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 March 31, ~~2020~~2021

☐ 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 ~~Stock Exchange~~
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 March 31, ~~2020: 597,475,300 shares.~~2021: 599.7 million shares.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Statements of Earnings

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three and six months ended March 31, ~~2019~~2020 and ~~2020~~2021

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


		Three Months Ended March 31,				Six Months Ended March 31,					Three Months Ended March 31,		Six Months Ended March 31,
		2019		2020	2019	2020		2020		2021	2020	2021
Net sales	Net sales	$	4,570	4,162	8,717	8,313	Net sales	$	4,162	4,431	8,313	8,592

Costs and expenses:	Costs and expenses:						Costs and expenses:
Cost of sales	Cost of sales	2,645		2,412	5,031	4,804	Cost of sales	2,412		2,569	4,804	5,007
Selling, general and administrative expenses	Selling, general and administrative expenses	1,145		983	2,222	2,106	Selling, general and administrative expenses	983		1,054	2,106	2,052
Other deductions, net	Other deductions, net	57		42	107	220	Other deductions, net	42		33	220	155
Interest expense (net of interest income of $7, $6, $12 and $12, respectively)		48		36	91	71
Interest expense (net of interest income of $6, $4, $12 and $6, respectively)							Interest expense (net of interest income of $6, $4, $12 and $6, respectively)	36		38	71	78

Earnings before income taxes	Earnings before income taxes	675		689	1,266	1,112	Earnings before income taxes	689		737	1,112	1,300

Income taxes	Income taxes	150		165	274	259	Income taxes	165		169	259	280

Net earnings	Net earnings	525		524	992	853	Net earnings	524		568	853	1,020

Less: Noncontrolling interests in earnings of subsidiaries	Less: Noncontrolling interests in earnings of subsidiaries	5		7	7	10	Less: Noncontrolling interests in earnings of subsidiaries	7		7	10	14

Net earnings common stockholders	Net earnings common stockholders	$	520	517	985	843	Net earnings common stockholders	$	517	561	843	1,006

Basic earnings per share common stockholders	Basic earnings per share common stockholders	$	0.85	0.85	1.59	1.38	Basic earnings per share common stockholders	$	0.85	0.94	1.38	1.68

Diluted earnings per share common stockholders	Diluted earnings per share common stockholders	$	0.84	0.84	1.58	1.37	Diluted earnings per share common stockholders	$	0.84	0.93	1.37	1.67

Cash dividends per common share		$	0.49	0.50	0.98	1.00

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three and six months ended March 31, ~~2019~~2020 and ~~2020~~2021

(Dollars in millions; unaudited)

Three Months Ended March 31, Six Months Ended March 31,
2019 2020 2019 2020
Net earnings $ 525 524 992 853
Other comprehensive income (loss), net of tax:
Foreign currency translation 88 (281) 53 (182)
Pension and postretirement 12 30 25 58
Cash flow hedges 25 (75) 10 (56)
Total other comprehensive income (loss) 125 (326) 88 (180)
Comprehensive income 650 198 1,080 673
Less: Noncontrolling interests in comprehensive income of subsidiaries 6 8 8 11
Comprehensive income common stockholders 644 190 1,072 662


	Three Months Ended March 31,				Six Months Ended March 31,
		2020		2021		2020	2021
Net earnings		$	524	568		853	1,020

Other comprehensive income (loss), net of tax:
Foreign currency translation		(281)		(21)		(182)	168
Pension and postretirement		30		27		58	54
Cash flow hedges		(75)		1		(56)	32
Total other comprehensive income (loss)		(326)		7		(180)	254

Comprehensive income		198		575		673	1,274

Less: Noncontrolling interests in comprehensive income of subsidiaries		8		6		11	13
Comprehensive income common stockholders		$	190	569		662	1,261

See accompanying Notes to Consolidated Financial Statements.

Consolidated Balance Sheets

EMERSON ELECTRIC CO. & SUBSIDIARIES

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


		Sept 30, 2019		Mar 31, 2020		Sept 30, 2020		Mar 31, 2021
ASSETS	ASSETS				ASSETS
Current assets	Current assets				Current assets
Cash and equivalents	Cash and equivalents	$	1,494	2,583	Cash and equivalents	$	3,315	2,342
Receivables, less allowances of $112 and $112, respectively		2,985		2,641
Receivables, less allowances of $138 and $129, respectively					Receivables, less allowances of $138 and $129, respectively	2,802		2,754
Inventories	Inventories	1,880		2,058	Inventories	1,928		2,016
Other current assets	Other current assets	780		750	Other current assets	761		849

Total current assets	Total current assets	7,139		8,032	Total current assets	8,806		7,961

Property, plant and equipment, net	Property, plant and equipment, net	3,642		3,553	Property, plant and equipment, net	3,688		3,663
Other assets	Other assets				Other assets
Goodwill	Goodwill	6,536		6,520	Goodwill	6,734		7,787
Other intangible assets	Other intangible assets	2,615		2,498	Other intangible assets	2,468		3,095
Other	Other	565		1,108	Other	1,186		1,294

Total other assets	Total other assets	9,716		10,126	Total other assets	10,388		12,176
Total assets	Total assets	$	20,497	21,711	Total assets	$	22,882	23,800

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY				LIABILITIES AND EQUITY
Current liabilities	Current liabilities				Current liabilities
Short-term borrowings and current maturities of long-term debt	Short-term borrowings and current maturities of long-term debt	$	1,444	3,741	Short-term borrowings and current maturities of long-term debt	$	1,160	1,456
Accounts payable	Accounts payable	1,874		1,521	Accounts payable	1,715		1,797
Accrued expenses	Accrued expenses	2,658		2,678	Accrued expenses	2,910		3,041

Total current liabilities	Total current liabilities	5,976		7,940	Total current liabilities	5,785		6,294

Long-term debt	Long-term debt	4,277		3,960	Long-term debt	6,326		5,823

Other liabilities	Other liabilities	1,971		2,248	Other liabilities	2,324		2,503

Equity	Equity				Equity
Common stock, $0.50 par value; authorized, 1,200.0 shares; issued, 953.4 shares; outstanding, 611.0 shares and 597.5 shares, respectively		477		477
Common stock, $0.50 par value; authorized, 1,200.0 shares; issued, 953.4 shares; outstanding, 598.0 shares and 599.7 shares, respectively					Common stock, $0.50 par value; authorized, 1,200.0 shares; issued, 953.4 shares; outstanding, 598.0 shares and 599.7 shares, respectively	477		477
Additional paid-in-capital	Additional paid-in-capital	393		453	Additional paid-in-capital	470		511
Retained earnings	Retained earnings	24,199		24,431	Retained earnings	24,955		25,354
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(1,722)		(1,903)	Accumulated other comprehensive income (loss)	(1,577)		(1,322)
Cost of common stock in treasury, 342.4 shares and 355.9 shares, respectively		(15,114)		(15,941)
Cost of common stock in treasury, 355.4 shares and 353.7 shares, respectively					Cost of common stock in treasury, 355.4 shares and 353.7 shares, respectively	(15,920)		(15,890)
Common stockholders’ equity	Common stockholders’ equity	8,233		7,517	Common stockholders’ equity	8,405		9,130
Noncontrolling interests in subsidiaries	Noncontrolling interests in subsidiaries	40		46	Noncontrolling interests in subsidiaries	42		50
Total equity	Total equity	8,273		7,563	Total equity	8,447		9,180
Total liabilities and equity	Total liabilities and equity	$	20,497	21,711	Total liabilities and equity	$	22,882	23,800

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Equity

EMERSON ELECTRIC CO. & SUBSIDIARIES

Three and six months ended March 31, ~~2019~~2020 and ~~2020~~2021

(Dollars in millions; unaudited)


		Three Months Ended March 31,				Six Months Ended March 31,					Three Months Ended March 31,		Six Months Ended March 31,
		2019		2020	2019	2020		2020		2021	2020	2021

Common stock	Common stock	$	477	477	477	477	Common stock	$	477	477	477	477

Additional paid-in-capital	Additional paid-in-capital						Additional paid-in-capital
Beginning balance	Beginning balance	375		447	348	393	Beginning balance	447		499	393	470
Stock plans	Stock plans	5		6	32	60	Stock plans	6		12	60	41

Ending balance	Ending balance	380		453	380	453	Ending balance	453		511	453	511

Retained earnings	Retained earnings						Retained earnings
Beginning balance	Beginning balance	23,252		24,220	23,072	24,199	Beginning balance	24,220		25,096	24,199	24,955
Net earnings common stockholders	Net earnings common stockholders	520		517	985	843	Net earnings common stockholders	517		561	843	1,006
Dividends paid		(302)		(306)	(607)	(611)
Adoption of accounting standard updates		5		—	25	—
Dividends paid (per share: $0.50, $0.505, $1.00 and $1.01, respectively)							Dividends paid (per share: $0.50, $0.505, $1.00 and $1.01, respectively)	(306)		(303)	(611)	(606)
Adoption of accounting standard							Adoption of accounting standard	0		0	0	(1)
Ending balance	Ending balance	23,475		24,431	23,475	24,431	Ending balance	24,431		25,354	24,431	25,354

Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)						Accumulated other comprehensive income (loss)
Beginning balance	Beginning balance	(1,052)		(1,576)	(1,015)	(1,722)	Beginning balance	(1,576)		(1,330)	(1,722)	(1,577)
Foreign currency translation	Foreign currency translation	87		(282)	52	(183)	Foreign currency translation	(282)		(20)	(183)	169
Pension and postretirement	Pension and postretirement	12		30	25	58	Pension and postretirement	30		27	58	54
Cash flow hedges	Cash flow hedges	25		(75)	10	(56)	Cash flow hedges	(75)		1	(56)	32
Ending balance	Ending balance	(928)		(1,903)	(928)	(1,903)	Ending balance	(1,903)		(1,322)	(1,903)	(1,322)

Treasury stock	Treasury stock						Treasury stock
Beginning balance	Beginning balance	(14,816)		(15,147)	(13,935)	(15,114)	Beginning balance	(15,147)		(15,847)	(15,114)	(15,920)
Purchases	Purchases	(75)		(813)	(1,000)	(942)	Purchases	(813)		(69)	(942)	(82)
Issued under stock plans	Issued under stock plans	13		19	57	115	Issued under stock plans	19		26	115	112
Ending balance	Ending balance	(14,878)		(15,941)	(14,878)	(15,941)	Ending balance	(15,941)		(15,890)	(15,941)	(15,890)

Common stockholders' equity	Common stockholders' equity	8,526		7,517	8,526	7,517	Common stockholders' equity	7,517		9,130	7,517	9,130

Noncontrolling interests in subsidiaries	Noncontrolling interests in subsidiaries						Noncontrolling interests in subsidiaries
Beginning balance	Beginning balance	40		38	43	40	Beginning balance	38		44	40	42
Net earnings	Net earnings	5		7	7	10	Net earnings	7		7	10	14
Other comprehensive income	Other comprehensive income	1		1	1	1	Other comprehensive income	1		(1)	1	(1)
Dividends paid	Dividends paid	—		—	(5)	(5)	Dividends paid	0		0	(5)	(5)

