EMERSON ELECTRIC CO

Previous wording

For the second quarter of fiscal 2026, net sales were $4.6 billion, up 3 percent compared with the prior year. Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, were up 0.5 percent, including a negative 1 percent impact related to the conflict in the Middle East. The conflict remains dynamic and continuation or escalation of the conflict could adversely impact our business or results of operations in future periods. Foreign currency translation had a 2.5 percent favorable impact.

Current wording

For the third quarter of fiscal 2026, net sales were$4.9 billion, up 7 percent compared with the prior year. Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, were up 6 percent. Foreign currency translation had a 1 percent favorable impact.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Following is an analysis of the Company’s operating results for the second quarter ended March 31, 2026, compared with the second quarter ended March 31, 2025.

Current wording

Following is an analysis of the Company’s operating results for the third quarter ended June 30, 2026, compared with the third quarter ended June 30, 2025.

Previous wording

Net sales for the second quarter of fiscal 2026 were $4.6 billion, up 3 percent compared with 2025. Software and System sales were up 4 percent, Intelligent Devices sales were up 2 percent, and Safety & Productivity sales were up 5 percent. Underlying sales were up 0.5 percent on 3.5 percent higher price, offset by 3 percent lower volume due to a negative impact of 2 percent related to the timing of software renewals and 1 percent related to the conflict in the Middle East. Foreign currency translation had a 2.5 percent favorable impact. Underlying sales were up 9 percent in the U.S. and down 5 percent internationally. The Americas was up 5 percent, Europe was down 4 percent, and Asia, Middle East & Africa was down 5 percent (China down 9 percent).

Current wording

Net sales for the third quarter of fiscal 2026 were $4.9 billion, up 7 percent compared with 2025. Software & Systems sales were up 11 percent, Intelligent Devices sales were up 6 percent, and Safety & Productivity sales were up 3 percent. Underlying sales were up 6 percent on 3 percent higher volume and 3 percent higher price. Foreign currency translation had a 1 percent favorable impact. Underlying sales were up 10 percent in the U.S. and up 4 percent internationally. The Americas was up 8 percent, Europe was down 1 percent, and Asia, Middle East & Africa was up 8 percent (China down 3 percent).

Previous wording

In February 2026, the U.S. Supreme Court ruled that the International Emergency Power Act ("IEEPA"), which the U.S. administration had relied upon to impose certain tariffs, does not authorize the imposition of tariffs. Following this decision, the U.S. Court of International Trade directed U.S. Customs and Border Protection ("CBP") to implement a process for refunding IEEPA tariffs. On April 20, 2026, CBP launched an administrative portal through which eligible importers may submit claims for such refunds. The amount and timing of any tariff refunds Emerson may be eligible for remains uncertain and accordingly, the Company did not record a benefit related to potential refunds of IEEPA tariffs paid as of March 31, 2026.

Current wording

In February 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act ("IEEPA") does not authorize the imposition of tariffs. Subsequently, on April 20, 2026, U.S. Customs and Border Protection launched an administrative portal through which eligible importers could submit claims for refunds. During the three months ended June 30, 2026, the Company filed certain claims and received tariff refunds of $82 ($0.11 per share), and the benefit was recorded in Cost of sales. The timing and amount of any further tariff refunds remain uncertain, and, accordingly, no benefit was recognized as of June 30, 2026 for any additional potential refunds related to IEEPA tariffs previously paid.

Previous wording

Selling, general and administrative (SG&A) expenses of $1,316 increased $33 and SG&A as apercent of sales was 28.9 percent, consistent with the prior year.

Current wording

Selling, general and administrative (SG&A) expenses of $1,343 increased $77 and SG&A as a percent of sales was 27.6 percent, a decrease of 0.2 percentage points. SG&A as a percent of sales decreased due to leverage on higher sales and savings from cost reduction actions.

Previous wording

Pretax earnings of $793 increased $164, up 26 percent compared with the prior year, reflecting the impact of the AspenTech acquisition-related costs in the prior year discussed above. Earnings increased $5 in Software & Systems, $8 in Intelligent Devices, and $4 in Safety and Productivity. See the Business Segments discussion that follows and Note 15.

Current wording

Pretax earnings from continuing operations of $916 increased $182, up 25 percent compared with the prior year, reflecting strong operating results as well as the tariff refunds discussed above. Earnings increased $51 in Software & Systems and $55 in Intelligent Devices, and decreased $10 in Safety and Productivity. See the Business Segments discussion that follows and Note 15.

