EMERSON ELECTRIC CO (Form: 10-K, Received: 11/18/2015 17:27:12)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2015

¨ 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 (State or other jurisdiction of incorporation or organization)		43-0259330 (I.R.S. Employer Identification No.)

8000 W. Florissant Ave. P.O. Box 4100 St. Louis, Missouri (Address of principal executive offices)		63136 (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		Name of each exchange on which registered

Common Stock of $0.50 par value per share		New York Stock Exchange Chicago Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No ý

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 ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files) Yes ý No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

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

Large accelerated filer ý Accelerated filer ¨

Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨

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

Aggregate market value of the voting stock held by nonaffiliates of the registrant as of close of business on

March 31, 2015: $37.9 billion .

Common stock outstanding at October 31, 2015: 654,557,141 shares.

Documents Incorporated by Reference


1.	Portions of Emerson Electric Co. 2015 Annual Report to Stockholders for the year ended September 30, 2015 incorporated by reference into Parts I and II hereof.


2.	Portions of Emerson Electric Co. Notice of 2016 Annual Meeting of Stockholders and Proxy Statement incorporated by reference into Part III hereof.

PART I

ITEM 1 - BUSINESS

Emerson (“the Company”) was incorporated in Missouri in 1890, and has evolved through internal growth and strategic acquisitions and divestitures from a regional manufacturer of electric motors and fans into a diversified global leader that brings technology and engineering together to provide innovative solutions for customers in a wide range of industrial, commercial and consumer markets around the world.

The Company is organized into the five business segments described below, based on the nature of the products and services rendered:


•	Process Management - provides measurement, control and diagnostic capabilities for automated industrial processes producing items such as fuels, chemicals, foods, medicines and power.


•	Industrial Automation - brings integrated manufacturing solutions to diverse industries worldwide.


•	Network Power - provides power conditioning and reliability, and environmental control to help keep telecommunication systems, data networks and other critical business applications operating continuously.


•	Climate Technologies - enhances household and commercial comfort, as well as food safety and energy efficiency, through heating, air conditioning and refrigeration technology.


•	Commercial & Residential Solutions - provides tools for professionals and homeowners, residential storage systems and appliance solutions.

Sales, earnings before interest and income taxes, and total assets attributable to each business segment for the three years ended September 30, 2015, are set forth in Note 17 of Notes to Consolidated Financial Statements of the 2015 Annual Report, which note is hereby incorporated by reference. Sales by segment in 2015, as a percentage of the total Company, were: Process Management, 37 percent; Industrial Automation, 18 percent; Network Power, 19 percent; Climate Technologies, 18 percent; and Commercial & Residential Solutions, 8 percent. Total Emerson sales by geographic destination in 2015 were: the United States and Canada, 48 percent; Asia, 22 percent; Europe, 18 percent; Latin America, 6 percent; and Middle East/Africa, 6 percent. Information with respect to acquisition and divestiture activity, the planned strategic portfolio repositioning actions and rationalization of operations is set forth in Notes 3 and 5 of Notes to Consolidated Financial Statements of the 2015 Annual Report, which notes are hereby incorporated by reference.

In June 2015, the Company announced plans to spin off its network power systems business through a tax-free distribution to shareholders as part of a strategic plan to streamline its portfolio, enhance growth potential and profitability, and accelerate value creation for shareholders. The Company is also exploring strategic alternatives, including potential sale, for its power generation and motors, drives, and residential storage businesses. In addition, the Company is bringing its corporate services and structure into alignment with the Company’s expected smaller scale and sharper focus. These transactions are subject to risks and uncertainties. See Item 1A - "Risk Factors” and Item 7 - "Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

PROCESS MANAGEMENT

The Process Management segment offers customers products and technology, and engineering, project management and consulting services for precision measurement, control, monitoring, asset optimization, and safety and reliability of oil and gas reservoirs and plants that process or treat various items. The Company’s array of products and services helps customers optimize their plant capabilities in the areas of plant safety and reliability, product quality and output efficiency. Significant end markets served include oil and gas, refining, chemicals and power generation, as well as pharmaceuticals, food and beverages, pulp and paper, metals and mining, and municipal water supplies. Sales by geographic destination in 2015 for Process Management were: the United States and Canada, 42 percent; Asia, 24 percent; Europe, 17 percent; Latin America, 7 percent; and Middle East/Africa, 10 percent.

