10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from ____________________ to __________________

Commission file number 1-278

EMERSON ELECTRIC CO.

(Exact name of registrant as specified in its charter)

Missouri			43-0259330
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
8000 W. Florissant Ave.
P.O. Box 4100
St. Louis,	Missouri		63136
(Address of principal executive offices)			(Zip Code)

Registrant's telephone number, including area code: (314) 553-2000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock of $0.50 par value per share	EMR	New York Stock Exchange
		NYSE Chicago
0.375% Notes due 2024	EMR 24	New York Stock Exchange
1.250% Notes due 2025	EMR 25A	New York Stock Exchange
2.000% Notes due 2029	EMR 29	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer		☒	Accelerated filer	☐
Non-accelerated filer	☐		Smaller reporting company		☐
			Emerging growth company		☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. Common stock of $0.50 par value per share outstanding at June 30, 2021: 597.8 million shares.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Statements of Earnings

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three and nine months ended June 30, 2020 and 2021

(Dollars in millions, except per share amounts; unaudited)

 

	Three Months Ended June 30,			Nine Months Ended June 30,
	2020		2021	2020	2021
Net sales	$	3,914	4,697	12,227	13,289
Costs and expenses:
Cost of sales	2,296		2,715	7,100	7,722
Selling, general and administrative expenses	934		1,073	3,040	3,125
Other deductions, net	181		88	401	243
Interest expense (net of interest income of $4, $3, $16 and $9, respectively)	45		37	116	115
Earnings before income taxes	458		784	1,570	2,084
Income taxes	51		151	310	431
Net earnings	407		633	1,260	1,653
Less: Noncontrolling interests in earnings of subsidiaries	8		6	18	20
Net earnings common stockholders	$	399	627	1,242	1,633
Basic earnings per share common stockholders	$	0.67	1.05	2.05	2.73
Diluted earnings per share common stockholders	$	0.67	1.04	2.04	2.71

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Comprehensive Income

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three and nine months ended June 30, 2020 and 2021

(Dollars in millions; unaudited)

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2021
Net earnings		$	407	633		1,260	1,653
Other comprehensive income (loss), net of tax:
Foreign currency translation		134		(5)		(48)	163
Pension and postretirement		29		27		87	81
Cash flow hedges		40		(6)		(16)	26
Total other comprehensive income (loss)		203		16		23	270
Comprehensive income		610		649		1,283	1,923
Less: Noncontrolling interests in comprehensive income of subsidiaries		7		7		18	20
Comprehensive income common stockholders		$	603	642		1,265	1,903

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Balance Sheets

EMERSON ELECTRIC CO. & SUBSIDIARIES

(Dollars and shares in millions, except per share amounts; unaudited)

	Sept 30, 2020		June 30, 2021
ASSETS
Current assets
Cash and equivalents	$	3,315	2,860
Receivables, less allowances of $138 and $124, respectively	2,802		2,754
Inventories	1,928		2,114
Other current assets	761		1,038
Total current assets	8,806		8,766
Property, plant and equipment, net	3,688		3,664
Other assets
Goodwill	6,734		7,777
Other intangible assets	2,468		2,993
Other	1,186		1,284
Total other assets	10,388		12,054
Total assets	$	22,882	24,484
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings and current maturities of long-term debt	$	1,160	1,478
Accounts payable	1,715		1,966
Accrued expenses	2,910		3,226
Total current liabilities	5,785		6,670
Long-term debt	6,326		5,835
Other liabilities	2,324		2,640
Equity
Common stock, $0.50 par value; authorized, 1,200.0 shares; issued, 953.4 shares; outstanding, 598.0 shares and 597.8 shares, respectively	477		477
Additional paid-in-capital	470		518
Retained earnings	24,955		25,678
Accumulated other comprehensive income (loss)	(1,577)		(1,307)
Cost of common stock in treasury, 355.4 shares and 355.6 shares, respectively	(15,920)		(16,075)
Common stockholders’ equity	8,405		9,291
Noncontrolling interests in subsidiaries	42		48
Total equity	8,447		9,339
Total liabilities and equity	$	22,882	24,484

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Equity

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three and nine months ended June 30, 2020 and 2021

(Dollars in millions; unaudited)

	Three Months Ended June 30,			Nine Months Ended June 30,
	2020		2021	2020	2021
Common stock	$	477	477	477	477
Additional paid-in-capital
Beginning balance	453		511	393	470
Stock plans	6		7	66	48
Ending balance	459		518	459	518
Retained earnings
Beginning balance	24,431		25,354	24,199	24,955
Net earnings common stockholders	399		627	1,242	1,633
Dividends paid (per share: $0.50, $0.505, $1.50 and $1.515,    respectively)	(299)		(303)	(910)	(909)
Adoption of accounting standard	—		—	—	(1)
Ending balance	24,531		25,678	24,531	25,678
Accumulated other comprehensive income (loss)
Beginning balance	(1,903)		(1,322)	(1,722)	(1,577)
Foreign currency translation	135		(6)	(48)	163
Pension and postretirement	29		27	87	81
Cash flow hedges	40		(6)	(16)	26
Ending balance	(1,699)		(1,307)	(1,699)	(1,307)
Treasury stock
Beginning balance	(15,941)		(15,890)	(15,114)	(15,920)
Purchases	—		(193)	(942)	(275)
Issued under stock plans	4		8	119	120
Ending balance	(15,937)		(16,075)	(15,937)	(16,075)
Common stockholders' equity	7,831		9,291	7,831	9,291
Noncontrolling interests in subsidiaries
Beginning balance	46		50	40	42
Net earnings	8		6	18	20
Other comprehensive income	(1)		1	—	—
Dividends paid	(6)		(9)	(11)	(14)
Ending balance	47		48	47	48
Total equity	$	7,878	9,339	7,878	9,339

See accompanying Notes to Consolidated Financial Statements.

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Consolidated Statements of Cash Flows

EMERSON ELECTRIC CO. & SUBSIDIARIES

Nine Months Ended June 30, 2020 and 2021

(Dollars in millions; unaudited)

	Nine Months Ended
	June 30,
	2020		2021
Operating activities
Net earnings	$	1,260	1,653
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	631		720
Stock compensation	69		191
Pension expense	50		23
Changes in operating working capital	(86)		246
Other, net	(70)		(113)
Cash provided by operating activities	1,854		2,720
Investing activities
Capital expenditures	(329)		(350)
Purchases of businesses, net of cash and equivalents acquired	(114)		(1,611)
Other, net	(65)		53
Cash used in investing activities	(508)		(1,908)
Financing activities
Net increase in short-term borrowings	269		31
Proceeds from short-term borrowings greater than three months	546		71
Payments of short-term borrowings greater than three months	(340)		—
Proceeds from long-term debt	1,488		—
Payments of long-term debt	(502)		(305)
Dividends paid	(910)		(909)
Purchases of common stock	(942)		(268)
Other, net	28		89
Cash used in financing activities	(363)		(1,291)
Effect of exchange rate changes on cash and equivalents	(27)		24
Increase (Decrease) in cash and equivalents	956		(455)
Beginning cash and equivalents	1,494		3,315
Ending cash and equivalents	$	2,450	2,860
Changes in operating working capital
Receivables	$	456	76
Inventories	(218)		(160)
Other current assets	40		(69)
Accounts payable	(439)		216
Accrued expenses	75		183
Total changes in operating working capital	$	(86)	246

See accompanying Notes to Consolidated Financial Statements.

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Notes to Consolidated Financial Statements

EMERSON ELECTRIC CO. & SUBSIDIARIES

(Dollars and shares in millions, except per share amounts or where noted)

(1) BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary for a fair presentation of operating results for the interim periods presented. Adjustments consist of normal and recurring accruals. The consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required for annual financial statements presented in conformity with U.S. generally accepted accounting principles (GAAP). For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2020. Certain prior year amounts have been reclassified to conform to current year presentation - see Note 12.

Effective October 1, 2020, the Company adopted two accounting standard updates and one new accounting standard which had an immaterial impact on the Company's financial statements as of and for the nine months ended June 30, 2021. These included:

•Updates to ASC 350, Intangibles - Goodwill and Other, which eliminate the requirement to measure impairment based on the implied fair value of goodwill compared to the carrying amount of a reporting unit’s goodwill. Instead, goodwill impairment will be measured as the excess of a reporting unit’s carrying amount over its estimated fair value.

•Updates to ASC 350, Intangibles - Goodwill and Other, which align the requirements for capitalizing implementation costs incurred in a software hosting arrangement with the requirements for costs incurred to develop or obtain internal-use software.

•Adoption of ASC 326, Financial Instruments - Credit Losses, which amends the impairment model by requiring entities to use a forward-looking approach to estimate lifetime expected credit losses on certain types of financial instruments, including trade receivables.

(2) REVENUE RECOGNITION

Emerson is a global manufacturer that combines technology and engineering to provide innovative solutions to its customers, largely in the form of tangible products. The vast majority of the Company's revenues relate to a broad offering of manufactured products which are recognized at the point in time when control transfers, while a smaller portion is recognized over time or relates to sales arrangements with multiple performance obligations. See Note 12 for additional information about the Company's revenues.

The following table summarizes the balances of the Company's unbilled receivables (contract assets), which are reported in Other current assets, and its customer advances (contract liabilities), which are reported in Accrued expenses.     

	Sept 30, 2020			June 30, 2021
Unbilled receivables (contract assets)		$	458		500
Customer advances (contract liabilities)		(583)			(774)
Net contract liabilities		$	(125)		(274)

The majority of the Company's contract balances relate to arrangements where revenue is recognized over time and payments from customers are made according to a contractual billing schedule. The increase in net contract liabilities was due to customer billings which exceeded revenue recognized for performance completed during the period. Revenue recognized for the three and nine months ended June 30, 2021 included $53 and $415 that was included in the beginning contract liability balance. Other factors that impacted the change in net contract liabilities were immaterial. Revenue recognized for the three and nine months ended June 30, 2021 for performance obligations that

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were satisfied in previous periods, including cumulative catchup adjustments on the Company's long-term contracts, was not material.

As of June 30, 2021, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately $6.6 billion. The Company expects to recognize approximately 80 percent of its remaining performance obligations as revenue over the next 12 months, with the remainder substantially over the subsequent two years thereafter.     

(3) WEIGHTED-AVERAGE COMMON SHARES

Reconciliations of weighted-average shares for basic and diluted earnings per common share follow. Earnings allocated to participating securities were inconsequential.

	Three Months Ended June 30,		Nine Months Ended June 30,
	2020	2021	2020	2021
Basic shares outstanding	596.9	598.2	604.8	598.7
Dilutive shares	3.1	3.9	3.6	3.6
Diluted shares outstanding	600.0	602.1	608.4	602.3

(4) ACQUISITIONS AND DIVESTITURES

On October 1, 2020, the Company completed the acquisition of Open Systems International, Inc. (OSI), a leading operations technology software provider in the global power industry, for approximately $1.6 billion, net of cash acquired. This business, which has annual sales of approximately $170 and is reported in the Automation Solutions segment, expands the Company's offerings in the power industry to include the digitization and modernization of the electric grid. The Company recognized goodwill of $960 (none of which is expected to be tax deductible), identifiable intangible assets of $783, primarily intellectual property and customer relationships with a weighted-average useful life of approximately 11 years, and deferred tax liabilities of approximately $185. Results of operations for the three months ended June 30, 2021 included first-year pretax acquisition accounting charges related to backlog amortization and deferred revenue of $7 and $3, respectively, while year-to-date results included $24 and $11, respectively.

On November 17, 2020, the Company acquired the remaining interest of an equity investment for approximately $19, net of cash acquired.

The Company acquired three businesses in fiscal 2020, two in the Automation Solutions segment and one in the Climate Technologies segment, for $126, net of cash acquired.

As previously disclosed, the Company sold its network power systems business (rebranded as Vertiv, now a publicly traded company, symbol VRT) in 2017 and retained a subordinated interest contingent upon the equity holders first receiving a threshold return on their initial investment. As of August 4, 2021, the equity holders have received a return on their investment substantially up to the threshold. Based on the terms of the agreement and the current calculation, the Company could receive approximately $600 on a pretax basis through periodic distributions over the next two years. However, the distributions are contingent on the timing and price at which Vertiv shares are sold by the equity holders and therefore, there can be no assurance as to the amount or timing of the distributions to the Company. As of June 30, 2021, no amounts have been recognized in the financial statements related to this gain contingency.

