Emerson Electric (EMR) 10-K risk factor changes: FY2017 vs FY2016

[removed: We] [added: If the proposed transaction were to proceed, we can] make no assurance [removed: regarding] [added: as to] the [added: completion,] terms, timing, costs or benefits anticipated from [removed: the strategic portfolio transactions.][added: any such acquisition.]

Unforeseen developments, including [removed: possible] delays in obtaining various tax, regulatory and other approvals, could delay [removed: the proposed transactions,] [added: any acquisition,] or cause [removed: them] [added: it] to occur on terms and conditions that are less favorable, or at a higher cost, than expected.

Various companies compete with us in one or more product lines and the [added: number of competitors varies by product line.]

In [removed: 2016] [added: 2017] and in past years, we have made various [removed: acquisitions] [added: acquisitions, including the valves & controls business,] and entered into joint venture arrangements intended to complement or expand our business, and may continue to do so in the future.

[removed: While we] monitor market prices of the commodities we require and attempt to [removed: reduce] [added: mitigate] price exposure through hedging activities, this risk could adversely affect our operating results.

Emerging market sales [removed: now] represent over one-third of total sales and serving a global customer base requires that we place more materials sourcing and production in emerging markets to capitalize on market opportunities and maintain our best-cost position.

Our Substantial Sales [added: Both in the U.S. and] Abroad Subject Us to Economic Risk as Our Results of Operations May Be Adversely Affected by [removed: Foreign Currency Fluctuations and] Changes in Local Government Regulations and Policies [added: and Foreign Currency Fluctuations]

We sell, manufacture, engineer and purchase products [removed: in overseas markets and a] [added: globally, with] significant [removed: portion of our] sales [removed: occur] in [added: both] mature and emerging [removed: markets outside the United States.][added: markets.]

We expect sales [removed: from] [added: in] non-U.S. markets to continue to represent a significant portion of our total sales.

[removed: International sales] [added: Our U.S.] and [added: international] operations are subject to changes in local government regulations and policies, including those related to tariffs and trade barriers, investments, taxation, exchange controls and repatriation of earnings, which could adversely affect our results.

[removed: Changes] [added: In addition, changes] in the relative values of currencies occur from time to time and have affected our operating results and could do so in the future.

While we monitor our exchange rate exposures and attempt to [removed: reduce] [added: mitigate] this exposure through hedging activities, this risk could adversely affect our operating results.

Our Proposed Acquisition of Rockwell Automation, Inc. May Not Be Completed or Completed On the Terms and Conditions Contemplated, or With the Expected Benefits

We are currently pursuing a potential acquisition of Rockwell Automation, Inc. Rockwell has not engaged with the Company on this or previous proposals.

The acquisition would involve increases in the Company's debt levels and outstanding shares.

In addition, the Company may encounter difficulties in integration and may not realize the degree or timing of the anticipated benefits of the acquisition.

While we

Our Strategic Portfolio Transactions, Including the Planned Sales of Our Network Power Systems Business and Our Power Generation, Motors and Drives Businesses, as Well as the Planned Acquisition of Pentair's Valves & Controls Business, May Not Be Completed Within the Currently Contemplated Time Frame, With the Expected Terms or Costs, and May Not Achieve the Intended Benefits

Further, we may not realize some or all of the anticipated strategic, financial or other benefits of the strategic portfolio transactions.

Moreover, after the transactions are completed, the Company will be smaller and less diversified, with a narrower business focus and may be more vulnerable to changing market conditions, which could adversely affect our business.

number of competitors varies by product line.

This Annual Report on Form 10-K contains various forward-looking statements and includes assumptions concerning Emerson's operations, future results and [removed: prospects, including the planned separation of the network power systems business and the power generation, motors and drives businesses and other strategic repositioning actions.][added: prospects.]

Earnings, earnings per share, return on common stockholders’ equity and return on total capital excluding certain gains and losses, impairments, [removed: costs associated with] [added: costs, impacts of] the strategic portfolio repositioning actions, 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.

Free cash flow (operating cash flow less capital expenditures) [removed: is an indicator] [added: and free cash flow as a percent] of [added: net sales are indicators of] the Company’s cash generating [removed: capabilities] [added: capabilities, and dividends as a percent of free cash flow is an indicator of the Company's ability to support its dividend,] after considering investments in capital assets which are necessary to maintain and enhance existing operations.

[added: Management believes that free cash flow, free cash flow as a percent of net sales and dividends as a percent of free cash flow are] useful to both management and investors as [removed: a measure] [added: measures] of the Company’s ability to generate cash [added: and support its dividend] (U.S. GAAP measure: operating cash [added: flow, operating cash flow as a percent of net sales, dividends as a percent of operating cash] flow).

Management believes that the financial statements for the three years ended September 30, [removed: 2016] [added: 2017] have been prepared in conformity with U.S. generally accepted accounting principles appropriate in the circumstances.

Based on this evaluation, management has concluded that internal control over financial reporting was effective as of September 30, [removed: 2016.][added: 2017.]

| | [removed: 2014] [added: 2015] | | | | [removed: 2015] [added: 2016] | | | [removed: 2016] [added: 2017] | | | [removed: 14] [added: 16] vs. 15 | | | [removed: 15] [added: 17] vs. 16 | |

| Net sales | $ | [removed: 17,733 | | |] 16,249 | | | 14,522 | | | [removed: (8] [added: 15,264] | [removed: )%] | | (11 | )% | [added: | 5 | % |]

| Gross profit | $ | [removed: 7,762 | | |] 7,008 | | | 6,262 | | | [removed: (10] [added: 6,404] | [removed: )%] | | (11 | )% | [added: | 2 | % |]

| Percent of sales | [removed: 43.8] [added: 43.1] | | % | | 43.1 | % | | [removed: 43.1] [added: 42.0] | % | | | | | | |

| SG&A | $ | [removed: 4,164] [added: 3,735] | | | [removed: 3,735] [added: 3,464] | | | [removed: 3,464] [added: 3,618] | | | | | | | |

| Percent of sales | [removed: 23.5] [added: 23.0] | | % | | [removed: 23.0] [added: 23.8] | % | | [removed: 23.8] [added: 23.7] | % | | | | | | |

| Gains on divestitures of businesses | $ | [removed: —] [added: 1,039] | | | [removed: 1,039] [added: —] | | | — | | | | | | | |

| Other deductions, net | $ | [removed: 211] [added: 330] | | | [removed: 330] [added: 294] | | | [removed: 294] [added: 286] | | | | | | | |

| Interest expense, net | $ | [removed: 196] [added: 175] | | | [removed: 175] [added: 188] | | | [removed: 188] [added: 165] | | | | | | | |

| before income taxes | $ | [removed: 3,191 | | |] 3,807 | | | 2,316 | | | [removed: 19] [added: 2,335] | [removed: %] | | (39 | )% | [added: | 1 | % |]

| Percent of sales | [removed: 18.0] [added: 23.4] | | % | | [removed: 23.4] [added: 16.0] | % | | [removed: 16.0] [added: 15.3] | % | | | | | | |

| common stockholders | $ | [removed: 2,201 | | |] 2,517 | | | 1,590 | | | [removed: 14] [added: 1,643] | [removed: %] | | (37 | )% | [added: | 3 | % |]

| Net earnings common stockholders | $ | [removed: 2,147 | | |] 2,710 | | | 1,635 | | | [removed: 26] [added: 1,518] | [removed: %] | | (40 | )% | [added: | (7 | )% |]

| Percent of sales | [removed: 12.1] [added: 16.7] | | % | | [removed: 16.7] [added: 11.3] | % | | [removed: 11.3] [added: 9.9] | % | | | | | | |

| Diluted EPS – Earnings from continuing operations | $ | [removed: 3.11 | | |] 3.71 | | | 2.45 | | | [removed: 19] [added: 2.54] | [removed: %] | | (34 | )% | [added: | 4 | % |]

| Diluted EPS – Net earnings | $ | [removed: 3.03 | | |] 3.99 | | | 2.52 | | | [removed: 32] [added: 2.35] | [removed: %] | | (37 | )% | [added: | (7 | )% |]

| Return on common stockholders' equity | [removed: 20.7] [added: 29.8] | | % | | [removed: 29.8] [added: 20.9] | % | | [removed: 20.9] [added: 18.6] | % | | | | | | |

| Return on total capital | [removed: 17.5] [added: 22.8] | | % | | [removed: 22.8] [added: 15.5] | % | | [removed: 15.5] [added: 15.3] | % | | | | | | |

[removed: The Company] [added: In 2017, Emerson successfully completed the] previously announced strategic actions to streamline its [removed: portfolio,] [added: portfolio and] drive growth [removed: and accelerate value creation for shareholders.][added: in its core businesses.]

Underlying sales were [removed: down 7] [added: up 1] percent compared with the prior year reflecting [removed: the negative impact of low oil] [added: improving economic conditions] and [removed: gas prices, weak] industrial [removed: and emerging market business spending, and global economic uncertainty.][added: end markets.]

Earnings from continuing operations common stockholders were [removed: $1,590] [added: $1,643] million in [removed: 2016, down 37] [added: 2017, up 3] percent compared with prior year earnings of [removed: $2,517] [added: $1,590] million.

Diluted earnings per share from continuing operations were [removed: $2.45, down 34] [added: $2.54, up 4] percent versus [removed: $3.71] [added: $2.45] per share in [removed: 2015.][added: 2016.]

[removed: Excluding divestiture gains in 2015, earnings] [added: Earnings] from continuing operations [added: attributable to common stockholders in 2016] were [added: $1,590 million,] down [removed: 17] [added: 37] percent compared with [removed: $1,906 million in] 2015, [removed: while] [added: and] diluted earnings per share [removed: from continuing operations] were [added: $2.45,] down [removed: 13 percent versus $2.81 in the prior year.][added: 34 percent.]

[removed: Gains from] [added: Divestiture gains in] the prior year [removed: divestitures of the power transmission solutions and commercial storage businesses were $611 million in total, or $0.90 per share, which] negatively impacted earnings [added: from continuing operations] and earnings per share comparisons by 20 and 21 percentage points, respectively.

Net earnings common [removed: stockholders] [added: stockholders, which includes the impact of discontinued operations,] were [removed: $1,635] [added: $1,518] million in [removed: 2016,] [added: 2017,] down [removed: 40] [added: 7] percent compared with prior year earnings of [removed: $2,710] [added: $1,635] million.

Diluted earnings per share were [removed: $2.52,] [added: $2.35,] down [removed: 37] [added: 7] percent versus [removed: $3.99] [added: $2.52] per share in [removed: 2015.][added: 2016.]

[removed: Excluded items in] [added: In addition, net earnings for] 2016 [removed: include separation costs of $220 million ($0.34 per share),] [added: included] a loss of $103 million [removed: ($0.16 per share)] to write down the power generation, motors and drives [removed: businesses] [added: business] to the sales price less costs to sell, and lower expense of $24 million [removed: ($0.04 per share benefit)] due to ceasing depreciation and amortization for the discontinued businesses held-for-sale.

[removed: In total, these items] [added: These results include the impact of discontinued operations discussed above which] negatively impacted net earnings and earnings per share comparisons [removed: 30] [added: 10] and [removed: 31] [added: 11] percentage points, respectively.