1 #

Process Management Systems and Software

Process Management systems and software control plant processes by collecting and analyzing information from measurement devices in the plant, and then uses that information to adjust valves, pumps, motors, drives and other control hardware for maximum product quality and process efficiency and safety. Software capabilities also include upstream oil and gas reservoir simulation and modeling for production optimization. The Company’s process control systems can be extended wirelessly to support a mobile workforce with handheld tools/communicators, provide site-wide location tracking of people and assets, and enable video monitoring and communication with wireless field devices, thereby increasing the information available to operators.

Measurement and Analytical Instrumentation

Measurement instrumentation measures the physical properties of liquids or gases in a process stream, such as pressure, temperature, level, rate and amount of flow, and communicates this information to a process control system. Measurement technologies provided by the Company include Coriolis direct mass flow, magnetic flow, vortex flow, ultrasonic flow, differential pressure, ultra-low flow fluid measurement, temperature sensors, radar-based tank gauging and magnetic level gauging. The Company’s measurement products are also often used in custody transfer applications, such as the transfer of gasoline from a storage tank to a tanker truck, where precise metering of the amount of fluid transferred helps ensure accurate asset management. Complementary products include onshore and subsea multi-phase meters, wetgas meters, downhole gauges and corrosion/erosion measuring instruments.

Analytical instrumentation analyzes the chemical composition of process fluids and emissions to enhance quality and efficiency, as well as environmental compliance. The Company’s analytical technologies include process gas chromatographs, in-situ oxygen analyzers, infrared gas and process fluid analyzers, combustion analyzers and systems, and analyzers that measure pH, conductivity and water quality. The Company provides sensors to detect combustible and toxic gases, and flames. These devices support the safety of both people and process plant assets.

Measurement and analytical instrumentation technologies are also available with wireless communication capability, allowing customers to monitor processes or equipment that were previously not measurable (remote, moving/rotating) or not economical to measure due to the high cost and difficulty of running wires in industrial process plants.

Valves, Actuators and Regulators

Control valves respond to commands from a control system to continuously and precisely modulate the flow of process fluids to provide maximum process efficiency and product quality. Engineered on/off valves are typically used to achieve tight shutoff, even in high pressure and temperature processes. The Company designs, engineers and manufactures ball valves, sliding stem valves, rotary valves, high performance butterfly valves and severe service valves for critical applications, and related valve actuators and controllers. The Company provides a line of industrial and residential regulators, whose function is to reduce the pressure of fluids moving from high-pressure supply lines into lower pressure systems, and also manufactures tank and terminal safety equipment, including hatches, vent pressure and vacuum relief valves, and flame arrestors for storage tanks in the oil and gas, petrochemical, refining and other process industries.

_®

PlantWeb Digital Plant Architecture

PlantWeb digital plant architecture combines the technologies described above with the advantages of “intelligent” plant devices (valves and measurement instruments with advanced diagnostic capabilities), open communication standards (nonproprietary wired and wireless digital protocols allowing plant devices and control systems to “talk” with one another) and integrated modular software, not only to better control the process but also to collect and analyze valuable information about the process and the plant assets. This capability gives the Company's customers the ability to detect or predict changes in equipment and process performance, and the associated impact on plant operations. PlantWeb architecture provides customers the insight to improve plant availability and safety, and also furnishes a platform to continually improve asset management and standards compliance, and to reduce startup, operating and maintenance costs.

2 #

Industry Services and Solutions

Process Management’s array of process automation and asset optimization services improve automation project implementation time and costs, increase process availability and productivity, and reduce the total cost of ownership. Reliability consulting services help process plant owners and operators improve plant availability through implementation of on-site and corporate-wide reliability programs. Through proven project methodologies and deep knowledge of plant assets, the Company helps industrial plants to improve safety, increase plant uptime and reduce maintenance costs. The Company’s Global Industry Centers offer engineering and project management services to help customers extract maximum performance and reliability from their process equipment and automation assets. These Centers serve industries such as oil and gas, pulp and paper, chemicals, power, food and beverage, and life sciences. They also assist customers in diagnosing equipment problems and plant inefficiencies.

Distribution

The principal worldwide distribution channel for Process Management is a direct sales force, although a network of independent sales representatives, and to a lesser extent independent distributors purchasing products for resale, are also utilized. Approximately half of the sales in the United States are made through a direct sales force with the remainder primarily through independent sales representatives. In Europe and Asia, sales are primarily made through a direct sales force with the remainder split evenly between independent sales representatives and distributors.