Ending balance	Ending balance	46		46	46	46	Ending balance	46		50	46	50

Total equity	Total equity	$	8,572	7,563	8,572	7,563	Total equity	$	7,563	9,180	7,563	9,180

See accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Cash Flows

EMERSON ELECTRIC CO. & SUBSIDIARIES

Six Months Ended March 31, ~~2019~~2020 and ~~2020~~2021

(Dollars in millions; unaudited)


		Six Months Ended						Six Months Ended
		March 31,						March 31,
		2019		2020		2020		2021
Operating activities	Operating activities				Operating activities
Net earnings	Net earnings	$	992	853	Net earnings	$	853	1,020

Adjustments to reconcile net earnings to net cash provided by operating activities:	Adjustments to reconcile net earnings to net cash provided by operating activities:				Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	406		422	Depreciation and amortization	422		483
Stock compensation	Stock compensation	52		18	Stock compensation	18		125
Pension expense	Pension expense	—		34	Pension expense	34		16
Changes in operating working capital	Changes in operating working capital	(530)		(260)	Changes in operating working capital	(260)		66

Other, net	Other, net	(64)		(55)	Other, net	(55)		(95)

Cash provided by operating activities	Cash provided by operating activities	856		1,012	Cash provided by operating activities	1,012		1,615

Investing activities	Investing activities				Investing activities
Capital expenditures	Capital expenditures	(274)		(225)	Capital expenditures	(225)		(222)
Purchases of businesses, net of cash and equivalents acquired	Purchases of businesses, net of cash and equivalents acquired	(243)		(96)	Purchases of businesses, net of cash and equivalents acquired	(96)		(1,611)
Divestitures of businesses		5		—

Other, net	Other, net	(65)		(42)	Other, net	(42)		61

Cash used in investing activities	Cash used in investing activities	(577)		(363)	Cash used in investing activities	(363)		(1,772)

Financing activities	Financing activities				Financing activities
Net increase in short-term borrowings	Net increase in short-term borrowings	851		2,076	Net increase in short-term borrowings	2,076		60
Proceeds from short-term borrowings greater than three months	Proceeds from short-term borrowings greater than three months	—		433	Proceeds from short-term borrowings greater than three months	433		0

Proceeds from long-term debt		1,135		—

Payments of long-term debt	Payments of long-term debt	(406)		(502)	Payments of long-term debt	(502)		(301)
Dividends paid	Dividends paid	(607)		(611)	Dividends paid	(611)		(606)
Purchases of common stock	Purchases of common stock	(1,000)		(942)	Purchases of common stock	(942)		(78)
Other, net	Other, net	29		39	Other, net	39		83
Cash provided by financing activities		2		493
Cash provided by (used in) financing activities					Cash provided by (used in) financing activities	493		(842)

Effect of exchange rate changes on cash and equivalents	Effect of exchange rate changes on cash and equivalents	10		(53)	Effect of exchange rate changes on cash and equivalents	(53)		26
Increase in cash and equivalents		291		1,089
Increase (Decrease) in cash and equivalents					Increase (Decrease) in cash and equivalents	1,089		(973)
Beginning cash and equivalents	Beginning cash and equivalents	1,093		1,494	Beginning cash and equivalents	1,494		3,315
Ending cash and equivalents	Ending cash and equivalents	$	1,384	2,583	Ending cash and equivalents	$	2,583	2,342

Changes in operating working capital	Changes in operating working capital				Changes in operating working capital
Receivables	Receivables	$	175	283	Receivables	$	283	75
Inventories	Inventories	(205)		(216)	Inventories	(216)		(61)
Other current assets	Other current assets	(82)		32	Other current assets	32		(16)
Accounts payable	Accounts payable	(211)		(290)	Accounts payable	(290)		55
Accrued expenses	Accrued expenses	(207)		(69)	Accrued expenses	(69)		13

Total changes in operating working capital	Total changes in operating working capital	$	(530)	(260)	Total changes in operating working capital	$	(260)	66

See accompanying Notes to Consolidated Financial Statements.

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, ~~2019.~~2020. Certain prior year amounts have been reclassified to conform to current year presentation. See Note 12.

OnEffective October 1, ~~2019,~~2020, the Company adopted ~~ASC 842,~~ ~~Leases,~~ two accounting standard updates and one new accounting standard which ~~requires rights and obligations related to lease arrangements to be recognized~~had an immaterial impact on the balance sheet, using the optional transition method under which prior periods were not adjusted. The Company elected the package of practical expedients for leases that commenced prior to the adoption date, which included carrying forward the historical lease classification as operating or finance. The adoption of ASC 842 resulted in the recognition of operating lease right-of-use assets and related lease liabilities of approximately $500Company's financial statements as of ~~October 1, 2019, but did not materially impact the Company's earnings or cash flows~~and for the ~~three and~~ six months ended March 31, ~~2020.~~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.

~~On October 1, 2019, the Company adopted updates~~•Updates to ASC ~~815,~~350, ~~Derivatives~~Intangibles - Goodwill and ~~Hedging~~Other, which ~~permit hedging~~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 contractually specified risk components. Additionally, the updates eliminate the requirement to separately measure and report hedge ineffectiveness and simplify hedge documentation and effectiveness assessment requirements. These updates were adopted using a modified retrospective approach and were immaterial to the Company'stypes of financial ~~statements for the three and six months ended March 31, 2020.~~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 1312 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, 2019			Mar 31, 2020				Sept 30, 2020		Mar 31, 2021
Unbilled receivables (contract assets)	Unbilled receivables (contract assets)		$	456	397	Unbilled receivables (contract assets)	$	458		472
Customer advances (contract liabilities)	Customer advances (contract liabilities)		(519)		(587)	Customer advances (contract liabilities)	(583)			(749)
Net contract liabilities	Net contract liabilities		$	(63)	(190)	Net contract liabilities	$	(125)		(277)

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 six months ended March 31, ~~2020~~2021 included ~~approximately $56~~$105 and ~~$326, respectively,~~$362 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 six months ended March 31, ~~2020~~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 March 31, ~~2020,~~2021, the Company's backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was approximately ~~$5.7~~$6.3 billion. The Company expects to recognize approximately 8580 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 March 31,			Six Months Ended March 31,				Three Months Ended March 31,		Six Months Ended March 31,
		2019	2020	2019	2020		2020	2021	2020	2021

Basic shares outstanding	Basic shares outstanding	614.0	607.4	619.0	608.7	Basic shares outstanding	607.4	599.4	608.7	599.0
Dilutive shares	Dilutive shares	4.1	3.6	3.9	3.9	Dilutive shares	3.6	3.4	3.9	3.3
Diluted shares outstanding	Diluted shares outstanding	618.1	611.0	622.9	612.6	Diluted shares outstanding	611.0	602.8	612.6	602.3

(4) ACQUISITIONS AND DIVESTITURES

~~During the first six months of~~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 (NaN 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. Valuations of these assets and liabilities are in process and subject to refinement. Results of operations for the three months ended March 31, 2021 included first-year pretax acquisition ~~spending totaled $96,~~accounting charges related to backlog amortization and deferred revenue of $6 and $4, respectively, while year-to-date results included $17 and $8, 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 83 businesses in ~~2019, all~~fiscal 2020, 2 in the Automation Solutions segment and 1 in the Climate Technologies segment, for ~~$469,~~$126, net of cash acquired. These eight businesses had combined annual sales of approximately $300. The Company recognized goodwill of $213 ($158 of which is expected to be tax deductible) and other identifiable intangible assets of $155, primarily customer relationships and intellectual property with a weighted-average life of approximately nine years.

~~Valuations of certain acquired assets and liabilities are in-process and subject to refinement for transactions completed after March 31, 2019.~~

(5) PENSION & POSTRETIREMENT PLANS

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


		Three Months Ended March 31,						Six Months Ended March 31,						Three Months Ended March 31,		Six Months Ended March 31,
			2019		2020	2019		2020		2020		2021	2020		2021
Service cost	Service cost		$	18	22	$	36	44	Service cost	$	22	21	44		42
Interest cost	Interest cost		50		40	100		80	Interest cost	40		32	80		64
Expected return on plan assets	Expected return on plan assets		(88)		(84)	(176)		(168)	Expected return on plan assets	(84)		(84)	(168)		(168)
Net amortization	Net amortization		16		38	33		75	Net amortization	38		35	75		70
Total	Total		$	(4)	16	$	(7)	31	Total	$	16	4	31		8

(6) OTHER DEDUCTIONS, NET

Other deductions, net are summarized below:


		Three Months Ended March 31,								Six Months Ended March 31,							Three Months Ended March 31,			Six Months Ended March 31,
		2019				2020			2019		2020	2020			2021		2020		2021

Amortization of intangibles (intellectual property and customer relationships)	Amortization of intangibles (intellectual property and customer relationships)		$	60	59		$	117		118	Amortization of intangibles (intellectual property and customer relationships)	$	59	74		118		152
Restructuring costs	Restructuring costs		10		31		20			128	Restructuring costs	31		17		128		83
Special advisory fees	Special advisory fees		—		—		—			13	Special advisory fees	0		0		13		0
Other	Other		(13)		(48)		(30)			(39)	Other	(48)		(58)		(39)		(80)
Total	Total		$	57	42		$	107		220	Total	$	42	33		220		155

InThe increase in intangibles amortization for the ~~second quarter~~three and six months ended March 31, 2021 was due to the OSI acquisition, including backlog amortization of ~~fiscal 2020, the change in Other included favorable impacts from foreign currency transactions of $36 and supplemental retirement plans of $16, partially offset by~~$6 an ~~unfavorable impact from pensions of $16. On a year-to-date basis, the~~d $17, respectively. The change in Other reflects investment-related gains, including an investment gain of $21 and a ~~favorable impact~~gain from the acquisition of the remaining interest of an equity investment of $17 recognized in the first quarter of fiscal 2021, and a gain of $31 on the sale of an equity investment in the second quarter. Unfavorable foreign currency transactions ofnegatively impacted results for the three and six months ended March 31, 2021 by $22 and ~~lower litigation costs, partially offset by an unfavorable impact from pensions of $30.~~$29, respectively.

(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. ~~The costs~~Costs incurred in the first ~~half~~six months of fiscal ~~2020 largely~~2021 relate to the Company's initiatives to improve operating margins that began in the third quarter of fiscal 2019 and ~~include~~were increased in response to the effects of the COVID-19 pandemic on demand for the Company's products. Expenses incurred in the first six months of fiscal 2021 included workforce reductions of approximately ~~1,800~~1,700 employees. The Company expects fiscal ~~2020~~2021 restructuring expense and related costs to be approximately ~~$280, an increase of $65 compared to its previous estimate,~~$200, including costs to complete actions initiated in the first ~~half~~six months of the year.

