DISCONTINUED OPERATIONS

6 Months Ended

Mar. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

On May 31, 2023, the Company completed the 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 fiscal 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 and a note receivable with a face value of $2.25 billion (which accrues 5 percent interest payable in kind by capitalizing interest), while retaining a 40 percent non-controlling common equity interest 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 fiscal 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 in the third quarter of fiscal 2023 (approximately $8.4 billion after-tax including tax expense recognized prior to the completion of the transaction related to subsidiary restructurings). The new standalone business is named Copeland. See Note 10 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 fiscal 2022. The Company recognized a pretax gain of approximately $2.8 billion (approximately $2.1 billion after-tax) in the first quarter of fiscal 2023.

The financial results of Climate Technologies and InSinkErator ("ISE") are reported as discontinued operations for the three and six months ended March 31, 2023 and were as follows:


	Three Months Ended March 31, 2023
	Climate Technologies		ISE	Total
Net sales	$	1,245	—	1,245
Cost of sales	782		—	782
SG&A	127		—	127
Gain on sale of business	—		(3)	(3)
Other deductions, net	35		—	35
Earnings before income taxes	301		3	304
Income taxes	39		—	39
Earnings, net of tax	$	262	3	265

	Six Months Ended March 31, 2023
	Climate Technologies		ISE	Total
Net sales	$	2,309	49	2,358
Cost of sales	1,484		29	1,513
SG&A	269		8	277
Gain on sale of business	—		(2,783)	(2,783)
Other deductions, net	67		12	79
Earnings before income taxes	489		2,783	3,272
Income taxes	352		653	1,005
Earnings, net of tax	$	137	2,130	2,267

Climate Technologies' results for the three and six months ended March 31, 2023 included lower expense of $43 and $70, respectively, due to ceasing depreciation and amortization upon the held-for-sale classification. Other deductions, net for Climate Technologies included $28 and $55 of transaction-related costs for the three and six months ended March 31, 2023, respectively. Income taxes for the six months ended March 31, 2023 included approximately $245 for Climate Technologies subsidiary restructurings and approximately $660 related to the gain on the InSinkErator divestiture.

Net cash from operating and investing activities for Climate Technologies, InSinkErator and Therm-O-Disc for the six months ended March 31, 2024 and 2023 were as follows:


	Climate Technologies				ISE and TOD				Total
	Six Months Ended March 31,				Six Months Ended March 31,			Six Months Ended March 31,
		2023		2024		2023	2024		2023	2024
Cash from operating activities		$	44	(43)		(435)	—		(391)	(43)
Cash from investing activities		$	(139)	1		3,055	—		2,916	1

Cash from operating activities for the six months ended March 31, 2023 reflects approximately $575 of income taxes paid related to the gain on the InSinkErator divestiture and the Climate Technologies subsidiary restructurings, transaction fees and unfavorable working capital. Cash from investing activities for the six months ended March 31, 2023 reflects the proceeds of $3.0 billion related to the InSinkErator divestiture.