Brands

Service/trademarks and trade names within Process Management include Emerson Process Management, AMS Suite, Baumann, Bettis, Bristol, CSI, Damcos, Daniel, DeltaV, EIM, El-O-Matic, Fisher, Go Switch, Guardian, Micro Motion, Net Safety, Ovation, PlantWeb, ROC, Rosemount, Roxar, Smart Process, SureService, Tescom, TopWorx, Valvetop and Virgo.

INDUSTRIAL AUTOMATION

The Industrial Automation segment provides integrated manufacturing solutions to its customers at the source of manufacturing their own products. Products include motors, drives, power generating alternators, fluid controls, electrical distribution devices and materials joining equipment. Through these offerings, the Company brings technology and enhanced quality to its customers' final products. Sales by geographic destination in 2015 for Industrial Automation were: the United States and Canada, 40 percent; Asia, 19 percent; Europe, 34 percent; Latin America, 3 percent; and Middle East/Africa, 4 percent.

Motors and Drives

Industrial Automation provides a broad line of drives and electric motors that are used in a wide variety of manufacturing operations and products, including production assembly lines, escalators in shopping malls and supermarket checkout stations. Products in this category include alternating current (AC) and direct current (DC) electrical variable speed drives, servo motors, pump motors, drive control systems, integral horsepower motors (1 HP and above), fractional horsepower motors (less than 1 HP), hermetic motors and gear drives.

Power Generation

Power generation products include low, medium and high voltage alternators for use in diesel and gas powered generator sets, as well as high frequency alternators, AC motor/generator sets, traction generators, wind power generators, wind turbine pitch control systems and solar photovoltaic converters.

Fluid Power and Control

These products control and power the flow of fluids (liquids and gases) in manufacturing operations such as automobile assembly, food processing, textile manufacturing and petrochemical processing. Products include solenoid and pneumatic valves, valve position indicators, pneumatic cylinders, air preparation equipment, and pressure, vacuum and temperature switches.

3 #

Electrical Distribution

Electrical distribution consists of a broad line of components for current- and noncurrent-carrying electrical distribution devices, including conduit and cable fittings, plugs and other receptacles, industrial lighting, enclosures and controls. Products are used in hazardous, industrial, commercial and construction environments, such as oil and gas drilling and production sites, pulp and paper mills and petrochemical plants.

Materials Joining and Precision Cleaning

The Company supplies plastic and metal joining technologies and equipment to a diversified manufacturing customer base, including automotive, medical devices and toys. The Company also provides precision cleaning and liquid processing solutions to industrial and commercial manufacturers. Products include ultrasonic joining and cleaning equipment; linear and orbital vibration welding equipment; systems for hot plate, spin and laser welding equipment; and aqueous, semi-aqueous and vapor cleaning systems.

Distribution

On a worldwide basis, the primary distribution channel for Industrial Automation is through direct sales forces, including to original equipment manufacturers. Independent distributors constitute the next significant sales channel, mostly to reach end users. To a lesser extent, independent sales representatives are utilized, particularly for electrical distribution products in the United States.

Brands

Service/trademarks and trade names within Industrial Automation include Emerson Industrial Automation, Appleton, ASCO, ASCO Joucomatic, ASCO Numatics, Branson Ultrasonics, Control Techniques, Kato Engineering, Leroy Somer, Nutsteel, O-Z/Gedney, SSB Wind Systems and Trident.

NETWORK POWER

The Network Power segment designs, manufactures, installs and maintains products providing electric power conditioning, power reliability and environmental control for telecommunications networks, data centers and other critical applications, and also provides comprehensive data center infrastructure management solutions. Products in this segment include critical power systems, uninterruptible power systems, thermal management, integrated data center control devices, software, monitoring and 24-hour service. Sales by geographic destination in 2015 for Network Power were: the United States and Canada, 43 percent; Asia, 28 percent; Europe, 19 percent; Latin America, 6 percent; and Middle East/Africa, 4 percent.

Critical Power Systems

Critical power technology provides reliable power systems which automatically transfer critical application loads from a utility to emergency backup generators in the event of a blackout or brownout. Products include automatic transfer switches, load banks, surge protection, field services, paralleling and synchronizing gear, and related distribution equipment and control systems.

Uninterruptible Power Systems

Uninterruptible AC and DC power systems provide reliable, conditioned power to telecommunication networks, data centers and other critical equipment in the event of blackouts or line surges and spikes. Products range from stand-alone desktop solutions to complete systems incorporating rectifiers, inverters, power distribution units, surge protection, batteries and system supervision.