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(5) PENSION & POSTRETIREMENT PLANS

Total periodic pension and postretirement (income) expense is summarized below:

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2021
Service cost		$	21	21		65	63
Interest cost		40		32		120	96
Expected return on plan assets		(84)		(84)		(252)	(252)
Net amortization		38		35		113	105
Total		$	15	4		46	12

(6) OTHER DEDUCTIONS, NET

Other deductions, net are summarized below:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2020			2021		2020	2021
Amortization of intangibles (intellectual property and customer relationships)		$	60	71		178	223
Restructuring costs		88		28		216	111
Special advisory fees		—		—		13	—
Other		33		(11)		(6)	(91)
Total		$	181	88		401	243

The increase in intangibles amortization for the three and nine months ended June 30, 2021 was due to the OSI acquisition, including backlog amortization of $7 and $24, respectively. The change in Other for the third quarter of fiscal 2021 included a favorable impact from foreign currency transactions of $25 due to losses in the prior year and a favorable impact from pensions. For the nine months ended June 30, 2021, the change in Other reflects a favorable impact from pensions and investment-related gains, including gains in the first quarter of fiscal 2021 of $21 from an investment sale and $17 from the acquisition of the remaining interest of an equity investment, and a gain in the second quarter of $31 from the sale of an equity investment.

(7) RESTRUCTURING COSTS

Restructuring expense reflects costs associated with the Company’s ongoing efforts to improve operational efficiency and deploy assets globally in order to remain competitive on a worldwide basis. Costs incurred in the first nine months of fiscal 2021 relate to the Company's initiatives that began in the third quarter of fiscal 2019 to improve operating margins and were increased in response to the effects of the COVID-19 pandemic on demand for the Company's products. Expenses incurred in the first nine months of fiscal 2021 included costs related to workforce reductions of approximately 1,900 employees. The Company expects fiscal 2021 restructuring expense and related costs to be approximately $200, including costs to complete actions initiated in the first nine months of the year.

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Restructuring expense by business segment follows:

	Three Months Ended June 30,					Nine Months Ended June 30,
	2020			2021		2020		2021
Automation Solutions		$	76		18		182		94
Climate Technologies		5			4		14		8
Tools & Home Products		4			2		12		4
Commercial & Residential Solutions		9			6		26		12
Corporate		3			4		8		5
Total		$	88		28		216		111

Details of the change in the liability for restructuring costs during the nine months ended June 30, 2021 follow:

	Sept 30, 2020			Expense		Utilized/Paid		June 30, 2021
Severance and benefits		$	176		87		95		168
Other		5			24		22		7
Total		$	181		111		117		175

The tables above do not include $6 and $4 of costs related to restructuring actions incurred for the three months ended June 30, 2020 and 2021, respectively, that are required to be reported in cost of sales and selling, general and administrative expenses; year-to-date amounts are $15 and $11, respectively.

(8) TAXES

Income taxes were $151 in the third quarter of fiscal 2021 and $51 in 2020, resulting in effective tax rates of 19 percent and 11 percent, respectively. The current year rate included $24 of favorable net discrete tax items which decreased the rate 3 percentage points. The prior year rate included $57 of discrete benefits, which decreased the rate 12 percentage points, related to updates to estimates for the prior year U.S. income tax return and the impact of a research and development tax credit study.

Income taxes were $431 for the first nine months of 2021 and $310 for 2020, resulting in effective tax rates of 21 percent and 20 percent, respectively. The current year and prior year rates included favorable net discrete items which reduced the rates 1 percentage point and 3 percentage points, respectively.

On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic, and among other things, provides tax relief to businesses. Tax provisions of the CARES Act include the deferral of certain payroll taxes, relief for retaining employees, and other provisions. The Company deferred $73 of certain payroll taxes through the end of calendar year 2020, half of which is due in December 2021 with the remainder due in December 2022.

(9) OTHER FINANCIAL INFORMATION

	Sept 30, 2020			June 30, 2021
Inventories
Finished products		$	584		666
Raw materials and work in process		1,344			1,448
Total		$	1,928		2,114

Property, plant and equipment, net
Property, plant and equipment, at cost	$	9,055	9,318
Less: Accumulated depreciation	5,367		5,654
Total	$	3,688	3,664

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	Sept 30, 2020		June 30, 2021
Goodwill by business segment
Automation Solutions	$	5,583	6,594
Climate Technologies	730		757
Tools & Home Products	421		426
Commercial & Residential Solutions	1,151		1,183
Total	$	6,734	7,777

Other intangible assets
Gross carrying amount	$	5,106	5,971
Less: Accumulated amortization	2,638		2,978
Net carrying amount	$	2,468	2,993

Other intangible assets include customer relationships, net, of $1,328 and $1,554 as of September 30, 2020 and June 30, 2021, respectively. The increases in goodwill and other intangible assets reflect the acquisition of OSI. See Note 4.

Other assets include the following:
Operating lease right-of-use assets	$	508	503
Pension assets	265		415
Deferred income taxes	99		110
Asbestos-related insurance receivables	100		96

Accrued expenses include the following:
Customer advances (contract liabilities)	$	583	774
Employee compensation	577		629
Product warranty	148		155
Operating lease liabilities (current)	148		151

Other liabilities include the following:
Pension and postretirement liabilities	$	769	781
Deferred income taxes	261		555
Operating lease liabilities (noncurrent)	373		366
Asbestos litigation	295		267

The increase in deferred income taxes is largely due to the OSI acquisition.

(10) FINANCIAL INSTRUMENTS

Following is a discussion regarding the Company’s use of financial instruments:

Hedging Activities – As of June 30, 2021, the notional amount of foreign currency hedge positions was approximately $1.9 billion, and commodity hedge contracts totaled approximately $139 (primarily 42 million pounds of copper and aluminum). All derivatives receiving hedge accounting are cash flow hedges. The majority of hedging gains and losses deferred as of June 30, 2021 are expected to be recognized over the next 12 months as the underlying forecasted transactions occur. Gains and losses on foreign currency derivatives reported in Other deductions, net reflect hedges of balance sheet exposures that do not receive hedge accounting.

Net Investment Hedge – In fiscal 2019, the Company issued euro-denominated debt of €1.5 billion. The euro notes reduce foreign currency risk associated with the Company's international subsidiaries that use the euro as their functional currency and have been designated as a hedge of a portion of the investment in these operations. Foreign currency gains or losses associated with the euro-denominated debt are deferred in accumulated other comprehensive income (loss) and will remain until the hedged investment is sold or substantially liquidated.

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The following gains and losses are included in earnings and other comprehensive income (OCI) for the three and nine months ended June 30, 2021 and 2020:

		Into Earnings					Into OCI
		3rd Quarter			Nine Months		3rd Quarter		Nine Months
Gains (Losses)	Location	2020		2021	2020	2021	2020	2021	2020	2021
Commodity	Cost of sales	$	(4)	13	(8)	24	17	8	1	34
Foreign currency	Sales	(2)		—	(5)	2	6	—	1	3
Foreign currency	Cost of sales	(3)		3	8	5	21	1	(28)	28
Foreign currency	Other deductions, net	(26)		8	(5)	33
Net Investment Hedges
Euro denominated debt							(72)	6	(41)	(21)
Total		$	(35)	24	(10)	64	(28)	15	(67)	44

Regardless of whether derivatives and non-derivative financial instruments receive hedge accounting, the Company expects hedging gains or losses to be offset by losses or gains on the related underlying exposures. The amounts ultimately recognized will differ from those presented above for open positions, which remain subject to ongoing market price fluctuations until settlement. Derivatives receiving hedge accounting are highly effective and no amounts were excluded from the assessment of hedge effectiveness.

Fair Value Measurement – Valuations for all derivatives and the Company's long-term debt fall within Level 2 of the GAAP valuation hierarchy. As of June 30, 2021, the fair value of long-term debt was $6.9 billion, which exceeded the carrying value by $526. The fair values of commodity and foreign currency contracts were reported in Other current assets and Accrued expenses and did not materially change since September 30, 2020.

Counterparties to derivatives arrangements are companies with investment-grade credit ratings. The Company has bilateral collateral arrangements with counterparties with credit rating-based posting thresholds that vary depending on the arrangement. If credit ratings on the Company's debt fall below pre-established levels, counterparties can require immediate full collateralization of all derivatives in net liability positions. The maximum amount that could potentially have been required was immaterial. The Company also can demand full collateralization of derivatives in net asset positions should any counterparty credit ratings fall below certain thresholds. No collateral was posted with counterparties and none was held by the Company as of June 30, 2021.

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(11) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Activity in Accumulated other comprehensive income (loss) for the three and nine months ended June 30, 2021 and 2020 is shown below, net of income taxes:  

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2021
Foreign currency translation
Beginning balance		$	(977)	(542)		(794)	(711)
Other comprehensive income (loss), net of tax of $17, $(1), $10 and $5, respectively		135		(6)		(48)	163
Ending balance		(842)		(548)		(842)	(548)
Pension and postretirement
Beginning balance		(870)		(810)		(928)	(864)
Amortization of deferred actuarial losses into earnings, net of tax of $(9), $(8), $(26) and $(24), respectively		29		27		87	81
Ending balance		(841)		(783)		(841)	(783)
Cash flow hedges
Beginning balance		(56)		30		—	(2)
Deferral of gains (losses) arising during the period, net of tax of $(11), $(2), $6 and $(15), respectively		33		7		(20)	50
Reclassification of realized (gains) losses to sales and cost of sales, net of tax of $(2), $3, $(1) and $7, respectively		7		(13)		4	(24)
Ending balance		(16)		24		(16)	24
Accumulated other comprehensive income (loss)		$	(1,699)	(1,307)		(1,699)	(1,307)

(12) BUSINESS SEGMENTS

Summarized information about the Company's results of operations by business segment follows:

	Three Months Ended June 30,					Nine Months Ended June 30,
	Sales			Earnings		Sales		Earnings
	2020		2021	2020	2021	2020	2021	2020	2021
Automation Solutions	$	2,589	2,947	311	521	8,150	8,432	1,012	1,353
Climate Technologies	970		1,268	195	274	2,869	3,459	563	731
Tools & Home Products	357		489	58	101	1,219	1,419	233	311
Commercial & Residential Solutions	1,327		1,757	253	375	4,088	4,878	796	1,042
Stock compensation				(51)	(66)			(69)	(191)
Unallocated pension and postretirement costs				12	24			37	71
Corporate and other				(22)	(33)			(90)	(76)
Eliminations/Interest	(2)		(7)	(45)	(37)	(11)	(21)	(116)	(115)
Total	$	3,914	4,697	458	784	12,227	13,289	1,570	2,084

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In fiscal 2021, the Company reclassified certain software product sales that were previously reported in Measurement and Analytical Instrumentation to Systems & Software (previously described as Process Control Systems & Solutions). Automation Solutions sales by major product offering are summarized below, including the reclassification of prior year amounts to reflect this change.

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2021
Measurement & Analytical Instrumentation		$	709	781		2,280	2,211
Valves, Actuators & Regulators		842		880		2,609	2,522
Industrial Solutions		469		593		1,470	1,656
Systems & Software		569		693		1,791	2,043
Automation Solutions		$	2,589	2,947		8,150	8,432

Depreciation and amortization (includes intellectual property, customer relationships and capitalized software) by business segment are summarized below:

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2020
Automation Solutions		$	137	152		414	464
Climate Technologies		44		48		133	144
Tools & Home Products		20		20		58	59
Commercial & Residential Solutions		64		68		191	203
Corporate and other		8		17		26	53
Total		$	209	237		631	720

Sales by geographic destination are summarized below:

	Three Months Ended June 30,
	2020				2021
	Automation Solutions		Commercial & Residential Solutions	Total	Automation Solutions	Commercial & Residential Solutions	Total
Americas	$	1,159	915	2,074	1,321	1,190	2,511
Asia, Middle East & Africa	893		253	1,146	1,011	331	1,342
Europe	537		159	696	615	236	851
Total	$	2,589	1,327	3,916	2,947	1,757	4,704
	Nine Months Ended June 30,
	2020				2021
	Automation Solutions		Commercial & Residential Solutions	Total	Automation Solutions	Commercial & Residential Solutions	Total
Americas	$	3,915	2,815	6,730	3,711	3,290	7,001
Asia, Middle East & Africa	2,619		765	3,384	2,907	944	3,851
Europe	1,616		508	2,124	1,814	644	2,458
Total	$	8,150	4,088	12,238	8,432	4,878	13,310

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Items 2 and 3.

Management's Discussion and Analysis of Financial Condition and Results of Operations 

(Dollars are in millions, except per share amounts or where noted)

OVERVIEW

For the third quarter of fiscal 2021, net sales were $4.7 billion, up 20 percent compared with the prior year, supported by foreign currency translation which added 4 percent and the Open Systems International, Inc. (OSI) acquisition which added 1 percent. Underlying sales, which exclude foreign currency translation, acquisitions and divestitures, were up 15 percent. Automation Solutions underlying sales were up high single digits, as all businesses turned positive and all geographies were up mid-to-high single digits. Commercial & Residential Solutions underlying sales were up sharply, reflecting strong growth across all businesses and geographies including robust demand in North American residential markets and global cold chain markets. Both business platforms also benefited from the impact of COVID-19 on prior year comparisons.

Net earnings common stockholders were $627, up 57 percent, and diluted earnings per share were $1.04, up 55 percent compared with $0.67 in the prior year. Operating results increased $0.33 per share, reflecting higher sales and strong segment margins due to significant savings from the Company's restructuring and cost reset actions. Third quarter results also benefited from lower restructuring costs ($0.09 per share) and favorable foreign currency translation ($0.06), offset by a higher tax rate compared to the prior year ($0.10 per share) and first year acquisition accounting charges related to the OSI acquisition ($0.01 per share).