Restructuring expense by business segment follows:


		Three Months Ended March 31,						Six Months Ended March 31,							Three Months Ended March 31,			Six Months Ended March 31,
		2019			2020		2019			2020			2020	2021		2020	2021

Automation Solutions	Automation Solutions		$	6	23	11		106	Automation Solutions		$	23	12	106		76

Climate Technologies	Climate Technologies		1		2	4		9	Climate Technologies		2		3	9		4
Tools & Home Products	Tools & Home Products		2		5	4		8	Tools & Home Products		5		1	8		2
Commercial & Residential Solutions	Commercial & Residential Solutions		3		7	8		17	Commercial & Residential Solutions		7		4	17		6

Corporate	Corporate		1		1	1		5	Corporate		1		1	5		1

Total	Total		$	10	31	20		128	Total		$	31	17	128		83

Details of the change in the liability for restructuring costs during the six months ended March 31, ~~2020~~2021 follow:


		Sept 30, 2019			Expense		Utilized/Paid			Mar 31, 2020			Sept 30, 2020	Expense	Utilized/Paid	Mar 31, 2021

Severance and benefits	Severance and benefits		$	62	105	57		110	Severance and benefits		$	176	71	71	176

Other	Other		7		23	26		4	Other		5		12	13	4
Total	Total		$	69	128	83		114	Total		$	181	83	84	180

The tables above do not include $9 and $4 of costs related to ~~these~~ restructuring actions incurred infor the ~~second quarter of fiscal~~three months ended March 31, 2020 and 2021, respectively, that ~~U.S. GAAP requires~~are required to be reported in cost of ~~sales.~~ sales and selling, general and administrative expenses, while year-to-date amounts are $9 and $7, respectively.

(8) ~~INCOME~~ TAXES

Income taxes were ~~$165~~$169 in the second quarter of fiscal ~~2020~~2021 and ~~$150~~$165 in 2019, resulting in effective tax rates of 24 percent and 22 percent, respectively. The current year rate included unfavorable discrete items, which increased the rate 1 percentage point, while the prior year rate included favorable discrete tax items, which reduced the rate 2 percentage points.

~~Income taxes were $259 for the first six months of~~ 2020, ~~and $274 for 2019,~~ resulting in effective tax rates of 23 percent and 2224 percent, respectively. The current year and prior year rate included ~~favorable~~unfavorable discrete tax items which ~~reduced~~increased the rate 21 percentage ~~points.~~point in both years.

Income taxes were $280 for the first six months of 2021 and $259 for 2020, resulting in effective tax rates of 22 percent and 23 percent, respectively.

On March 27, 2020, the CARES Act ~~(the "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 ~~is evaluating the impact of the Act and currently expects to benefit from the deferral~~deferred $73 of certain payroll taxes through the end of calendar year ~~2020.~~2020, half of which is due in December 2021 with the remainder due in December 2022.

(9) ~~LEASES~~OTHER FINANCIAL INFORMATION


	Sept 30, 2020			Mar 31, 2021
Inventories
Finished products		$	584		622
Raw materials and work in process		1,344			1,394
Total		$	1,928		2,016

The Company leases offices; manufacturing facilities and equipment; and transportation, information technology and office equipment under operating lease arrangements. Finance lease arrangements are immaterial. The Company determines whether an arrangement is, or contains, a lease at contract inception. An arrangement contains a lease if the Company has the right to direct the use of and obtain substantially all of the economic benefits of an identified asset. Right-of-use assets and lease liabilities are recognized at lease commencement based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recognized on the balance sheet and are recorded as short-term lease expense. The discount rate used to calculate present value is the Company's incremental borrowing rate based on the lease term and the economic environment of the applicable country or region.



Property, plant and equipment, net
Property, plant and equipment, at cost	$	9,055	9,227
Less: Accumulated depreciation	5,367		5,564
Total	$	3,688	3,663

Certain leases contain renewal options or options to terminate prior to lease expiration, which are included in the measurement of right-of-use assets and lease liabilities when it is reasonably certain they will be exercised. The Company has elected to account for lease and non-lease components as a single lease component for its offices and manufacturing facilities. Some lease arrangements include payments that are adjusted periodically based on actual charges incurred for common area maintenance, utilities, taxes and insurance, or changes in an index or rate referenced in the lease. The fixed portion of these payments is included in the measurement of right-of-use assets and lease liabilities at lease commencement, while the variable portion is recorded as variable lease expense. The Company's leases typically do not contain material residual value guarantees or restrictive covenants.



Goodwill by business segment
Automation Solutions	$	5,583	6,603

Climate Technologies	730		757
Tools & Home Products	421		427
Commercial & Residential Solutions	1,151		1,184

Total	$	6,734	7,787

~~The components~~



Other intangible assets
Gross carrying amount	$	5,106	5,963
Less: Accumulated amortization	2,638		2,868
Net carrying amount	$	2,468	3,095

Other intangible assets include customer relationships, net of ~~lease expense for the three~~$1,328 and ~~six months ended~~$1,597 as of September 30, 2020 and March 31, ~~2020 were as follows:~~2021, respectively. The increases in goodwill and other intangible assets reflect the acquisition of OSI. See Note 4.

Three Months Ended Six Months Ended
March 31, 2020
Operating lease expense $ 53 106
Variable lease expense $ 5 10



Other assets include the following:
Operating lease right-of-use assets	$	508	523
Pension assets	265		374
Deferred income taxes	99		108
Asbestos-related insurance receivables	100		97

Short-term lease expense and sublease income were immaterial for the three and six months ended March 31, 2020. Cash paid for operating leases is classified within operating cash flows and was $101 for the six months ended March 31, 2020. Operating lease right-of-use asset additions were $123 for the six months ended March 31, 2020.

The following table summarizes the balances of the Company's operating lease right-of-use assets and operating lease liabilities as of March 31, 2020, the vast majority of which relates to offices and manufacturing facilities:

~~Mar 31, 2020~~

~~Right-of-use assets (Other assets)~~

~~496~~

~~Current lease liabilities (Accrued expenses)~~

~~148~~

~~Noncurrent lease liabilities (Other liabilities)~~

~~353~~

~~The weighted-average remaining lease term for operating leases was 5.2 years and the weighted-average discount rate was 2.8 percent as of March 31, 2020.~~


	Sept 30, 2020			Mar 31, 2021
Accrued expenses include the following:
Customer advances (contract liabilities)		$	583		749
Employee compensation		577			516
Product warranty		148			152
Operating lease liabilities (current)		148			150

~~Future maturities of operating lease liabilities as of March 31, 2020 are summarized below:~~

Mar 31, 2020
Remainder of 2020 $ 84
2021 132
2022 100
2023 73
2024 51
Thereafter 94
Total lease payments 534
Less: Interest 33
Total lease liabilities $ 501

~~Lease commitments that have not yet commenced were immaterial as of March 31, 2020.~~


Other liabilities include the following:
Pension and postretirement liabilities	$	769	781
Deferred income taxes	261		429
Operating lease liabilities (noncurrent)	373		389
Asbestos litigation	295		272

The ~~future minimum annual rentals under noncancelable long-term leases as of September 30, 2019 were as follows: $159~~increase in ~~2020, $112 in 2021, $82 in 2022, $57 in 2023, $38 in 2024 and $63 thereafter.~~

~~(10) OTHER FINANCIAL INFORMATION~~

Sept 30, 2019 Mar 31, 2020
Inventories
Finished products $ 578 641
Raw materials and work in process 1,302 1,417
Total $ 1,880 2,058

Property, plant and equipment, net
Property, plant and equipment, at cost $ 8,671 8,734
Less: Accumulated depreciation 5,029 5,181
Total $ 3,642 3,553

Goodwill by business segment
Automation Solutions $ 5,467 5,404
Climate Technologies 668 726
Tools & Home Products 401 390
Commercial & Residential Solutions 1,069 1,116
Total $ 6,536 6,520

Other intangible assets
Gross carrying amount $ 4,872 4,916
Less: Accumulated amortization 2,257 2,418
Net carrying amount $ 2,615 2,498

~~Other intangible assets include customer relationships of $1,305 and $1,391 as of March 31, 2020 and September 30, 2019, respectively.~~

Sept 30, 2019 Mar 31, 2020
Other assets include the following:
Operating lease right-of-use assets $ — 496
Pension assets 164 230
Asbestos-related insurance receivables 115 105
Deferred income taxes 97 83

Accrued expenses include the following:
Customer advances (contract liabilities) $ 519 587
Employee compensation 606 512
Operating lease liabilities (current) — 148
Product warranty 140 134

Other liabilities include the following:
Pension and postretirement liabilities $ 775 770
Operating lease liabilities (noncurrent) — 353
Deferred income taxes 327 339
Asbestos litigation 313 305
deferred income taxes is largely due to the OSI acquisition.

~~(11)~~(10) FINANCIAL INSTRUMENTS

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

Hedging Activities – As of March 31, ~~2020,~~2021, the notional amount of foreign currency hedge positions was approximately ~~$2.2~~$2.1 billion, and commodity hedge contracts totaled approximately ~~$122~~$111 (primarily 5039 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 March 31, ~~2020~~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 six months ended March 31, ~~2020~~2021 and ~~2019:~~2020:


			Into Earnings									Into OCI												Into Earnings			Into OCI
			2nd Quarter					Six Months			2nd Quarter					Six Months						2nd Quarter		Six Months		2nd Quarter	Six Months
Gains (Losses)	Gains (Losses)	Location	2019		2020	2019		2020	2019	2020	2019	2020	Gains (Losses)	Location			2020		2021	2020	2021	2020	2021	2020	2021
Commodity	Commodity	Cost of sales	$	(3)	(1)	(6)		(4)	10	(23)	3	(16)	Commodity	Cost of sales			$	(1)	8	(4)	11	(23)	13	(16)	26
Foreign currency	Foreign currency	Sales	(1)		(1)	(3)		(3)	(1)	(8)	(2)	(5)	Foreign currency	Sales			(1)		1	(3)	2	(8)	(2)	(5)	3
Foreign currency	Foreign currency	Cost of sales	5		4	9		11	23	(66)	12	(49)	Foreign currency	Cost of sales			4		2	11	2	(66)	0	(49)	27
Foreign currency	Foreign currency	Other deductions, net	29		13	40		21					Foreign currency	Other deductions, net			13		29	21	25

Net Investment Hedges	Net Investment Hedges														Net Investment Hedges
Euro denominated debt	Euro denominated debt								6	57	6	31	Euro denominated debt									57	53	31	(27)
Total	Total		$	30	15	$	40	25	38	(40)	19	(39)	Total				$	15	40	25	40	(40)	64	(39)	29

Regardless of whether derivatives and non-derivative financial instruments receive hedge accounting, the Company expects hedging gains or losses to be ~~essentially~~ 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.~~hierarchy. As of March 31, ~~2020,~~2021, the fair value of long-term debt was ~~$4.5~~$6.8 billion, which exceeded the

carrying value by ~~$280.~~$425. 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, ~~2019.~~2020.