Operating cash flow from continuing operations [removed: increased $459 million] [added: of $2.5 billion] in 2016 [added: was a 23 percent increase compared to $2.0 billion in 2015,] as comparisons benefited from income taxes of $424 million paid [removed: in the prior year] on the [removed: divestiture gains.][added: gains from divestitures in 2015.]

Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, [removed: decreased 7] [added: increased 1] percent [removed: ($1,046] [added: ($168] million) on [removed: 6 percent lower] [added: higher] volume and [removed: 1 percent] [added: slightly] lower price.

Net sales for [removed: 2015] [added: 2017] were [removed: $16.2] [added: $15.3] billion, [removed: a decrease] [added: an increase] of [removed: $1,484] [added: $742] million, or [removed: 8] [added: 5] percent compared with [removed: 2014.][added: 2016.]

Underlying sales decreased [removed: 1] [added: 7] percent [removed: ($169] [added: ($1,046] million) on [added: 6 percent lower] volume [removed: declines.][added: and 1 percent lower price.]

[removed: Foreign currency translation subtracted] [added: Acquisitions added] 4 percent [removed: ($717] [added: ($628] million) [removed: and divestitures, net of acquisitions] [added: while foreign currency translation] subtracted [removed: 3 percent ($598 million).][added: $54 million.]

Underlying sales [removed: were flat] [added: increased 2 percent] in the U.S. and [removed: decreased 2 percent] [added: were flat] internationally.

The valves & controls business was acquired on April 28, 2017.

Management has excluded this business from its assessment of internal control over financial reporting as of September 30, 2017.

Valves & controls' total assets and revenues excluded from the assessment represented approximately 20 percent and 4 percent, respectively, of the Company's related consolidated financial statement amounts as of and for the year ended September 30, 2017.

These actions resulted in the divestiture of the network power systems, and power generation, motors and drives businesses, which are reported in discontinued operations for all years presented.

Additionally, on April 28, 2017, the Company completed the acquisition of Pentair's valves & controls business.

Sales from continuing operations for 2017 were $15.3 billion, an increase of $742 million, or 5 percent, supported by the acquisition of the valves & controls business, which added 4 percent.

Earnings per share from continuing operations were $2.64, up 8 percent, excluding first year acquisition accounting charges of $0.10 per share related to the valves & controls business which deducted 4 percentage points.

Discontinued operations in 2017 was a net loss of $125 million, $0.19 per share, reflecting the impact of completing the divestitures.

Discontinued operations income in 2016 was $45 million, $0.07 per share.

See Note 4 for further information.

Sales increased in both businesses.

Automation Solutions sales increased 5 percent due to the acquisition of the valves & controls business, while underlying sales decreased slightly, reflecting weakness in energy-related markets which began to improve in the second half of the year.

Commercial & Residential Solutions sales increased 5 percent reflecting favorable conditions in HVAC, refrigeration and construction related markets.

The Company generated operating cash flow from continuing operations of $2.7 billion in 2017, an increase of $191 million, or 8 percent.

Total operating cash flow of $1.9 billion was reduced by cash used for discontinued operations of $778 million to execute the repositioning, primarily for income taxes on completion of the divestitures and repatriation of cash.

Sales increased $441 million in Automation Solutions and $302 million in Commercial & Residential Solutions.

Sales in Automation Solutions decreased $1,176 million and Commercial & Residential solutions decreased $76 million.

International destination sales, including U.S. exports, increased 5 percent, to $8.0 billion in 2017, reflecting increases in both the Automation Solutions and Commercial & Residential Solutions businesses.

U.S. exports of $927 million were up 4 percent compared with 2016, reflecting increases in both Automation Solutions, which benefited from the valves & controls acquisition, and Commercial & Residential Solutions.

The Company is currently pursuing a potential acquisition of Rockwell Automation, Inc. On November 16, 2017, the Company announced that it proposed to acquire Rockwell for $29 billion, or $225 per share, consisting of $135 per share in cash, financed primarily with newly issued debt, and $90 per share in Emerson stock, which would result in Rockwell shareholders owning approximately 22 percent of the combined company.

Rockwell has not engaged with the Company on this or previous proposals.

Rockwell had fiscal 2017 sales of approximately $6.3 billion.

See Item 1A - "Risk Factors" for additional information.

The Company also acquired two smaller businesses in the Automation Solutions segment.

Total cash paid for all businesses was $3.0 billion, net of cash acquired.

On October 2, 2017, the Company sold its residential storage business for $200 million in cash, subject to post-closing adjustments, and expects to recognize a loss of approximately $40 million in 2018 due to income taxes resulting from nondeductible goodwill.

The Company expects to realize approximately $140 million in after-tax cash proceeds from the sale.

This business, with sales of $298 million and pretax earnings of $15 million in 2017, is a leader in home organization and storage systems, and was reported within the Tools & Home Products segment.

Cost of sales for 2017 were $8.9 billion, an increase of $600 million compared with $8.3 billion in 2016.

The increase reflects the acquisition of the valves & controls business and higher volume, partially offset by cost reduction actions and the impact of foreign currency translation.

Gross profit was $6.4 billion in 2017 compared to $6.3 billion in 2016.

Gross margin of 42.0 percent reflected dilution of 1.2 percentage points due to the valves & controls operations and first year acquisition accounting charges of $74 million related to inventory.

Slightly lower price also contributed to the decline, while savings from cost reduction actions partially offset these decreases.

Gross profit margin was 43.1 percent in 2016.

Selling, general and administrative (SG&A) expenses of $3.6 billion in 2017 increased $154 million compared with 2016, primarily due to the valves & controls acquisition.

Savings from cost reduction actions and lower incentive stock compensation of $35 million, reflecting the impact of changes in the stock price, were partially offset by higher other costs.

SG&A as a percent of sales of 23.7 percent decreased 0.1 percentage points compared with 2016.

See Note 3.

Other deductions, net were $286 million in 2017, a decrease of $8 million compared with 2016.

The decrease primarily reflects favorable foreign currency transactions comparisons of $78 million (unfavorable in the prior year) and lower restructuring expense of $18 million.

Management believes that free cash flow is

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These portfolio repositioning actions resulted in agreements to sell the network power systems business and the power generation, motors and drives businesses.

These businesses have been reported within discontinued operations for all years presented.

Emerson's sales from continuing operations for 2016 were $14.5 billion, a decrease of $1,727 million, or 11 percent.

Foreign currency translation subtracted 2 percent and divestitures, net of acquisitions reduced sales by 2 percent.

Net sales related to discontinued operations were $5.7 billion for 2016 compared with $6.1 billion in 2015.

Earnings from discontinued operations for 2016 were $45 million ($0.07 per share), which includes earnings from the operations of the network power systems, and power generation, motors and drives businesses of $344 million ($0.53 per share), and other items which reduced earnings by $299 million ($0.46 per share).

See discussion below.

Excluding items, net earnings were $1,934 million, down 10 percent compared with $2,151 million in 2015, while diluted earnings per share were $2.98, down 6 percent versus $3.17 in 2015.

Excluded items in 2015 include the divestiture gains of $611 million ($0.90 per share benefit) and separation costs of $52 million ($0.08 per share).

Sales decreased in all segments.

Process Management sales decreased 12 percent and Industrial Automation sales were down 15 percent (7 percent due to the power transmission solutions divestiture in 2015) as global oil and gas customers curtailed spending levels in a difficult environment and weakness in industrial spending persisted.

Climate Technologies sales decreased 2 percent, while Commercial & Residential Solutions sales decreased 16 percent (15 percent due to the commercial storage divestiture in 2015).

The Company generated operating cash flow of $2.9 billion, of which $2.5 billion related to continuing operations.

Sales in Process Management decreased $1,032 million, Industrial Automation decreased $376 million ($189 million due to the power transmission solutions divestiture in 2015), Climate Technologies decreased $62 million and Commercial & Residential Solutions decreased $302 million ($288 million due to the commercial storage divestiture in 2015).

Sales in Process Management decreased $673 million, Industrial Automation decreased $556 million and Climate Technologies decreased $98 million, while sales in Commercial & Residential Solutions increased slightly.

International destination sales, including U.S. exports, decreased 12 percent, to $8.6 billion in 2015, primarily reflecting decreases in Process Management and Industrial Automation, partially due to the power transmission solutions divestiture.

These decreases were partially offset by growth in Climate Technologies and Commercial & Residential Solutions.

U.S. exports of $1.2 billion were down 8 percent compared with 2014.

Sales in Middle East/Africa increased 5 percent.

The slowdown in industrial capital spending, particularly in oil and gas, hampered growth in these areas.

The transaction is expected to close by the end of calendar year 2016 or shortly thereafter, subject to customary closing conditions and various regulatory approvals.

These acquisitions complement the existing segment portfolios and create incremental growth opportunities.

See Note 3 and Item 1A - "Risk Factors."

In 2014, the Company acquired Virgo Valves and Enardo Holdings, manufacturers of engineered valves and automation systems, and tank and terminal safety equipment, respectively.

Both businesses are reported in Process Management and complement the existing portfolio.

The Company also acquired four other smaller businesses in 2014, in Process Management and Network Power.

Combined annualized sales for all businesses acquired in 2014 were approximately $376 million.

The Company also acquired the remaining 44.5 percent noncontrolling interest in the Appleton Group electrical distribution business, in the Industrial Automation segment, in 2014.

Sales for this business were $542 million in 2014.

Full ownership of Appleton provides growth opportunities in oil and gas and chemicals end markets.

Early in 2014, the Company completed the divestiture of a 51 percent controlling interest in Artesyn and received net proceeds of $264 million.

The Company used the sale proceeds and cash repatriated from the business to purchase common stock.

Late in 2014, the Company sold its connectivity solutions business for $99 million in cash.

Cost of sales for 2015 were $9.2 billion, a decrease of $730 million compared with $10.0 billion in 2014, primarily due to the impact of foreign currency translation ($459 million), divestitures ($425 million), lower sales volume and the benefit of cost reduction efforts.

Gross profit was $7.0 billion in 2015 compared with $7.8 billion in 2014.

Gross margin of 43.1 percent decreased 0.7 percentage points versus 43.8 percent in 2014 due to deleverage on the lower volume, unfavorable mix and the impact of the stronger dollar on product costs, partially offset by savings from restructuring actions.

Divestitures had a 0.4 percentage point favorable impact on margin.

The information from this [removed: 2016] Annual Report on Form 10-K set forth in Item 8 under "Financial Instruments" is hereby incorporated by reference.

[removed: As a result of the Company's strategic portfolio repositioning actions further described herein, the] [added: The] network power systems [removed: business, which comprised the former Network Power segment,] [added: business] and the power generation, motors and drives [removed: businesses, which] [added: business] were [removed: part of the Industrial Automation segment,] [added: sold in 2017 and] are reported as discontinued operations in the Consolidated Financial Statements for all years presented.

The [removed: new] Automation Solutions segment [removed: will include] [added: includes] the [removed: current] [added: former] Process Management segment and the remaining businesses in the [removed: existing] [added: former] Industrial Automation segment, except for the hermetic motors [removed: business] [added: business,] which [removed: will be] [added: is now] included in the Climate Technologies segment.

Sales, earnings before interest and income taxes, and total assets attributable to each business segment for the three years ended September 30, [removed: 2016,] [added: 2017] are set forth in [removed: Item 8 of this Annual Report on Form 10-K in] Note [removed: 18 of Notes to Consolidated Financial Statements, which note is hereby incorporated by reference.][added: 18.]