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30

Following is an analysis of the Company’s operating results for the third quarter ended June 30, 2021, compared with the third quarter ended June 30, 2020.

	2020			2021		Change
Net sales	$	3,914		4,697		20	%
Gross profit	$	1,618		1,982		23	%
Percent of sales	41.3		%	42.2	%
SG&A	$	934		1,073		15	%
Percent of sales	23.8		%	22.9	%
Other deductions, net	$	181		88
Amortization of intangibles	$	60		71
Restructuring costs	$	88		28
Interest expense, net	$	45		37
Earnings before income taxes	$	458		784		71	%
Percent of sales	11.7		%	16.7	%
Net earnings common stockholders	$	399		627		57	%
Percent of sales	10.2		%	13.3	%
Diluted earnings per share	$	0.67		1.04		55	%

Net sales for the third quarter of fiscal 2021 were $4.7 billion, up 20 percent compared with 2020. Automation Solutions sales were up 14 percent and Commercial & Residential Solutions sales were up 32 percent. Underlying sales were up 15 percent, as foreign currency translation added 4 percent and the OSI acquisition added 1 percent. Underlying sales were up 18 percent in the U.S. and up 13 percent internationally. The Americas was up 18 percent, Europe was up 13 percent and Asia, Middle East & Africa was up 11 percent (China up 7 percent).

Cost of sales for the third quarter of fiscal 2021 were $2,715, an increase of $419 compared with 2020, due to higher sales volume, the impact of foreign currency translation and the OSI acquisition. Gross margin of 42.2 percent

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increased 0.9 percentage points compared with the prior year reflecting leverage on higher sales volume, partially offset by unfavorable price-cost in Commercial & Residential Solutions.

Selling, general and administrative (SG&A) expenses of $1,073 increased $139 compared with the prior year on increased sales volume and higher stock and other performance-based compensation expense. SG&A as a percent of sales decreased 0.9 percentage points to 22.9 percent reflecting savings from the Company's restructuring and cost reset actions.

Other deductions, net were $88 in 2021, a decrease of $93 compared with the prior year, reflecting lower restructuring costs of $60, a favorable impact from foreign currency transactions of $25 due to losses in the prior year, and a favorable impact from pensions, partially offset by higher intangibles amortization of $11, primarily related to the OSI acquisition. See Notes 6 and 7.

Pretax earnings of $784 increased $326, up 71 percent compared with the prior year. Earnings increased $210 in Automation Solutions and $122 in Commercial & Residential Solutions, while costs reported at Corporate increased $14. See the Business Segments discussion that follows and Note 12.

Income taxes were $151 for 2021 and $51 for 2020, resulting in effective tax rates of 19 percent and 11 percent, respectively. The current year rate included $24 of favorable net discrete tax items which decreased the rate 3 percentage points, while the prior year rate included $57 of discrete benefits which decreased the rate 12 percentage points.

Net earnings common stockholders in the third quarter of fiscal 2021 were $627, up 57 percent, compared with $399 in the prior year, and earnings per share were $1.04, up 55 percent, compared with $0.67 in the prior year. See discussion in the Overview above for further details.

Business Segments

Following is an analysis of operating results for the Company’s business segments for the third quarter ended June 30, 2021, compared with the third quarter ended June 30, 2020. The Company defines segment earnings as earnings before interest and taxes. See Note 12 for a discussion of the Company's business segments.

AUTOMATION SOLUTIONS

Three Months Ended June 30	2020			2021		Change
Sales	$	2,589		2,947		14	%
Earnings	$	311		521		67	%
Margin	12.0		%	17.7	%

Sales by Major Product Offering
Measurement & Analytical Instrumentation	$	709	781	10	%
Valves, Actuators & Regulators	842		880	5	%
Industrial Solutions	469		593	26	%
Systems & Software	569		693	22	%
Total	$	2,589	2,947	14	%

Automation Solutions sales were $2.9 billion in the third quarter, an increase of $358 or 14 percent. Underlying sales increased 8 percent on 7 percent higher volume and 1 percent higher price, reflecting recovery in global markets from the impacts of COVID-19. Foreign currency translation had a 4 percent favorable impact and the OSI acquisition had a 2 percent favorable impact. Underlying sales turned positive and increased 9 percent in the Americas (U.S. up 9 percent), as process end markets recovered, while Europe increased 6 percent and Asia, Middle East & Africa increased 7 percent (China up 5 percent). Sales for Measurement & Analytical Instrumentation increased $72, or 10 percent, and Valves, Actuators & Regulators increased $38, or 5 percent, as market conditions continued to improve for North American process industries. Measurement & Analytical sales were strong in Asia, Middle East & Africa, while demand in Europe for both businesses was soft. Industrial Solutions sales were up $124, or 26 percent, reflecting strong global demand in discrete end markets. Systems & Software increased $124, or 22 percent, on strength in process end markets in North America and Europe and solid growth in Asia, Middle East & Africa, while power end markets were strong in North America, and the OSI acquisition added $51. Earnings were $521, an increase of $210, or 67 percent, and margin increased 5.7 percentage points to 17.7 percent, reflecting leverage on

15

higher volume, lower restructuring expenses which benefited margins 2.5 percentage points, savings from cost reduction actions and favorable price-cost.

COMMERCIAL & RESIDENTIAL SOLUTIONS

Three Months Ended June 30	2020			2021		Change
Sales:
Climate Technologies	$	970		1,268		31	%
Tools & Home Products	357			489		37	%
Total	$	1,327		1,757		32	%
Earnings:
Climate Technologies	$	195		274		40	%
Tools & Home Products	58			101		74	%
Total	$	253		375		48	%
Margin	19.1		%	21.3	%

Commercial & Residential Solutions sales were $1.8 billion in the third quarter, up $430, or 32 percent compared to the prior year. Underlying sales increased 29 percent due to strong growth across all businesses and geographies while foreign currency translation added 3 percent. Results also benefited from comparisons to prior year results which were negatively impacted by COVID-19. Overall, underlying sales increased 29 percent in the Americas (U.S. up 28 percent), 37 percent in Europe and 25 percent in Asia, Middle East & Africa (China up 15 percent). Climate Technologies sales were $1.3 billion in the third quarter, an increase of $298, or 31 percent. Air conditioning and heating sales were up 20 percent and cold chain sales were up over 40 percent, reflecting strong global demand across all end markets, especially food service, food retail and aftermarket. Tools & Home Products sales were $489 in the third quarter, an increase of $132, or 37 percent. Sales of wet/dry vacuums were robust in part due to competitor outages, while professional tools and food waste disposers were up sharply. Earnings were $375, up 48 percent compared with the prior year, and margin increased 2.2 percentage points to 21.3 percent due to leverage on higher sales volume and savings from cost reduction actions, partially offset by unfavorable price-cost.

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RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JUNE 30

Following is an analysis of the Company’s operating results for the nine months ended June 30, 2021, compared with the nine months ended June 30, 2020.

	2020			2021		Change
Net sales	$	12,227		13,289		9	%
Gross profit	$	5,127		5,567		9	%
Percent of sales	41.9		%	41.9	%
SG&A	$	3,040		3,125		3	%
Percent of sales	24.8		%	23.5	%
Other deductions, net	$	401		243
Amortization of intangibles	$	178		223
Restructuring costs	$	216		111
Interest expense, net	$	116		115
Earnings before income taxes	$	1,570		2,084		33	%
Percent of sales	12.8		%	15.7	%
Net earnings common stockholders	$	1,242		1,633		31	%
Percent of sales	10.2		%	12.3	%
Diluted earnings per share	$	2.04		2.71		33	%

Net sales for the first nine months of 2021 were $13.3 billion, up 9 percent compared with 2020. Automation Solutions sales were up 3 percent while Commercial & Residential Solutions sales were up 19 percent. Underlying sales were up 5 percent, as foreign currency translation added 3 percent and acquisitions added 1 percent. Underlying sales increased 1 percent in the U.S. and increased 8 percent internationally. The Americas was up 2 percent, Europe was up 8 percent and Asia, Middle East & Africa was up 9 percent (China up 16 percent).

Cost of sales for 2021 were $7,722, an increase of $622 versus $7,100 in 2020, primarily due to the impact of higher sales volume in Commercial & Residential Solutions, foreign currency translation, and the OSI acquisition. Gross margin was 41.9 percent, flat compared to the prior year, as leverage on higher sales volume was offset by unfavorable mix and unfavorable price-cost in Commercial & Residential Solutions.

SG&A expenses of $3,125 increased $85 compared with the prior year on higher stock compensation expense, as well as increased sales volume. SG&A as a percent of sales decreased 1.3 percentage points to 23.5 percent, reflecting significant savings from the Company's restructuring and cost reset actions, partially offset by higher stock compensation expense of $122 (0.8 percentage points) due to a higher share price in the current year.

Other deductions, net were $243 in 2021, a decrease of $158 compared with the prior year, reflecting lower restructuring costs of $105, investment-related gains, including gains in the first quarter of fiscal 2021 of $21 from an investment sale and $17 from the acquisition of the remaining interest of an equity investment, and a gain in the second quarter of $31 from the sale of an equity investment, and a favorable impact from pensions. These items were partially offset by higher intangibles amortization of $45, primarily related to the OSI acquisition. See Notes 6 and 7.

Pretax earnings of $2,084 increased $514, or 33 percent. Earnings increased $341 in Automation Solutions and $246 in Commercial & Residential Solutions. Costs reported at Corporate increased $74, reflecting higher stock compensation expense of $122 and first year acquisition accounting charges and fees related to the OSI acquisition of $41, partially offset by the investment-related gains discussed above and lower unallocated pension and postretirement costs which decreased by $34. See the Business Segments discussion that follows and Note 12.

Income taxes were $431 for 2021 and $310 for 2020, resulting in effective tax rates of 21 percent and 20 percent, respectively. The current year and prior year rates included favorable net discrete items which reduced the rates 1 percentage point and 3 percentage points, respectively.

17

Net earnings common stockholders in 2021 were $1,633, up 31 percent compared with the prior year, and earnings per share were $2.71, up 33 percent compared with $2.04 in 2020. Operating results increased $0.54 per share, reflecting significant savings from the Company's restructuring and cost reset actions and leverage on higher sales volume in Commercial & Residential Solutions. Lower restructuring and advisory fees ($0.16 per share), favorable foreign currency translation ($0.05 per share), lower pension expense ($0.03 per share) and share repurchases ($0.02 per share) also benefited operating results, while higher stock compensation expense deducted $0.15 per share and a higher tax rate deducted $0.03 per share. The Company recognized several investment-related gains in the current year ($0.10 per share), while first year acquisition accounting charges and fees related to the OSI acquisition deducted $0.05 per share.

Business Segments

Following is an analysis of operating results for the Company’s business segments for the nine months ended June 30, 2021, compared with the nine months ended June 30, 2020. The Company defines segment earnings as earnings before interest and taxes.

 AUTOMATION SOLUTIONS

Nine Months Ended June 30	2020			2021		Change
Sales	$	8,150		8,432		3	%
Earnings	$	1,012		1,353		34	%
Margin	12.4		%	16.0	%

Sales by Major Product Offering
Measurement & Analytical Instrumentation	$	2,280	2,211	(3)	%
Valves, Actuators & Regulators	2,609		2,522	(3)	%
Industrial Solutions	1,470		1,656	13	%
Systems & Software	1,791		2,043	14	%
Total	$	8,150	8,432	3	%

Automation Solutions sales were $8.4 billion in the first nine months of 2021, an increase of $282, or 3 percent. Underlying sales decreased 1 percent as lower volume was partially offset by slightly higher price. Foreign currency translation had a 3 percent favorable impact and the OSI acquisition added 1 percent. Underlying sales decreased 9 percent in the Americas, while Europe increased 5 percent and Asia, Middle East & Africa was up 6 percent (China up 14 percent). Sales for Measurement & Analytical Instrumentation decreased $69, or 3 percent, as process industries were weak in the first half of the year, but have improved sequentially as markets continue to recover from the impacts of COVID-19. Valves, Actuators & Regulators decreased $87, or 3 percent, reflecting slower demand in most end markets, particularly in North America and Europe, partially offset by strength in Asia. Industrial Solutions sales increased $186, or 13 percent, on strong growth in Europe and robust growth in China, while North American discrete end markets were down slightly but continued to improve sequentially. Systems & Software increased $252, or 14 percent, reflecting the impact of the OSI acquisition which added $141. Process end markets were strong in Europe and had solid growth in Asia while North America declined. Power end markets were solid in North America, partially offset by softness in Asia. Earnings were $1,353, an increase of $341, or 34 percent, and margin increased 3.6 percentage points to 16.0 percent, as significant savings from cost reduction actions and favorable price-cost more than offset unfavorable mix, while lower restructuring expense benefited margins 1.3 percentage points.