Counterparties to derivatives ~~arrangements~~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 ~~$53.~~immaterial. The Company also can demand full collateralization of derivatives in net asset positions should any counterparty credit ratings fall below certain thresholds. NaN collateral was posted with counterparties and NaN was held by the Company as of March 31, ~~2020.~~2021.

~~(12)~~(11) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Activity in Accumulated other comprehensive income (loss) for the three and six months ended March 31, ~~2020~~2021 and ~~2019~~2020 is shown below, net of income taxes:


		Three Months Ended March 31,					Six Months Ended March 31,						Three Months Ended March 31,		Six Months Ended March 31,
			2019		2020	2019	2020		2020		2021	2020		2021
Foreign currency translation	Foreign currency translation							Foreign currency translation
Beginning balance	Beginning balance		$	(635)	(695)	(600)	(794)	Beginning balance	$	(695)	(522)	(794)		(711)
Other comprehensive income (loss), net of tax of $(1), $(13), $(1) and $(7), respectively			87		(282)	52	(183)
Other comprehensive income (loss), net of tax of $(13), $(13), $(7) and $6, respectively								Other comprehensive income (loss), net of tax of $(13), $(13), $(7) and $6, respectively	(282)		(20)	(183)		169

Ending balance	Ending balance		(548)		(977)	(548)	(977)	Ending balance	(977)		(542)	(977)		(542)

Pension and postretirement	Pension and postretirement							Pension and postretirement
Beginning balance	Beginning balance		(407)		(900)	(420)	(928)	Beginning balance	(900)		(837)	(928)		(864)
Amortization of deferred actuarial losses into earnings, net of tax of $(4), $(8), $(8) and $(17), respectively			12		30	25	58
Amortization of deferred actuarial losses into earnings, net of tax of $(8), $(8), $(17) and $(16), respectively								Amortization of deferred actuarial losses into earnings, net of tax of $(8), $(8), $(17) and $(16), respectively	30		27	58		54

Ending balance	Ending balance		(395)		(870)	(395)	(870)	Ending balance	(870)		(810)	(870)		(810)

Cash flow hedges	Cash flow hedges							Cash flow hedges
Beginning balance	Beginning balance		(10)		19	5	—	Beginning balance	19		29	0		(2)
Deferral of gains (losses) arising during the period, net of tax of $(8), $23, $(3) and $17, respectively			24		(74)	10	(53)
Reclassification of realized (gains) losses to sales and cost of sales, net of tax of $0, $1, $0 and $1, respectively			1		(1)	—	(3)
Deferral of gains (losses) arising during the period, net of tax of $23, $(2), $17 and $(13), respectively								Deferral of gains (losses) arising during the period, net of tax of $23, $(2), $17 and $(13), respectively	(74)		9	(53)		43
Reclassification of realized (gains) losses to sales and cost of sales, net of tax of $1, $3, $1 and $4, respectively								Reclassification of realized (gains) losses to sales and cost of sales, net of tax of $1, $3, $1 and $4, respectively	(1)		(8)	(3)		(11)
Ending balance	Ending balance		15		(56)	15	(56)	Ending balance	(56)		30	(56)		30

Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)		$	(928)	(1,903)	(928)	(1,903)	Accumulated other comprehensive income (loss)	$	(1,903)	(1,322)	(1,903)		(1,322)

~~(13)~~(12) BUSINESS SEGMENTS

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


		Three Months Ended March 31,								Six Months Ended March 31,										Three Months Ended March 31,			Six Months Ended March 31,
		Sales				Earnings			Sales						Earnings			Sales		Earnings		Sales	Earnings
		2019		2020	2019	2020	2019	2020	2019	2020		2020		2021		2020	2021	2020	2021	2020	2021

Automation Solutions	Automation Solutions	$	3,010	2,709	444	391	5,809	5,561	851	701	Automation Solutions	$	2,709	2,793		391	471	5,561	5,485	701	832

Climate Technologies	Climate Technologies	1,092		1,026	226	217	1,972	1,899	372	368	Climate Technologies	1,026		1,160		217	245	1,899	2,191	368	457
Tools & Home Products	Tools & Home Products	469		432	102	89	927	862	193	175	Tools & Home Products	432		485		89	112	862	930	175	210
Commercial & Residential Solutions	Commercial & Residential Solutions	1,561		1,458	328	306	2,899	2,761	565	543	Commercial & Residential Solutions	1,458		1,645		306	357	2,761	3,121	543	667

Stock compensation	Stock compensation				(59)	38			(52)	(18)	Stock compensation					38	(61)			(18)	(125)
Unallocated pension and postretirement costs	Unallocated pension and postretirement costs				27	12			54	25	Unallocated pension and postretirement costs					12	23			25	47
Corporate and other	Corporate and other				(17)	(22)			(61)	(68)	Corporate and other					(22)	(15)			(68)	(43)
Eliminations/Interest	Eliminations/Interest	(1)		(5)	(48)	(36)	9	(9)	(91)	(71)	Eliminations/Interest	(5)		(7)		(36)	(38)	(9)	(14)	(71)	(78)
Total	Total	$	4,570	4,162	675	689	8,717	8,313	1,266	1,112	Total	$	4,162	4,431		689	737	8,313	8,592	1,112	1,300

~~The decrease~~In fiscal 2021, the Company reclassified certain software product sales that were previously reported in ~~stock compensation expense reflects the decline in the Company's stock price in the current year.~~

Measurement and Analytical Instrumentation to Systems & Software (previously described as Process Control Systems & Solutions).

Automation Solutions sales by major product offering are summarized ~~below:~~below, including the reclassification of prior year amounts to reflect this change.


		Three Months Ended March 31,					Six Months Ended March 31,						Three Months Ended March 31,		Six Months Ended March 31,
			2019		2020	2019	2020		2020		2021	2020		2021

Measurement & Analytical Instrumentation	Measurement & Analytical Instrumentation		$	927	816	1,785	1,646	Measurement & Analytical Instrumentation	$	776	732	1,571		1,430
Valves, Actuators & Regulators	Valves, Actuators & Regulators		937		854	1,811	1,767	Valves, Actuators & Regulators	854		836	1,767		1,642
Industrial Solutions	Industrial Solutions		574		494	1,116	1,001	Industrial Solutions	494		555	1,001		1,063
Process Control Systems & Solutions			572		545	1,097	1,147
Systems & Software								Systems & Software	585		670	1,222		1,350
Automation Solutions	Automation Solutions		$	3,010	2,709	5,809	5,561	Automation Solutions	$	2,709	2,793	5,561		5,485

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


		Three Months Ended March 31,						Six Months Ended March 31,					Three Months Ended March 31,		Six Months Ended March 31,
			2019		2020	2019		2020		2020		2021	2020	2020
Automation Solutions	Automation Solutions		$	131	138	$	260	277	Automation Solutions	$	138	156	277	312

Climate Technologies	Climate Technologies		45		45	90		89	Climate Technologies	45		47	89	96
Tools & Home Products	Tools & Home Products		17		19	36		38	Tools & Home Products	19		20	38	39
Commercial & Residential Solutions	Commercial & Residential Solutions		62		64	126		127	Commercial & Residential Solutions	64		67	127	135

Corporate and other	Corporate and other		11		9	20		18	Corporate and other	9		16	18	36
Total	Total		$	204	211	$	406	422	Total	$	211	239	422	483

Sales by geographic destination are summarized below:


		Three Months Ended March 31,														Three Months Ended March 31,
		2019						2020							2020		2021
		Automation Solutions		Commercial & Residential Solutions	Total	Automation Solutions	Commercial & Residential Solutions	Total		Automation Solutions		Commercial & Residential Solutions	Total	Automation Solutions	Commercial & Residential Solutions	Total

Americas	Americas	$	1,523	1,082	2,605	1,346	1,037	2,383	Americas	$	1,346	1,037	2,383	1,223	1,119	2,342
Asia, Middle East & Africa	Asia, Middle East & Africa	910		285	1,195	830	235	1,065	Asia, Middle East & Africa	830		235	1,065	953	305	1,258
Europe	Europe	577		194	771	533	186	719	Europe	533		186	719	617	221	838
Total	Total	$	3,010	1,561	4,571	2,709	1,458	4,167	Total	$	2,709	1,458	4,167	2,793	1,645	4,438

		Six Months Ended March 31,														Six Months Ended March 31,
		2019						2020							2020		2021
		Automation Solutions		Commercial & Residential Solutions	Total	Automation Solutions	Commercial & Residential Solutions	Total		Automation Solutions		Commercial & Residential Solutions	Total	Automation Solutions	Commercial & Residential Solutions	Total

Americas	Americas	$	2,928	1,989	4,917	2,756	1,900	4,656	Americas	$	2,756	1,900	4,656	2,390	2,100	4,490
Asia, Middle East & Africa	Asia, Middle East & Africa	1,751		550	2,301	1,726	512	2,238	Asia, Middle East & Africa	1,726		512	2,238	1,896	613	2,509
Europe	Europe	1,130		360	1,490	1,079	349	1,428	Europe	1,079		349	1,428	1,199	408	1,607
Total	Total	$	5,809	2,899	8,708	5,561	2,761	8,322	Total	$	5,561	2,761	8,322	5,485	3,121	8,606

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

~~The Company's results for~~For the second quarter of fiscal 2020 were negatively impacted by the global outbreak and rapid spread of the novel coronavirus (COVID-19). The actions taken around the world to slow the spread of COVID-19 resulted in a rapid decline in demand which impacted most of the Company's end markets and geographies, particularly in China, the U.S. and Europe. In addition, the dramatic drop in the price of oil due to geopolitical tensions and a surge in global supply also negatively impacted results. These conditions accelerated into April and are expected to be more pronounced in the third quarter, especially in the U.S. Although these conditions are expected to negatively impact demand in many of our end markets for the remainder of the fiscal year, the Company has taken actions to protect its operating results and support its financial condition and liquidity. See the "Financial Condition", "Outlook" and "Part II - Other Information, Item 1A, Risk Factors" sections below for additional details.

~~Overall,~~2021, net sales ~~for the second quarter of fiscal 2020~~ were ~~$4.2~~$4.4 billion, ~~down 9~~up 6 percent compared with the prior year, ~~adversely affected~~supported by foreign currency translation which ~~deducted 2~~added 3 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 2 percent. Automation Solutions underlying sales were down 7slightly compared to the prior year, but continued to improve sequentially as global markets recover from the impacts of COVID-19. Sales in North America were down 15 percent as automation markets remained weak, but hybrid and discrete markets improved sequentially. Sales rebounded sharply in China (up 42 percent) due to easier comparisons and Europe was up 6 percent. Commercial & Residential Solutions underlying sales were up sharply, reflecting growth across all businesses and geographies. Demand for residential-oriented products and solutions in North America and global cold chain end markets were strong, while sales in China rebounded sharply.