Thermal Management

Thermal management equipment provides efficient, reliable and cost-effective management of heat in mission- critical facilities. Applications include data center and telecom sites ranging from small network closets, to computer rooms, to hyperscale-sized facilities. Additionally, the thermal management portfolio spans a variety of offerings, including chilled water, direct expansion and evaporative equipment, software and controls.

4 #

Data Center Infrastructure Management

The Company provides comprehensive data center management solutions through server access technologies that enable access, monitoring and control of the information technology infrastructure and provide linkage with data center operations.

Service and Site Operations

Network Power staffs Customer Resolution Centers in more than 30 countries and deploys field service personnel worldwide to assist customers in managing their critical infrastructure. Services include on-site operations management, energy consumption monitoring, preventive maintenance, electrical testing, remote monitoring and management, and 24-hour service capability.

Distribution

Network Power segment sales are primarily through worldwide direct sales forces, particularly in Europe and Asia. The remainder of sales are handled by independent sales representatives, particularly in the United States, and independent distributors.

Brands

Service/trademarks and trade names within Network Power include Emerson Network Power, Aperture, ASCO Power Technologies, Avocent, Chloride, Knürr, Liebert, Liebert Services, NetXtend and Netsure.

CLIMATE TECHNOLOGIES

The Climate Technologies segment provides products and services for all areas of the climate control industry, including residential heating and cooling, commercial air conditioning, and commercial and industrial refrigeration. The Company's technologies enable homeowners and businesses to better manage their heating, air conditioning and refrigeration systems for improved control and comfort, and lower energy costs. Climate Technologies also provides services that digitally control and remotely monitor refrigeration units in grocery stores and other food distribution outlets to enhance food freshness and safety. Sales by geographic destination in 2015 for Climate Technologies were: the United States and Canada, 55 percent; Asia, 23 percent; Europe, 10 percent; Latin America, 7 percent; and Middle East/Africa, 5 percent.

Residential and Commercial Heating and Air Conditioning

The Company provides a full range of heating and air conditioning products that help reduce operational and energy costs and create comfortable environments in all types of buildings. These products include reciprocating and scroll air conditioning compressors, including ultra-efficient residential scroll compressors with two stages of cooling capacity, as well as variable speed scroll compressors; system protector and flow control devices; standard, programmable and Wi-Fi thermostats; monitoring equipment and electronic controls for gas and electric heating systems; gas valves for furnaces and water heaters; ignition systems for furnaces; sensors and thermistors for home appliances; and temperature sensors and controls.

Commercial and Industrial Refrigeration

The Company's technology is incorporated into equipment to refrigerate food and beverages in supermarkets, convenience stores, food service operations, refrigerated trucks and refrigerated marine transport containers. Climate Technologies refrigeration products are also used in a wide variety of industrial applications, including medical applications, food processing and cold storage. Products include reciprocating, scroll and screw compressors; precision flow controls; system diagnostics and controls that provide precise temperature management; and environmental control systems.

5 #

Services and Solutions

Services and solutions enable global customers to optimize the performance of facilities including large-scale retailers, supermarkets, convenience stores and food services facilities. By providing expertise in air conditioning, refrigeration and lighting control, Climate Technologies performs as a complete facility manager for its customers. The Company’s expertise allows customers to reduce energy and maintenance costs, thereby improving overall facility uptime. In addition to industry-leading controls, services include facility design and product management, site commissioning, facility monitoring and energy modeling.

Distribution

Climate Technologies segment sales, primarily to original equipment manufacturers and end users, are made predominately through worldwide direct sales forces. Remaining sales are primarily through independent distributor networks throughout the world.

Brands

Service/trademarks and trade names within the Climate Technologies segment include Emerson Climate Technologies, Control Products, Clive Samuels & Associates, Computer Process Controls, Copeland, Design Services Network, Dixell, Emerson Climate Technologies Distribution Services, Emerson Climate Technologies Educational Services, Emerson Climate Technologies Retail Services, Fusite, Therm-O-Disc, Vilter and White-Rodgers.

COMMERCIAL & RESIDENTIAL SOLUTIONS

The Company’s Commercial & Residential Solutions segment includes a broad range of tools, storage products and appliance solutions. Sales by geographic destination in 2015 for this segment were: the United States and Canada, 86 percent; Asia, 4 percent; Europe, 6 percent; Latin America, 2 percent; and Middle East/Africa, 2 percent.

