspenTech were not fully deductible. Overall, these items increased the currentprior year rate by approximately 53 percentage points.

Earnings from continuing operations attributable to common stockholders were $1,223,$1,941, up 1418 percent compared with the prior year, and diluted earnings per share from continuing operations were $2.17,$3.45, up 1519 percent compared with $1.88$2.91 in 2025. Adjusted diluted earnings per share from continuing operations were $3.00$4.71 compared with $2.86$4.38 in the prior year, reflectingup 8 percent. Overall, the increase in earnings per share reflected strong operating results. See the analysis below of adjusted earnings per share for further details.

The table below presents the Company's diluted earnings per share from continuing operations on an adjusted basis to facilitate period-to-period comparisons and provide additional insight into the underlying, ongoing operating performance of the Company.

The table below summarizes the changes in adjusted diluted earnings per share.share from continuing operations. The items identified below are discussed throughout MD&A, see further discussion above and in the Business Segments and Financial Position sections below.

Following is an analysis of operating results for the Company’s business segments for the sixnine months ended MarchJune 31,30, 2026, compared with the sixnine months ended MarchJune 31,30, 2025. The Company defines segment earnings as earnings before interest and taxes. See Note 15 for a discussion of the Company's business segments.

Software & Systems sales were $2,956$4,600 in the first sixnine months of 2026, an increase of 47 percent compared to the prior year. Underlying sales increased 25 percent on 3 percent higher price whileand 2 percent higher volume decreased 1 percent including(despite a negative 43 percent impact related to the timing of software renewals.renewals). Underlying sales increased 47 percent in the Americas, Europe decreased 1 percent, and Asia, Middle East & Africa increased 27 percent (China was flatup 4 percent). Control Systems & Software sales increased $17,$97, or 13 percent, and underlying sales decreasedincreased 12 percent reflecting strong demand in power and life sciences, partially offset by the negative impact related to the timing of software renewals, partially offset by strong demand in power and life sciences.renewals. Sales for Test & Measurement increased $106,$191, or 1518 percent, and underlying sales increased 1215 percent, reflecting strength in aerospace & defense and semiconductor. Earnings for Software & Systems were $466,$762, an increase of $59,$109, or 1417 percent, and margin increased 1.4 percentage points, reflecting leverage on higher sales, lower intangibles amortization and savings from cost reduction actions.actions and lower intangibles amortization, partially offset by the negative impact related to the timing of software renewals. Adjusted EBITA margin was 30.230.8 percent, a decrease of 1.20.9 percentage points, which included a negative impact relating to the timing of software renewals of approximately 2.52 percentage points.

Intelligent Devices sales were $4,902$7,580 in the first sixnine months of 2026, an increase of $137,$279, or 34 percent compared to the prior year. Underlying sales wereincreased up2 slightlypercent on 3 percent higher price partially offset by 31 percent lower volume, including a 10.5 percent negative impact related to the conflict in the Middle East. Underlying sales increased 5 percent in the Americas, decreased 1 percent in Europe, and decreased 52 percent in Asia, Middle East & Africa (China down 10 percent). SensorSensors sales increased $48,$125, or 24 percent, and underlying sales increased slightly, reflecting solid growth in the Americas. Final Control sales increased $89, or 32 percent, and underlying sales increased slightly, reflecting solid growth in the Americas, with strength in power and LNG. Final Control sales increased $154, or 4 percent, and underlying sales increased 2 percent, reflecting solid growth in the Americas, with strength in power. Earnings for Intelligent Devices increased $15,$71, up 1 percent4 percent, while margin decreasedwas 0.4 percentage points,flat, reflecting unfavorable mix, unfavorable foreign currency transaction comparisons and deleverage on lower volume, partially offset by favorable price less net material inflation.inflation and savings from cost reduction actions, offset by increased restructuring costs and unfavorable mix. Adjusted EBITA margin increased 0.10.9 percentage points.