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COMMERCIAL & RESIDENTIAL SOLUTIONS

Nine Months Ended June 30	2020			2021		Change
Sales:
Climate Technologies	$	2,869		3,459		21	%
Tools & Home Products	1,219			1,419		16	%
Total	$	4,088		4,878		19	%
Earnings:
Climate Technologies	$	563		731		30	%
Tools & Home Products	233			311		34	%
Total	$	796		1,042		31	%
Margin	19.5		%	21.4	%

Commercial & Residential Solutions sales were $4.9 billion in the first nine months of 2021, an increase of $790, or 19 percent compared to the prior year. Underlying sales were up 17 percent due to strong global demand while foreign currency translation added 2 percent. Overall, underlying sales increased 17 percent in the Americas, 17 percent in Europe and 18 percent in Asia, Middle East & Africa (China up 22 percent). Climate Technologies sales were $3.5 billion in the first nine months of 2021, an increase of $590, or 21 percent. Air conditioning and heating sales were up mid-teens, reflecting strong demand for residential-oriented products and solutions in North America and robust growth in Europe and China. Cold chain sales were up over 20 percent, driven by favorable global market conditions and strength in food retail and aftermarket. Tools & Home Products sales were $1.4 billion in the first nine months of 2021, up $200, or 16 percent. Sales of wet/dry vacuums were robust in part due to competitor outages, while sales were strong for food waste disposers and global professional tools, partially due to easier comparisons in the third quarter. Earnings were $1,042, up 31 percent compared to the prior year, and margin increased 1.9 percentage points, reflecting leverage on higher volume and savings from cost reduction actions, partially offset by unfavorable price-cost and mix.

FINANCIAL CONDITION

Key elements of the Company's financial condition for the nine months ended June 30, 2021 as compared to the year ended September 30, 2020 and the nine months ended June 30, 2020 follow.

	June 30, 2020			Sept 30, 2020			June 30, 2021
Operating working capital	$	1,169		$	866		$	714
Current ratio	1.3			1.5			1.3
Total debt-to-total capital	48.0		%	47.1		%	44.0		%
Net debt-to-net capital	37.9		%	33.2		%	32.4		%
Interest coverage ratio	12.9		X	14.4		X	17.8		X

The Company's operating working capital decreased $455 compared to the same quarter last year largely due to timing-related reductions reflecting current business conditions. The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 17.8X for the first nine months of fiscal 2021 compares to 12.9X for the nine months ended June 30, 2020. The increase reflects higher pretax earnings in the current year.

Operating cash flow for the first nine months of fiscal 2021 was $2.7 billion, an increase of $866 compared with $1.9 billion in the prior year due to higher earnings and favorable operating working capital. Free cash flow of $2.4 billion in the first nine months of fiscal 2021 (operating cash flow of $2.7 billion less capital expenditures of $350) increased $845 compared to free cash flow of $1.5 billion in 2020 (operating cash flow of $1.9 billion less capital expenditures of $329), reflecting the increase in operating cash flow. Cash used for investing activities was $1.9 billion largely due to the OSI acquisition. Cash used for financing activities was $1.3 billion, primarily due to dividends and share repurchases.

On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic, and among other things, provides tax relief to businesses. Tax provisions of the CARES Act include the deferral of certain payroll taxes, relief for retaining employees, and other provisions. The Company deferred $73 of certain payroll taxes through the end of calendar year 2020, half of which is due in December 2021 with the remainder due in December 2022.

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Emerson maintains a conservative financial structure to provide the strength and flexibility necessary to achieve our strategic objectives and has been successful in efficiently deploying cash where needed worldwide to fund operations, complete acquisitions and sustain long-term growth. Emerson is in a strong financial position, with total assets of $24 billion and stockholders' equity of $9 billion, and has the resources available for reinvestment in existing businesses, strategic acquisitions and managing its capital structure on a short- and long-term basis.

FISCAL 2021 OUTLOOK

The Company delivered strong financial performance in the quarter, despite pandemic and operating-related challenges, including material costs, availability, logistics, and labor constraints. Overall, the Company expects continued improvement in industrial and commercial demand over the remainder of 2021. Operational, supply chain, and materials inflation is expected to remain challenging through the remainder of the fiscal year. For the full year, consolidated net sales are expected to be up 9 to 10 percent, with underlying sales up 5 to 6 percent excluding a 3 percent favorable impact from foreign currency translation and a 1 percent favorable impact from the OSI acquisition. Automation Solutions net sales are expected to be up 5 to 6 percent, with underlying sales flat to up 1 percent excluding a 3 percent favorable impact from foreign currency translation and a 2 percent favorable impact from the OSI acquisition. Commercial & Residential Solutions net sales are expected to be up 17 to 18 percent, with underlying sales up 15 to 16 percent excluding a 2 percent impact from favorable foreign currency translation. Earnings per share are expected to be $3.78 to $3.80, while adjusted earnings per share, which exclude a $0.24 per share impact from restructuring actions, a $0.07 per share impact from OSI first year acquisition accounting charges and fees, and a $0.03 per share equity investment gain, are expected to be $4.06 to $4.08. Operating cash flow is expected to be approximately $3.6 billion and free cash flow, which excludes targeted capital spending of $600 million, is expected to be approximately $3.0 billion. Fiscal 2021 share repurchases are expected to be in the amount of $500 million. However, future developments related to COVID-19, including further actions taken by governmental authorities, potential shutdowns of our operations, or delays in the stabilization and recovery of economic conditions could further adversely affect our operations and financial results, as well as those of our customers and suppliers. See Item 1A – “Risk Factors” in our Annual Report on Form 10-K.

Statements in this report that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties, and Emerson undertakes no obligation to update any such statements to reflect later developments. These risks and uncertainties include the scope, duration and ultimate impact of the COVID-19 pandemic, as well as economic and currency conditions, market demand, including related to the pandemic and oil and gas price declines and volatility, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, 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, 2020 and in subsequent reports filed with the SEC, which are hereby incorporated by reference.

The United Kingdom's (UK) withdrawal from the European Union (EU), commonly known as "Brexit", was completed on January 31, 2020. Negotiations over the terms of trade and other laws and regulations took place during 2020 and an agreement between the EU and the UK was reached on December 24, 2020, which included zero tariffs and quotas on goods. The Company's net sales in the UK are principally in the Automation Solutions segment and represent less than two percent of consolidated sales. While there could be certain incremental costs for logistics and other items, the Company expects any impact of these items will be immaterial.

Item 4. Controls and Procedures 

The Company maintains a system of disclosure controls and procedures designed to ensure that information required to be disclosed in its reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported in a timely manner. This system also is designed to ensure information is accumulated and communicated to management, including the Company's certifying officers, to allow timely decisions regarding required disclosure. Based on an evaluation performed, the certifying officers have concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report.

Notwithstanding the foregoing, there can be no assurance that the Company's disclosure controls and procedures will detect or uncover all failures of persons within the Company and its consolidated subsidiaries to report material information otherwise required to be set forth in the Company's reports.

There was no change in the Company's internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c) Issuer Purchases of Equity Securities (shares in 000s).

Period	Total Number of Shares Purchased		Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 2021		803	$91.52		803	63,756
May 2021		467	$93.14		467	63,289
June 2021		801	$95.96		801	62,488
Total		2,071	$93.60		2,071	62,488

In November 2015, the Board of Directors authorized the purchase of up to 70 million shares. In March 2020, the Board of Directors authorized the purchase of an additional 60 million shares and a total of approximately 62.5 million shares remain available for purchase under the authorizations.

Item 6. Exhibits

(a) Exhibits (Listed by numbers corresponding to the Exhibit Table of Item 601 in Regulation S-K). 

3	Bylaws of Emerson Electric Co., as amended through May 4, 2021, incorporated by reference to the Company's Form 8-K dated May 4, 2021, filed on May 4, 2021, File No. 1-278, Exhibit 3.1.
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 iXBRL (Inline Extensible Business Reporting Language): (i) Consolidated Statements of Earnings for the three and nine months ended June 30, 2021 and 2020, (ii) Consolidated Statements of Comprehensive Income for the three and nine months ended June 30, 2021 and 2020, (iii) Consolidated Balance Sheets as of September 30, 2020 and June 30, 2021, (iv) Consolidated Statements of Equity for the three and nine months ended June 30, 2021 and 2020, (v) Consolidated Statements of Cash Flows for the nine months ended June 30, 2021 and 2020, and (vi) Notes to Consolidated Financial Statements for the three and nine months ended ended June 30, 2021 and 2020.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

EMERSON ELECTRIC CO.
By	/s/ Frank J. Dellaquila
	Frank J. Dellaquila
	Senior Executive Vice President and Chief Financial Officer
	(on behalf of the registrant and as Chief Financial Officer)
	August 4, 2021

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EX-31

Exhibit 31

Certification

I, S. L. Karsanbhai, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Emerson Electric Co.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ S. L. Karsanbhai

S. L. Karsanbhai

President and

Chief Executive Officer

Emerson Electric Co.

August 4, 2021

Certification

I, F. J. Dellaquila, certify that:

1.  I have reviewed this quarterly report on Form 10-Q of Emerson Electric Co.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors: 

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and 

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ F. J. Dellaquila

F. J. Dellaquila

Senior Executive Vice President and

Chief Financial Officer

Emerson Electric Co.

August 4, 2021

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

EXCHANGE ACT RULE 13a-14(b) AND

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Emerson Electric Co. (the "Company") on Form 10-Q for the period ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, S. L. Karsanbhai, certify, to the best of my knowledge, pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ S. L. Karsanbhai

S. L. Karsanbhai

President and

Chief Executive Officer

Emerson Electric Co.

August 4, 2021

CERTIFICATION PURSUANT TO

EXCHANGE ACT RULE 13a-14(b) AND

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Emerson Electric Co. (the "Company") on Form 10-Q for the period ended June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, F. J. Dellaquila, certify, to the best of my knowledge, pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ F. J. Dellaquila

F. J. Dellaquila

Senior Executive Vice President and

Chief Financial Officer

Emerson Electric Co.

August 4, 2021

XML

Cover	9 Months Ended
	Jun. 30, 2021 shares
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Document Transition Report	false
Entity File Number	1-278
Entity Registrant Name	EMERSON ELECTRIC CO.
Entity Central Index Key	0000032604
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Entity Incorporation, State or Country Code	MO
Entity Tax Identification Number	43-0259330
Entity Address, Address Line One	8000 W. Florissant Ave.
Entity Address, Address Line Two	P.O. Box 4100
Entity Address, City or Town	St. Louis,
Entity Address, State or Province	MO
Entity Address, Postal Zip Code	63136
City Area Code	314
Local Phone Number	553-2000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	597,800,000
Amendment Flag	false
NEW YORK STOCK EXCHANGE, INC. [Member] | Common Stock of $0.50 par value per share [Member]
Entity Information [Line Items]
Title of 12(b) Security	Common Stock of $0.50 par value per share
Trading Symbol	EMR
Security Exchange Name	NYSE
NEW YORK STOCK EXCHANGE, INC. [Member] | 0.375% Notes due 2024 [Member]
Entity Information [Line Items]
Title of 12(b) Security	0.375% Notes due 2024
Trading Symbol	EMR 24
Security Exchange Name	NYSE
NEW YORK STOCK EXCHANGE, INC. [Member] | 1.250% Notes due 2025 [Member]
Entity Information [Line Items]
Title of 12(b) Security	1.250% Notes due 2025
Trading Symbol	EMR 25A
Security Exchange Name	NYSE
NEW YORK STOCK EXCHANGE, INC. [Member] | 2.000% Notes due 2029 [Member]
Entity Information [Line Items]
Title of 12(b) Security	2.000% Notes due 2029
Trading Symbol	EMR 29
Security Exchange Name	NYSE
CHICAGO STOCK EXCHANGE, INC [Member] | Common Stock of $0.50 par value per share [Member]
Entity Information [Line Items]
Title of 12(b) Security	Common Stock of $0.50 par value per share
Trading Symbol	EMR
Security Exchange Name	CHX

XML

Consolidated Statements Of Earnings - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Net sales	$ 4,697	$ 3,914	$ 13,289	$ 12,227
Costs and expenses:
Cost of sales	2,715	2,296	7,722	7,100
Selling, general and administrative expenses	1,073	934	3,125	3,040
Other deductions, net	88	181	243	401
Interest expense (net of interest income of $3, $4, $9 and $16, respectively)	37	45	115	116
Earnings before income taxes	784	458	2,084	1,570
Income taxes	151	51	431	310
Net earnings	633	407	1,653	1,260
Less: Noncontrolling interests in earnings of subsidiaries	6	8	20	18
Net earnings common stockholders	$ 627	$ 399	$ 1,633	$ 1,242
Basic earnings per share common stockholders	$ 1.05	$ 0.67	$ 2.73	$ 2.05
Diluted earnings per share common stockholders	$ 1.04	$ 0.67	$ 2.71	$ 2.04