Sales by [removed: segment] [added: business] in [removed: 2016,] [added: 2017,] as a percentage of the total Company, were: [removed: Process Management, 49 percent; Industrial Automation, 14 percent; Climate Technologies, 26 percent;] [added: Automation Solutions, 62 percent] and Commercial & Residential Solutions, [removed: 11] [added: 38] percent.

Total Emerson sales by geographic destination in [removed: 2016] [added: 2017] were: the United States and Canada, 52 percent; Asia, [removed: 20] [added: 21] percent; Europe, 16 percent; Latin America, [removed: 6] [added: 5] percent; and Middle East/Africa, 6 percent.

Information with respect to acquisition and divestiture activity, including the discontinued businesses, and restructuring costs is set forth in [removed: Item 8 of this Annual Report on Form 10-K in] Notes 3, 4 and [removed: 6 of Notes to Consolidated Financial Statements, which notes are hereby incorporated by reference.][added: 6.]

[removed: See Item 1A - "Risk Factors,” Item 7 - "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and Notes 3] [added: This reference] and [removed: 4 of] [added: all other Note references in this document refer to] Notes to Consolidated Financial Statements set forth in Item 8 of this Annual Report on Form 10-K, which notes are hereby incorporated by reference.

The [removed: Process Management] [added: Automation Solutions] segment offers customers [removed: products] [added: products, software] and technology, and engineering, project [removed: management and] [added: management,] consulting services [added: and integrated manufacturing solutions] for precision measurement, control, monitoring, asset optimization, and safety and reliability of oil and gas [removed: reservoirs] [added: reservoirs, manufacturing operations] and plants that process or treat various items.

The Company’s array of products and services [removed: helps] [added: enables] customers [added: to] optimize their plant capabilities in the areas of plant safety and reliability, product [removed: quality] [added: quality, energy] and [added: emissions, and] output efficiency.

Significant end markets served include oil and gas, refining, chemicals and power generation, as well as pharmaceuticals, food and [removed: beverages,] [added: beverage, automotive,] pulp and paper, metals and mining, and municipal water supplies.

Sales by geographic destination in [removed: 2016] [added: 2017] for [removed: Process Management] [added: Automation Solutions] were: the United States and Canada, [removed: 42] [added: 44] percent; Asia, 23 percent; Europe, [removed: 19] [added: 20] percent; Latin America, [removed: 6] [added: 5] percent; and Middle East/Africa, [removed: 10] [added: 8] percent.

Process [removed: Management] [added: control] systems and software control plant processes by collecting and analyzing information from measurement devices in the plant, and then [removed: uses] [added: use] that information to adjust valves, pumps, motors, drives and other control hardware for maximum product quality and process efficiency and safety.

Software capabilities also include [added: life sciences operations management,] upstream oil and gas reservoir simulation and [removed: modeling for] production [removed: optimization.][added: optimization modeling, pipeline and terminal management, operations management simulation, and training systems.]

Measurement [removed: and] [added: &] Analytical Instrumentation

Measurement instrumentation measures the physical properties of liquids or gases in a process stream, such as pressure, temperature, level, rate and amount of flow, and communicates this information to a process control [removed: system.][added: system or other software applications.]

Complementary products include onshore and subsea multi-phase meters, [removed: wetgas] [added: wet gas] meters, downhole gauges and corrosion/erosion measuring instruments.

Measurement and analytical instrumentation technologies are also available with [added: highly secure and reliable] wireless communication capability, allowing customers to monitor processes or equipment that were previously not measurable (remote, moving/rotating) or not economical to measure due to the high cost and difficulty of running wires in industrial process plants.

Valves, Actuators [removed: and] [added: &] Regulators

[removed: Control] [added: Control, isolation and pressure relief] valves respond to commands from a control system to continuously and precisely modulate the flow of process [removed: fluids to provide maximum process efficiency and product quality.][added: fluids.]

The Company designs, engineers and manufactures [removed: ball valves,] [added: ball, gate, globe, check,] sliding [removed: stem valves, rotary valves,] [added: stem, rotary,] high performance [removed: butterfly valves] [added: butterfly, triple offset,] and severe [removed: service] [added: services] valves for critical [removed: applications, and related valve actuators and controllers.][added: applications.]

The Company [removed: provides] [added: also supplies] a line of industrial and residential regulators, whose function is to reduce the pressure of fluids moving from high-pressure supply lines into lower pressure systems, and also manufactures tank and terminal safety equipment, including hatches, vent pressure and vacuum relief valves, and flame arrestors for storage tanks in the oil and gas, petrochemical, refining and other process industries.

[removed: PlantWeb] [added: Plantweb] Digital [removed: Plant Architecture][added: Ecosystem]

Industry Services [removed: and Solutions]

[removed: Process Management’s array] [added: Automation Solutions provides a broad portfolio] of [removed: process automation and asset optimization] services [added: to] improve automation project implementation time and costs, increase process availability and productivity, and reduce the total cost of [removed: ownership.][added: ownership in industries such as oil and gas, chemicals, power generation, food and beverage, and life sciences.]

[removed: Reliability consulting] [added: Consulting] services help [removed: process] plant owners and operators improve plant [removed: availability] [added: safety, reliability, availability, cybersecurity, and operational performance] through implementation of on-site and corporate-wide [removed: reliability] programs.

The principal worldwide distribution channel for [removed: Process Management] [added: Automation Solutions] is a direct sales force, although a network of independent sales representatives, and to a lesser extent independent distributors purchasing products for resale, are also utilized.

Approximately half of the sales in the United States are made through a direct sales force with the remainder primarily through independent sales [removed: representatives.][added: representatives and distributors.]

Service/trademarks and trade names within [removed: Process Management] [added: Automation Solutions] include Emerson [removed: Process Management, AMS Suite,] [added: Automation Solutions, AMS, Anderson Greenwood, Appleton, ASCO, ASCO Numatics,] Baumann, Bettis, [added: Biffi, Branson,] Bristol, [added: Crosby,] CSI, Damcos, Daniel, DeltaV, EIM, El-O-Matic, Fisher, Go Switch, Guardian, [added: Keystone, KTM,] Micro Motion, Net Safety, [removed: Ovation, PlantWeb, ROC, Rosemount, Roxar, Smart Process, SureService, Tescom, TopWorx, Valvetop and Virgo.]

Sales by geographic destination in [removed: 2016] [added: 2017] for [removed: Industrial Automation] [added: Climate Technologies] were: the United States and Canada, [removed: 51] [added: 55] percent; Asia, [removed: 20] [added: 24] percent; Europe, [removed: 22] [added: 10] percent; Latin America, [removed: 4] [added: 7] percent; and Middle East/Africa, [removed: 3] [added: 4] percent.

[removed: These] [added: Fluid power] products control and power the flow of [removed: fluids (liquids] [added: liquids] and [removed: gases)] [added: gases] in manufacturing operations such as automobile assembly, food processing, textile manufacturing and petrochemical [removed: processing.][added: processing, and include products such as solenoid and pneumatic valves, valve position indicators, pneumatic cylinders, air preparation equipment, and pressure, vacuum and temperature switches.]

[removed: Products] [added: Electrical distribution products] are used in hazardous, industrial, commercial and construction environments, such as oil and gas drilling and production sites, pulp and paper mills and petrochemical plants.

[removed: The Company supplies plastic] [added: Plastic] and metal joining technologies and equipment [added: are supplied] to a diversified manufacturing customer base, including automotive, medical [removed: devices] [added: devices, business] and [added: consumer electronics, and] toys.

[removed: Products include ultrasonic joining and] cleaning equipment; linear and orbital vibration welding equipment; systems for hot plate, spin and laser welding equipment; and aqueous, semi-aqueous and vapor cleaning systems.

The Climate Technologies segment provides products and services for [removed: all] [added: many] areas of the climate control industry, including residential heating and cooling, commercial air conditioning, and commercial and industrial refrigeration.

Climate Technologies also provides services that digitally control and remotely monitor refrigeration units in grocery stores and other food distribution outlets to enhance food freshness and [removed: safety.][added: safety, as well as cargo and transportation monitoring solutions.]

Sales by geographic destination in [removed: 2016] [added: 2017] for [removed: Climate Technologies] [added: this segment] were: the United States and Canada, [removed: 56] [added: 86] percent; Asia, [removed: 22] [added: 4] percent; Europe, [removed: 10] [added: 7] percent; Latin America, [removed: 7] [added: 2] percent; and Middle East/Africa, [removed: 5] [added: 1] percent.

[removed: The Company] [added: This business] provides a full range of heating and air conditioning products that help reduce operational and energy costs and create comfortable environments in all types of buildings.

These products include reciprocating and scroll [removed: air conditioning] compressors, including ultra-efficient residential scroll compressors with two stages of cooling capacity, as well as variable speed scroll compressors; system protector and flow control devices; standard, programmable and Wi-Fi thermostats; monitoring equipment and electronic controls for gas and electric heating systems; gas valves for furnaces and water heaters; ignition systems for furnaces; sensors and thermistors for home appliances; and temperature sensors and controls.

[removed: The Company's technology is] [added: Commercial and industrial refrigeration technologies are] incorporated into equipment to refrigerate food and beverages in supermarkets, convenience stores, food service operations, refrigerated trucks and refrigerated marine transport containers.

[added: Products include reciprocating, scroll and screw] compressors; precision flow controls; system diagnostics and controls that provide precise temperature management; and environmental control systems.

In connection with the strategic portfolio repositioning actions undertaken to transform the Company into a more focused enterprise, its businesses and organization were realigned.

In fiscal 2017, the Company began reporting three segments: Automation Solutions, and Climate Technologies and Tools & Home Products which together comprise the Commercial & Residential Solutions business.

The new Tools & Home Products segment consists of the businesses previously reported in the Commercial & Residential Solutions segment in fiscal 2016.

See Note 18.

A summary of the Company's businesses is described below.

| • | Automation Solutions - enables process, hybrid and discrete manufacturers to maximize production, protect personnel and the environment, and optimize their energy efficiency and operating costs through a broad offering of integrated solutions and products, including measurement and analytical instrumentation, industrial valves and equipment, and process control systems. |

| • | Commercial & Residential Solutions - provides products and solutions that promote energy efficiency, enhance household and commercial comfort, and protect food quality and sustainability through heating, air conditioning and refrigeration technology, as well as a broad range of tools and appliance solutions. |

The Company's strategic repositioning actions resulted in the sale of the network power systems business which closed in the first quarter of 2017, and the sale of the power generation, motors and drives business which closed in the second quarter of 2017.

These businesses have been reported in discontinued operations for all periods presented.

Additionally, on April 28, 2017, the Company completed the acquisition of Pentair's valves & controls business, which is reported in the Automation Solutions segment and complements the Valves, Actuators and Regulators product offering.

See also Item 1A - “Risk Factors” and Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

AUTOMATION SOLUTIONS

The primary role of an industrial valve is to control, isolate, or regulate the flow of liquids or gases to achieve safe operation along with reliability and optimized performance.

The Company also designs and manufactures sophisticated smart actuation and control technologies that continuously monitor valve health and remotely control valve positions to foster proactive and predictive maintenance as well as decrease the risk of unplanned shutdowns.

The Company provides pressure management products, including pressure relief, vacuum relief, and gauge valves designed to control fugitive emissions.