Professional and Do-It-Yourself Tools

Pipe-working tools are used by plumbing and mechanical professionals to install and repair piping systems. Products include pipe wrenches, pipe cutters, pipe threading and roll grooving equipment, mechanical crimping tube joining systems, drain cleaners, tubing tools, and diagnostic systems, including closed-circuit television pipe inspection and locating equipment. Other professional tools include water jetters, wet-dry vacuums, commercial vacuums and bolt cutters. Do-it-yourself tools, available at retail home improvement outlets, include drain cleaning equipment, pipe and tube working tools, and wet-dry vacuums.

Storage Solutions

The Company provides a wide variety of freestanding, fixed and mobile storage products for residential applications. Products for the home include shelving systems, cabinet and closet organizers, home office storage, and drawer systems and containers, available in wire, stainless steel and laminate.

Appliance Solutions

The Company provides a number of appliance solutions, including residential and commercial food waste disposers, ceiling fans, instant hot water dispensers and compact electric water heaters.

Distribution

The principal worldwide distribution channels for Commercial & Residential Solutions are distributors and direct sales forces. Professional tools are sold worldwide almost exclusively through distributors. Independent sales representatives are utilized to a lesser extent. Appliance solutions are sold through direct sales force networks and distributors. Approximately one-third of this segment's sales are made to a small number of big box retailers.

6 #

Brands

Service/trademarks and trade names within the Commercial & Residential Solutions segment include Emerson, Emerson Appliance Solutions, Emerson Professional Tools, Emerson Storage Solutions, ClosetMaid, InSinkErator, ProTeam and RIDGID.

PRODUCTION

The Company utilizes various production operations and methods. The principal production operations are electronics assembly, metal stamping, forming, casting, machining, welding, plating, heat treating, painting and assembly. In addition, the Company uses specialized production operations, including automatic and semiautomatic testing, automated material handling and storage, ferrous and nonferrous machining, and special furnaces for heat treating and foundry applications. Management believes the equipment, machinery and tooling used in these processes are of modern design and well maintained.

RAW MATERIALS

The Company's major requirements for basic raw materials include steel, copper, cast iron, electronics, rare earth metals, aluminum and brass; and to a lesser extent, plastics and other petroleum-based chemicals. The Company seeks to have many sources of supply for each of its major requirements in order to avoid significant dependence on any one or a few suppliers. However, the supply of materials or other items could be disrupted by natural disasters or other events. Despite market price volatility for certain requirements and materials pricing pressures at some of our businesses, the raw materials and various purchased components needed for the Company’s products have generally been available in sufficient quantities.

PATENTS, TRADEMARKS AND LICENSES

The Company maintains an intellectual property portfolio it has developed or acquired over a number of years, including patents, trademarks and licenses. The Company also continues to develop or acquire new intellectual property on an ongoing basis. New patent applications are continuously filed to protect the Company’s ongoing research and development activities. The Company’s trademark registrations may be renewed and their duration is dependent upon national laws and trademark use. While this proprietary intellectual property portfolio is important to the Company in the aggregate, management does not regard any of its segments as being dependent on any single patent, trademark registration or license.

BACKLOG

The Company’s estimated consolidated order backlog was $5,986 million and $6,714 million at September 30, 2015 and 2014, respectively. The vast majority of the consolidated backlog as of September 30, 2015 is expected to be shipped within one year. Estimated backlog by business segment at September 30, 2015 and 2014 follows (dollars in millions). The declines in Industrial Automation and Commercial & Residential Solutions include the impacts from divesting the power transmission solutions and commercial storage businesses.



	2014		2015
Process Management	$	4,141	3,725
Industrial Automation	646		481
Network Power	1,368		1,342
Climate Technologies	452		370
Commercial & Residential Solutions	107		68
Total Backlog	$	6,714	5,986

7 #

COMPETITION

The Company's businesses operate in end markets that are highly competitive. The Company competes based on product performance, quality, service and/or price across the industries and markets served. A significant element of the Company's competitive strategy is to deliver solutions to our customers by manufacturing high-quality products at the best relevant global cost. Although no single company competes directly with Emerson in all of the Company's product lines, various companies compete in one or more product lines with the number of competitors varying by product line. Some competitors have substantially greater sales, assets and financial resources than Emerson and the Company also competes with many smaller companies. Management believes Emerson has a market leadership position in many of its product lines.