XML

Consolidated Statements Of Earnings (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement [Abstract]
Interest income	$ 3	$ 4	$ 9	$ 16

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Net earnings	$ 633	$ 407	$ 1,653	$ 1,260
Other comprehensive income (loss), net of tax:
Foreign currency translation	(5)	134	163	(48)
Pension and postretirement	27	29	81	87
Cash flow hedges	(6)	40	26	(16)
Total other comprehensive income (loss)	16	203	270	23
Comprehensive income	649	610	1,923	1,283
Less: Noncontrolling interests in comprehensive income of subsidiaries	7	7	20	18
Comprehensive income common stockholders	$ 642	$ 603	$ 1,903	$ 1,265

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2021	Sep. 30, 2020
Current assets
Cash and equivalents	$ 2,860	$ 3,315
Receivables, less allowances of $124 and $138, respectively	2,754	2,802
Inventories	2,114	1,928
Other current assets	1,038	761
Total current assets	8,766	8,806
Property, plant and equipment, net	3,664	3,688
Other assets
Goodwill	7,777	6,734
Other intangible assets	2,993	2,468
Other	1,284	1,186
Total other assets	12,054	10,388
Total assets	24,484	22,882
Current liabilities
Short-term borrowings and current maturities of long-term debt	1,478	1,160
Accounts payable	1,966	1,715
Accrued expenses	3,226	2,910
Total current liabilities	6,670	5,785
Long-term debt	5,835	6,326
Other liabilities	2,640	2,324
Equity
Common stock, $0.50 par value; authorized, 1,200.0 shares; issued, 953.4 shares; outstanding, 597.8 shares and 598.0 shares, respectively	477	477
Additional paid-in-capital	518	470
Retained earnings	25,678	24,955
Accumulated other comprehensive income (loss)	(1,307)	(1,577)
Cost of common stock in treasury, 355.6 shares and 355.4 shares, respectively	(16,075)	(15,920)
Common stockholders’ equity	9,291	8,405
Noncontrolling interests in subsidiaries	48	42
Total equity	9,339	8,447
Total liabilities and equity	$ 24,484	$ 22,882

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions	Jun. 30, 2021	Sep. 30, 2020
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 124	$ 138
Common stock, par value per share	$ 0.50	$ 0.50
Common stock, shares authorized	1,200.0	1,200.0
Common stock, shares issued	953.4	953.4
Common stock, shares outstanding	597.8	598.0
Treasury stock, shares	355.6	355.4

XML

Consolidated Statement of Equity Statement - USD ($) $ in Millions	Total	Common stock	Additional paid-in-capital	Retained earnings	Retained earnings Cumulative effect of adoption of accounting standard	Accumulated other comprehensive income (loss)	Treasury stock	Noncontrolling interests in subsidiaries
Beginning balance at Sep. 30, 2019			$ 393	$ 24,199	$ 0	$ (1,722)	$ (15,114)	$ 40
Statement [Roll Forward]
Stock plans			66
Net earnings common stockholders	$ 1,242			1,242
Dividends paid				(910)				(11)
Foreign currency translation	(48)					(48)
Pension and postretirement						87
Cash flow hedges	(16)					(16)
Purchases							(942)
Issued under stock plans							119
Net earnings								18
Other comprehensive income	23							0
Ending balance at Jun. 30, 2020	7,878	$ 477	459	24,531		(1,699)	(15,937)	47
Beginning balance at Mar. 31, 2020			453	24,431	0	(1,903)	(15,941)	46
Statement [Roll Forward]
Stock plans			6
Net earnings common stockholders	399			399
Dividends paid				(299)				(6)
Foreign currency translation	134					135
Pension and postretirement						29
Cash flow hedges	40					40
Purchases							0
Issued under stock plans							4
Net earnings								8
Other comprehensive income	203							(1)
Ending balance at Jun. 30, 2020	7,878	477	459	24,531		(1,699)	(15,937)	47
Statement [Roll Forward]
Common stockholders' equity	7,831
Common stockholders' equity	8,405
Beginning balance at Sep. 30, 2020	8,447		470	24,955	(1)	(1,577)	(15,920)	42
Statement [Roll Forward]
Stock plans			48
Net earnings common stockholders	1,633			1,633
Dividends paid				(909)				(14)
Foreign currency translation	163					163
Pension and postretirement						81
Cash flow hedges	26					26
Purchases							(275)
Issued under stock plans							120
Net earnings								20
Other comprehensive income	270							0
Ending balance at Jun. 30, 2021	9,339	477	518	25,678		(1,307)	(16,075)	48
Beginning balance at Mar. 31, 2021			511	25,354	$ 0	(1,322)	(15,890)	50
Statement [Roll Forward]
Stock plans			7
Net earnings common stockholders	627			627
Dividends paid				(303)				(9)
Foreign currency translation	(5)					(6)
Pension and postretirement						27
Cash flow hedges	(6)					(6)
Purchases							(193)
Issued under stock plans							8
Net earnings								6
Other comprehensive income	16							1
Ending balance at Jun. 30, 2021	9,339	$ 477	$ 518	$ 25,678		$ (1,307)	$ (16,075)	$ 48
Statement [Roll Forward]
Common stockholders' equity	$ 9,291

XML

Consolidated Statement of Equity (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Dividends paid, per share	$ 0.505	$ 0.50	$ 1.515	$ 1.50

XML

Consolidated Statements Of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Operating activities
Net earnings	$ 1,653	$ 1,260
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	720	631
Stock compensation	191	69
Pension expense	23	50
Total changes in operating working capital	246	(86)
Other, net	(113)	(70)
Cash provided by operating activities	2,720	1,854
Investing activities
Capital expenditures	(350)	(329)
Purchases of businesses, net of cash and equivalents acquired	(1,611)	(114)
Other, net	53	(65)
Cash used in investing activities	(1,908)	(508)
Financing activities
Net increase in short-term borrowings	31	269
Proceeds from short-term borrowings greater than three months	71	546
Payments of short-term borrowings greater than three months	0	(340)
Proceeds from long-term debt	0	1,488
Payments of long-term debt	(305)	(502)
Dividends paid	(909)	(910)
Purchases of common stock	(268)	(942)
Other, net	89	28
Cash used in financing activities	(1,291)	(363)
Effect of exchange rate changes on cash and equivalents	24	(27)
Increase (Decrease) in cash and equivalents	(455)	956
Beginning cash and equivalents	3,315	1,494
Ending cash and equivalents	2,860	2,450
Changes in operating working capital
Receivables	76	456
Inventories	(160)	(218)
Other current assets	(69)	40
Accounts payable	216	(439)
Accrued expenses	183	75
Total changes in operating working capital	$ 246	$ (86)

XML

Basis of Presentation

9 Months Ended

Jun. 30, 2021

Accounting Policies [Abstract]

Basis of Presentation

BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments necessary for a fair presentation of operating results for the interim periods presented. Adjustments consist of normal and recurring accruals. The consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all disclosures required for annual financial statements presented in conformity with U.S. generally accepted accounting principles (GAAP). For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2020. Certain prior year amounts have been reclassified to conform to current year presentation - see Note 12.

Effective October 1, 2020, the Company adopted two accounting standard updates and one new accounting standard which had an immaterial impact on the Company's financial statements as of and for the nine months ended June 30, 2021. These included:

•Updates to ASC 350, Intangibles - Goodwill and Other, which eliminate the requirement to measure impairment based on the implied fair value of goodwill compared to the carrying amount of a reporting unit’s goodwill. Instead, goodwill impairment will be measured as the excess of a reporting unit’s carrying amount over its estimated fair value.

•Updates to ASC 350, Intangibles - Goodwill and Other, which align the requirements for capitalizing implementation costs incurred in a software hosting arrangement with the requirements for costs incurred to develop or obtain internal-use software.

•Adoption of ASC 326, Financial Instruments - Credit Losses, which amends the impairment model by requiring entities to use a forward-looking approach to estimate lifetime expected credit losses on certain types of financial instruments, including trade receivables.

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Revenue Recognition

9 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

REVENUE RECOGNITION

Emerson is a global manufacturer that combines technology and engineering to provide innovative solutions to its customers, largely in the form of tangible products. The vast majority of the Company's revenues relate to a broad offering of manufactured products which are recognized at the point in time when control transfers, while a smaller portion is recognized over time or relates to sales arrangements with multiple performance obligations. See Note 12 for additional information about the Company's revenues.

The following table summarizes the balances of the Company's unbilled receivables (contract assets), which are reported in Other current assets, and its customer advances (contract liabilities), which are reported in Accrued expenses.     

	Sept 30, 2020			June 30, 2021
Unbilled receivables (contract assets)		$	458		500
Customer advances (contract liabilities)		(583)			(774)
Net contract liabilities		$	(125)		(274)

The majority of the Company's contract balances relate to arrangements where revenue is recognized over time and payments from customers are made according to a contractual billing schedule. The increase in net contract liabilities was due to customer billings which exceeded revenue recognized for performance completed during the period. Revenue recognized for the three and nine months ended June 30, 2021 included $53 and $415 that was included in the beginning contract liability balance. Other factors that impacted the change in net contract liabilities were immaterial. Revenue recognized for the three and nine months ended June 30, 2021 for performance obligations that

were satisfied in previous periods, including cumulative catchup adjustments on the Company's long-term contracts, was not material. As of June 30, 2021, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately $6.6 billion. The Company expects to recognize approximately 80 percent of its remaining performance obligations as revenue over the next 12 months, with the remainder substantially over the subsequent two years thereafter.

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Weighted Average Common Shares

9 Months Ended

Jun. 30, 2021

Weighted Average Number of Shares Outstanding Reconciliation [Abstract]

Weighted Average Common Shares

WEIGHTED-AVERAGE COMMON SHARESReconciliations of weighted-average shares for basic and diluted earnings per common share follow. Earnings allocated to participating securities were inconsequential.

	Three Months Ended June 30,		Nine Months Ended June 30,
	2020	2021	2020	2021
Basic shares outstanding	596.9	598.2	604.8	598.7
Dilutive shares	3.1	3.9	3.6	3.6
Diluted shares outstanding	600.0	602.1	608.4	602.3

XML

Acquisitions and Divestitures

9 Months Ended

Jun. 30, 2021

Business Combinations [Abstract]

Acquisitions and Divestitures

ACQUISITIONS AND DIVESTITURES

On October 1, 2020, the Company completed the acquisition of Open Systems International, Inc. (OSI), a leading operations technology software provider in the global power industry, for approximately $1.6 billion, net of cash acquired. This business, which has annual sales of approximately $170 and is reported in the Automation Solutions segment, expands the Company's offerings in the power industry to include the digitization and modernization of the electric grid. The Company recognized goodwill of $960 (none of which is expected to be tax deductible), identifiable intangible assets of $783, primarily intellectual property and customer relationships with a weighted-average useful life of approximately 11 years, and deferred tax liabilities of approximately $185. Results of operations for the three months ended June 30, 2021 included first-year pretax acquisition accounting charges related to backlog amortization and deferred revenue of $7 and $3, respectively, while year-to-date results included $24 and $11, respectively.

On November 17, 2020, the Company acquired the remaining interest of an equity investment for approximately $19, net of cash acquired.

The Company acquired three businesses in fiscal 2020, two in the Automation Solutions segment and one in the Climate Technologies segment, for $126, net of cash acquired.

As previously disclosed, the Company sold its network power systems business (rebranded as Vertiv, now a publicly traded company, symbol VRT) in 2017 and retained a subordinated interest contingent upon the equity holders first receiving a threshold return on their initial investment. As of August 4, 2021, the equity holders have received a return on their investment substantially up to the threshold. Based on the terms of the agreement and the current calculation, the Company could receive approximately $600 on a pretax basis through periodic distributions over the next two years. However, the distributions are contingent on the timing and price at which Vertiv shares are sold by the equity holders and therefore, there can be no assurance as to the amount or timing of the distributions to the Company. As of June 30, 2021, no amounts have been recognized in the financial statements related to this gain contingency.

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Pension & Postretirement Plans

9 Months Ended

Jun. 30, 2021

Retirement Benefits [Abstract]

Pension & Postretirement Plans

PENSION & POSTRETIREMENT PLANSTotal periodic pension and postretirement (income) expense is summarized below:

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2021
Service cost		$	21	21		65	63
Interest cost		40		32		120	96
Expected return on plan assets		(84)		(84)		(252)	(252)
Net amortization		38		35		113	105
Total		$	15	4		46	12

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Other Deductions, Net

9 Months Ended

Jun. 30, 2021

Other Income and Expenses [Abstract]

Other Deductions, Net

OTHER DEDUCTIONS, NET

Other deductions, net are summarized below:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2020			2021		2020	2021
Amortization of intangibles (intellectual property and customer relationships)		$	60	71		178	223
Restructuring costs		88		28		216	111
Special advisory fees		—		—		13	—
Other		33		(11)		(6)	(91)
Total		$	181	88		401	243

The increase in intangibles amortization for the three and nine months ended June 30, 2021 was due to the OSI acquisition, including backlog amortization of $7 and $24, respectively. The change in Other for the third quarter of fiscal 2021 included a favorable impact from foreign currency transactions of $25 due to losses in the prior year and a favorable impact from pensions. For the nine months ended June 30, 2021, the change in Other reflects a favorable impact from pensions and investment-related gains, including gains in the first quarter of fiscal 2021 of $21 from an investment sale and $17 from the acquisition of the remaining interest of an equity investment, and a gain in the second quarter of $31 from the sale of an equity investment.