Industrial Solutions

Industrial Solutions include fluid power and control mechanisms, electrical distribution equipment, and materials joining and precision cleaning products which are used in a variety of manufacturing operations to provide integrated solutions to customers.

Products include ultrasonic joining and

Process Control Systems & Solutions

TM

The Plantweb Digital Ecosystem combines the Company’s intelligent field sensors, communication gateways and controllers, software, and complementary partner technologies to create a comprehensive Industrial Internet of Things (IIoT) architecture to improve customer operational performance.

Newly developed sensors (usually wireless) monitor variables such as equipment health and energy consumption, providing data to software applications.

Existing sensor information from control systems is also incorporated using secure communication designs.

These applications contain analytic capabilities that provide insights into production performance, energy consumption, reliability of specific equipment or process units, and safety.

Alerts are generated in areas such as impending equipment failure or excessive energy consumption.

Complete solutions range from covering a few assets, such as pumps or steam traps with small applications, to complete facility monitoring using more sophisticated modeling.

Customers may also subscribe to IIoT “connected services” to improve the performance of their facilities.

In this model, Company personnel who are experts in specific applications or asset classes monitor and analyze customer data that is supplied on a periodic basis and generate reports that provide specific information on actions to take to improve plant operational performance.

Global industry centers offer engineering and project management services to help customers optimize cost and schedule on large capital projects.

Lifecycle service centers provide maintenance, engineering, process, quality, and troubleshooting expertise to aid in process optimization for efficient and consistent operations, regulatory compliance, asset repair, asset replacement, shutdown/outage management and employee training.

These offerings are available on demand or through long-term service agreements.

Ovation, O-Z/Gedney, Plantweb, ROC, Rosemount, Roxar, Smart Process, SureService, TESCOM, TopWorx, Vanessa and Virgo.

The Commercial & Residential Solutions business consists of the Climate Technologies and Tools & Home Products segments, and provides products and solutions that promote energy efficiency, enhance household and commercial comfort, and protect food quality and sustainability through heating, air conditioning and refrigeration technology, as well as a broad range of tools and appliance solutions.

Transport and cargo monitoring solutions are also offered, which extend throughout the cold chain to ensure quality and safety as food travels from growers to processing and distribution facilities and finally to retail points of sale.

TOOLS & HOME PRODUCTS

On October 2, 2017, the Company sold its residential storage solutions business.

See Note 3.

See Note 4.

| | 2016 | | | | 2017 | |

| Automation Solutions | $ | 3,464 | | | 4,414 | |

The Company's business segments described below are based on the nature of the products and services rendered:

| | |

| --- | --- |

| • | Process Management - provides measurement, control and diagnostic capabilities for automated industrial processes producing items such as fuels, chemicals, foods, medicines and power. |

| • | Industrial Automation - brings integrated manufacturing solutions to diverse industries worldwide. |

| • | Climate Technologies - enhances household and commercial comfort, as well as food safety and energy efficiency, through heating, air conditioning and refrigeration technology. |

| • | Commercial & Residential Solutions - provides tools for professionals and homeowners, residential storage systems and appliance solutions. |

In fiscal 2017, the Company expects to realign its business segments.

The Commercial & Residential Solutions business will include the Climate Technologies segment and the Tools & Home Products segment.

Tools & Home Products will include the existing Commercial & Residential Solutions businesses.

The Company entered into an agreement as of July 29, 2016 to sell its network power systems business, and on July 30, 2016, entered into an agreement to sell its power generation, motors and drives businesses.

Additionally, on August 18, 2016, the Company entered into an agreement to acquire Pentair’s Valves & Controls business for approximately $3.15 billion, which will complement Process Management’s final control business.

These transactions are expected to close by the end of calendar year 2016 or shortly thereafter, subject to customary closing conditions and regulatory approvals.

PROCESS MANAGEMENT

Process Management Systems and Software

PlantWeb digital plant architecture combines the technologies described above with the advantages of “intelligent” plant devices (valves and measurement instruments with advanced diagnostic capabilities), open communication standards (nonproprietary wired and wireless digital protocols allowing plant devices and control systems to “talk” with one another) and integrated modular software, not only to better control the process but also to collect and analyze valuable information about the process and the plant assets.

This capability gives the Company's customers the ability to detect or predict changes in equipment and process performance, and the associated impact on plant operations.

PlantWeb architecture provides customers the insight to improve plant availability and safety, and also furnishes a platform to continually improve asset management and standards compliance, and to reduce startup, operating and maintenance costs.

Through proven project methodologies and deep knowledge of plant assets, the Company helps industrial plants to improve safety, increase plant uptime and reduce maintenance costs.

The Company’s Global Industry Centers offer engineering and project management services to help customers extract maximum performance and reliability from their process equipment and automation assets.

These Centers serve industries such as oil and gas, pulp and paper, chemicals, power, food and beverage, and life sciences.

They also assist customers in diagnosing equipment problems and plant inefficiencies.

Distribution

Brands

INDUSTRIAL AUTOMATION

The Industrial Automation segment provides integrated manufacturing solutions to its customers at the source of manufacturing their own products.

Products include fluid controls, electrical distribution devices, materials joining equipment and hermetic motors.

Through these offerings, the Company brings technology and enhanced quality to its customers' final products.

Fluid Power and Control

Products include solenoid and pneumatic valves, valve position indicators, pneumatic cylinders, air preparation equipment, and pressure, vacuum and temperature switches.

Electrical Distribution

Materials Joining and Precision Cleaning

Hermetic Motors

The Company provides a broad range of hermetic motors that are used in a wide variety of commercial, industrial and residential HVAC products and applications.

On a worldwide basis, the primary distribution channel for Industrial Automation is through direct sales forces, including to original equipment manufacturers.

Independent distributors constitute the next significant sales channel, mostly to reach end users.

To a lesser extent, independent sales representatives are utilized, particularly for electrical distribution products in the United States.

Service/trademarks and trade names within Industrial Automation include Emerson Industrial Automation, Appleton, ASCO, ASCO Joucomatic, ASCO Numatics, Branson Ultrasonics and O-Z/Gedney.

Products include reciprocating, scroll and screw

Storage Solutions

Information regarding legal proceedings is set forth in Note 13.

The information regarding legal proceedings set forth in Item 8 of this Annual Report on Form 10-K in Note 13 of Notes to Consolidated Financial Statements is hereby incorporated by reference.

For the fiscal year ended September 30, [removed: 2016][added: 2017]

| Missouri (State or other jurisdiction of incorporation or organization) | [removed: ] [added: ] | 43-0259330 (I.R.S. Employer Identification No.) |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form [removed: 10-K.]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company, or an emerging growth] company.

See the definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting [removed: company”] [added: company,” and "emerging growth company"] in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer ¨ Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨ [added: Emerging growth company ¨]

| 1. | Portions of Emerson Electric Co. Notice of [removed: 2017] [added: 2018] Annual Meeting of [removed: Stockholders] [added: Shareholders] and Proxy Statement incorporated by reference into Part III hereof. |

10-K 1 emr-09302017x10xk.htm FORM 10-K

10-K.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

March 31, 2017: $38.4 billion.

Common stock outstanding at October 31, 2017: 641,819,838 shares.

10-K 1 emr930201610-k.htm FORM 10-K

March 31, 2016: $34.8 billion.

Common stock outstanding at October 31, 2016: 642,776,971 shares.

At September 30, [removed: 2016,] [added: 2017,] the Company had approximately [removed: 205] [added: 200] manufacturing locations worldwide, of which approximately [removed: 135] [added: 130] were located outside the United States, primarily in Europe and Asia, and to a lesser extent in Canada and Latin America.

Manufacturing locations by business [removed: segment] are: [removed: Process Management, 76; Industrial Automation, 32; Climate Technologies, 33;] [added: Automation Solutions, 150,] and Commercial & Residential Solutions, [removed: 14.][added: 50, including 40 in the Climate Technologies segment and 10 in the Tools & Home Products segment.]

There were approximately 50 manufacturing facilities related to businesses included in discontinued operations at September 30, 2016.

The following sets forth certain information as of November [removed: 16, 2016] [added: 20, 2017] with respect to the Company's executive officers.

These officers have been elected or appointed to terms which expire February [removed: 7, 2017:][added: 6, 2018:]

| D. N. Farr | Chairman of the Board and Chief Executive Officer* | [removed: 61] [added: 62] | 1985 |

| F. J. Dellaquila | Senior Executive Vice President and Chief Financial Officer | [removed: 59] [added: 60] | 1991 |

| E. L. Monser | President | [removed: 66] [added: 67] | 2002 |

| E. M. Purvis | Executive Vice President and Chief Operating Officer | [removed: 59] [added: 60] | 2003 |

| S. J. Pelch | Executive Vice President - Organization Planning and Development | [removed: 52] [added: 53] | 2005 |

| R. T. Sharp | Executive President - Commercial & Residential Solutions | [removed: 49] [added: 50] | 2012 |

| M. H. Train | Executive President - Automation Solutions | [removed: 54] [added: 55] | 1994 |

| S. Y. Bosco | Senior Vice President, Secretary and General Counsel | [removed: 58] [added: 59] | 2005 |

| M. J. Bulanda | Senior Vice President - Acquisition Planning and Development | [removed: 50] [added: 51] | 2002 |

| K. Button Bell | Senior Vice President and Chief Marketing Officer | [removed: 58] [added: 59] | 1999 |

| R. J. Schlueter | Vice President, Controller and Chief Accounting Officer | [removed: 62] [added: 63] | 1992 |

Prior to his current position, Mr. Bulanda was Executive Vice President - Emerson Industrial Automation from 2012 through May 2016 and President of [removed: Emerson’s] Control Techniques [removed: business] from 2010 through 2012.

On November 9, 2017, the Company announced that Mr. Purvis will retire as Executive Vice President and Chief Operating Officer on December 31, 2017, and that Mr. Pelch will be appointed as the Company's Chief Operating Officer and Executive Vice President Organizational Development as of that same date.

Information regarding the market for the Company's common stock, quarterly market price ranges and dividend payments is set forth in [removed: Item 8 of this Annual Report on Form 10-K in] Note [removed: 20 of Notes to Consolidated Financial Statements, which note is hereby incorporated by reference.][added: 20.]

There were approximately [removed: 19,724] [added: 19,066] stockholders of record at September 30, [removed: 2016.][added: 2017.]

In November 2015, the Board of Directors authorized the purchase of up to 70 million shares, and 56.9 million shares remain available.