Previous wording

Income taxes were $175 in the second quarter of fiscal 2026 and $199 in 2025, resulting in effective tax rates of 22 percent and 32 percent, respectively. In the current year, the One Big Beautiful Bill Act (the "OBBBA") increased the effective tax rate by approximately 1 percentage point due to lower tax deduction for foreign derived intangible income from the change to domestic research and development in fiscal 2026. The Company expects the OBBBA to slightly benefit the effective tax rate beginning in fiscal 2027. Excluding the impact related to the OBBBA, the lower rate in the current year reflected favorable tax items that reduced the rate by approximately 2 percentage points. The prior year rate was negatively impacted by $49 ($0.09 per share) of discrete tax items related to the AspenTech transaction. In addition, the fees incurred by AspenTech were not fully deductible. In total, the net impact of these items increased the rate by 10 percentage points.

Current wording

Income taxes were $198 in the third quarter of fiscal 2026 and $154 in 2025, resulting in effective tax rates of 22 percent and 21 percent, respectively. In the current year, the One Big Beautiful Bill Act (the "OBBBA") increased the effective tax rate by approximately 1 percentage point due to lower tax deduction for foreign-derived intangible income from the change to domestic research and development in fiscal 2026. The Company expects the OBBBA to slightly benefit the effective tax rate beginning in fiscal 2027.

Previous wording

Earnings attributable to common stockholders were $618, up 27 percent, and diluted earnings per share were $1.10, up 28 percent compared with $0.86 in the prior year. Adjusted diluted earnings per share were $1.54 compared with $1.48 in the prior year. See the analysis above ofadjusted earnings per share for further details.

Current wording

Earnings from continuing operations attributable to common stockholders were $718, up 24 percent, and diluted earnings per share from continuing operations were $1.28, up 24 percent compared with $1.03 in the prior year. Adjusted diluted earnings per share from continuing operations were $1.71 compared with $1.52 in the prior year, up 13 percent. Overall, the increase in earnings per share reflected strong operating results. See the analysis above ofadjusted earnings per share for further details.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Software & Systems sales were $1,503 in the second quarterof 2026, an increase of $52, or 4 percent. Underlying sales were up 1 percent on 3 percent higher price, while volume decreased 2 percent including a 4.5 percent negative percent impact related to the timing of software renewals. Unde rlying sales increased 6 percent in the Americas, Europe decreased 5 percent, and Asia, Middle East & Africa was flat (China down 2 percent). Control Systems & Software sales decreased slightly and underlying sales decreased 2 percent, reflecting the negative impact related to the timing of software renewals, partially offset by strong demand in power and life sciences. Sales for Test & Measurement increased $56, or 16 percent, and underlying sales increased 12 percent in the second quarter, reflecting strength in aerospace & defense and semiconductor. Earnings for Software & Systems were $219, anincrease of $5, or 3 percent, while margin decreased slightly to 14.6 percent, reflecting the negative impact related to the timing of software renewals offset byleverage on higher Test & Measurement sales, lower intangibles amortization and savings from cost reduction actions. Adjusted EBITA margin was 29.2 percent, a decrease of 2.5 percentage points, which included a negative impact relating to the timing of software renewals of approximately 3 percentage points.

Current wording

Software & Systems sales were $1,644 in the third quarterof 2026, an increase of $164, or 11 percent. Underlying sales were up 11 percent on 7 percent higher volume and 4 percent higher price. Unde rlying sales increased 13 percent in the Americas and 16 percent in Asia, Middle East & Africa (China up 14 percent), while Europe decreased 1 percent. Control Systems & Software sales increased 7 percent, reflecting strong demand in power. Sales for Test & Measurement increased $85, or 23 percent, reflecting strength in semiconductor and aerospace & defense. Earnings for Software & Systems were $296, anincrease of $51, or 21 percent, while margin increased 1.4 percentage points to 18.0 percent, reflecting leverage on higher sales, lower intangibles amortization and savings from cost reduction actions. Adjusted EBITA margin was 31.8 percent, a decrease of 0.3 percentage points.