Net earnings common stockholders were ~~$517 million, down 1~~$561, up 9 percent, and diluted earnings per share were ~~$0.84, flat~~$0.93, up 11 percent compared with $0.84 in the prior year. Operating results ~~were negatively impacted~~increased $0.14 per share on strong segment margins, reflecting significant savings from the Company's restructuring and cost reset actions. This was largely offset by ~~the effects of COVID-19 and lower oil prices~~higher stock compensation expense ($0.12 per share), ~~while~~reflecting a higher stock price in the current year compared to a sharply lower price in the prior year due to market conditions. Second quarter results also benefited from a gain on the sale of an equity investment ($0.04 per share), lower restructuring costs ~~reduced earnings by $0.05~~($0.02 per ~~share. These results were largely offset by the net impact of~~share), a lower ~~stock compensation expense due to a declining share price and slightly higher pension costs~~tax rate ($~~0.11~~0.01 per share) and ~~favorable foreign currency transactions of $0.05~~share repurchases ($0.01 per ~~share.~~share), partially offset by first year acquisition accounting charges related to the OSI acquisition ($0.01 per share).

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31

Following is an analysis of the Company’s operating results for the second quarter ended March 31, ~~2020,~~2021, compared with the second quarter ended March 31, ~~2019.~~2020.


		2019			2020		Change			2020			2021		Change
(dollars in millions, except per share amounts)

Net sales	Net sales	$	4,570		4,162		(9)	%	Net sales	$	4,162		4,431		6	%
Gross profit	Gross profit	$	1,925		1,750		(9)	%	Gross profit	$	1,750		1,862		6	%
Percent of sales	Percent of sales	42.1		%	42.1	%			Percent of sales	42.1		%	42.0	%

SG&A	SG&A	$	1,145		983		(14)	%	SG&A	$	983		1,054		7	%
Percent of sales	Percent of sales	25.0		%	23.7	%			Percent of sales	23.7		%	23.8	%

Other deductions, net	Other deductions, net	$	57		42				Other deductions, net	$	42		33
Amortization of intangibles									Amortization of intangibles	$	59		74
Restructuring costs									Restructuring costs	$	31		17

Interest expense, net	Interest expense, net	$	48		36				Interest expense, net	$	36		38

Earnings before income taxes	Earnings before income taxes	$	675		689		2	%	Earnings before income taxes	$	689		737		7	%
Percent of sales	Percent of sales	14.8		%	16.6	%			Percent of sales	16.6		%	16.6	%

Net earnings common stockholders	Net earnings common stockholders	$	520		517		(1)	%	Net earnings common stockholders	$	517		561		9	%
Percent of sales	Percent of sales	11.4		%	12.4	%			Percent of sales	12.4		%	12.7	%

Diluted earnings per share	Diluted earnings per share	$	0.84		0.84		—	%	Diluted earnings per share	$	0.84		0.93		11	%

Net sales for the second quarter of fiscal ~~2020~~2021 were ~~$4.2~~$4.4 billion, ~~a decrease of $408 million, or 9~~up 6 percent compared with ~~2019.~~2020. Automation Solutions sales were up 3 percent and Commercial & Residential Solutions sales were up 13 percent. Underlying sales were ~~down 7~~up 2 percent, ~~($313 million) on~~as f ~~lower volume. F~~or~~oreign~~eign currency translation subtracted 2 percent ($81 million) and divestitures subtracted $14 million. Underlying sales were down 8 percent in the U.S. and 6 percent internationally. The Americas was down 8 percent, Europe was down 2added 3 percent and ~~Asia, Middle East & Africa was down 8 percent (China down 24 percent).~~the OSI acquisition added 1 percent.

Underlying sales were down 5 percent in the U.S. and up 9 percent internationally. The Americas was down 4 percent, Europe was up 7 percent and Asia, Middle East & Africa was up 12 percent (China up 45 percent).

Cost of sales for the second quarter of fiscal ~~2020~~2021 were ~~$2.4 billion, a decrease~~$2,569, an increase of ~~$233 million~~$157 compared with ~~2019, primarily~~2020, due to ~~lower volume and~~ the impact of foreign currency ~~translation.~~translation, higher sales volume and the OSI acquisition. Gross margin of ~~42.1~~42.0 percent ~~was flat~~decreased 0.1 percentage points compared with the prior y~~ear, reflecting deleverage on lower sales volume and~~year due to unfavorable ~~mix primarily within Automation Solutions, offset by favorable price-cost.~~mix.

Selling, general and administrative (SG&A) expenses of ~~$1.0 billion decreased $162 million~~$1,054 increased $71 compared with the prior year ~~primarily due~~and SG&A as a percent of sales increased 0.1 percentage points to ~~lower~~23.8 percent. Higher stock compensation expense of ~~$97 million due to a declining share price and savings from cost reduction actions.~~$99 negatively impacted comparisons by 2.3 percentage points. Excluding the higher stock compensation expense, SG&A as a percent of sales decreased ~~1.3~~2.2 percentage points, ~~to 23.7 percent primarily due to a favorable impact on comparisons~~reflecting significant savings from the ~~lower stock compensation expense of 2.1 percentage points~~Company's restructuring and ~~savings from~~ cost ~~reduction actions, partially offset by deleverage on the lower sales volume.~~reset actions.

Other deductions, net were ~~$42 million~~$33 in ~~2020,~~2021, a decrease of ~~$15 million~~$9 compared with the prior year, reflecting ~~favorable impacts~~lower restructuring costs of $14 and a gain on ~~comparisons from~~the sale of an equity investment of $31, partially offset by unfavorable foreign currency transactions of ~~$36 million~~$22 and ~~supplemental retirement plans~~higher intangibles amortization of ~~$16 million, partially offset by increased restructuring costs of $21 million~~$15, primarily related to the OSI acquisition. See Notes 6 and ~~an unfavorable impact on comparisons from pensions of $16 million. See Note 6.~~7.

Pretax earnings of ~~$689 million~~$737 increased ~~$14 million, or 2~~$48, up 7 percent compared with the prior year. Earnings ~~decreased $53 million~~increased $80 in Automation Solutions and ~~$22 million~~$51 in ~~Commercial~~Commercial & Residential ~~Solutions, while costs~~Solutions. Costs reported at ~~corporate decreased $77 million.~~Corporate increased $81 primarily due to higher stock compensation expense of $99, partially offset by the gain on sale of an equity investment of $31. See the Business Segments discussion that follows and Note ~~13.~~12.

~~Income~~Income taxes were $169 for 2021 and $165 ~~million~~ for 2020, ~~and $150 million for 2019,~~ resulting in effective tax rates of 23 percent and 24 percent, ~~and 22 percent,~~ respectively. The current year and prior year rate included unfavorable discrete tax items which increased the rate 1 percentage point ~~while the prior year rate included favorable discrete tax items, which reduced the rate 2 percentage points.~~

~~On March 27, 2020, the CARES Act (the "Act") was enacted~~ in response to the COVID-19 pandemic, and among other things, provides tax relief to businesses. Tax provisions of the Act include the deferral of certain payroll taxes, relief for retaining employees, and other provisions. The Company is evaluating the impact of the Act and currently expects to benefit from the deferral of certain payroll taxes through the end of calendar year 2020.both years.

Net earnings common stockholders in the second quarter of fiscal ~~2020~~2021 were ~~$517 million, down 1~~$561, up 9 percent, compared with ~~$520 million~~$517 in the prior year, and earnings per share were ~~$0.84, or flat~~$0.93, up 11 percent, compared with $0.84 in the prior year. ~~Operating results were negatively impacted by~~See discussion in the effects of COVID-19 and lower oil prices ($0.12 per share), while restructuring costs reduced earnings by $0.05 per share. These results were largely offset by the net impact of lower stock compensation expense due to a declining share price and slightly higher pension costs ($0.11 per share) and favorable foreign currency transactions of $0.05 per share.Overview above for further details.

Business Segments

Following is an analysis of operating results for the Company’s business segments for the second quarter ended March 31, ~~2020,~~2021, compared with the second quarter ended March 31, ~~2019.~~2020. The Company defines segment earnings as earnings before interest and taxes. See Note 1312 for a discussion of the Company's business segments.

AUTOMATION SOLUTIONS


Three Months Ended Mar 31	Three Months Ended Mar 31	2019			2020		Change		Three Months Ended Mar 31	2020			2021		Change
(dollars in millions)

Sales	Sales	$	3,010		2,709		(10)	%	Sales	$	2,709		2,793		3	%
Earnings	Earnings	$	444		391		(12)	%	Earnings	$	391		471		20	%
Margin	Margin	14.8		%	14.4	%			Margin	14.4		%	16.8	%


Sales by Major Product Offering	Sales by Major Product Offering						Sales by Major Product Offering
Measurement & Analytical Instrumentation	Measurement & Analytical Instrumentation	$	927	816	(12)	%	Measurement & Analytical Instrumentation	$	776	732	(6)	%
Valves, Actuators & Regulators	Valves, Actuators & Regulators	937		854	(9)	%	Valves, Actuators & Regulators	854		836	(2)	%
Industrial Solutions	Industrial Solutions	574		494	(14)	%	Industrial Solutions	494		555	12	%
Process Control Systems & Solutions		572		545	(5)	%
Systems & Software							Systems & Software	585		670	14	%
Total	Total	$	3,010	2,709	(10)	%	Total	$	2,709	2,793	3	%

Automation Solutions sales were $2.8 billion in the second quarter, an increase of $84 or 3 percent. Underlying sales decreased 2 percent on lower volume, but continued to improve sequentially as global markets recover from the impacts of COVID-19. Foreign currency translation had a 3 percent favorable impact and the OSI acquisition had a 2 percent favorable impact. Underlying sales decreased 12 percent in the Americas (U.S. down 15 percent), while Europe increased 6 percent and Asia, Middle East & Africa increased 9 percent (China up 42 percent). Sales for Measurement & Analytical Instrumentation decreased $44, or 6 percent, and Valves, Actuators & Regulators decreased $18, or 2 percent, due to continued weakness in North American process industries, partially offset by

~~Automation~~moderate growth in Europe and robust growth in China on easier comparisons. Industrial Solutions sales were $2.7 billion in the second quarter, a decrease of $301 million or 10 percent. Underlying sales decreased 8 percent ($238 million) on lower volume. Foreign currency translation had a 2 percent ($63 million) unfavorable impact. All businesses were negatively impacted by the effects of COVID-19 and lower oil prices. Sales for Measurement & Analytical Instrumentation decreased $111 million,up $61, or 12 percent, reflecting robust demand in China due to ~~weakness~~easier comparisons and strong growth in ~~upstream oil and gas~~Europe. North American discrete end markets primarily in North America, and a sharp decline in China. Valves, Actuators & Regulators decreased $83 million, or 9 percent, reflecting slower demand in power, chemical and oil and gas end markets. Industrial Solutions sales decreased $80 million, or 14 percent, on weakness in global discrete end markets. Process Control Systems & Solutions decreased $27 million, or 5 percent, due to weakness in power end markets in China and process end markets in the U.S. Underlying sales decreased 11 percent in the Americas (U.S. down 12 percent) while Europe decreased 3 percent and Asia, Middle East & Africa decreased 6 percent (China down 21 percent). Earnings were $391 million, a decrease of $53 million, or 12 percent, primarily due to lower volume and higher restructuring expenses of $23 million, partially offset by a favorable impact on comparisons from foreign currency transactions of $31 million. Margin decreased 0.4 percentage points to 14.4 percent, reflecting a negative impact from restructuring expenses of 0.9 percentage points. Excluding the increased restructuring expense, margin improved due to savings from cost reduction actions which helped offset deleverage on the lower sales volume, while favorable foreign currency transactions of 1.1 percentage points were partially offset by unfavorable mix.