No shares were purchased in the fourth quarter of 2017.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Period | | Total Number of Share Purchased (000s) | | | | Average Price Paid per Share | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (000s) | | | | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (000s) |

| July 2016 | | | — | | | | — | | | | — | | | 64,416 |

| August 2016 | | | 875 | | | | $52.94 | | | | 875 | | | 63,541 |

| September 2016 | | | — | | | | — | | | | — | | | 63,541 |

| Total | | | 875 | | | | $52.94 | | | | 875 | | | 63,541 |

The 63.5 million shares available for purchase represent the remaining authorized shares under a 70 million share purchase program approved by the Board of Directors in November 2015.

| | [removed: 2012 (a) | | | |] 2013 (a) | | | [added: |] 2014 | | | 2015 (b) | | | 2016 | | [added: | 2017 | |]

| Net sales | $ | [removed: 17,349 | | |] 17,935 | | | 17,733 | | | 16,249 | | | 14,522 | | [added: | 15,264 | |]

| Earnings from continuing operations – common stockholders | $ | [removed: 1,444 | | |] 1,506 | | | 2,201 | | | 2,517 | | | 1,590 | | [added: | 1,643 | |]

| Basic earnings per common share from continuing operations | $ | [removed: 1.97 | | |] 2.09 | | | 3.13 | | | 3.72 | | | 2.46 | | [added: | 2.54 | |]

| Diluted earnings per common share from continuing operations | $ | [removed: 1.96 | | |] 2.08 | | | 3.11 | | | 3.71 | | | 2.45 | | [added: | 2.54 | |]

| Cash dividends per common share | $ | [removed: 1.60 | | |] 1.64 | | | 1.72 | | | 1.88 | | | 1.90 | | [added: | 1.92 | |]

| Long-term debt | $ | [removed: 3,787 | | |] 4,055 | | | 3,559 | | | 4,289 | | | [removed: 4,062] [added: 4,051] | | [added: | 3,794 | |]

| Total assets | $ | [removed: 23,818 | | |] 24,711 | | | 24,177 | | | 22,088 | | | [removed: 21,743] [added: 21,732] | | [added: | 19,589 | |]

(a) Includes goodwill impairment and income tax charges [removed: as follows: 2013,] [added: of] $566 million and $0.78 per [removed: share; 2012, $425 million and $0.58 per] share.

See Notes 3 and 4 [removed: of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, which notes are hereby incorporated by reference,] for information regarding the Company's acquisition and divestiture activities for the last three years.

| | [removed: 2014] [added: 2015] | | | | [removed: 2015] [added: 2016] | | | [removed: 2016] [added: 2017] | |

| Net sales | $ | [removed: 17,733] [added: 16,249] | | | [removed: 16,249] [added: 14,522] | | | [removed: 14,522] [added: 15,264] | |

| Cost of sales | [removed: 9,971] [added: 9,241] | | | | [removed: 9,241] [added: 8,260] | | | [removed: 8,260] [added: 8,860] | |

| Selling, general and administrative expenses | [removed: 4,164] [added: 3,735] | | | | [removed: 3,735] [added: 3,464] | | | [removed: 3,464] [added: 3,618] | |

| Gains on divestitures of businesses | [removed: —] [added: 1,039] | | | | [removed: 1,039] [added: —] | | | — | |

| Other deductions, net | [removed: 211] [added: 330] | | | | [removed: 330] [added: 294] | | | [removed: 294] [added: 286] | |

| Interest expense, net of interest income of: [removed: 2014, $18;] 2015, $23; 2016, [removed: $27] [added: $27; 2017, $36] | [removed: 196] [added: 175] | | | | [removed: 175] [added: 188] | | | [removed: 188] [added: 165] | |

| Earnings from continuing operations before income taxes | [removed: 3,191] [added: 3,807] | | | | [removed: 3,807] [added: 2,316] | | | [removed: 2,316] [added: 2,335] | |

| Income taxes | [removed: 953] [added: 1,267] | | | | [removed: 1,267] [added: 697] | | | [removed: 697] [added: 660] | |

| Earnings from continuing operations | [removed: 2,238] [added: 2,540] | | | | [removed: 2,540] [added: 1,619] | | | [removed: 1,619] [added: 1,675] | |

| Discontinued operations, net of tax: [removed: 2014, $211;] 2015, $161; 2016, [removed: $269] [added: $269; 2017, $671] | [removed: (54] [added: 193] | | [removed: )] | | [removed: 193] [added: 45] | | | [removed: 45] [added: (125] | [added: )] |

| Net earnings | [removed: 2,184] [added: 2,733] | | | | [removed: 2,733] [added: 1,664] | | | [removed: 1,664] [added: 1,550] | |

| Less: Noncontrolling interests in earnings of subsidiaries | [removed: 37] [added: 23] | | | | [removed: 23] [added: 29] | | | [removed: 29] [added: 32] | |

| Net earnings common stockholders | $ | [removed: 2,147] [added: 2,710] | | | [removed: 2,710] [added: 1,635] | | | [removed: 1,635] [added: 1,518] | |

| Earnings from continuing operations | $ | [removed: 2,201] [added: 2,517] | | | [removed: 2,517] [added: 1,590] | | | [removed: 1,590] [added: 1,643] | |

| Discontinued operations, net of tax | [removed: (54] [added: 193] | | [removed: )] | | [removed: 193] [added: 45] | | | [removed: 45] [added: (125] | [added: )] |

| Earnings from continuing operations | $ | [removed: 3.13] [added: 3.72] | | | [removed: 3.72] [added: 2.46] | | | [removed: 2.46] [added: 2.54] | |

| Discontinued operations | [removed: (0.08] [added: 0.29] | | [removed: )] | | [removed: 0.29] [added: 0.07] | | | [removed: 0.07] [added: (0.19] | [added: )] |

| Basic earnings per common share | $ | [removed: 3.05] [added: 4.01] | | | [removed: 4.01] [added: 2.53] | | | [removed: 2.53] [added: 2.35] | |

| Earnings from continuing operations | $ | [removed: 3.11] [added: 3.71] | | | [removed: 3.71] [added: 2.45] | | | [removed: 2.45] [added: 2.54] | |

| Discontinued operations | [removed: (0.08] [added: 0.28] | | [removed: )] | | [removed: 0.28] [added: 0.07] | | | [removed: 0.07] [added: (0.19] | [added: )] |

| Diluted earnings per common share | $ | [removed: 3.03] [added: 3.99] | | | [removed: 3.99] [added: 2.52] | | | [removed: 2.52] [added: 2.35] | |

| | | [removed: 2014] [added: 2015] | | | | [removed: 2015] [added: 2016] | | | [removed: 2016] [added: 2017] | |

| Net earnings | | $ | [removed: 2,184] [added: 2,733] | | | [removed: 2,733] [added: 1,664] | | | [removed: 1,664] [added: 1,550] | |

| Foreign currency translation | | [removed: (344] [added: (794] | | ) | | [removed: (794] [added: (188] | ) | | [removed: (188] [added: 441] | [removed: )] |

| Pension and postretirement | | [removed: (54] [added: (206] | | ) | | [removed: (206] [added: (210] | ) | | [removed: (210] [added: 500] | [removed: )] |

| Cash flow hedges | | [removed: 1] [added: (43] | | [added: )] | | [removed: (43] [added: 18] | [removed: )] | | [removed: 18] [added: 37] | |

| Total other comprehensive income (loss) | | [removed: (397] [added: (1,043] | | ) | | [removed: (1,043] [added: (380] | ) | | [removed: (380] [added: 978] | [removed: )] |

| Comprehensive income | | [removed: 1,787] [added: 1,690] | | | | [removed: 1,690] [added: 1,284] | | | [removed: 1,284] [added: 2,528] | |

| Less: Noncontrolling interests in comprehensive income of subsidiaries | | [removed: 34] [added: 22] | | | | [removed: 22] [added: 31] | | | [removed: 31] [added: 30] | |

| Comprehensive income common stockholders | | $ | [removed: 1,753] [added: 1,668] | | | [removed: 1,668] [added: 1,253] | | | [removed: 1,253] [added: 2,498] | |

| | 2015 | | | | 2016 | | [added: | 2017 | |]

| [removed: Cash] [added: Beginning cash] and equivalents | [removed: $] [added: 3,149] | [added: | | |] 3,054 | | | 3,182 | |

| Receivables, less allowances of [removed: $89 in 2015 and] $92 in 2016 [added: and $91 in 2017] | [removed: 2,870] [added: 2,701] | | | | [removed: 2,701] [added: 3,072] | |

| Inventories | [removed: 1,265] [added: 1,208] | | | | [removed: 1,208] [added: 1,696] | |

| Other current assets | [removed: 724] [added: 669] | | | | [removed: 669] [added: 349] | |

| Current assets held-for-sale | [removed: 2,136] [added: 2,200] | | | | [removed: 2,200] [added: 73] | |

| Total current assets | [removed: 10,049] [added: 9,960] | | | | [removed: 9,960] [added: 8,252] | |

| Property, plant and equipment, net | [removed: 2,929] [added: 2,931] | | | | [removed: 2,931] [added: 3,321] | |

| Goodwill | [removed: 3,847] [added: 3,909] | | | | [removed: 3,909] [added: 5,316] | |

See the Company's consolidated financial statements and accompanying notes and the report thereon of KPMG LLP that follow.

| | 2016 | | | | 2017 | |

| Other | 200 | | | | 634 | |

| Total assets | $ | 21,732 | | | 19,589 | |

| | 20,399 | | | | 21,750 | |

| Net earnings common stockholders | 2,710 | | | | 1,635 | | | 1,518 | |

In the first quarter of 2017, the Company adopted updates to ASC Subtopic 835-30, Interest-Imputation of Interest, which require presentation of debt issuance costs as a deduction from the related debt liability rather than within other assets.

These updates were adopted on a retrospective basis and did not materially impact the Company’s financial statements.

In the fourth quarter of 2017, the Company adopted updates to ASC 718, Compensation - Stock Compensation, which require all excess tax benefits and deficiencies related to share-based payments to be recognized in income tax expense rather than through additional paid-in-capital, and to be presented as operating cash flows instead of financing.

In the fourth quarter of 2017, the Company adopted updates to ASC 740, Income Taxes, which require noncurrent presentation of all deferred tax assets and liabilities on the balance sheet.

These updates were adopted on a prospective basis and resulted in the reclassification of current deferred tax assets and liabilities to noncurrent presentation.

In the fourth quarter of 2017, the Company adopted updates to ASC 820, Fair Value Measurement, which require investments measured using the net asset value per share practical expedient to be removed from the fair value hierarchy and separately reported when making disclosures.

These updates did not change the determination of fair value for any investments.

Adoption affected disclosure presentation only; there was no impact on the Company’s financial results.

| | | 2016 | | | | 2017 | |

The increase is primarily due to the valves & controls acquisition.

| | | 2016 | | | | 2017 | |

The increase is primarily due to the valves & controls acquisition.

See Note 3.

of certain foreign-currency-denominated assets and liabilities.

The Company recognized goodwill of $1,472 (none of which is expected to be tax deductible), and other identifiable intangible assets of $1,045, primarily customer relationships and intellectual property with a weighted-average life of approximately fifteen years.

The Company also acquired two smaller businesses in the Automation Solutions segment.

Total cash paid for all businesses was $3.0 billion, net of cash acquired.

The purchase price of the valves & controls business was preliminarily allocated to assets and liabilities as follows.

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | |

| Accounts receivable | | $ | 350 | |

| Inventory | | 525 | | |

| Property, plant & equipment | | 355 | | |

| Goodwill | | 1,472 | | |

| Intangibles | | 1,045 | | |

| Other assets | | 289 | | |

| | | | | |

| Accounts payable | | 119 | | |

| Other current liabilities | | 300 | | |

| Deferred taxes and other liabilities | | 657 | | |

| Cash paid, net of cash acquired | | $ | 2,960 | |

Results of operations for 2017 included sales of $600 and a net loss of $97, $0.15 per share, including restructuring expense of $25 and intangibles amortization of $29.