Previous wording

Intelligent Devices sales were $2,512 in the second quarter of 2026, an increase of $53, or 2 percent, compared to the prior year. Underlying sales decreased 1 percent on 4 percent lower volume, including a 2 percent negative impact related to the conflict in the Middle East, offset by 3 percent higher price. Underlying sales increased 5 percent in the Americas, while Europe decreased 4 percent and Asia, Middle East & Africa was down 7 percent (China down 13 percent). Sensors sales increased $24, or 2 percent, and underlying sales were flat, reflecting the negative impact related to the conflict in the Middle East offset by strong growth in the Americas. Final Control sales increased $29 or 2 percent, and underlying sales decreased 1 percent, reflecting the negative impact related to the conflict in the Middle East offset by solid growth in the Americas, including strength in power and LNG. Earnings for Intelligent Devices increased $8, or 1 percent, while margin decreased 0.3 percentage points reflecting unfavorable mix and deleverage on lower volume, partially offset by favorable price less net material inflation. Adjusted EBITA margin was 27.9 percent, an increase of 0.8 percentage points.

Current wording

Intelligent Devices sales were $2,677 in the third quarter of 2026, an increase of $142, or 6 percent, compared to the prior year. Underlying sales increased 5 percent on 3 percent higher price and 2 percent higher volume. Underlying sales increased 6 percent in the Americas and 5 percent in Asia, Middle East & Africa (China down 8 percent), while Europe was flat. Sensors sales increased $78, or 8 percent, and underlying sales increased 7 percent, reflecting strong growth in the Americas, including strength in power and LNG. Final Control sales increased $64 or 4 percent, and underlying sales increased 3 percent, reflecting strong growth in Asia, Middle East & Africa and solid growth in the Americas, with strength in power. Earnings for Intelligent Devices increased $55, or 9 percent, while margin increased 0.8 percentage points reflecting leverage on higher sales and favorable price less net material inflation, partially offset by unfavorable mix resulting from increased greenfield project activity and increased restructuring costs. Adjusted EBITA margin was 27.9 percent, an increase of 2.4 percentage points, reflecting strong operating results.

Previous wording

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

Current wording

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

Previous wording

Net sales for the first six months of 2026 were $8.9 billion, up 3 percent compared with 2025. Software & Systems sales were up 4 percent, Intelligent Device sales were up 3 percent, and Safety & Productivity sales were up 4 percent. Underlying sales were up 1 percent on 3 percent higher price, offset by 2 percent lower volume due to a negative impact of 1.5 percent related to the timing of software renewals and 0.5 percent related to the conflict in the Middle East. Foreign currency translation had a 2 percent favorable impact. Underlying sales increased 7 percent in the U.S. and decreased 3 percent internationally. The Americas was up 4 percent, Europe was down 1 percent and Asia, Middle East & Africa was down 3 percent (China was down 7 percent).

Current wording

Net sales for the first nine months of 2026 were $13.8 billion, up 5 percent compared with 2025. Software & Systems sales were up 7 percent, Intelligent Devices sales were up 4 percent, and Safety & Productivity sales were up 3 percent. Underlying sales were up 3 percent on 3 percent higher price, while volume was negatively impacted by approximately 1.5 percent related to the timing of software renewals and the conflict in the Middle East. Foreign currency translation had a 2 percent favorable impact. Underlying sales increased 8 percent in the U.S. and decreased 1 percent internationally. The Americas was up 6 percent, Europe was down 1 percent and Asia, Middle East & Africa was up 1 percent (China was down 5 percent).

Previous wording

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

Current wording

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

Previous wording

Other deductions, net were $434 in 2026, a decrease of $212 compared with the prior year, due to a $155 decrease in acquisition/divestiture fees and related costs primarily associated with the AspenTech acquisition in the prior year and lower amortization due to backlog amortization of $52 in the prior year related to the AspenTech acquisition.

Current wording

Other deductions, net were $744 in 2026, a decrease of $200 compared with the prior year, due to a $175 decrease in acquisition/divestiture fees and related costs primarily associated with the AspenTech acquisition in the prior year and lower amortization due to backlog amortization of $65 in the prior year related to the AspenTech acquisition.

Previous wording

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

Current wording

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

Previous wording

Income taxes were $344 in the first six months of fiscal 2026 and $382 in 2025, resulting in effective tax rates of 22 percent and 27 percent, respectively. In the current year, the One Big Beautiful Bill Act (the "OBBBA") increased the effective tax rate by approximately 1 percentage point due to lower tax deduction for foreign derived intangible income from the change to domestic research and development in fiscal 2026. The Company expects the OBBBA to slightly benefit the effective tax rate beginning in fiscal 2027. Excluding the impact related to the OBBBA, the lower rate in the current year reflected favorable tax items that reduced the rate by approximately 2 percentage points. The prior year rate was negatively impacted by $49 ($0.09 per share) of discrete tax items related to the AspenTech transaction. In addition, the fees incurred by AspenTech were not fully deductible. Overall, these items increasedthe current year rate by approximately 5 percentage points.