Safety & Productivity sales were $1,050$1,601 in the first sixnine months of 2026, an increase of $40,$53, or 43 percent compared to the prior year. Underlying sales were up 2 percent on 5 percent higher price offset by 3 percent lower volume. Underlying sales increased 4 percent in the Americas, Europe decreased 45 percent and Asia, Middle East & Africa decreased 31 percent. Earnings for Safety & Productivity increaseddecreased $2,$7, or 2 percent, while margin decreased 0.41.1 percentage points, reflecting increased restructuring costs and deleverage on lower volume, offset by higherfavorable price less net material inflation and the impact of tariffs, and savings from cost reduction actions. Adjusted EBITA margin decreasedincreased 0.30.1 percentage points.

Key elements of the Company's financial condition as of and for the sixnine months ended MarchJune 31,30, 2026 as compared to the year ended September 30, 2025 and the sixnine months ended MarchJune 31,30, 2025 follow.

Operating working capital increased $571$251 compared to September 30, 2025, primarily reflecting an increase in inventory and a decrease in accrued expenses.inventory. The current ratio remained flat compared to September 30, 2025. The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 7.5X8.2X for the 612 months ended MarchJune 31,30, 2026 compares to 9.8X9.6X for the 612 months ended MarchJune 31,30, 2025. The decrease reflects higher interest expense compared to the prior year.

Operating cash flow from continuing operations for the first sixnine months of fiscal 2026 was $1,478,$2,902, aan decreaseincrease of $125$238 compared with $1,603$2,664 in the prior year, reflecting higher earnings, partially offset by an increase in operating working capital, partially offset by higher earnings.capital. Free cash flow of $1,296$2,618 in the first sixnine months of fiscal 2026 (operating cash flow of $1,478$2,902 less capital expenditures of $182$284) decreasedincreased $137$217 compared to free cash flow of $1,433$2,401 in 2025 (operating cash flow of $1,603$2,664 less capital expenditures of $170$263), reflecting the decreaseincrease in operating cash flow. Cash used in investing activities was $206.$322. Cash used in financing activities was $1,013,$1,920, reflecting share repurchases of $542$898 and dividends.dividends of $935. During the first quarter, the Company repaid €500 of 1.25% euro notes that matured in October 2025.

Total cash provided by operating activities was $1,478,$2,902, an increase of $460$814 compared with $1,018$2,088 in the prior year. The increase reflects $585 of income taxes paid in the second quarter of fiscal 2025 related to the sale of the Company's 40 percent non-controlling common equity interest in Copeland,Copeland offsetand by lowerhigher operating cash flow from continuing operations.

For fiscal year 2026, consolidated net sales are expected to be up approximately 4.55 percent, with underlying sales up approximately 33.5 percent, excluding a 1.5 percent favorable impact from foreign currency translation. Earnings per share are expected to be $4.79 toapproximately $4.89, while adjusted earnings per share are expected to be $6.45 toapproximately $6.55 (see the following reconciliation).

Operating cash flow is expected to be $4.0 toapproximately $4.1 billion and free cash flow, which excludes projected capital spending of approximately $0.45 billion, is expected to be $3.5 toapproximately $3.6 billion. The fiscal 2026 outlook assumes returning approximately $2.2 billion to shareholders through approximately $1.0 billion of share repurchases and approximately $1.2 billion of dividend payments.

Statements in this report that are not strictly historical may be “forward-looking” statements, which represent management’s expectations, based on currently available information. Actual results, performance or achievements could differ materially from those expressed in any forward-looking statement. Any forward-looking statements in this report speak only as of the date of this report. Emerson undertakes no obligation to update any such statements to reflect new information or later developments. Examples of risks and uncertainties that may cause orour actual results or performance to be materially different from those expressed or implied by forward lookingforward-looking statements include the scope, duration and ultimate impacts of the Russia-Ukraine, Middle East and other global conflicts, as well as economic and currency conditions, market demand, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, inflation, among others, which are set forth in the “Risk Factors” of Part I, Item 1A, and the "Safe Harbor Statement" of Part II, Item 7, to the Company's Annual Report on Form 10-K for the year ended September 30, 2025, and in subsequent reports filed with the SEC, which are hereby incorporated by reference. The outlook contained herein represents the Company's expectation for its consolidated results, other than as noted herein.