These results also included first year pretax acquisition accounting charges related to inventory of $74 and backlog of $19, or a total of $93 ($65 after-tax, $0.10 per share), which are reported in Corporate and other.

| Other | 239 | | | | 211 | |

| | 20,338 | | | | 20,399 | |

| Purchase of noncontrolling interests | (101 | | ) | | — | | | — | |

| Purchase of noncontrolling interests | (574 | | ) | | — | | | — | |

(U.S. GAAP) requires management to make estimates and assumptions that affect reported amounts and related disclosures.

In the first quarter of 2014, the Company adopted revisions to ASC 220, Comprehensive Income, which require disclosure of reclassifications into earnings from accumulated other comprehensive income (AOCI) and other current period activity.

There is no change to the items reported in AOCI or when those items should be reclassified into earnings.

These acquisitions complement the existing segment portfolios and create incremental growth opportunities.

The transaction is expected to close by the end of calendar year 2016 or shortly thereafter, subject to customary closing conditions and various regulatory approvals.

Power transmission

In the first quarter of 2014, the Company acquired 100 percent of Virgo Valves and Controls Limited and Enardo Holdings, both in the Process Management final control business.

Virgo is a manufacturer of engineered valves and automation systems and Enardo is a manufacturer of tank and terminal safety equipment.

Total cash paid for both businesses was approximately $506, net of cash acquired, and the Company also assumed $76 of debt.

Combined sales for Virgo and Enardo in 2014 were $321.

Goodwill of $323 (largely nondeductible) and identifiable intangible assets of $178, primarily customer relationships and patents and technology with weighted-average lives of approximately 12 years, were recognized from these transactions.

The Company also acquired four other smaller businesses in 2014 for a total of approximately $104, net of cash acquired.

Combined annual sales for these four businesses were approximately $55.

These acquisitions were complementary to the existing business portfolio.

In the second quarter of 2014, the Company acquired the remaining 44.5 percent noncontrolling interest in Appleton Group (formally EGS Electrical Group), which is reported in Industrial Automation, for $574.

Full ownership provides growth opportunities in the oil and gas and chemicals end markets by leveraging the Company's Process Management and international distribution channels.

The transaction reduced noncontrolling interests $101 and common stockholders' equity $343, and increased deferred tax assets $130.

The transaction did not affect consolidated results of operations other than eliminating the noncontrolling interest's share of future earnings and distributions from this business.

Sales for this electrical distribution business were $542 in 2014.

In November 2013, the Company completed the divestiture of a 51 percent controlling interest in Artesyn and received proceeds of $264, net of working capital adjustments.

The Company retained an interest with a fair value of approximately $60, determined using a Level 3 option pricing model.

A tax benefit of $20 was recognized on completion of the transaction.

Consolidated operating results for 2014 include sales of $146 and a net loss of $9 for this business through the closing date.

As the Company retained a noncontrolling interest in this business, it was not classified as discontinued operations.

Assets and liabilities held-for-sale at the closing date were: other current assets, $367 (accounts receivable, inventories, other current assets); other assets, $212 (property plant and equipment, goodwill, other noncurrent assets); and accrued expenses, $255 (accounts payable and other liabilities).

Prior to the divestiture, cash of $376 ($308, after tax provided for in fiscal 2013) was repatriated from this business.

In fiscal 2013, the Company initiated the purchase of $600 of Emerson common stock in anticipation of the sale proceeds and the cash repatriation.

The purchase of shares was completed in the first quarter of 2014.

In the fourth quarter of 2014, the Company sold its connectivity solutions business for $99 in cash, and recognized a slight gain.

This business reported 2014 sales of $63 and pretax earnings of $3.

Connectivity solutions offered industry-leading fiber optic, radio-frequency and microwave-coaxial technologies that safeguard network reliability.

These plans consisted of divesting its network power systems business through a spinoff to shareholders or sale, and also exploring strategic alternatives, including potential sale, of its power generation, motors and drives businesses.

This business comprised the former Network Power segment and provides mission-critical infrastructure products and solutions and life cycle management services for vital applications in data centers,

communication networks, and commercial/industrial environments.

Also, on July 30, 2016, the Company entered into an agreement to sell its power generation, motors and drives businesses for a value of $1.2 billion, representing cash plus assumption of certain postretirement liabilities by the buyer, subject to post-closing adjustments.

These businesses were previously reported in the Industrial Automation segment, and provide low, medium and high voltage alternators and other power generation equipment and commercial and industrial motors and drives, which are used in a wide variety of manufacturing and industrial applications.

Based on an evaluation performed, the Company's certifying officers have concluded that the disclosure controls and procedures were effective as of September 30, [removed: 2016] [added: 2017] to provide reasonable assurance of achieving these objectives.

There was no change in the Company's internal control over financial reporting during the quarter ended September 30, [removed: 2016,] [added: 2017,] that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Information regarding nominees and directors appearing under [removed: "Nominees and Continuing] [added: "Proxy Item No. 1: Election of] Directors" in the Emerson Electric Co. Notice of Annual Meeting of [removed: Stockholders] [added: Shareholders] and Proxy Statement for the February [removed: 2017] [added: 2018] annual [removed: stockholders'] [added: shareholders'] meeting (the [removed: "2017] [added: "2018] Proxy Statement") is hereby incorporated by reference.

Information appearing under "Section 16(a) Beneficial Ownership Reporting Compliance" in the [removed: 2016] [added: 2018] Proxy Statement is hereby incorporated by reference.

Information regarding the Audit Committee and Audit Committee Financial Expert appearing under "Board [added: and Committee Operations - Board and Corporate Governance - Committees] of [removed: Directors] [added: Our Board of Directors," "Board] and [removed: Committees"] [added: Committee Operations - Corporate Governance and Nominating Committee - Nomination Process" and "- Proxy Access"] in the [removed: 2017] [added: 2018] Proxy Statement is hereby incorporated by reference.

Information appearing under [removed: “Board of Directors] [added: “Executive Compensation" (including the information set forth under "Compensation Discussion] and [removed: Committees—Compensation Committee,” “Board of Directors] [added: Analysis"), "Compensation Tables," "Board] and [removed: Committees—Corporate] [added: Committee Operations—Corporate] Governance and Nominating [removed: Committee,” “Director Compensation,” “Executive Compensation”] [added: Committee—Director Compensation," "Board and Committee Operations—Compensation Committee"] (including, but not limited to, the information set forth under [removed: “Compensation Discussion and Analysis,” “Compensation Committee Report”] [added: "Role of Executive Officers] and [removed: “Summary] [added: the] Compensation [removed: Table”)] [added: Consultant"] and [removed: “Compensation] [added: "Compensation] Committee [added: Report") and "Compensation Committee] Interlocks and Insider [removed: Participation”] [added: Participation"] in the [removed: 2017] [added: 2018] Proxy Statement is hereby incorporated by reference.

The information regarding beneficial ownership of shares by nominees and continuing directors, named executive officers, five percent beneficial owners, and by all directors and executive officers as a group appearing [removed: under, "Stock Ownership] [added: under "Ownership] of [removed: Directors, Executive Officers and 5% Beneficial Owners"] [added: Emerson Equity Securities"] in the [removed: 2017] [added: 2018] Proxy [removed: Statement,] [added: Statement] is hereby incorporated by reference.

The following table sets forth aggregate information regarding the Company’s equity compensation plans as of September 30, [removed: 2016:][added: 2017:]

| | Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights | | [added: | |] Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights | | [added: | |] Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | [added: | |]

| Plan Category | [added: |] (a) | | [added: | |] (b) | | [added: | |] (c) | [added: |]

| Equity compensation plans [added: not] approved by security holders [removed: (1)] | [removed: 21,731,572] | [added: —] | [removed: $54.87] | | [removed: 26,554,538] | [added: — | | | | — | |]

| Equity compensation plans [removed: not] approved by security holders [added: (1)] | [removed: —] | [added: 15,428,415] | [removed: —] | | [removed: —] | [added: $55.49 | | | | 24,580,373 | |]

| (1) | Includes the Stock Option and Incentive Shares Plans previously approved by the Company's security holders. Included in column (a) are: [removed: (i) 15,276,335] [added: (i)10,759,141] shares reserved for outstanding stock option awards, (ii) [removed: 2,186,150] [added: 2,388,125] shares reserved for performance share awards granted in [removed: 2016,] [added: 2017,] (iii) [removed: 4,252,335] [added: 2,178,388] shares reserved for performance share awards granted [removed: primarily] in [removed: 2013,] [added: 2016 and] (iv) [removed: 16,513] [added: 102,761] reserved for outstanding restricted stock unit [removed: awards, and (v) 239 shares which have been earned under prior performance share programs but for which participants elected to defer payment.] [added: awards.] As provided by the Company’s Incentive Shares Plans, performance shares awards represent a commitment to issue such shares without cash payment by the employee, contingent upon achievement of the performance objectives and continued service by the employee. |

Included in column (c) are shares remaining available for award under previously approved plans as follows: (i) [removed: 10,917,345] [added: 11,483,140] under the 2011 Stock Option Plan, (ii) [removed: 11,230,650] [added: 10,481,900] under the 2015 Incentive Shares Plan, (iii) [removed: 4,211,966] [added: 2,440,978] under the 2006 Incentive Shares Plan, and (iv) [removed: 194,577] [added: 174,355] under the Restricted Stock Plan for Non-Management Directors.

Information regarding stock option plans and incentive shares plans is set forth in [removed: Item 8 of this Annual Report on Form 10-K in] Note [removed: 15 of Notes to Consolidated Financial Statements, which note is hereby incorporated by reference.][added: 15.]

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

| Total | | 15,428,415 | | | | $55.49 | | | | 24,580,373 | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Total | 21,731,572 | | $54.87 | | 26,554,538 |

[removed: Information appearing under “Director Independence”] [added: Party Transactions" and "—Director Independence"] in the [removed: 2017] [added: 2018] Proxy Statement is hereby incorporated by reference.