~~COMMERCIAL & RESIDENTIAL SOLUTIONS~~

Three Months Ended Mar 31 2019 2020 Change
(dollars in millions)
Sales:
  Climate Technologies $ 1,092 1,026 (6) %
  Tools & Home Products 469 432 (8) %
     Total $ 1,561 1,458 (7) %
Earnings:
  Climate Technologies $ 226 217 (4) %
  Tools & Home Products 102 89 (12) %
     Total $ 328 306 (7) %
     Margin 21.0 % 21.0 %

~~Commercial & Residential Solutions sales were $1.5 billion in the second quarter, down $103 million, or 7 percent~~declined compared to the prior ~~year. The divestiture of two small non-core businesses subtracted 1~~year but improved sequentially. Systems & Software increased $85, or 14 percent, ~~($10 million)~~reflecting the OSI acquisition, which added $48, and ~~foreign currency translation subtracted 1 percent ($18 million). Underlying sales decreased 5 percent ($75 million) due to lower volume, reflecting weakening~~strong demand ~~due to the effects of COVID-19, especially~~ in China. Climate Technologies sales were $1.0 billion in the second quarter, a decrease of $66 million, or 6 percent. Air conditioning and heating sales were down moderately, reflecting a sharp decline in China due to the effects of COVID-19 and softness in North America. Cold chain sales were down moderately, driven by slower market conditions in Asia, Middle East & Africa and Europe, while North American markets grew slightly. Tools & Home Products sales were $432 million in the second quarter, a decrease of $37 million, or 8 percent. Global professional tools end markets softened further, while food waste disposers were down slightly and wet/dry vacuums were down high double-digits. Overall, underlying sales decreased 3 percent in the Americas (U.S. down 3 percent), while Europe decreased 1 percent and Asia, Middle East & Africa was up moderately and process end markets were down ~~15 percent (China down 33 percent).~~modestly in North America. Earnings were ~~$306 million, down 7~~$471, an increase of $80, or 20 percent, ~~compared with the prior year,~~ and margin ~~was flat. Excluding a 0.4~~increased 2.4 percentage ~~point impact from higher restructuring expense of $6 million, margin was up slightly~~points to 16.8 percent, as significant savings from cost reduction actions and favorable price-cost more than offset deleverage on lower volume, unfavorable foreign currency transactions and unfavorable mix.

COMMERCIAL & RESIDENTIAL SOLUTIONS


Three Months Ended Mar 31	2020			2021		Change


Sales:
Climate Technologies	$	1,026		1,160		13	%
Tools & Home Products	432			485		13	%
Total	$	1,458		1,645		13	%

Earnings:
Climate Technologies	$	217		245		13	%
Tools & Home Products	89			112		25	%
Total	$	306		357		17	%
Margin	21.0		%	21.7	%

Commercial & Residential Solutions sales were $1.6 billion in the ~~lower~~second quarter, up $187, or 13 percent compared to the prior year. Underlying sales ~~volume.~~increased 11 percent due to higher volume and reflected growth across all businesses and geographies, while foreign currency translation added 2 percent. Overall, underlying sales increased 8 percent in the Americas (U.S. up 7 percent), 9 percent in Europe and 24 percent in Asia, Middle East & Africa (China up 56 percent). Climate Technologies sales were $1.2 billion in the second quarter, an increase of $134, or 13 percent. Air conditioning and heating sales were up high single-digits, reflecting strong demand for residential-oriented products and solutions in North America and robust growth in Europe and China. Cold chain sales were up mid teens, driven by favorable global market conditions. Tools & Home Products sales were $485 in the second quarter, an increase of $53, or 13 percent. Sales for wet/dry vacuums were robust due to competitor outages, while growth was strong for food waste disposers and solid for professional tools. Earnings were $357, up 17 percent compared with the prior year, and margin increased 0.7 percentage points to 21.7 percent due to savings from cost reduction actions, while leverage on higher volume offset unfavorable price-cost.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31

Following is an analysis of the Company’s operating results for the six months ended March 31, ~~2020,~~2021, compared with the six months ended March 31, ~~2019.~~2020.


		2019			2020		Change			2020			2021		Change
(dollars in millions, except per share amounts)

Net sales	Net sales	$	8,717		8,313		(5)	%	Net sales	$	8,313		8,592		3	%
Gross profit	Gross profit	$	3,686		3,509		(5)	%	Gross profit	$	3,509		3,585		2	%
Percent of sales	Percent of sales	42.3		%	42.2	%			Percent of sales	42.2		%	41.7	%

SG&A	SG&A	$	2,222		2,106		(5)	%	SG&A	$	2,106		2,052		(3)	%
Percent of sales	Percent of sales	25.5		%	25.3	%			Percent of sales	25.3		%	23.9	%

Other deductions, net	Other deductions, net	$	107		220				Other deductions, net	$	220		155
Amortization of intangibles									Amortization of intangibles	$	118		152
Restructuring costs									Restructuring costs	$	128		83

Interest expense, net	Interest expense, net	$	91		71				Interest expense, net	$	71		78

Earnings before income taxes	Earnings before income taxes	$	1,266		1,112		(12)	%	Earnings before income taxes	$	1,112		1,300		17	%
Percent of sales	Percent of sales	14.5		%	13.4	%			Percent of sales	13.4		%	15.1	%

Net earnings common stockholders	Net earnings common stockholders	$	985		843		(14)	%	Net earnings common stockholders	$	843		1,006		19	%
Percent of sales	Percent of sales	11.3		%	10.1	%			Percent of sales	10.1		%	11.7	%

Diluted earnings per share	Diluted earnings per share	$	1.58		1.37		(13)	%	Diluted earnings per share	$	1.37		1.67		22	%

Net sales for the first six months of ~~2020~~2021 were ~~$8.3~~$8.6 billion, ~~a decrease of $404 million, or 5~~up 3 percent compared with ~~2019.~~2020. Automation Solutions sales were down 1 percent while Commercial & Residential Solutions sales were up 13 percent. Underlying sales were ~~down 4 percent ($302 million) on lower volume partially offset by slightly higher price. Acquisitions net of divestitures added $6 million and~~flat, as foreign currency translation ~~subtracted~~added 2 percent and acquisitions added 1 ~~percent ($108 million).~~percent. Underlying sales decreased 6 percent in the U.S. and 1increased 5 percent internationally. The Americas was down 5 percent, Europe was ~~down 1~~up 5 percent and Asia, Middle ~~Eas~~tEast & Africa was ~~down 1~~up 7 percent (China ~~down 9~~up 22 percent).

Cost of sales for ~~2020~~2021 were ~~$4.8 billion, a decrease~~$5,007, an increase of ~~$227 million~~$203 versus ~~$5.0 billion~~$4,804 in ~~2019,~~2020, primarily due to ~~lower volume and~~ the impact of foreign currency ~~translation.~~translation and the OSI acquisition. Gross margin decreased ~~0.1~~0.5 percentage points to ~~42.2~~41.7 percent, reflecting unfavorable mix and deleverage on lower sales volume ~~and unfavorable mix primarily~~ within Automation ~~Solutions, largely offset by favorable price-cost.~~Solutions.

SG&A expenses of ~~$2.1 billion~~$2,052 decreased ~~$116 million primarily due to savings from cost reduction actions~~$54 and ~~lower stock compensation expense of $34 million due to a declining share price.~~ SG&A as a percent of sales decreased ~~0.2~~1.4 percentage points to ~~25.3~~23.9 percent, ~~due to a favorable impact on comparisons~~reflecting significant savings from the ~~lower~~Company's restructuring and cost reset actions, which more than offset higher stock compensation expense of ~~0.4~~ $107 (1.3 percentage ~~points~~ points) a~~and savings from cost reduction actions, partially offset by~~nd deleverage on ~~the~~ lower sales volume. within Automation Solutions.

Other deductions, net were ~~$220 million~~$155 in ~~2020, an increase~~2021, a decrease of ~~$113 million~~$65 compared with the prior year, reflecting ~~increased~~lower restructuring costs of ~~$108 million~~$45 and investment-related gains. In the first quarter of fiscal 2021, the Company recognized an ~~unfavorable impact~~investment gain of $21 and a gain from the acquisition of the remaining interest of an equity investment of $17, and in the second quarter recognized a gain of $31 on ~~comparisons from pensions~~the sale of ~~$30 million,~~an equity investment. These items were partially offset by ~~a favorable impact on comparisons from~~higher intangibles amortization of $34, primarily related to the OSI acquisition, and unfavorable foreign currency transactions of ~~$22 million~~$29. See Notes 6 and ~~lower litigation costs. See Note 6.~~7.

Pretax earnings of ~~$1.1 billion decreased $154 million,~~$1,300 increased $188, or 1217 percent. Earnings ~~decreased $150 million~~increased $131 in Automation Solutions and ~~$22 million~~$124 in Commercial & Residential Solutions. Costs reported at Corporate increased $60, reflecting higher stock compensation expense of $107 and first year acquisition accounting charges and fees related to the OSI acquisition of $31, partially offset by the investment-related gains discussed above and lower unallocated pension and postretirement costs of $22. See ~~Note 13 and~~ the ~~following~~ Business Segments ~~discussion.~~discussion that follows and Note 12.

Income taxes were $280 for 2021 and $259 ~~million~~ for 2020, ~~and $274 million for 2019,~~ resulting in effective tax rates of 22 percent and 23 percent, ~~and 22 percent,~~ respectively. ~~The prior year rate included favorable discrete items, which reduced the rate 2 percentage points.~~

Net earnings common stockholders in ~~2020~~2021 were ~~$843 million, down 14~~$1,006, up 19 percent compared with the prior year, and earnings per share were ~~$1.37, down 13~~$1.67, up 22 percent compared with ~~$1.58~~$1.37 in ~~2019. Earnings~~2020. Operating results increased $0.24 per share, ~~were negatively~~

~~impacted by~~as significant savings from the Company's restructuring ~~costs~~ and ~~special~~cost reset actions more than offset deleverage on lower sales volume in Automation Solutions. Lower restructuring and advisory fees ~~of $0.19~~($0.07 per share), a lower tax rate ($0.03 per share) and share repurchases ($0.03 per share) also benefited operating results, while ~~the effects of COVID-19 and lower oil prices began to negatively impact earnings~~higher stock compensation expense deducted $0.13 per share. The Company recognized several investment-related gains in the ~~second quarter~~current year ($~~0.12~~0.10 per share)., while first year acquisition accounting charges and fees related to the OSI acquisition deducted $0.04 per share.