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Restructuring Costs

9 Months Ended

Jun. 30, 2021

Restructuring and Related Activities [Abstract]

Restructuring Costs

RESTRUCTURING COSTSRestructuring expense reflects costs associated with the Company’s ongoing efforts to improve operational efficiency and deploy assets globally in order to remain competitive on a worldwide basis. Costs incurred in the first nine months of fiscal 2021 relate to the Company's initiatives that began in the third quarter of fiscal 2019 to improve operating margins and were increased in response to the effects of the COVID-19 pandemic on demand for the Company's products. Expenses incurred in the first nine months of fiscal 2021 included costs related to workforce reductions of approximately 1,900 employees. The Company expects fiscal 2021 restructuring expense and related costs to be approximately $200, including costs to complete actions initiated in the first nine months of the year.

Restructuring expense by business segment follows:

	Three Months Ended June 30,					Nine Months Ended June 30,
	2020			2021		2020		2021
Automation Solutions		$	76		18		182		94
Climate Technologies		5			4		14		8
Tools & Home Products		4			2		12		4
Commercial & Residential Solutions		9			6		26		12
Corporate		3			4		8		5
Total		$	88		28		216		111

Details of the change in the liability for restructuring costs during the nine months ended June 30, 2021 follow:

	Sept 30, 2020			Expense		Utilized/Paid		June 30, 2021
Severance and benefits		$	176		87		95		168
Other		5			24		22		7
Total		$	181		111		117		175

The tables above do not include $6 and $4 of costs related to restructuring actions incurred for the three months ended June 30, 2020 and 2021, respectively, that are required to be reported in cost of sales and selling, general and administrative expenses; year-to-date amounts are $15 and $11, respectively.

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Income Taxes

9 Months Ended

Jun. 30, 2021

Income Tax Disclosure [Abstract]

Income Taxes

TAXES

Income taxes were $151 in the third quarter of fiscal 2021 and $51 in 2020, resulting in effective tax rates of 19 percent and 11 percent, respectively. The current year rate included $24 of favorable net discrete tax items which decreased the rate 3 percentage points. The prior year rate included $57 of discrete benefits, which decreased the rate 12 percentage points, related to updates to estimates for the prior year U.S. income tax return and the impact of a research and development tax credit study.

Income taxes were $431 for the first nine months of 2021 and $310 for 2020, resulting in effective tax rates of 21 percent and 20 percent, respectively. The current year and prior year rates included favorable net discrete items which reduced the rates 1 percentage point and 3 percentage points, respectively.

On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic, and among other things, provides tax relief to businesses. Tax provisions of the CARES Act include the deferral of certain payroll taxes, relief for retaining employees, and other provisions. The Company deferred $73 of certain payroll taxes through the end of calendar year 2020, half of which is due in December 2021 with the remainder due in December 2022.

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Other Financial Information

9 Months Ended

Jun. 30, 2021

Disclosure Text Block [Abstract]

Other Financial Information

OTHER FINANCIAL INFORMATION

	Sept 30, 2020			June 30, 2021
Inventories
Finished products		$	584		666
Raw materials and work in process		1,344			1,448
Total		$	1,928		2,114

Property, plant and equipment, net
Property, plant and equipment, at cost	$	9,055	9,318
Less: Accumulated depreciation	5,367		5,654
Total	$	3,688	3,664

	Sept 30, 2020		June 30, 2021
Goodwill by business segment
Automation Solutions	$	5,583	6,594
Climate Technologies	730		757
Tools & Home Products	421		426
Commercial & Residential Solutions	1,151		1,183
Total	$	6,734	7,777

Other intangible assets
Gross carrying amount	$	5,106	5,971
Less: Accumulated amortization	2,638		2,978
Net carrying amount	$	2,468	2,993

Other intangible assets include customer relationships, net, of $1,328 and $1,554 as of September 30, 2020 and June 30, 2021, respectively. The increases in goodwill and other intangible assets reflect the acquisition of OSI. See Note 4.

Other assets include the following:
Operating lease right-of-use assets	$	508	503
Pension assets	265		415
Deferred income taxes	99		110
Asbestos-related insurance receivables	100		96

Accrued expenses include the following:
Customer advances (contract liabilities)	$	583	774
Employee compensation	577		629
Product warranty	148		155
Operating lease liabilities (current)	148		151

Other liabilities include the following:
Pension and postretirement liabilities	$	769	781
Deferred income taxes	261		555
Operating lease liabilities (noncurrent)	373		366
Asbestos litigation	295		267

The increase in deferred income taxes is largely due to the OSI acquisition.

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Financial Instruments

9 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

FINANCIAL INSTRUMENTS

Following is a discussion regarding the Company’s use of financial instruments:

Hedging Activities – As of June 30, 2021, the notional amount of foreign currency hedge positions was approximately $1.9 billion, and commodity hedge contracts totaled approximately $139 (primarily 42 million pounds of copper and aluminum). All derivatives receiving hedge accounting are cash flow hedges. The majority of hedging gains and losses deferred as of June 30, 2021 are expected to be recognized over the next 12 months as the underlying forecasted transactions occur. Gains and losses on foreign currency derivatives reported in Other deductions, net reflect hedges of balance sheet exposures that do not receive hedge accounting.

Net Investment Hedge – In fiscal 2019, the Company issued euro-denominated debt of €1.5 billion. The euro notes reduce foreign currency risk associated with the Company's international subsidiaries that use the euro as their functional currency and have been designated as a hedge of a portion of the investment in these operations. Foreign currency gains or losses associated with the euro-denominated debt are deferred in accumulated other comprehensive income (loss) and will remain until the hedged investment is sold or substantially liquidated.

The following gains and losses are included in earnings and other comprehensive income (OCI) for the three and nine months ended June 30, 2021 and 2020:

		Into Earnings					Into OCI
		3rd Quarter			Nine Months		3rd Quarter		Nine Months
Gains (Losses)	Location	2020		2021	2020	2021	2020	2021	2020	2021
Commodity	Cost of sales	$	(4)	13	(8)	24	17	8	1	34
Foreign currency	Sales	(2)		—	(5)	2	6	—	1	3
Foreign currency	Cost of sales	(3)		3	8	5	21	1	(28)	28
Foreign currency	Other deductions, net	(26)		8	(5)	33
Net Investment Hedges
Euro denominated debt							(72)	6	(41)	(21)
Total		$	(35)	24	(10)	64	(28)	15	(67)	44

Regardless of whether derivatives and non-derivative financial instruments receive hedge accounting, the Company expects hedging gains or losses to be offset by losses or gains on the related underlying exposures. The amounts ultimately recognized will differ from those presented above for open positions, which remain subject to ongoing market price fluctuations until settlement. Derivatives receiving hedge accounting are highly effective and no amounts were excluded from the assessment of hedge effectiveness.

Fair Value Measurement – Valuations for all derivatives and the Company's long-term debt fall within Level 2 of the GAAP valuation hierarchy. As of June 30, 2021, the fair value of long-term debt was $6.9 billion, which exceeded the carrying value by $526. The fair values of commodity and foreign currency contracts were reported in Other current assets and Accrued expenses and did not materially change since September 30, 2020.

Counterparties to derivatives arrangements are companies with investment-grade credit ratings. The Company has bilateral collateral arrangements with counterparties with credit rating-based posting thresholds that vary depending on the arrangement. If credit ratings on the Company's debt fall below pre-established levels, counterparties can require immediate full collateralization of all derivatives in net liability positions. The maximum amount that could potentially have been required was immaterial. The Company also can demand full collateralization of derivatives in net asset positions should any counterparty credit ratings fall below certain thresholds. No collateral was posted with counterparties and none was held by the Company as of June 30, 2021.

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Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Jun. 30, 2021

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Activity in Accumulated other comprehensive income (loss) for the three and nine months ended June 30, 2021 and 2020 is shown below, net of income taxes:  

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2021
Foreign currency translation
Beginning balance		$	(977)	(542)		(794)	(711)
Other comprehensive income (loss), net of tax of $17, $(1), $10 and $5, respectively		135		(6)		(48)	163
Ending balance		(842)		(548)		(842)	(548)
Pension and postretirement
Beginning balance		(870)		(810)		(928)	(864)
Amortization of deferred actuarial losses into earnings, net of tax of $(9), $(8), $(26) and $(24), respectively		29		27		87	81
Ending balance		(841)		(783)		(841)	(783)
Cash flow hedges
Beginning balance		(56)		30		—	(2)
Deferral of gains (losses) arising during the period, net of tax of $(11), $(2), $6 and $(15), respectively		33		7		(20)	50
Reclassification of realized (gains) losses to sales and cost of sales, net of tax of $(2), $3, $(1) and $7, respectively		7		(13)		4	(24)
Ending balance		(16)		24		(16)	24
Accumulated other comprehensive income (loss)		$	(1,699)	(1,307)		(1,699)	(1,307)

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Business Segments

9 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Business Segments

BUSINESS SEGMENTSSummarized information about the Company's results of operations by business segment follows:

	Three Months Ended June 30,					Nine Months Ended June 30,
	Sales			Earnings		Sales		Earnings
	2020		2021	2020	2021	2020	2021	2020	2021
Automation Solutions	$	2,589	2,947	311	521	8,150	8,432	1,012	1,353
Climate Technologies	970		1,268	195	274	2,869	3,459	563	731
Tools & Home Products	357		489	58	101	1,219	1,419	233	311
Commercial & Residential Solutions	1,327		1,757	253	375	4,088	4,878	796	1,042
Stock compensation				(51)	(66)			(69)	(191)
Unallocated pension and postretirement costs				12	24			37	71
Corporate and other				(22)	(33)			(90)	(76)
Eliminations/Interest	(2)		(7)	(45)	(37)	(11)	(21)	(116)	(115)
Total	$	3,914	4,697	458	784	12,227	13,289	1,570	2,084

In fiscal 2021, the Company reclassified certain software product sales that were previously reported in Measurement and Analytical Instrumentation to Systems & Software (previously described as Process Control Systems & Solutions). Automation Solutions sales by major product offering are summarized below, including the reclassification of prior year amounts to reflect this change.

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2021
Measurement & Analytical Instrumentation		$	709	781		2,280	2,211
Valves, Actuators & Regulators		842		880		2,609	2,522
Industrial Solutions		469		593		1,470	1,656
Systems & Software		569		693		1,791	2,043
Automation Solutions		$	2,589	2,947		8,150	8,432

Depreciation and amortization (includes intellectual property, customer relationships and capitalized software) by business segment are summarized below:

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2020
Automation Solutions		$	137	152		414	464
Climate Technologies		44		48		133	144
Tools & Home Products		20		20		58	59
Commercial & Residential Solutions		64		68		191	203
Corporate and other		8		17		26	53
Total		$	209	237		631	720

Sales by geographic destination are summarized below:

	Three Months Ended June 30,
	2020				2021
	Automation Solutions		Commercial & Residential Solutions	Total	Automation Solutions	Commercial & Residential Solutions	Total
Americas	$	1,159	915	2,074	1,321	1,190	2,511
Asia, Middle East & Africa	893		253	1,146	1,011	331	1,342
Europe	537		159	696	615	236	851
Total	$	2,589	1,327	3,916	2,947	1,757	4,704
	Nine Months Ended June 30,
	2020				2021
	Automation Solutions		Commercial & Residential Solutions	Total	Automation Solutions	Commercial & Residential Solutions	Total
Americas	$	3,915	2,815	6,730	3,711	3,290	7,001
Asia, Middle East & Africa	2,619		765	3,384	2,907	944	3,851
Europe	1,616		508	2,124	1,814	644	2,458
Total	$	8,150	4,088	12,238	8,432	4,878	13,310

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Revenue Recognition (Tables)

9 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Contract Assets and Contract Liabilities

The following table summarizes the balances of the Company's unbilled receivables (contract assets), which are reported in Other current assets, and its customer advances (contract liabilities), which are reported in Accrued expenses.     