Information appearing under “Board and Committee Operations—Board and Corporate Governance—Review, Approval or Ratification of Transactions with Related Persons," "—Certain Business Relationships and Related

Information appearing under [removed: "Fees] [added: "Board and Committee Operations—Audit Committee—Fees] Paid to KPMG LLP" in the [removed: 2017] [added: 2018] Proxy Statement is hereby incorporated by reference.

| 3(a) | [removed: Restated] [added: [Restated] Articles of Incorporation of Emerson Electric [removed: Co.,] [added: Co.](http://www.sec.gov/Archives/edgar/data/32604/000003260401500011/articles2.htm),] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended March 31, 2001, File No. 1-278, Exhibit 3(a); [removed: Termination] [added: [Termination] of Designated Shares of Stock and Certificate of Designation, Preferences and Rights of Series B Junior Participating Preferred [removed: Stock,] [added: Stock](http://www.sec.gov/Archives/edgar/data/32604/0000032604-98-000016.txt),] incorporated by reference to Emerson Electric Co. 1998 Form 10-K, File No. 1-278, Exhibit 3(a). |

| 3(b) | [removed: Bylaws] [added: [Bylaws] of Emerson Electric [removed: Co.,] [added: Co.](http://www.sec.gov/Archives/edgar/data/32604/000114036117029789/ex3_1.htm),] as amended through [removed: October 6, 2016,] [added: August 1, 2017,] incorporated by reference to Emerson Electric Co. Form 8-K filed [removed: October 6, 2016,] [added: August 2, 2017,] Exhibit 3.1. |

| 4(a) | [removed: Indenture] [added: [Indenture] dated as of December 10, 1998, between Emerson Electric Co. and The Bank of New York, [removed: Trustee,] [added: Trustee](http://www.sec.gov/Archives/edgar/data/32604/0000032604-98-000016.txt),] incorporated by reference to Emerson Electric Co. 1998 Form 10-K, File No. 1-278, Exhibit 4(b). |

| 10(a)* | [removed: Third] [added: [Third] Amendment to the Emerson Electric Co. 1993 Incentive Shares Plan, as [removed: restated,] [added: restated](http://www.sec.gov/Archives/edgar/data/32604/0000032604-96-000015.txt),] incorporated by reference to Emerson Electric Co. 1996 Form 10-K, File No. 1-278, Exhibit 10(g), and [removed: Fourth] [added: [Fourth] Amendment [removed: thereto,] [added: thereto](http://www.sec.gov/Archives/edgar/data/32604/000003260401500032/ex10d.htm),] incorporated by reference to Emerson Electric Co. 2001 Form 10-K, File No. 1-278, Exhibit 10(d). |

| 10(b)* | [removed: Amended] [added: [Amended] and Restated Emerson Electric Co. Continuing Compensation Plan for Non-Management [removed: Directors,] [added: Directors](http://www.sec.gov/Archives/edgar/data/32604/000114420407063041/v094142_ex10c.htm),] incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(c). |

| 10(c)* | [removed: Amended] [added: [Amended] and Restated Deferred Compensation Plan for Non-Employee Directors and Forms of Payment Election Form, Initial Notice of Election and Notice of Election [removed: Change,] [added: Change](http://www.sec.gov/Archives/edgar/data/32604/000114420407063041/v094142_ex10d.htm),] incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(d). |

| 10(d)* | [removed: First] [added: [First] Amendment to the Emerson Electric Co. Supplemental Executive Retirement [removed: Plan,] [added: Plan](http://www.sec.gov/Archives/edgar/data/32604/000003260499000014/0000032604-99-000014.txt),] incorporated by reference to Emerson Electric Co. 1999 Form 10-K, File No. 1-278, Exhibit 10(h), and [removed: Form] [added: [Form] of Change of Control [removed: Election,] [added: Election](http://www.sec.gov/Archives/edgar/data/32604/000095013804000592/exh10-9.htm),] incorporated by reference to Emerson Electric Co. Form 8-K dated October 1, 2004, Exhibit 10.9 (applicable only with respect to benefits vested as of December 31, 2004). |

| 10(e)* | [removed: Amended] [added: [Amended] and Restated Emerson Electric Co. Pension Restoration Plan dated October 6, [removed: 2015,] [added: 2015](http://www.sec.gov/Archives/edgar/data/32604/000003260415000051/exhibit10e.htm),] incorporated by reference to Emerson Electric Co. 2015 Form 10-K, File No. 1-278, Exhibit 10(e); [removed: Forms] [added: [Forms] of Participation Award Letter, Acceptance of Award and Benefit Election Forms (applicable only with respect to benefits after January 1, [removed: 2005),] [added: 2005)](http://www.sec.gov/Archives/edgar/data/32604/000114420407063041/v094142_ex10f.htm),] incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(f); and Lump Sum Distribution Election Forms. |

| 10(f)* | [removed: Fifth] [added: [Fifth] Amendment to the Supplemental Executive Savings Investment [removed: Plan,] [added: Plan](http://www.sec.gov/Archives/edgar/data/32604/0000032604-99-000007.txt),] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended March 31, 1999, File No. 1-278, Exhibit 10(j), and [removed: Form] [added: [Form] of Participation Agreement and Form of Annual [removed: Election,] [added: Election](http://www.sec.gov/Archives/edgar/data/32604/000095013804000592/exh10-8.htm),] incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.8 (applicable only with respect to benefits vested as of December 31, 2004). |

| 10(g)* | [removed: Amended] [added: [Amended] and Restated Emerson Electric Co. Savings Investment Restoration Plan and Forms of Participation Agreement, Annual Election Form and Payment Election Form (applicable only with respect to benefits after January 1, [removed: 2005),] [added: 2005)](http://www.sec.gov/Archives/edgar/data/32604/000114420407063041/v094142_ex10h.htm),] incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(h), and [removed: First] [added: [First] Amendment to Emerson Electric Co. Savings Investment Restoration [removed: Plan,] [added: Plan](http://www.sec.gov/Archives/edgar/data/32604/000114420408026482/v112540_ex10-1.htm),] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended March 31, 2008, File No. 1-278, Exhibit 10.1. |

| 10(h)* | [removed: Amended] [added: [Amended] and Restated Emerson Electric Co. Annual Incentive Plan and Form of Acceptance of [removed: Award,] [added: Award](http://www.sec.gov/Archives/edgar/data/32604/000114420407063041/v094142_ex10i.htm),] incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(i). |

| 10(i)* | [removed: 1997] [added: [1997] Incentive Shares [removed: Plan,] [added: Plan](http://www.sec.gov/Archives/edgar/data/32604/0000950114-96-000333.txt),] incorporated by reference to Emerson Electric Co. 1997 Proxy Statement dated December 6, 1996, File No. 1-278, Exhibit A, and [removed: First] [added: [First] Amendment [removed: thereto,] [added: thereto](http://www.sec.gov/Archives/edgar/data/32604/000003260401500032/ex10j.htm),] incorporated by reference to Emerson Electric Co. 2001 Form 10-K, File No. 1-278, Exhibit 10(j), [removed: Amendment] [added: [Amendment] for 409A [removed: Compliance,] [added: Compliance](http://www.sec.gov/Archives/edgar/data/32604/000114420407063041/v094142_ex10j.htm),] incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(j), [removed: Form] [added: [Form] of Performance Share Award Certificate, Forms of Acceptance of Award and Change of Control [removed: Election,] [added: Election](http://www.sec.gov/Archives/edgar/data/32604/000095013804000592/exh10-5.htm),] incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.5, and [removed: Form] [added: [Form] of Restricted Shares Award [removed: Agreement,] [added: Agreement](http://www.sec.gov/Archives/edgar/data/32604/000095013804000592/exh10-6.htm),] incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.6. |

| 10(j)* | [removed: 1998] [added: [1998] Stock Option [removed: Plan,] [added: Plan](http://www.sec.gov/Archives/edgar/data/32604/0000950114-97-000522.txt),] incorporated by reference to Emerson Electric Co. 1998 Proxy Statement dated December 12, 1997, File No. 1-278, Appendix A, and [removed: Amendment] [added: [Amendment] No. 1 [removed: thereto,] [added: thereto](http://www.sec.gov/Archives/edgar/data/32604/000003260400000030/0000032604-00-000030-0006.txt),] incorporated by reference to Emerson Electric Co. 2000 Form 10-K, File No. 1-278, Exhibit 10(l), [removed: Form] [added: [Form] of Notice of Grant of Stock Options and Option Agreement and Form of Incentive Stock Option [removed: Agreement,] [added: Agreement](http://www.sec.gov/Archives/edgar/data/32604/000095013804000592/exh10-1.htm),] incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.1, and [removed: Form] [added: [Form] of Notice of Grant of Stock Options and Option Agreement and Form of Nonqualified Stock Option [removed: Agreement,] [added: Agreement](http://www.sec.gov/Archives/edgar/data/32604/000095013804000592/exh10-2.htm),] incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.2. |

| 10(k)* | [removed: 2001] [added: [2001] Stock Option [removed: Plan,] [added: Plan](http://www.sec.gov/Archives/edgar/data/32604/000106880001500321/emerson.txt),] incorporated by reference to Emerson Electric Co. 2002 Proxy Statement dated December 12, 2001, File No. 1-278, Appendix A, [removed: Form] [added: [Form] of Notice of Grant of Stock Options and Option Agreement and Form of Incentive Stock Option [removed: Agreement,] [added: Agreement](http://www.sec.gov/Archives/edgar/data/32604/000095013804000592/exh10-3.htm),] incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.3 (used on or prior to September 30, 2011), [removed: Forms] [added: [Forms] of Notice of Grant of Stock Options, Option Agreement and Incentive Stock Option [removed: Agreement,] [added: Agreement](http://www.sec.gov/Archives/edgar/data/32604/000114420412006547/v243548_ex10-1.htm),] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2011, File No. 1-278, Exhibit 10.1 (used after September 30, 2011), [removed: Form] [added: [Form] of Notice of Grant of Stock Options and Option Agreement and Form of Nonqualified Stock Option [removed: Agreement,] [added: Agreement](http://www.sec.gov/Archives/edgar/data/32604/000095013804000592/exh10-4.htm),] incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.4 (used on or prior to September 30, 2011), [removed: Forms] [added: [Forms] of Notice of Grant of Stock Options, Option Agreement and Nonqualified Stock Option [removed: Agreement,] [added: Agreement,](http://www.sec.gov/Archives/edgar/data/32604/000114420412006547/v243548_ex10-2.htm)] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2011, File No. 1-278, Exhibit 10.2 (used after September 30, 2011). |

| 10(l)* | [removed: Emerson] [added: [Emerson] Electric Co. Description of Split Dollar Life Insurance Program [removed: Transition,] [added: Transition](http://www.sec.gov/Archives/edgar/data/32604/000095013805000885/exh10-1.htm),] incorporated by reference to Emerson Electric Co. Form 8-K filed September 2, 2005, Exhibit 10.1. |

| 10(m)* | [removed: Amended] [added: [Amended] and Restated Restricted Stock Plan for Non-Management [removed: Directors,] [added: Directors](http://www.sec.gov/Archives/edgar/data/32604/000114420410005166/v172873_ex10-1.htm),] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2009, File No. 1-278, Exhibit 10.1, [removed: Form] [added: [Form] of Restricted Stock Award Letter under the Emerson Electric Co. Restricted Stock Plan for Non-Management [removed: Directors,] [added: Directors](http://www.sec.gov/Archives/edgar/data/32604/000095013805000060/exh10-2.htm),] incorporated by reference to Emerson Electric Co. Form 8-K filed February 1, 2005, Exhibit 10.2, and [removed: Form] [added: [Form] of Restricted Stock Unit Award Letter under the Emerson Electric Co. Restricted Stock Plan for Non-Management [removed: Directors,] [added: Directors](http://www.sec.gov/Archives/edgar/data/32604/000114420410005166/v172873_ex10-1.htm),] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2009, File No. 1-278, Exhibit 10.1. |

