Discontinued Operations

12 Months Ended

Sep. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONSOn May 31, 2023, the Company completed the previously announced sale of a majority stake in its Climate Technologies business (which constitutes the former Climate Technologies segment, excluding Therm-O-Disc which was divested earlier in 2022) to private equity funds managed by Blackstone in a $14.0 billion transaction. Emerson received upfront, pre-tax cash proceeds of approximately $9.7 billion (an increase of $0.2 billion from when the

transaction was announced due to Blackstone's decision to purchase an additional 5 percent of the common equity) and a note receivable with a face value of $2.25 billion (which will accrue 5 percent interest payable in kind by capitalizing interest), while retaining a 40 percent non-controlling common equity interest (down from 45 percent when the transaction was announced) in a new standalone joint venture between Emerson and Blackstone. The Climate Technologies business, which includes the Copeland compressor business and the entire portfolio of products and services across all residential and commercial HVAC and refrigeration end-markets, had 2022 net sales of approximately $5.0 billion and pretax earnings of $1.0 billion. The Company recognized a pretax gain of approximately $10.6 billion (approximately $8.4 billion after-tax including tax expense recognized in prior quarters related to subsidiary restructurings). The new standalone business is named Copeland. See Note 8 for further details.

On October 31, 2022, the Company completed the divestiture of its InSinkErator business, which manufactures food waste disposers, to Whirlpool Corporation for $3.0 billion. This business had net sales of $630 and pretax earnings of $152 in 2022. The Company recognized a pretax gain of approximately $2.8 billion (approximately $2.1 billion after-tax) in the first quarter of 2023.

On May 31, 2022 the Company completed the divestiture of its Therm-O-Disc sensing and protection technologies business to an affiliate of One Rock Capital Partners, LLC. The Company recognized a pretax gain of $486 ($429 after-tax) in the third quarter of 2022.

The financial results of Climate Technologies, InSinkErator ("ISE") and Therm-O-Disc ("TOD") (through the completion of the divestitures), are reported as discontinued operations for all years presented and were as follows:


	Climate Technologies				ISE and TOD			Total
	2021		2022	2023	2021	2022	2023	2021	2022	2023
Net sales	$	4,401	4,976	3,156	903	848	49	5,304	5,824	3,205
Cost of sales	2,899		3,405	2,000	572	538	29	3,471	3,943	2,029
SG&A	560		514	390	125	119	7	685	633	397
Gain on sale of business	—		—	(10,610)	—	(486)	(2,783)	—	(486)	(13,393)
Other deductions, net	(10)		55	75	8	26	12	(2)	81	87
Earnings before income taxes	952		1,002	11,301	198	651	2,784	1,150	1,653	14,085
Income taxes	196		209	2,358	43	97	654	239	306	3,012
Earnings, net of tax	$	756	793	8,943	155	554	2,130	911	1,347	11,073

Climate Technologies' results for 2023 include lower expense of $96 due to ceasing depreciation and amortization upon the held-for-sale classification and $57 of transaction-related costs reported in Other deductions, net. Income taxes for 2023 included approximately $2.2 billion for the gain on the Copeland transaction and subsidiary restructurings, and approximately $660 related to the gain on the InSinkErator divestiture.

The aggregate carrying amounts of the major classes of assets and liabilities classified as held-for-sale as of September 30, 2023 and 2022 are summarized as follows:


	Climate Technologies			ISE		Total
	September 30,			September 30,		September 30,
Assets	2022		2023	2022	2023	2022	2023
Receivables	$	747	—	68	—	815	—
Inventories	449		—	81	—	530	—
Other current assets	49		—	4	—	53	—
Property, plant & equipment, net	1,122		—	141	—	1,263	—
Goodwill	716		—	2	—	718	—
Other noncurrent assets	265		—	12	—	277	—
Total assets held-for-sale	$	3,348	—	308	—	3,656	—

Liabilities
Accounts payable	$	752	—	60	—	812	—
Other current liabilities	475		—	61	—	536	—
Deferred taxes and other noncurrent liabilities	154		—	13	—	167	—
Total liabilities held-for-sale	$	1,381	—	134	—	1,515	—

Net cash from operating and investing activities for Climate Technologies, InSinkErator and Therm-O-Disc were as follows:


	Climate Technologies				ISE and TOD			Total
	2021		2022	2023	2021	2022	2023	2021	2022	2023
Cash from operating activities	$	906	881	(1,330)	211	(7)	(759)	1,117	874	(2,089)
Cash from investing activities	$	(80)	(202)	9,475	(49)	552	3,055	(129)	350	12,530

Cash from operating activities for 2023 reflects approximately $2.3 billion of income taxes paid related to the gains on the Copeland transaction and InSinkErator divestiture and subsidiary restructurings related to the Copeland transaction. Cash from investing activities for 2023 reflects the proceeds of approximately $9.7 billion related to the Copeland transaction and approximately $3.0 billion related to the InSinkErator divestiture.