Business Segments

Following is an analysis of operating results for the Company’s business segments for the six months ended March 31, ~~2020,~~2021, compared with the six months ended March 31, ~~2019.~~2020. The Company defines segment earnings as earnings before interest and taxes.

AUTOMATION SOLUTIONS


Six Months Ended Mar 31	Six Months Ended Mar 31	2019			2020		Change		Six Months Ended Mar 31	2020			2021		Change
(dollars in millions)

Sales	Sales	$	5,809		5,561		(4)	%	Sales	$	5,561		5,485		(1)	%
Earnings	Earnings	$	851		701		(18)	%	Earnings	$	701		832		19	%
Margin	Margin	14.7		%	12.6	%			Margin	12.6		%	15.2	%


Sales by Major Product Offering	Sales by Major Product Offering						Sales by Major Product Offering
Measurement & Analytical Instrumentation	Measurement & Analytical Instrumentation	$	1,785	1,646	(8)	%	Measurement & Analytical Instrumentation	$	1,571	1,430	(9)	%
Valves, Actuators & Regulators	Valves, Actuators & Regulators	1,811		1,767	(2)	%	Valves, Actuators & Regulators	1,767		1,642	(7)	%
Industrial Solutions	Industrial Solutions	1,116		1,001	(10)	%	Industrial Solutions	1,001		1,063	6	%
Process Control Systems & Solutions		1,097		1,147	5	%
Systems & Software							Systems & Software	1,222		1,350	10	%
Total	Total	$	5,809	5,561	(4)	%	Total	$	5,561	5,485	(1)	%

Automation Solutions sales were ~~$5.6~~$5.5 billion in the first six months of ~~2020,~~2021, a decrease of ~~$248 million,~~$76, or 41 percent. Underlying sales decreased 45 percent ~~($211 million)~~ on lower ~~volume partially offset by slightly higher price. The Machine Automation Solutions acquisition added 1 percent ($47 million) and foreign~~volume. Foreign currency translation had a 12 percent ~~($84 million) unfavorable impact.~~favorable impact and the OSI acquisition added 2 percent. Underlying sales decreased 16 percent in the Americas, while Europe increased 4 percent and Asia, Middle East & Africa was up 5 percent (China up 21 percent). Sales for Measurement & Analytical Instrumentation decreased ~~$139 million,~~$141, or 89 percent, due to weakness in ~~upstream oil~~process industries, particularly in North America, partially offset by moderate growth in Europe and ~~gas~~Asia. Valves, Actuators & Regulators decreased $125, or 7 percent, reflecting slower demand in most end markets, ~~primarily~~particularly in North America and ~~a sharp decline~~Europe, partially offset by strength in Asia. Industrial Solutions sales increased $62, or 6 percent, on moderate growth in Europe and robust growth in China, ~~in the second quarter due to the effects of COVID-19. Valves, Actuators & Regulators decreased $44 million, or 2 percent, as favorable first quarter results were more than~~partially offset by weakness in ~~the second quarter, reflecting slowing demand in power, chemical and oil and gas end markets. Industrial Solutions sales decreased $115 million, or 10 percent, on softness in global~~ discrete end ~~markets. Process Control~~markets in North America. Systems & ~~Solutions~~Software increased ~~$50 million, or 5 percent, due to~~$128, reflecting the ~~Machine Automation Solutions~~impact of the OSI acquisition which added ~~$47 million. Underlying sales decreased 6 percent~~$90. Power end markets grew moderately in ~~the Americas (U.S. down 7 percent) and 2 percent~~North America offset by softness in Asia, while process end markets were strong in Europe ~~while~~and Asia, offset by declines in North America and Middle East & ~~Africa was flat (China down 7 percent).~~Africa. Earnings were ~~$701 million, a decrease~~$832, an increase of ~~$150 million,~~$131, or 1819 percent, ~~primarily due to higher restructuring expenses of $100 million~~ and ~~lower volume, partially offset by a favorable impact on comparisons from foreign currency transactions of $16 million. Margin decreased 2.1~~margin increased 2.6 percentage points to ~~12.6~~15.2 percent, ~~reflecting a negative impact~~as significant savings from ~~restructuring expenses of 1.8 percentage points,~~cost reduction actions and favorable price-cost more than offset deleverage on lower sales volume and unfavorable mix. ~~Savings from cost reduction actions and favorable~~Lower restructuring expense benefited margins 0.6 percentage points, while foreign currency transactions had an unfavorable impact of ~~0.2~~0.3 percentage ~~points partially offset the decrease.~~points.

COMMERCIAL & RESIDENTIAL SOLUTIONS


Six Months Ended Mar 31	Six Months Ended Mar 31	2019			2020		Change		Six Months Ended Mar 31	2020			2021		Change
(dollars in millions)

Sales:	Sales:								Sales:
Climate Technologies	Climate Technologies	$	1,972		1,899		(4)	%	Climate Technologies	$	1,899		2,191		15	%
Tools & Home Products	Tools & Home Products	927			862		(7)	%	Tools & Home Products	862			930		8	%
Total	Total	$	2,899		2,761		(5)	%	Total	$	2,761		3,121		13	%

Earnings:	Earnings:								Earnings:
Climate Technologies	Climate Technologies	$	372		368		(1)	%	Climate Technologies	$	368		457		24	%
Tools & Home Products	Tools & Home Products	193			175		(9)	%	Tools & Home Products	175			210		20	%
Total	Total	$	565		543		(4)	%	Total	$	543		667		23	%
Margin	Margin	19.5		%	19.7	%			Margin	19.7		%	21.4	%

Commercial & Residential Solutions sales were ~~$2.8~~$3.1 billion in the first six months of ~~2020, a decrease~~2021, an increase of ~~$138 million,~~$360, or 513 percent compared to the prior year. Underlying sales were ~~down 3~~up 11 percent ~~($90 million)~~ on ~~lower~~higher volume ~~partially offset by slightly higher price. The divestiture of two small non-core businesses subtracted 1 percent ($24 million)~~ and foreign currency translation ~~subtracted 1~~added 2 percent ~~($24 million)~~. Overall, underlying sales increased 11 percent in the Americas, 8 percent in Europe and 15 percent in Asia, Middle East & Africa (China up 26 percent). Climate Technologies sales were ~~$1.9~~$2.2 billion in the first six months of ~~2020, a decrease~~2021, an increase of ~~$73 million,~~$292, or 415 percent. Air conditioning ~~and~~and heating sales were ~~down moderately,~~up significantly, reflecting ~~a sharp decline~~strong demand for residential-oriented products and solutions in ~~China due to the effects of COVID-19, while sales~~North America and robust growth in ~~the U.S. were down modestly. Global cold~~Europe and China. Cold chain sales were ~~down modestly on slower demand in Asia (particularly China) and Europe, while North America was essentially flat.~~strong, driven by favorable global market conditions. Tools & Home Products sales were ~~$862~~$930 million in the first six months of ~~2020, down $65 million,~~2021, up $68, or ~~7 percent compared to the prior year, reflecting softness in global professional tools markets.~~8 percent. Sales for wet/dry vacuums were ~~essentially flat while~~robust due to competitor outages and were strong for food waste disposers, while global professional tools were ~~down~~up slightly. ~~Overall, underlying sales decreased 3 percent in the Americas (U.S. down 4 percent) while Europe was flat and Asia, Middle East & Africa decreased 5 percent (China down 13 percent).~~ Earnings were ~~$543 million, down 4~~$667, up 23 percent compared to the prior year, and margin increased ~~0.2~~1.7 percentage points, asreflecting leverage on higher volume and savings from cost reduction actions, partially offset by unfavorable price-cost and ~~favorable price-cost more than offset deleverage on the lower sales volume and higher restructuring expense of $11 million.~~mix.

FINANCIAL CONDITION

Key elements of the Company's financial condition for the six months ended March 31, ~~2020~~2021 as compared to the year ended September 30, ~~2019~~2020 and the six months ended March 31, 2020 follow.


		Sept 30, 2019			Mar 31, 2020				Mar 31, 2020			Sept 30, 2020			Mar 31, 2021
Working capital (in millions)		$	1,163		$	92
Operating working capital								Operating working capital	$	1,250		$	866		$	781
Current ratio	Current ratio	1.2			1.0			Current ratio	1.0			1.5			1.3
Total debt-to-total capital	Total debt-to-total capital	41.0		%	50.6		%	Total debt-to-total capital	50.6		%	47.1		%	44.4		%
Net debt-to-net capital	Net debt-to-net capital	33.9		%	40.5		%	Net debt-to-net capital	40.5		%	33.2		%	35.1		%
Interest coverage ratio	Interest coverage ratio	15.2		X	14.4		X	Interest coverage ratio	14.4		X	14.4		X	16.6		X

The Company's operating working capital decreased $469 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 16.6 for the first six months of fiscal 2021 compares to 14.4X for the six months ended March 31, 2020. The increase reflects higher pretax earnings in the current year.

Operating cash flow for the first six months of fiscal 2021 was $1.6 billion, an increase of $603 compared with $1.0 billion in the prior year due to favorable operating working capital and higher earnings. Free cash flow of $1.4 billion in the first six months of fiscal 2021 (operating cash flow of $1.6 billion less capital expenditures of $222) increased $606 compared to free cash flow of $0.8 billion in 2020 (operating cash flow of $1.0 billion less capital expenditures of $225), reflecting the increase in operating cash flow. Cash used for investing activities was $1.8 billion largely due to the OSI acquisition.

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.

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. In the second quarter of fiscal 2020, the Company increased its short-term borrowings and cash holdings by over $1 billion compared to its planned holdings under normal conditions to support liquidity in response to the potential effects of COVID-19, resulting in an increase in the debt-to-capital ratios. The Company has also taken actions to conservatively manage its cash through planned reductions in capital expenditures for fiscal 2020 and by suspending its share repurchases for the remainder of the fiscal year. No changes have been made to the dividend plan for the year. The Company's long-term debt ratings, which are A2 by Moody's Investors Service and A by Standard and Poor's, remain unchanged. The Company currently believes that sufficient funds will be available to meet its needs for the foreseeable future through operating cash flow, existing resources, short- and long-term debt capacity, or its $3.5 billion revolving backup credit facility under which it has not incurred any borrowings. Depending on market conditions, the Company may issue additional long-term debt in the near future to further manage its liquidity and balance sheet. However, the Company could be adversely affected if credit market conditions deteriorate or customers, suppliers and financial institutions are unable to meet their commitments to the

~~Company.~~complete acquisitions and sustain long-term growth. Emerson is in a strong financial position, with total assets of ~~$22~~$24 billion and stockholders' equity of ~~$7.5~~$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.