| 10(p)* | [removed: Emerson] [added: [Emerson] Electric Co. 2006 Incentive Shares [removed: Plan,] [added: Plan](http://www.sec.gov/Archives/edgar/data/32604/000106880005000769/emerprox.txt),] incorporated by reference to Emerson Electric Co. 2006 Proxy Statement dated December 16, 2005, Appendix C, [removed: Amendment] [added: [Amendment] for 409A [removed: Compliance,] [added: Compliance](http://www.sec.gov/Archives/edgar/data/32604/000114420407063041/v094142_ex10q.htm),] incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(q), [removed: Forms] [added: [Forms] of Performance Shares Award Certificate and Acceptance of Award (used on or prior to September 30, 2009) and Restricted Shares Award Agreement (used on or prior to September 30, [removed: 2011),] [added: 2011)](http://www.sec.gov/Archives/edgar/data/32604/000114420407063041/v094142_ex10q.htm),] incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(q), [removed: Amendment] [added: [Amendment] to Emerson Electric Co. 2006 Incentive Shares [removed: Plan,] [added: Plan](http://www.sec.gov/Archives/edgar/data/32604/000114420408044085/v121762_ex10-1.htm),] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended June 30, 2008, File No. 1-278, Exhibit 10.1, [removed: Forms] [added: [Forms] of Performance Shares Award Certificate, Acceptance of Award and 2010 Performance Shares Program Award [removed: Summary,] [added: Summary](http://www.sec.gov/Archives/edgar/data/32604/000114420410005166/v172873_ex10-2.htm),] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2009 (used after September 30, 2009 and on or prior to September 30, 2011), File No. 1-278, Exhibit 10.2, [removed: Forms] [added: [Forms] of Performance Shares Award Certificate and Acceptance of [removed: Award,] [added: Award](http://www.sec.gov/Archives/edgar/data/32604/000114420412006547/v243548_ex10-3.htm),] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2011, File No. 1-278, Exhibit 10.3 (used after September 30, 2011), and [removed: Form] [added: [Form] of Restricted Shares Award [removed: Agreement,] [added: Agreement](http://www.sec.gov/Archives/edgar/data/32604/000114420412006547/v243548_ex10-4.htm),] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2011, File No. 1-278, Exhibit 10.4 (used after September 30, 2011). |

| 10(q) | [removed: Credit] [added: [Credit] Agreement dated as of April 30, [removed: 2014,] [added: 2014](http://www.sec.gov/Archives/edgar/data/32604/000144530514001795/chi-2816838xv10xemerson_xx.htm),] incorporated by reference to Emerson Electric Co. Form 8-K filed May 2, 2014, Exhibit 10.1. |

| 10(r)* | [removed: 2011] [added: [2011] Stock Option [removed: Plan,] [added: Plan](http://www.sec.gov/Archives/edgar/data/32604/000095012310112771/c61168dfdef14a.htm),] incorporated by reference to Emerson Electric Co. 2011 Proxy Statement dated December 10, 2010, File No. 1-278, Appendix B, 2011 [removed: Stock] [added: [Stock] Option Plan as Amended and Restated effective October 1, [removed: 2012,] [added: 2012](http://www.sec.gov/Archives/edgar/data/32604/000003260412000012/exhibit10rfy12.htm),] incorporated by reference to Emerson Electric Co. 2012 Form 10-K, File No. 1-278, Exhibit 10(r), [removed: Forms] [added: [Forms] of Notice of Grant of Stock Options, Option Agreement and Incentive Stock Option Agreement under the 2011 Stock Option [removed: Plan,] [added: Plan](http://www.sec.gov/Archives/edgar/data/32604/000003260412000006/exhibit10-1.htm),] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended March 31, 2012, File No. 1-278, Exhibit 10.1 and [removed: Forms] [added: [Forms] of Notice of Grant of Stock Options, Option Agreement and Nonqualified Stock Option Agreement under the 2011 Stock Option [removed: Plan,] [added: Plan](http://www.sec.gov/Archives/edgar/data/32604/000003260412000006/exhibit10-2.htm),] incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended March 31, 2012, File No. 1-278, Exhibit 10.2. |

| 10(s)* | [removed: Emerson] [added: [Emerson] Electric Co. 2015 Incentive Shares [removed: Plan,] [added: Plan](http://www.sec.gov/Archives/edgar/data/32604/000003260414000052/emersonproxystatement2015a.htm#s499493357b434e7aaeb3614bfefa2de8),] incorporated by reference to Emerson Electric Co. 2015 Proxy Statement dated December 12, 2014, Appendix B, [removed: Forms] [added: [Forms] of Performance Shares Award Certificate and Acceptance of Award, [removed: 2016] Performance Shares Program Award Summary and Form of Restricted Shares Award [removed: Agreement,] [added: Agreement](http://www.sec.gov/Archives/edgar/data/32604/000003260415000051/exhibit10u.htm),] incorporated by reference to Emerson Electric Co. 2015 Form 10-K, File No. 1-278, Exhibit 10(u). |

| 10(t)* | [removed: Letter] [added: [Letter] Agreement effective as of January 15, 2014 between Emerson Electric Co. and Edgar M. [removed: Purvis,] [added: Purvis](http://www.sec.gov/Archives/edgar/data/32604/000003260415000051/exhibit10v.htm),] incorporated by reference to Emerson Electric Co. 2015 Form 10-K, File No. 1-278, Exhibit 10(v). |

| 10(u)* | [removed: Letter] [added: [Letter] Agreement dated December 7, 2015 by and between Emerson Electric Co. and Charles A. [removed: Peters,] [added: Peters](http://www.sec.gov/Archives/edgar/data/32604/000003260416000062/q1fy16exhibit101.htm),] incorporated by reference to Emerson Electric Co. form 10-Q for the quarter ended December 31, 2015, Exhibit 10.1. |

| 10(w) | [removed: Transaction] [added: [Transaction] Agreement dated as of July 29, 2016 among Emerson Electric Co., Cortes NP Holdings, LLC, Cortes NP Acquisition Corporation, ASCO Power Grp, LLC and Cortes NP JV Holdings, [removed: LLC.] [added: LLC](http://www.sec.gov/Archives/edgar/data/32604/000003260416000105/exhibit10w.htm), incorporated by reference to Emerson Electric Co. 2016 Form 10-K, File No. 1-278, Exhibit 10(w).] |

| 10(x) | [removed: Share] [added: [Share] Purchase Agreement by and between Emerson Electric Co. and Pentair plc dated August 18, [removed: 2016.] [added: 2016](http://www.sec.gov/Archives/edgar/data/32604/000003260416000105/exhibit10x.htm), incorporated by reference to Emerson Electric Co. 2016 Form 10-K, File No. 1-278, Exhibit 10(x).] |

| 23 | [removed: Consent] [added: [Consent] of Independent Registered Public Accounting [removed: Firm] [added: Firm](https://www.sec.gov/Archives/edgar/data/32604/000003260417000046/exhibit23fy17.htm)] |

| 31 | [removed: Certifications] [added: [Certifications] pursuant to Exchange Act Rule [removed: 13a-14(a)] [added: 13a-14(a)](https://www.sec.gov/Archives/edgar/data/32604/000003260417000046/exhibit31fy17.htm)] |

| 32 | [removed: Certifications] [added: [Certifications] pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. Section [removed: 1350] [added: 1350](https://www.sec.gov/Archives/edgar/data/32604/000003260417000046/exhibit32fy17.htm)] |

| 101 | Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Earnings for the years ended September 30, [removed: 2014, 2015] [added: 2015, 2016] and [removed: 2016,] [added: 2017,] (ii) Consolidated Statements of Comprehensive Income for the years ended September 30, [removed: 2014,] 2015, [added: 2016,] and [removed: 2016] [added: 2017] (iii) Consolidated Balance Sheets at September 30, [removed: 2015] [added: 2016] and [removed: 2016,] [added: 2017,] (iv) Consolidated Statements of Equity for the years ended September 30, [removed: 2014, 2015] [added: 2015, 2016] and [removed: 2016,] [added: 2017,] (v) Consolidated Statements of Cash Flows for the years ended September 30, [removed: 2014, 2015] [added: 2015, 2016] and [removed: 2016,] [added: 2017,] and (vi) Notes to Consolidated Financial Statements for the year ended September 30, [removed: 2016.] [added: 2017.] |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on November [removed: 16, 2016,] [added: 20, 2017,] by the following persons on behalf of the registrant and in the capacities indicated.

| 10(n)* | [Description of Non-Management Director Compensation, filed herewith](https://www.sec.gov/Archives/edgar/data/32604/000003260417000046/exhibit10nfy17.htm). |

| 10(o)* | [Description of Named Executive Officer Compensation, filed herewith.](https://www.sec.gov/Archives/edgar/data/32604/000003260417000046/exhibit10ofy17.htm) |

| 10(v)* | [Letter Agreement effective as of January 15, 2014 between Emerson Electric Co. and Steven J. Pelch](http://www.sec.gov/Archives/edgar/data/32604/000003260416000105/exhibit10v.htm), incorporated by reference to Emerson Electric Co. 2016 Form 10-K, File No. 1-278, Exhibit 10(v). |

| 12 | [Ratio of Earnings to Fixed Charges](https://www.sec.gov/Archives/edgar/data/32604/000003260417000046/exhibit12fy17.htm) |

| 21 | [Subsidiaries of Emerson Electric Co.](https://www.sec.gov/Archives/edgar/data/32604/000003260417000046/exhibit21fy17.htm) |

| 24 | [Power of Attorney](https://www.sec.gov/Archives/edgar/data/32604/000003260417000046/exhibit24fy17.htm) |

| 99.1 | [Description of Capital Stock](https://www.sec.gov/Archives/edgar/data/32604/000003260417000046/exhibit991fy17.htm) |

| | |

| --- | --- |

| | | November 20, 2017 | |

| G. A. Flach | | |

| 10(n)* | Description of Non-Management Director Compensation, incorporated by reference to Emerson Electric Co. 2012 Form 10-K, File No. 1-278, Exhibit 10(n). |

| 10(o)* | Description of Named Executive Officer Compensation, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2004, Exhibit 10.1. |

| 10(v)* | Letter Agreement effective as of January 15, 2014 between Emerson Electric Co. and Steven J. Pelch. |

| 12 | Ratio of Earnings to Fixed Charges |

| 21 | Subsidiaries of Emerson Electric Co. |

| 24 | Power of Attorney |

| | | November 16, 2016 | |

| W. R. Johnson | | |

INDEX TO EXHIBITS

Exhibits are listed by numbers corresponding to the Exhibit Table of Item 601 in Regulation S-K.

| | | | | |

| --- | --- | --- | --- | --- |

| Exhibit No. | | | Exhibit | |

| 10(v) | | | Letter Agreement effective as of January 15, 2014 between Emerson Electric Co. and Steven J. Pelch. | |

| 10(w) | | | Transaction Agreement dated as of July 29, 2016 among Emerson Electric Co., Cortes NP Holdings, LLC, Cortes NP Acquisition Corporation, ASCO Power Grp, LLC and Cortes NP JV Holdings, LLC. | |

| 10(x) | | | Share Purchase Agreement by and between Emerson Electric Co. and Pentair plc dated August 18, 2016. | |

| 12 | | | Ratio of Earnings to Fixed Charges | |

| 21 | | | Subsidiaries of Emerson Electric Co. | |

| 23 | | | Consent of Independent Registered Public Accounting Firm | |

| 24 | | | Power of Attorney | |

| 31 | | | Certifications pursuant to Exchange Act Rule 13a – 14(a) | |

| 32 | | | Certifications pursuant to Exchange Act Rule 13a – 14(b) and 18 U.S.C. Section 1350 | |

| 101 | | | Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Earnings for the years ended September 30, 2014, 2015 and 2016, (ii) Consolidated Statements of Comprehensive Income for the years ended September 30, 2014, 2015 and 2016, (iii) Consolidated Balance Sheets as of September 30, 2015 and 2016, (iv) Consolidated Statements of Equity for the years ended September 30, 2014, 2015 and 2016, (v) Consolidated Statements of Cash Flows for the years ended September 30, 2014, 2015 and 2016, and (vi) Notes to Consolidated Financial Statements for the year ended September 30, 2016. | |

See Item 15(A) 3.

for a list of exhibits incorporated by reference.