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Discontinued Operations and Disposal Groups | 6 Months Ended
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Mar. 31, 2023
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations | DISCONTINUED OPERATIONS In October 2022, the Board of Directors approved the Company's agreement to sell a majority stake in its Climate Technologies business (which constitutes the former Climate Technologies segment, excluding Therm-O-Disc which was divested earlier in fiscal 2022) to private equity funds managed by Blackstone in a $14.0 billion transaction. Emerson will receive upfront, pre-tax cash proceeds of approximately $9.5 billion and a note of $2.25 billion at close (which will accrue 5 percent interest payable in kind by capitalizing interest), while retaining a 45 percent non-controlling interest in a new standalone joint venture between Emerson and Blackstone. The Climate Technologies business, which includes the Copeland compressor business and the entire portfolio of products and services across all residential and commercial HVAC and refrigeration end-markets, had fiscal 2022 net sales of approximately $5.0 billion and pretax earnings of $1.0 billion. The transaction is expected to close in the Company's third quarter of fiscal 2023, subject to regulatory approvals and customary closing conditions. On October 31, 2022, the Company completed the divestiture of its InSinkErator business, which manufactures food waste disposers, to Whirlpool Corporation for $3.0 billion. This business had net sales of $630 and pretax earnings of $152 in fiscal 2022. The Company recognized a pretax gain of $2.8 billion (approximately $2.1 billion after-tax) in the first quarter of fiscal 2023. On May 31, 2022 the Company completed the divestiture of its Therm-O-Disc sensing and protection technologies business to an affiliate of One Rock Capital Partners, LLC. The Company recognized a pretax gain of $486 ($429 after-tax) in the third fiscal quarter of 2022. The financial results of Climate Technologies, InSinkErator ("ISE") and Therm-O-Disc ("TOD") (through the completion of the divestitures), are reported as discontinued operations for the three and six months ended March 31, 2023 and 2022 and were as follows:
| Climate Technologies |  | ISE and TOD |  |  | Total
| Three Months Ended March 31, |  | Three Months Ended March 31, |  | Three Months Ended March 31,
|  | 2022 |  |  |  | 2023 |  |  |  | 2022 |  |  |  | 2023 |  |  |  | 2022 |  |  |  | 2023 |
Net sales |  | $ | 1,255 |  |  |  | 1,245 |  |  |  | 245 |  |  |  | — |  |  |  | 1,500 |  |  |  | 1,245 |
Cost of sales |  | 866 |  |  |  | 782 |  |  |  | 158 |  |  |  | — |  |  |  | 1,024 |  |  |  | 782 |
SG&A |  | 127 |  |  |  | 127 |  |  |  | 34 |  |  |  | — |  |  |  | 161 |  |  |  | 127 |
Gain on sale of business |  | — |  |  |  | — |  |  |  | — |  |  |  | (3) |  |  |  | — |  |  |  | (3) |
Other deductions, net |  | 6 |  |  |  | 35 |  |  |  | 7 |  |  |  | — |  |  |  | 13 |  |  |  | 35 |
Earnings before income taxes |  | 256 |  |  |  | 301 |  |  |  | 46 |  |  |  | 3 |  |  |  | 302 |  |  |  | 304 |
Income taxes |  | 56 |  |  |  | 39 |  |  |  | — |  |  |  | — |  |  |  | 56 |  |  |  | 39 |
Earnings, net of tax |  | $ | 200 |  |  |  | 262 |  |  |  | 46 |  |  |  | 3 |  |  |  | 246 |  |  |  | 265 |
| Climate Technologies |  | ISE and TOD |  |  | Total
| Six Months Ended March 31, |  | Six Months Ended March 31, |  | Six Months Ended March 31,
|  | 2022 |  |  |  | 2023 |  |  |  | 2022 |  |  |  | 2023 |  |  |  | 2022 |  |  |  | 2023 |
Net sales |  | $ | 2,334 |  |  |  | 2,309 |  |  |  | 483 |  |  |  | 49 |  |  |  | 2,817 |  |  |  | 2,358 |
Cost of sales |  | 1,628 |  |  |  | 1,484 |  |  |  | 306 |  |  |  | 29 |  |  |  | 1,934 |  |  |  | 1,513 |
SG&A |  | 254 |  |  |  | 269 |  |  |  | 69 |  |  |  | 8 |  |  |  | 323 |  |  |  | 277 |
Gain on sale of business |  | — |  |  |  | — |  |  |  | — |  |  |  | (2,783) |  |  |  | — |  |  |  | (2,783) |