Current wording

Income taxes were $542 in the first nine months of fiscal 2026 and $536 in 2025, resulting in effective tax rates of 22 percent and 25 percent, respectively. In the current year, the One Big Beautiful Bill Act (the "OBBBA") increased the effective tax rate by approximately 1 percentage point due to lower tax deduction for foreign-derived intangible income from the change to domestic research and development in fiscal 2026. The Company expects the OBBBA to slightly benefit the effective tax rate beginning in fiscal 2027. Excluding the impact related to the OBBBA, the lower rate in the current year reflected favorable tax items that reduced the rate by approximately 2 percentage points. The prior year rate was negatively impacted by $49 ($0.09 per share) of discrete tax items related to the AspenTech transaction. In addition, the fees incurred by AspenTech were not fully deductible. Overall, these items increased the prior year rate by approximately 3 percentage points.

Previous wording

Earnings attributable to common stockholders were $1,223, up 14 percent compared with the prior year, and diluted earnings per share were $2.17, up 15 percent compared with $1.88 in 2025. Adjusted diluted earnings per share were $3.00 compared with $2.86 in the prior year, reflecting strong operating results. See the analysis below ofadjusted earnings per share for further details.

Current wording

Earnings from continuing operations attributable to common stockholders were $1,941, up 18 percent compared with the prior year, and diluted earnings per share from continuing operations were $3.45, up 19 percent compared with $2.91 in 2025. Adjusted diluted earnings per share from continuing operations were $4.71 compared with $4.38 in the prior year, up 8 percent. Overall, the increase in earnings per share reflected strong operating results. See the analysis below of adjusted earnings per share for further details.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

Software & Systems sales were $2,956 in the first six months of 2026, an increase of 4 percent compared to the prior year. Underlying sales increased 2 percent on 3 percent higher price while volume decreased 1 percent including a negative 4 percent impact related to the timing of software renewals. Underlying sales increased 4 percent in the Americas, Europe decreased 1 percent, and Asia, Middle East & Africa increased 2 percent (China was flat). Control Systems & Software sales increased $17, or 1 percent, and underlying sales decreased 1 percent reflectingthe negative impact related to the timing of software renewals, partially offset by strong demand in power and life sciences. Sales for Test & Measurement increased $106, or 15 percent, and underlying sales increased 12 percent, reflecting strength in aerospace & defense and semiconductor. Earnings for Software & Systems were $466, an increase of $59, or 14 percent, and margin increased 1.4 percentage points, reflecting leverage on higher sales, lower intangibles amortization and savings from cost reduction actions. Adjusted EBITA margin was 30.2 percent, a decrease of 1.2 percentage points, which included a negative impact relating to the timing of software renewals of approximately 2.5 percentage points.

Current wording

Software & Systems sales were $4,600 in the first nine months of 2026, an increase of 7 percent compared to the prior year. Underlying sales increased 5 percent on 3 percent higher price and 2 percent higher volume (despite a negative 3 percent impact related to the timing of software renewals). Underlying sales increased 7 percent in the Americas, Europe decreased 1 percent, and Asia, Middle East & Africa increased 7 percent (China was up 4 percent). Control Systems & Software sales increased $97, or 3 percent, and underlying sales increased 2 percent reflecting strong demand in power and life sciences, partially offset bythe negative impact related to the timing of software renewals. Sales for Test & Measurement increased $191, or 18 percent, and underlying sales increased 15 percent, reflecting strength in aerospace & defense and semiconductor. Earnings for Software & Systems were $762, an increase of $109, or 17 percent, and margin increased 1.4 percentage points, reflecting leverage on higher sales, savings from cost reduction actions and lower intangibles amortization, partially offset by the negative impact related to the timing of software renewals. Adjusted EBITA margin was 30.8 percent, a decrease of 0.9 percentage points, which included a negative impact relating to the timing of software renewals of approximately 2 percentage points.

Previous wording

Intelligent Devices sales were $4,902 in the first six months of 2026, an increase of $137, or 3 percent compared to the prior year. Underlying sales were up slightly on 3 percent higher price offset by 3 percent lower volume, including a 1 percent negative impact related to the conflict in the Middle East. Underlying sales increased 5 percent in the Americas, decreased 1 percent in Europe, and decreased 5 percent in Asia, Middle East & Africa (China down 10 percent). Sensor sales increased $48, or 2 percent, and underlying sales increased slightly, reflecting solid growth in the Americas. Final Control sales increased $89, or 3 percent, and underlying sales increased slightly, reflecting solid growth in the Americas, with strength in power and LNG. Earnings for Intelligent Devices increased $15, up 1 percent percent, while margin decreased 0.4 percentage points, reflecting unfavorable mix, unfavorable foreign currency transaction comparisons and deleverage on lower volume, partially offset by favorable price less net material inflation. Adjusted EBITA margin increased 0.1 percentage points.