RESEARCH AND DEVELOPMENT

Costs associated with Company-sponsored research and development activities were $506 million , $541 million and $576 million in 2015, 2014 and 2013, respectively.

ENVIRONMENT

The Company's manufacturing locations generate waste, of which treatment, storage, transportation and disposal are subject to federal, state, foreign and/or local laws and regulations relating to protection of the environment. Compliance with laws regulating the discharge of materials into the environment or otherwise relating to protection of the environment has not had a material effect on the Company's capital expenditures, earnings or competitive position. The Company does not anticipate having material capital expenditures for environmental control facilities during the next fiscal year.

EMPLOYEES

The Company and its subsidiaries had an average of approximately 110,800 employees during 2015. Management believes that the Company's employee relations are favorable. Some of the Company's employees are represented under collective bargaining agreements, but none of these agreements are considered significant.

DOMESTIC AND FOREIGN OPERATIONS

International sales were $12,521 million in 2015, $14,227 million in 2014 and $14,669 million in 2013, including U.S. exports of $1,330 million , $1,396 million and $1,604 million in 2015, 2014 and 2013, respectively. There are additional risks attendant to foreign operations, such as possible nationalization of facilities, currency fluctuations and potential restrictions on the movement of funds. See Note 17 of Notes to Consolidated Financial Statements of the 2015 Annual Report, which note is hereby incorporated by reference, for further information with respect to foreign operations.

INTERNET ACCESS

Emerson's reports on Forms 10-K, 10-Q, 8-K and all amendments to those reports are available without charge through the Company’s website on the Internet as soon as reasonably practicable after they are electronically filed with, or furnished to, the U.S. Securities and Exchange Commission (SEC). They may be accessed as follows: www.Emerson.com, Investor Relations, SEC Filings. Information on the Company’s website does not constitute part of this Form 10-K.

The information set forth under “Item 1A - Risk Factors” is hereby incorporated by reference.

ITEM 1A - RISK FACTORS

Investing in our securities involves risks. We may amend or supplement the risk factors described below from time to time by other reports we file with the SEC.

8 #

Our Proposed Strategic Portfolio Transactions, Including the Planned Spinoff of our Network Power Systems Business, May Not Be Completed Within the Currently Contemplated Time Frame, With the Expected Terms or Costs, or at All, and May Not Achieve the Intended Benefits.

We make no assurance that the spinoff or any other potential transactions will occur, nor can we provide assurance regarding the terms, timing, costs or benefits anticipated. Unforeseen developments, including possible delays in obtaining various tax, regulatory and other approvals, could delay or prevent the proposed spinoff or other potential transactions from occurring, or cause them to occur on terms and conditions that are less favorable, or at a higher cost, than expected. Moreover, we may further revise our plans with respect to one or more of these transactions. Executing the proposed spinoff will require significant time and attention from management, which could impact operations in our other businesses.

Even if one or more transactions are completed, we may not realize some or all of the anticipated strategic, financial or other benefits. Moreover, if the spinoff is consummated, the two independent companies will each be smaller and less diversified, with a narrower business focus and may be more vulnerable to changing market conditions, which could adversely affect our business, as well as that of the spun-off company. There may also be a loss of synergies from separating the businesses that could negatively impact the balance sheet, profit margins or earnings of both businesses. Further, the combined value of the common stock of the two publicly-traded companies may not be equal to or greater than what the value of our common stock would have been had the proposed spinoff not occurred.

We Operate in Businesses That Are Subject to Competitive Pressures That Could Affect Prices or Demand for Our Products

Our businesses operate in markets that are highly competitive, and we compete on the basis of product performance, quality, service and/or price across the industries and markets served. A significant element of our competitive strategy is to deliver solutions to our customers by manufacturing high-quality products at the best relevant global cost. Various companies compete with us in one or more product lines and the number of competitors varies by product line. Some of our competitors have substantially greater sales, assets and financial resources than our Company and we also compete with many smaller companies. Competitive pressures could adversely affect prices or customer demand for our products, impacting our sales or profit margins, and/or resulting in a loss of market share.