Other deductions, net |  | 12 |  |  |  | 67 |  |  |  | 13 |  |  |  | 12 |  |  |  | 25 |  |  |  | 79 |
Earnings before income taxes |  | 440 |  |  |  | 489 |  |  |  | 95 |  |  |  | 2,783 |  |  |  | 535 |  |  |  | 3,272 |
Income taxes |  | 95 |  |  |  | 352 |  |  |  | 45 |  |  |  | 653 |  |  |  | 140 |  |  |  | 1,005 |
Earnings, net of tax |  | $ | 345 |  |  |  | 137 |  |  |  | 50 |  |  |  | 2,130 |  |  |  | 395 |  |  |  | 2,267 |
Climate Technologies' results for the three and six months ended March 31, 2023 include lower expense of $43 and $70, respectively, due to ceasing depreciation and amortization upon the held-for-sale classification. Other deductions, net for Climate Technologies included $28 and $55 of transaction-related costs for the three and six months ended March 31, 2023, respectively. Income taxes for the six months ended March 31, 2023 included approximately $245 for Climate Technologies subsidiary restructurings and approximately $660 related to the gain on the InSinkErator divestiture. The aggregate carrying amounts of the major classes of assets and liabilities classified as held-for-sale as of March 31, 2023 and September 30, 2022 are summarized as follows:
| Climate Technologies |  | ISE |  | Total
|  | Sept. 30, |  |  | March 31, |  |  | Sept. 30, |  |  | March 31, |  |  | Sept. 30, |  |  | March 31,
Assets |  | 2022 |  |  |  | 2023 |  |  |  | 2022 |  |  |  | 2023 |  |  |  | 2022 |  |  |  | 2023 |
Receivables |  | $ | 747 |  |  |  | 780 |  |  |  | 68 |  |  |  | — |  |  |  | 815 |  |  |  | 780 |
Inventories |  | 449 |  |  |  | 505 |  |  |  | 81 |  |  |  | — |  |  |  | 530 |  |  |  | 505 |
Other current assets |  | 49 |  |  |  | 62 |  |  |  | 4 |  |  |  | — |  |  |  | 53 |  |  |  | 62 |
Property, plant & equipment, net |  | 1,122 |  |  |  | 1,171 |  |  |  | 141 |  |  |  | — |  |  |  | 1,263 |  |  |  | 1,171 |
Goodwill |  | 716 |  |  |  | 720 |  |  |  | 2 |  |  |  | — |  |  |  | 718 |  |  |  | 720 |
Other noncurrent assets |  | 265 |  |  |  | 347 |  |  |  | 12 |  |  |  | — |  |  |  | 277 |  |  |  | 347 |
Total assets held-for-sale |  | $ | 3,348 |  |  |  | 3,585 |  |  |  | 308 |  |  |  | — |  |  |  | 3,656 |  |  |  | 3,585 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 752 |  |  |  | 644 |  |  |  | 60 |  |  |  | — |  |  |  | 812 |  |  |  | 644 |
Other current liabilities |  | 475 |  |  |  | 494 |  |  |  | 61 |  |  |  | — |  |  |  | 536 |  |  |  | 494 |
Deferred taxes and other noncurrent liabilities |  | 154 |  |  |  | 149 |  |  |  | 13 |  |  |  | — |  |  |  | 167 |  |  |  | 149 |
Total liabilities held-for-sale |  | $ | 1,381 |  |  |  | 1,287 |  |  |  | 134 |  |  |  | — |  |  |  | 1,515 |  |  |  | 1,287 |
Net cash from operating and investing activities for Climate Technologies, InSinkErator and Therm-O-Disc for the six months ended March 31, 2023 and 2022 were as follows:
| Climate Technologies |  | ISE and TOD |  |  | Total
| Six Months Ended March 31, |  | Six Months Ended March 31, |  | Six Months Ended March 31, |
|  | 2022 |  |  |  | 2023 |  |  |  | 2022 |  |  |  | 2023 |  |  |  | 2022 |  |  |  | 2023 |  |
Cash from operating activities |  | $ | 234 |  |  |  | 44 |  |  |  | (25) |  |  |  | (435) |  |  |  | 209 |  |  |  | (391) |  |
Cash from investing activities |  | $ | (69) |  |  |  | (139) |  |  |  | (19) |  |  |  | 3,055 |  |  |  | (88) |  |  |  | 2,916 |  |
Cash from operating activities for the six months ended March 31, 2023 reflects approximately $575 of income taxes paid related to the gain on the InSinkErator divestiture and the Climate Technologies subsidiary restructurings (the remainder of which is expected to be paid by the end of fiscal 2023), transaction fees and unfavorable working capital. Cash from investing activities for the six months ended March 31, 2023 reflects the proceeds of $3.0 billion related to the InSinkErator divestiture.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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