	Sept 30, 2020			June 30, 2021
Unbilled receivables (contract assets)		$	458		500
Customer advances (contract liabilities)		(583)			(774)
Net contract liabilities		$	(125)		(274)

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Weighted Average Common Shares (Tables)

9 Months Ended

Jun. 30, 2021

Weighted Average Number of Shares Outstanding Reconciliation [Abstract]

Schedule Of Basic And Diluted Earnings Per Share Reconciliation

	Three Months Ended June 30,		Nine Months Ended June 30,
	2020	2021	2020	2021
Basic shares outstanding	596.9	598.2	604.8	598.7
Dilutive shares	3.1	3.9	3.6	3.6
Diluted shares outstanding	600.0	602.1	608.4	602.3

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Pension & Postretirement Plans (Tables)

9 Months Ended

Jun. 30, 2021

Retirement Benefits [Abstract]

Schedule of Pension and Postretirement Plan Expenses

Total periodic pension and postretirement (income) expense is summarized below:

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2021
Service cost		$	21	21		65	63
Interest cost		40		32		120	96
Expected return on plan assets		(84)		(84)		(252)	(252)
Net amortization		38		35		113	105
Total		$	15	4		46	12

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Other Deductions, Net (Tables)

9 Months Ended

Jun. 30, 2021

Other Income and Expenses [Abstract]

Schedule of Other Deductions, net

Other deductions, net are summarized below:

	Three Months Ended June 30,				Nine Months Ended June 30,
	2020			2021		2020	2021
Amortization of intangibles (intellectual property and customer relationships)		$	60	71		178	223
Restructuring costs		88		28		216	111
Special advisory fees		—		—		13	—
Other		33		(11)		(6)	(91)
Total		$	181	88		401	243

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Restructuring Costs (Tables)

9 Months Ended

Jun. 30, 2021

Restructuring and Related Activities [Abstract]

Schedule of Restructuring Expense by Segment

Restructuring expense by business segment follows:

	Three Months Ended June 30,					Nine Months Ended June 30,
	2020			2021		2020		2021
Automation Solutions		$	76		18		182		94
Climate Technologies		5			4		14		8
Tools & Home Products		4			2		12		4
Commercial & Residential Solutions		9			6		26		12
Corporate		3			4		8		5
Total		$	88		28		216		111

Schedule of Change in Restructuring Reserve by Type of Cost

Details of the change in the liability for restructuring costs during the nine months ended June 30, 2021 follow:

	Sept 30, 2020			Expense		Utilized/Paid		June 30, 2021
Severance and benefits		$	176		87		95		168
Other		5			24		22		7
Total		$	181		111		117		175

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Other Financial Information (Tables)

9 Months Ended

Jun. 30, 2021

Disclosure Text Block [Abstract]

Inventories

	Sept 30, 2020			June 30, 2021
Inventories
Finished products		$	584		666
Raw materials and work in process		1,344			1,448
Total		$	1,928		2,114

Property, Plant and Equipment, net

Property, plant and equipment, net
Property, plant and equipment, at cost	$	9,055	9,318
Less: Accumulated depreciation	5,367		5,654
Total	$	3,688	3,664

Goodwill by Business Segment

	Sept 30, 2020		June 30, 2021
Goodwill by business segment
Automation Solutions	$	5,583	6,594
Climate Technologies	730		757
Tools & Home Products	421		426
Commercial & Residential Solutions	1,151		1,183
Total	$	6,734	7,777

Other Intangible Assets

Other intangible assets
Gross carrying amount	$	5,106	5,971
Less: Accumulated amortization	2,638		2,978
Net carrying amount	$	2,468	2,993

Other Assets

Other assets include the following:
Operating lease right-of-use assets	$	508	503
Pension assets	265		415
Deferred income taxes	99		110
Asbestos-related insurance receivables	100		96

Accrued Expenses

Accrued expenses include the following:
Customer advances (contract liabilities)	$	583	774
Employee compensation	577		629
Product warranty	148		155
Operating lease liabilities (current)	148		151

Other Liabilities

Other liabilities include the following:
Pension and postretirement liabilities	$	769	781
Deferred income taxes	261		555
Operating lease liabilities (noncurrent)	373		366
Asbestos litigation	295		267

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Financial Instruments (Tables)

9 Months Ended

Jun. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule Of Derivative Instruments

		Into Earnings					Into OCI
		3rd Quarter			Nine Months		3rd Quarter		Nine Months
Gains (Losses)	Location	2020		2021	2020	2021	2020	2021	2020	2021
Commodity	Cost of sales	$	(4)	13	(8)	24	17	8	1	34
Foreign currency	Sales	(2)		—	(5)	2	6	—	1	3
Foreign currency	Cost of sales	(3)		3	8	5	21	1	(28)	28
Foreign currency	Other deductions, net	(26)		8	(5)	33
Net Investment Hedges
Euro denominated debt							(72)	6	(41)	(21)
Total		$	(35)	24	(10)	64	(28)	15	(67)	44

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Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Jun. 30, 2021

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

Activity in Accumulated other comprehensive income (loss) for the three and nine months ended June 30, 2021 and 2020 is shown below, net of income taxes:  

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2021
Foreign currency translation
Beginning balance		$	(977)	(542)		(794)	(711)
Other comprehensive income (loss), net of tax of $17, $(1), $10 and $5, respectively		135		(6)		(48)	163
Ending balance		(842)		(548)		(842)	(548)
Pension and postretirement
Beginning balance		(870)		(810)		(928)	(864)
Amortization of deferred actuarial losses into earnings, net of tax of $(9), $(8), $(26) and $(24), respectively		29		27		87	81
Ending balance		(841)		(783)		(841)	(783)
Cash flow hedges
Beginning balance		(56)		30		—	(2)
Deferral of gains (losses) arising during the period, net of tax of $(11), $(2), $6 and $(15), respectively		33		7		(20)	50
Reclassification of realized (gains) losses to sales and cost of sales, net of tax of $(2), $3, $(1) and $7, respectively		7		(13)		4	(24)
Ending balance		(16)		24		(16)	24
Accumulated other comprehensive income (loss)		$	(1,699)	(1,307)		(1,699)	(1,307)

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Business Segments (Tables)

9 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Summarized information about the Company's results of operations by business segment follows:

	Three Months Ended June 30,					Nine Months Ended June 30,
	Sales			Earnings		Sales		Earnings
	2020		2021	2020	2021	2020	2021	2020	2021
Automation Solutions	$	2,589	2,947	311	521	8,150	8,432	1,012	1,353
Climate Technologies	970		1,268	195	274	2,869	3,459	563	731
Tools & Home Products	357		489	58	101	1,219	1,419	233	311
Commercial & Residential Solutions	1,327		1,757	253	375	4,088	4,878	796	1,042
Stock compensation				(51)	(66)			(69)	(191)
Unallocated pension and postretirement costs				12	24			37	71
Corporate and other				(22)	(33)			(90)	(76)
Eliminations/Interest	(2)		(7)	(45)	(37)	(11)	(21)	(116)	(115)
Total	$	3,914	4,697	458	784	12,227	13,289	1,570	2,084

Depreciation and amortization (includes intellectual property, customer relationships and capitalized software) by business segment are summarized below:

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2020
Automation Solutions		$	137	152		414	464
Climate Technologies		44		48		133	144
Tools & Home Products		20		20		58	59
Commercial & Residential Solutions		64		68		191	203
Corporate and other		8		17		26	53
Total		$	209	237		631	720

Schedule of Financial Information by Major Product Offering

In fiscal 2021, the Company reclassified certain software product sales that were previously reported in Measurement and Analytical Instrumentation to Systems & Software (previously described as Process Control Systems & Solutions). Automation Solutions sales by major product offering are summarized below, including the reclassification of prior year amounts to reflect this change.

	Three Months Ended June 30,				Nine Months Ended June 30,
		2020		2021		2020	2021
Measurement & Analytical Instrumentation		$	709	781		2,280	2,211
Valves, Actuators & Regulators		842		880		2,609	2,522
Industrial Solutions		469		593		1,470	1,656
Systems & Software		569		693		1,791	2,043
Automation Solutions		$	2,589	2,947		8,150	8,432

Schedule of Financial Information By Geographic Area

Sales by geographic destination are summarized below:

	Three Months Ended June 30,
	2020				2021
	Automation Solutions		Commercial & Residential Solutions	Total	Automation Solutions	Commercial & Residential Solutions	Total
Americas	$	1,159	915	2,074	1,321	1,190	2,511
Asia, Middle East & Africa	893		253	1,146	1,011	331	1,342
Europe	537		159	696	615	236	851
Total	$	2,589	1,327	3,916	2,947	1,757	4,704
	Nine Months Ended June 30,
	2020				2021
	Automation Solutions		Commercial & Residential Solutions	Total	Automation Solutions	Commercial & Residential Solutions	Total
Americas	$	3,915	2,815	6,730	3,711	3,290	7,001
Asia, Middle East & Africa	2,619		765	3,384	2,907	944	3,851
Europe	1,616		508	2,124	1,814	644	2,458
Total	$	8,150	4,088	12,238	8,432	4,878	13,310

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Revenue Recognition Contract Assets (Liabilities) (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Jun. 30, 2021	Jun. 30, 2021	Sep. 30, 2020
Revenue from Contract with Customer [Abstract]
Unbilled receivables (contract assets)	$ 500	$ 500	$ 458
Customer advances (contract liabilities)	(774)	(774)	(583)
Net contract liabilities	(274)	(274)	$ (125)
Revenue recognized, included in beginning contract liability	$ 53	$ 415

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Revenue Recognition Performance Obligations (Details) $ in Billions	Jun. 30, 2021 USD ($)
Revenue from Contract with Customer [Abstract]
Backlog	$ 6.6
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01
Revenue from Contract with Customer [Abstract]
Percentage of backlog recognized as revenue, next 12 months	80.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction, backlog	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction, backlog	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Expected timing of satisfaction, backlog	1 year

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Weighted Average Common Shares (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Basic shares outstanding	598.2	596.9	598.7	604.8
Dilutive shares	3.9	3.1	3.6	3.6
Diluted shares outstanding	602.1	600.0	602.3	608.4

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Acquisitions and Divestitures Narrative (Details) $ in Millions			3 Months Ended	9 Months Ended		12 Months Ended	27 Months Ended
	Nov. 17, 2020 USD ($)	Oct. 01, 2020 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2023 USD ($)
Business Acquisition & Disposal [Line Items]
Purchase price of businesses, net of cash acquired				$ 1,611	$ 114	$ 126
Goodwill			$ 7,777	7,777		$ 6,734
Forecast [Member]
Business Acquisition & Disposal [Line Items]
Pretax periodic distribution from retained subordinated interest in Vertiv (VRT)							$ 600
Open Systems International Inc. [Member]
Business Acquisition & Disposal [Line Items]
Deferred revenue adjustment			3	11
Open Systems International Inc. [Member] | Order or Production Backlog [Member]
Business Acquisition & Disposal [Line Items]
Backlog amortization			7	24
Series of Individually Immaterial Business Acquisitions [Member]
Business Acquisition & Disposal [Line Items]
Purchase price of businesses, net of cash acquired	$ 19
Number of businesses acquired						3
Automation Solutions [Member]
Business Acquisition & Disposal [Line Items]
Goodwill			6,594	6,594		$ 5,583
Automation Solutions [Member] | Open Systems International Inc. [Member]
Business Acquisition & Disposal [Line Items]
Purchase price of businesses, net of cash acquired		$ 1,600
Annualized sales						$ 170
Goodwill		960
Goodwill expected tax deductible amount		0
Intangibles		$ 783
Intangible assets, weighted average useful life		11 years
Deferred tax liabilities		$ 185
Automation Solutions [Member] | Series of Individually Immaterial Business Acquisitions [Member]
Business Acquisition & Disposal [Line Items]
Number of businesses acquired						2
Climate Technologies [Member]
Business Acquisition & Disposal [Line Items]
Goodwill			$ 757	$ 757		$ 730
Climate Technologies [Member] | Series of Individually Immaterial Business Acquisitions [Member]
Business Acquisition & Disposal [Line Items]
Number of businesses acquired						1

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Pension & Postretirement Plans (Schedule Of Net Periodic Pension And Net Postretirement Plan Expenses) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 21	$ 21	$ 63	$ 65
Interest cost	32	40	96	120
Expected return on plan assets	(84)	(84)	(252)	(252)
Net amortization	35	38	105	113
Total	$ 4	$ 15	$ 12	$ 46

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Other Deductions, Net (Schedule Of Other Deductions, Net) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Other deductions, net [Line Items]
Amortization of intangibles (intellectual property and customer relationships)	$ 71	$ 60	$ 223	$ 178
Restructuring costs	28	88	111	216
Special advisory fees	0	0	0	13
Other	(11)	33	(91)	(6)
Other deductions, net	88	$ 181	243	$ 401
Change in gain (loss) from foreign currency exchange transactions	25
Gain (loss) from an investment			21
Gain (loss) from acquiring the remaining interest of an equity investment			17
Gain (loss) from sale of equity investment			31
Open Systems International Inc. [Member] | Order or Production Backlog [Member]
Other deductions, net [Line Items]
Backlog amortization	$ 7		$ 24