Our Operating Results Depend in Part on Continued Successful Research, Development and Marketing of New and/or Improved Products and Services, and There Can Be No Assurance That We Will Continue to Successfully Introduce New Products and Services

The success of new and improved products and services depends on their initial and continued acceptance by our customers. Our businesses are affected by varying degrees of technological change and corresponding shifts in customer demand, which result in unpredictable product transitions, shortened life cycles and increased importance of being first to market with new products and services. We may experience difficulties or delays in the research, development, production and/or marketing of new products and services which may negatively impact our operating results and prevent us from recouping or realizing a return on the investments required to continue to bring new products and services to market.

If We Are Unable to Defend or Protect Our Intellectual Property Rights the Company's Competitive Position Could Be Adversely Affected

The Company's intellectual property rights are important to its business and include numerous patents, trademarks, copyrights, trade secrets and other confidential information. This intellectual property may be subject to challenge, infringement, invalidation or circumvention by third parties. Despite extensive security measures, our intellectual property may be subject to misappropriation through unauthorized access of our information technology systems, employee theft, or other acts of industrial espionage. Should the Company be unable to adequately defend or protect its intellectual property, it may suffer competitive harm.

9 #

We Engage in Acquisitions, and May Encounter Difficulties in Integrating These Businesses and Therefore We May Not Realize the Anticipated Benefits of the Acquisitions

We regularly seek growth through strategic acquisitions. In 2015 and in past years, we have made various acquisitions and entered into joint venture arrangements intended to complement or expand our business, and may continue to do so in the future. The success of these transactions will depend on our ability to integrate assets and personnel acquired in these transactions and to cooperate with our strategic partners. We may encounter difficulties in integrating acquisitions with our operations, and in managing strategic investments. Furthermore, we may not realize the degree, or timing, of benefits we anticipate when we first enter into a transaction. Any of the foregoing could adversely affect our business and results of operations.

We Use a Variety of Raw Materials and Components in Our Businesses, and Significant Shortages or Price Increases Could Increase Our Operating Costs and Adversely Impact the Competitive Positions of Our Products

Our major requirements for raw materials include steel, copper, cast iron, electronics, rare earth metals, aluminum, brass and, to a lesser extent, plastics and other petroleum-based chemicals. The Company seeks multiple sources of supply for each of its major requirements in order to avoid significant dependence on any one or a few suppliers. However, the supply of materials or other items could be disrupted by natural disasters or other events. Significant shortages or price increases could impact the prices our affected businesses charge, their operating costs and the competitive position of their products and services, which could adversely affect our results of operations. While we monitor market prices of the commodities we require and attempt to reduce price exposure through hedging activities, this risk could adversely affect our operating results.

Our Operations Depend on Production Facilities Throughout the World, a Majority of Which Are Located Outside the United States and Subject to Increased Risks of Disrupted Production Causing Delays in Shipments and Loss of Customers and Revenue

We manage businesses with manufacturing facilities worldwide, a majority of which are located outside the United States, and also source certain materials internationally. Emerging market sales now represent over one-third of total sales and serving a global customer base requires that we place more materials sourcing and production in emerging markets to capitalize on market opportunities and maintain our best-cost position. Our and our suppliers’ international production facilities and operations could be disrupted by a natural disaster, labor strife, war, political unrest, terrorist activity or public health concerns, particularly in emerging countries that are not well-equipped to handle such occurrences.

Our manufacturing facilities abroad also may be more susceptible to changes in laws and policies in host countries and economic and political upheaval than our domestic facilities. Any such disruption could cause delays in shipments of products and the loss of sales and customers, and insurance proceeds may not adequately compensate us.

Our Substantial Sales Abroad Subject Us to Economic Risk as Our Results of Operations May Be Adversely Affected by Foreign Currency Fluctuations and Changes in Local Government Regulations and Policies

We sell, manufacture, engineer and purchase products in overseas markets and a significant portion of our sales occur in mature and emerging markets outside the United States. We expect sales from non-U.S. markets to continue to represent a significant portion of our total sales. International sales and operations are subject to changes in local government regulations and policies, including those related to tariffs and trade barriers, investments, taxation, exchange controls and repatriation of earnings, which could adversely affect our results. Changes in the relative values of currencies occur from time to time and have affected our operating results and could do so in the future. While we monitor our exchange rate exposures and attempt to reduce this exposure through hedging activities, this risk could adversely affect our operating results.

10 #

Recessions, Adverse Market Conditions or Downturns in End Markets We Serve May Negatively Affect Our Operations

In the past, our operations have been exposed to significant volatility due to changes in general economic conditions, recessions or adverse conditions in the end markets we serve. In the future, similar changes could adversely impact overall sales, operating results and cash flows. Moreover, during economic downturns we may undertake more extensive rationalization actions and incur higher costs. If our rationalization actions are not sufficiently effective, we may not be able to achieve our anticipated operating results. In addition, these factors could lead to impairment charges for goodwill or other long-lived assets.