The Company's working capital declined approximately $350 million compared to the same quarter last year, reflecting lower business levels. The interest coverage ratio (earnings before income taxes plus interest expense, divided by interest expense) of 14.4X for the first six months of fiscal 2020 compares to 13.3X for the six months ended March 31, 2019. The increase reflects lower interest expense in the current year, partially offset by lower pretax earnings.

Operating cash flow for the first six months of fiscal 2020 was $1.0 billion, an increase of $156 million compared with $856 million in the prior year, as operating working capital declined due to lower business levels, partially offset by lower earnings. Free cash flow of $787 million in the first six months of fiscal 2020 (operating cash flow of $1.0 billion less capital expenditures of $225 million) increased $205 million compared to free cash flow of $582 million in 2019 (operating cash flow of $856 million less capital expenditures of $274 million), reflecting the increase in operating cash flow and lower capital investment.

FISCAL ~~2020~~2021 OUTLOOK

~~Emerson's top priority is~~Despite ongoing pandemic challenges in many parts of the safety and health of its employees, customers, and communities around the world. The Company has implemented recommended policies and practices to protect its workforce so they can safely and effectively carry out their vital work. Employees who are able to work remotely are doing so. The Company is following guidelines from global health experts and has taken stringent steps to protect its employees going to work in facilities that manufacture critical technologies and equipment. The Company's employees and facilities have a key role in the effort to both combat the COVID-19 crisis and to keep essential infrastructure and industries operating, including life sciences and medical, water, food and beverage, chemical, energy, and power generation. While some operating sites remain below full capacity and we have experienced some disruptions in our supply chain, the majority of our sites are operating. Further,world, the Company ~~is prioritizing the production of materials~~expects overall continued improvement in industrial and ~~solutions needed on the front lines of the pandemic battle, including solutions used in the manufacturing of respirators, masks and other safety equipment.~~

~~The outlook discussed herein reflects the changing~~commercial demand ~~environment associated with COVID-19 and the concurrent unfolding energy market dynamics. The guidance assumes, among other items, continued significant demand deterioration for~~over the remainder of ~~the fiscal year, particularly in the third quarter, with demand remaining negative through the first half of~~ 2021. ~~The decline in~~Residential demand is expected to ~~be particularly pronounced~~remain robust, but begin to taper in the ~~U.S.,~~second half. For the full year, consolidated net sales are expected to be up 6 to 9 percent, with underlying sales up 3 to 6 percent excluding a ~~longer recovery period compared~~2 percent favorable impact from foreign currency translation and a 1 percent favorable impact from the OSI acquisition. Automation Solutions net sales are expected to ~~Europe~~be up 3 to 5 percent, with underlying sales down 1 to up 1 percent excluding a 3 percent favorable impact from foreign currency translation and ~~Asia, Middle East~~a 1 percent favorable impact from the OSI acquisition. Commercial & ~~Africa. The outlook also assumes oil prices stabilize~~Residential Solutions net sales are expected to be up 14 to 16 percent, with underlying sales up 12 to 14 percent excluding a 2 percent impact from favorable foreign currency translation. Earnings per share are expected to be $3.55 to $3.65, while adjusted earnings per share, which exclude a $0.26 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 $3.85 to $3.95. Operating cash flow is expected to be approximately $3.3 billion and free cash flow, which excludes targeted capital spending of $600 million, is expected to be approximately $2.7 billion. Fiscal 2021 share repurchases and acquisition activity are expected to be in the ~~$20~~amount of $500 million to ~~$30 range for~~$1 billion, excluding the ~~same time period.~~OSI acquisition which closed on October 1, 2020. However, future developments ~~such as a longer duration than assumed or a rebound in the spread of~~related to COVID-19, including further actions taken by governmental authorities, ~~including~~ 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 ~~"Part II - Other Information,~~ Item 1A ~~Risk Factors."~~

Consolidated fiscal 2020 net sales are expected to be down 9 to 11 percent, with underlying sales down 7 to 9 percent excluding a 2 percent unfavorable impact from foreign currency translation. Automation Solutions net sales are expected to be down 8 to 10 percent, with underlying sales down 6 to 8 percent excluding a 2 percent unfavorable impact from foreign currency translation. The midpoint of this outlook assumes a reduction of backlog of approximately $300 million by the end of the fiscal year. Commercial & Residential Solutions net sales are expected to be down 11 to 13 percent, with underlying sales down 9 to 11 percent excluding an impact from divestitures of 1 percent and unfavorable foreign currency translation of 1 percent. Earnings per share are expected to be $2.62 to $2.82, while adjusted earnings per share, which exclude a $0.38 per share impact from restructuring actions and related costs for the year, are expected to be $3.00 to $3.20. Operating cash flow is expected to be approximately $2.75 billion and free cash flow, which excludes targeted capital spending of $550 million, is expected to be approximately $2.2 billion. The Company's share repurchases for the six months ended March 31, 2020 were $942 million and additional repurchases have been suspended for the remainder of the fiscal year. The Company has made no changes to its dividend plan for fiscal 2020.– “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, ~~2019, "Risk Factors" of Part II - Other Information, Item 1A of the Company's Quarterly Report on Form 10-Q for the three-month period ended March 31,~~ 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. ~~The UK is now in a transition period and has begun negotiating~~Negotiations over the terms of a trade ~~agreement~~ and other laws and regulations ~~with~~took place during 2020 and an agreement between the ~~EU.~~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. Sales of products manufactured in the UK and sold within the EU are immaterial. The Company is evaluating several potential outcomes of the UK's negotiations with the EU and believes the direct cost ofWhile there could be certain incremental ~~tariffs,~~costs for logistics and other items, ~~would~~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.

PART II. OTHER INFORMATION

~~Item 1A. Risk Factors~~

The following risk factor supplements the “Risk Factors” section in Part 1, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 (our “Form 10-K). The following risk factor disclosure should be read in conjunction with the other risk factors set out in our Form 10-K.

The Recent Coronavirus (COVID-19) Outbreak Has Adversely Impacted our Business and Could in the Future Have a Material Adverse Impact on our Business, Results of Operation, Financial Condition and Liquidity, the Nature and Extent of Which is Highly Uncertain

The global outbreak of the coronavirus (COVID-19) has significantly increased economic, demand and operational uncertainty. We have global operations, customers and suppliers, including in countries most impacted by COVID-19. Authorities around the world have taken a variety of measures to slow the spread of COVID-19, including travel bans or restrictions, increased border controls or closures, quarantines, shelter-in-place orders and business shutdowns and such authorities may impose additional restrictions. We have also taken actions to protect our employees and to mitigate the spread of COVID-19, including embracing guidelines set by the World Health Organization and the Centers for Disease Control and Prevention on social distancing, good hygiene, restrictions on employee travel and in-person meetings, and changes to employee work arrangements including remote work arrangements where feasible. The actions taken around the world to slow the spread of COVID-19 have also impacted our customers and suppliers, and future developments could cause further disruptions to Emerson due to the interconnected nature of our business relationships.

The impact of COVID-19 on the global economy and our customers, as well as recent volatility in commodity markets (including oil prices), has negatively impacted demand for our products and could continue to do so in the future. Its effects could also result in further disruptions to our manufacturing operations, including higher rates of employee absenteeism, and supply chain, which could continue to negatively impact our ability to meet customer demand. Additionally, the potential deterioration and volatility of credit and financial markets could limit our ability to obtain

external financing. The extent to which COVID-19 will impact our business, results of operations, financial condition or liquidity is highly uncertain and will depend on future developments, including the spread and duration of the virus, potential actions taken by governmental authorities, and how quickly economic conditions stabilize and recover.

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

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
January 2020 — $0.00 — 19,984
February 2020 3,842 $68.80 3,842 16,142
March 2020 10,615 $51.68 10,615 65,527
Total 14,457 $56.23 14,457 65,527


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
January 2021		—	$0.00		—	65,339
February 2021		320	$85.83		320	65,019
March 2021		460	$90.01		460	64,559
Total		780	$88.30		780	64,559

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 ~~65.5~~64.6 million shares remain ~~available.~~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.

10.1			~~First Amendment to the~~Letter Agreement dated February 23, 2021, by and between Emerson Electric Co. ~~Savings Investment Restoration Plan II.~~and David N. Farr, incorporated by reference to the Company's Form 8-K dated February 23, 2021, filed on February 26, 2021, File No. 1-278, Exhibit 10.1.

10.2			~~Second Amendment to the~~Consulting Agreement dated February 23, 2021, by and between Emerson Electric Co. ~~Savings Investment Restoration Plan.~~and David N. Farr, incorporated by reference to the Company's Form 8-K dated February 23, 2021, filed on February 26, 2021, File No. 1-278, Exhibit 10.2.

10.3			Letter Agreement dated February 16, 2021 entered into on March 8, 2021, by and between Emerson Electric Co. and Steven J. Pelch, incorporated by reference to the Company's Form 8-K dated March 8, 2021, filed on March 12, 2021, File No. 1-278, Exhibit 10.1.

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 six months ended March 31, ~~2020~~2021 and ~~2019,~~2020, (ii) Consolidated Statements of Comprehensive Income for the three and six months ended March 31, ~~2020~~2021 and ~~2019,~~2020, (iii) Consolidated Balance Sheets as of September 30, ~~2019~~2020 and March 31, ~~2020,~~2021, (iv) Consolidated Statements of Equity for the three and six months ended March 31, ~~2020~~2021 and ~~2019,~~2020, (v) Consolidated Statements of Cash Flows for the six months ended March 31, ~~2020~~2021 and ~~2019,~~2020, and (vi) Notes to Consolidated Financial Statements for the three and six months ended ended March 31, ~~2020~~2021 and ~~2019.~~ 2020.

104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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.

/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)

~~April 24, 2020~~May 5, 2021


	Three Months Ended			Six Months Ended
	March 31, 2020

Operating lease expense		$	53	106
Variable lease expense		$	5	10


	Mar 31, 2020
Remainder of 2020		$	84
2021		132
2022		100
2023		73
2024		51
Thereafter		94
Total lease payments		534
Less: Interest		33
Total lease liabilities		$	501



Property, plant and equipment, net
Property, plant and equipment, at cost	$	8,671	8,734
Less: Accumulated depreciation	5,029		5,181
Total	$	3,642	3,553



Goodwill by business segment
Automation Solutions	$	5,467	5,404

Climate Technologies	668		726
Tools & Home Products	401		390
Commercial & Residential Solutions	1,069		1,116

Total	$	6,536	6,520


Other intangible assets
Gross carrying amount	$	4,872	4,916
Less: Accumulated amortization	2,257		2,418
Net carrying amount	$	2,615	2,498