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Restructuring Costs (Details) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Sep. 30, 2021 USD ($)
Restructuring Reserve [Roll Forward]
Beginning restructuring liability			$ 181
Restructuring expense	$ 28	$ 88	111	$ 216
Restructuring utilized/paid			117
Ending restructuring liability	175		$ 175
Total number of employee workforce reductions			1,900
Cost of sales and selling, general, and administrative expenses [Member]
Restructuring Reserve [Roll Forward]
Restructuring expense	4	6	$ 11	15
Severance and benefits [Member]
Restructuring Reserve [Roll Forward]
Beginning restructuring liability			176
Restructuring expense			87
Restructuring utilized/paid			95
Ending restructuring liability	168		168
Other Restructuring [Member]
Restructuring Reserve [Roll Forward]
Beginning restructuring liability			5
Restructuring expense			24
Restructuring utilized/paid			22
Ending restructuring liability	7		7
Automation Solutions [Member]
Restructuring Reserve [Roll Forward]
Restructuring expense	18	76	94	182
Commercial & Residential Solutions [Member]
Restructuring Reserve [Roll Forward]
Restructuring expense	6	9	12	26
Climate Technologies [Member]
Restructuring Reserve [Roll Forward]
Restructuring expense	4	5	8	14
Tools & Home Products [Member]
Restructuring Reserve [Roll Forward]
Restructuring expense	2	4	4	12
Corporate [Member]
Restructuring Reserve [Roll Forward]
Restructuring expense	$ 4	$ 3	$ 5	$ 8
Forecast [Member]
Restructuring Reserve [Roll Forward]
Expected fiscal year restructuring expense					$ 200

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		15 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Income Tax [Line Items]
Payroll tax deferral from CARES Act through December 2020					$ 73
Income taxes	$ 151	$ 51	$ 431	$ 310
Effective income tax rate	19.00%	11.00%	21.00%	20.00%
Favorable net discrete items, percentage impact	3.00%	12.00%	1.00%	3.00%
Favorable net discrete tax impact	$ 24	$ 57

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Other Financial Information (Inventories) (Details) - USD ($) $ in Millions	Jun. 30, 2021	Sep. 30, 2020
Inventory Disclosure [Abstract]
Finished products	$ 666	$ 584
Raw materials and work in process	1,448	1,344
Total	$ 2,114	$ 1,928

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Other Financial Information (PPE) (Details) - USD ($) $ in Millions	Jun. 30, 2021	Sep. 30, 2020
Property, Plant and Equipment [Abstract]
Property, plant and equipment, at cost	$ 9,318	$ 9,055
Less: Accumulated depreciation	5,654	5,367
Total	$ 3,664	$ 3,688

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Other Financial Information (Goodwill) (Details) - USD ($) $ in Millions	Jun. 30, 2021	Sep. 30, 2020
Goodwill [Line Items]
Goodwill	$ 7,777	$ 6,734
Automation Solutions [Member]
Goodwill [Line Items]
Goodwill	6,594	5,583
Commercial & Residential Solutions [Member]
Goodwill [Line Items]
Goodwill	1,183	1,151
Climate Technologies [Member]
Goodwill [Line Items]
Goodwill	757	730
Tools & Home Products [Member]
Goodwill [Line Items]
Goodwill	$ 426	$ 421

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Other Financial Information (Intangibles) (Details) - USD ($) $ in Millions	Jun. 30, 2021	Sep. 30, 2020
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 5,971	$ 5,106
Less: Accumulated amortization	2,978	2,638
Net carrying amount	2,993	2,468
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Net carrying amount	$ 1,554	$ 1,328

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Other Financial Information (Other Assets) (Details) - USD ($) $ in Millions	Jun. 30, 2021	Sep. 30, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Operating lease right-of-use assets	$ 503	$ 508
Pension assets	415	265
Deferred income taxes	110	99
Asbestos-related insurance receivables	$ 96	$ 100

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Other Financial Information (Accrued Expenses) (Details) - USD ($) $ in Millions	Jun. 30, 2021	Sep. 30, 2020
Accrued Liabilities and Other Liabilities [Abstract]
Customer advances (contract liabilities)	$ 774	$ 583
Employee compensation	629	577
Product warranty	155	148
Operating lease liabilities (current)	$ 151	$ 148

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Other Financial Information (Other Liabilities) (Details) - USD ($) $ in Millions	Jun. 30, 2021	Sep. 30, 2020
Other Liabilities [Abstract]
Pension and postretirement liabilities	$ 781	$ 769
Deferred income taxes	555	261
Operating lease liabilities (noncurrent)	366	373
Asbestos litigation	$ 267	$ 295

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Financial Instruments (Schedule Of Derivative Instruments) (Details) € in Millions, lb in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021 USD ($) lb	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) lb	Jun. 30, 2020 USD ($)	Sep. 30, 2019 EUR (€)
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified to earnings	$ 24	$ (35)	$ 64	$ (10)
Gain (loss) to other comprehensive income	15	(28)	44	(67)
Commodity Contract [Member] | Cash Flow Hedging [Member] | Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified to earnings	13	(4)	24	(8)
Commodity Contract [Member] | Cash Flow Hedging [Member] | Cost of Sales [Member] | Other Comprehensive Income (Loss) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) to other comprehensive income	8	17	34	1
Foreign Exchange Contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount of foreign currency hedge positions	1,900		1,900
Foreign Exchange Contract [Member] | Other deductions, net [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified to earnings	8	(26)	33	(5)
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified to earnings	3	(3)	5	8
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | Cost of Sales [Member] | Other Comprehensive Income (Loss) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) to other comprehensive income	1	21	28	(28)
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) reclassified to earnings	0	(2)	2	(5)
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | Sales [Member] | Other Comprehensive Income (Loss) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) to other comprehensive income	0	6	3	1
Foreign Exchange Contract [Member] | Net Investment Hedging [Member] | Other Comprehensive Income (Loss) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) to other comprehensive income	6	$ (72)	(21)	$ (41)
All Commodity Hedges [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of commodities hedged	$ 139		$ 139
Copper and Aluminum [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Weight in pounds of copper and aluminum commodity hedges | lb	42		42
Senior Notes [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Debt, face amount | €					€ 1,500

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Financial Instruments (Fair Value Measurements) (Details) $ in Millions	Jun. 30, 2021 USD ($)
Derivatives, Fair Value [Line Items]
Fair value of long-term debt compared with carrying value	$ 526
Collateral posted to counterparties	0
Collateral held from counterparties	0
Fair Value, Inputs, Level 2 [Member]
Derivatives, Fair Value [Line Items]
Fair value of long-term debt	$ 6,900

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Sep. 30, 2020
Accumulated other comprehensive income [Roll Forward]
Beginning balance			$ 8,447
Ending balance	$ 9,339	$ 7,878	9,339	$ 7,878
Accumulated other comprehensive income (loss)	(1,307)	(1,699)	(1,307)	(1,699)	$ (1,577)
Foreign currency translation [Member]
Accumulated other comprehensive income [Roll Forward]
Beginning balance	(542)	(977)	(711)	(794)
Other comprehensive income (loss), foreign currency translation, net of tax of $(1), $17, $5 and $10, respectively	(6)	135	163	(48)
Ending balance	(548)	(842)	(548)	(842)
Pension and post retirement [Member]
Accumulated other comprehensive income [Roll Forward]
Beginning balance	(810)	(870)	(864)	(928)
Amortization of deferred actuarial losses into earnings, net of tax of $(8), $(9), $(24) and $(26), respectively	27	29	81	87
Ending balance	(783)	(841)	(783)	(841)
Cash Flow Hedges [Member]
Accumulated other comprehensive income [Roll Forward]
Beginning balance	30	(56)	(2)	0
Deferral of gains (losses) arising during the period, net of tax of $(2), $(11), $(15) and $6, respectively	7	33	50	(20)
Reclassification of realized gains (losses) to sales and cost of sales, net of tax of $3, $(2), $7 and $(1), respectively	(13)	7	(24)	4
Ending balance	$ 24	$ (16)	$ 24	$ (16)

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Accumulated Other Comprehensive Income (Loss) (Details 2) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Accumulated Other Comprehensive Income (Loss) [Line Items]
Foreign currency translation, tax	$ (1)	$ 17	$ 5	$ 10
Amortization of deferred actuarial losses, tax	(8)	(9)	(24)	(26)
Deferred cash flow hedging gains (losses), tax	(2)	(11)	(15)	6
Reclassification of realized cash flow hedging (losses), tax	$ 3	$ (2)	$ 7	$ (1)

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Business Segments (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Segment Reporting Information [Line Items]
Net sales	$ 4,697	$ 3,914	$ 13,289	$ 12,227
Earnings	784	458	2,084	1,570
Interest expense	(37)	(45)	(115)	(116)
Operating Segments [Member] | Automation Solutions [Member]
Segment Reporting Information [Line Items]
Net sales	2,947	2,589	8,432	8,150
Earnings	521	311	1,353	1,012
Operating Segments [Member] | Commercial & Residential Solutions [Member]
Segment Reporting Information [Line Items]
Net sales	1,757	1,327	4,878	4,088
Earnings	375	253	1,042	796
Operating Segments [Member] | Climate Technologies [Member]
Segment Reporting Information [Line Items]
Net sales	1,268	970	3,459	2,869
Earnings	274	195	731	563
Operating Segments [Member] | Tools & Home Products [Member]
Segment Reporting Information [Line Items]
Net sales	489	357	1,419	1,219
Earnings	101	58	311	233
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Stock compensation	(66)	(51)	(191)	(69)
Unallocated pension and postretirement costs	24	12	71	37
Interest expense	(37)	(45)	(115)	(116)
Corporate and other [Member]
Segment Reporting Information [Line Items]
Earnings	(33)	(22)	(76)	(90)
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Net sales	$ (7)	$ (2)	$ (21)	$ (11)

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Business Segments Product Line Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue [Line Items]
Net sales	$ 4,697	$ 3,914	$ 13,289	$ 12,227
Automation Solutions [Member] | Measurement & Analytical Instrumentation [Member]
Disaggregation of Revenue [Line Items]
Net sales	781	709	2,211	2,280
Automation Solutions [Member] | Valves, Actuators & Regulators [Member]
Disaggregation of Revenue [Line Items]
Net sales	880	842	2,522	2,609
Automation Solutions [Member] | Industrial Solutions [Member]
Disaggregation of Revenue [Line Items]
Net sales	593	469	1,656	1,470
Automation Solutions [Member] | Systems & Software
Disaggregation of Revenue [Line Items]
Net sales	693	569	2,043	1,791
Operating Segments [Member] | Automation Solutions [Member]
Disaggregation of Revenue [Line Items]
Net sales	$ 2,947	$ 2,589	$ 8,432	$ 8,150

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Business Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Segment Reporting Information [Line Items]
Depreciation and amortization	$ 237	$ 209	$ 720	$ 631
Corporate, non-segment [Member] | Corporate and Other [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	17	8	53	26
Operating Segments [Member] | Automation Solutions [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	152	137	464	414
Operating Segments [Member] | Commercial & Residential Solutions [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	68	64	203	191
Operating Segments [Member] | Climate Technologies [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	48	44	144	133
Operating Segments [Member] | Tools & Home Products [Member]
Segment Reporting Information [Line Items]
Depreciation and amortization	$ 20	$ 20	$ 59	$ 58

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Business Segments Geographic Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue [Line Items]
Net sales	$ 4,697	$ 3,914	$ 13,289	$ 12,227
Reportable Geographical Components [Member]
Disaggregation of Revenue [Line Items]
Net sales	4,704	3,916	13,310	12,238
Reportable Geographical Components [Member] | Americas
Disaggregation of Revenue [Line Items]
Net sales	2,511	2,074	7,001	6,730
Reportable Geographical Components [Member] | Asia, Middle East & Africa
Disaggregation of Revenue [Line Items]
Net sales	1,342	1,146	3,851	3,384
Reportable Geographical Components [Member] | Europe [Member]
Disaggregation of Revenue [Line Items]
Net sales	851	696	2,458	2,124
Reportable Geographical Components [Member] | Automation Solutions [Member]
Disaggregation of Revenue [Line Items]
Net sales	2,947	2,589	8,432	8,150
Reportable Geographical Components [Member] | Automation Solutions [Member] | Americas
Disaggregation of Revenue [Line Items]
Net sales	1,321	1,159	3,711	3,915
Reportable Geographical Components [Member] | Automation Solutions [Member] | Asia, Middle East & Africa
Disaggregation of Revenue [Line Items]
Net sales	1,011	893	2,907	2,619
Reportable Geographical Components [Member] | Automation Solutions [Member] | Europe [Member]
Disaggregation of Revenue [Line Items]
Net sales	615	537	1,814	1,616
Reportable Geographical Components [Member] | Commercial & Residential Solutions [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,757	1,327	4,878	4,088
Reportable Geographical Components [Member] | Commercial & Residential Solutions [Member] | Americas
Disaggregation of Revenue [Line Items]
Net sales	1,190	915	3,290	2,815
Reportable Geographical Components [Member] | Commercial & Residential Solutions [Member] | Asia, Middle East & Africa
Disaggregation of Revenue [Line Items]
Net sales	331	253	944	765
Reportable Geographical Components [Member] | Commercial & Residential Solutions [Member] | Europe [Member]
Disaggregation of Revenue [Line Items]
Net sales	$ 236	$ 159	$ 644	$ 508