Current wording

Intelligent Devices sales were $7,580 in the first nine months of 2026, an increase of $279, or 4 percent compared to the prior year. Underlying sales increased 2 percent on 3 percent higher price partially offset by 1 percent lower volume, including a 0.5 percent negative impact related to the conflict in the Middle East. Underlying sales increased 5 percent in the Americas, decreased 1 percent in Europe, and decreased 2 percent in Asia, Middle East & Africa (China down 10 percent). Sensors sales increased $125, or 4 percent, and underlying sales increased 2 percent, reflecting solid growth in the Americas, with strength in power and LNG. Final Control sales increased $154, or 4 percent, and underlying sales increased 2 percent, reflecting solid growth in the Americas, with strength in power. Earnings for Intelligent Devices increased $71, up 4 percent, while margin was flat, reflecting favorable price less net material inflation and savings from cost reduction actions, offset by increased restructuring costs and unfavorable mix. Adjusted EBITA margin increased 0.9 percentage points.

Previous wording

Safety & Productivity sales were $1,050 in the first six months of 2026, an increase of $40, or 4 percent compared to the prior year. Underlying sales were up 2 percent on 5 percent higher price offset by 3 percent lower volume. Underlying sales increased 4 percent in the Americas, Europe decreased 4 percent and Asia, Middle East & Africa decreased 3 percent. Earnings for Safety & Productivity increased $2, or 2 percent, while margin decreased 0.4 percentage points, reflecting deleverage on lower volume, offset by higher price less net material inflation and the impact of tariffs, and savings from cost reduction actions. Adjusted EBITA margin decreased 0.3 percentage points.

Current wording

Safety & Productivity sales were $1,601 in the first nine months of 2026, an increase of $53, or 3 percent compared to the prior year. Underlying sales were up 2 percent on 5 percent higher price offset by 3 percent lower volume. Underlying sales increased 4 percent in the Americas, Europe decreased 5 percent and Asia, Middle East & Africa decreased 1 percent. Earnings for Safety & Productivity decreased $7, or 2 percent, while margin decreased 1.1 percentage points, reflecting increased restructuring costs and deleverage on lower volume, offset by favorable price less net material inflation and savings from cost reduction actions. Adjusted EBITA margin increased 0.1 percentage points.

Previous wording

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

Current wording

Key elements of the Company's financial condition as of and forthe nine months ended June 30, 2026 as compared to the year ended September 30, 2025 and the nine months ended June 30, 2025 follow.

Previous wording

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

Current wording

Operating working capital increased $251 compared to September 30, 2025, primarily reflecting an increase in inventory. The current ratio remained flat compared to September 30, 2025. The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 8.2X for the 12 months ended June 30, 2026 compares to 9.6X for the 12 months ended June 30, 2025. The decrease reflects higher interest expense compared to the prior year.

Previous wording

Operating cash flow from continuing operations for the first six months of fiscal 2026 was $1,478, a decrease of $125 compared with $1,603 in the prior year, reflecting an increase in operating working capital, partially offset by higher earnings. Free cash flow of $1,296 in the first six months of fiscal 2026 (operating cash flow of $1,478 less capital expenditures of $182) decreased $137 compared to free cash flow of $1,433 in 2025 (operating cash flow of $1,603 less capital expenditures of $170), reflecting the decrease in operating cash flow. Cash used in investing activities was $206. Cash used in financing activities was $1,013, reflecting share repurchases of $542 and dividends. During the first quarter, the Company repaid €500 of 1.25% euro notes that matured in October 2025.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

For fiscal year 2026, consolidated net sales are expected to be up approximately 4.5 percent, with underlying sales up approximately 3 percent, excluding a 1.5 percent favorable impact from foreign currency translation. Earnings per share are expected to be $4.79 to $4.89, while adjusted earnings per share are expected to be $6.45 to $6.55 (see the following reconciliation).

Current wording

For fiscal year 2026, consolidated net sales are expected to be up approximately 5 percent, with underlying sales up approximately 3.5 percent, excluding a 1.5 percent favorable impact from foreign currency translation. Earnings per share are expected to be approximately $4.89, while adjusted earnings per share are expected to be approximately $6.55 (see the following reconciliation).

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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