Access to Funding Through the Capital Markets Is Essential to the Execution of Our Business Plan and if We Are Unable to Maintain Such Access We Could Experience a Material Adverse Effect on Our Business and Financial Results

Our ability to invest in our businesses, make strategic acquisitions and refinance maturing debt obligations requires access to the capital markets and sufficient bank credit lines to support short-term borrowings. Volatility in the capital markets may increase costs associated with issuing commercial paper or other debt instruments, or affect the Company’s ability to access those markets. If we are unable to continue to access the capital markets, we could experience a material adverse effect on our business and financial results. Additionally, if our customers, suppliers or financial institutions are unable to access the capital markets to meet their commitments to the Company, our business could be adversely impacted.

Security Breaches or Disruptions of Our Information Technology Systems Could Adversely Affect Our Business

The Company utilizes a variety of information technology systems to manage and operate its businesses. Despite the implementation of extensive security measures (including access controls, data encryption, vulnerability assessments, continuous monitoring, and maintenance of back-up and protective systems), the Company’s information technology systems are potentially vulnerable to unauthorized access, computer viruses, cyberattack and other events, ranging from individual attempts to advanced persistent threats. Although considered unlikely, it is possible a security breach could result in theft of trade secrets or other intellectual property or disclosure of confidential customer, supplier or employee information. Should the Company be unable to prevent security breaches, disruptions could have an adverse effect on our operations, as well as expose the Company to litigation, increased cybersecurity protection costs, and reputational damage.

We Are Subject to Litigation and Environmental Regulations That Could Adversely Impact Our Operating Results

We are, and may in the future be, a party to a number of legal proceedings and claims, including those involving intellectual property, product liability and environmental matters, several of which claim, or may in the future claim, significant damages. Given the inherent uncertainty of litigation, we can offer no assurance that existing litigation or a future adverse development will not have a material adverse impact. We also are subject to various laws and regulations relating to environmental protection and the discharge of materials into the environment, and we could incur substantial costs as a result of the noncompliance with or liability for cleanup or other costs or damages under environmental laws.

ITEM 1B - UNRESOLVED STAFF COMMENTS

None.

ITEM 2 - PROPERTIES

At September 30, 2015, the Company had approximately 205 manufacturing locations worldwide, of which approximately 140 were located outside the United States, primarily in Europe and Asia, and to a lesser extent in Canada and Latin America. Manufacturing locations by business segment are: Process Management, 73; Industrial Automation, 58; Network Power, 25; Climate Technologies, 35; and Commercial & Residential Solutions, 14. The majority of the locations are owned, with the remainder occupied under lease. The Company considers its facilities suitable and adequate for the purposes for which they are used.

11 #

ITEM 3 - LEGAL PROCEEDINGS

The Company and its subsidiaries are party to various legal proceedings, some of which claim substantial amounts of damages. It is not possible to predict the outcome of these matters, but historically the Company has been largely successful in both prosecuting and defending claims and lawsuits.

The Company believes a material adverse impact of any pending litigation is unlikely. Nevertheless, given the uncertainties of litigation, a remote possibility exists that litigation could have a material adverse impact on the Company.

The information regarding legal proceedings set forth in Note 12 of Notes to Consolidated Financial Statements of the 2015 Annual Report is hereby incorporated by reference.

ITEM 4 - MINE SAFETY DISCLOSURES

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following sets forth certain information as of November 18, 2015 with respect to the Company's executive officers. The Fiscal Year column indicates the first year the executive served as an officer of the Company. These officers have been elected or appointed to terms which expire February 2, 2016:



Name	Position	Age	Fiscal Year

D. N. Farr	Chairman of the Board and Chief Executive Officer*	60	1985

F. J. Dellaquila	Executive Vice President and Chief Financial Officer	58	1991

E. L. Monser	President	65	2002

E. M. Purvis	Executive Vice President and Chief Operating Officer	58	2003

S. J. Pelch	Senior Vice President - Organization Planning and Development	51	2005

C. A. Peters	Senior Executive Vice President	60	1990

R. J. Schlueter	Vice President, Controller and Chief Accounting Officer	61	1992

*Also chairman of the Executive Committee of the Board of Directors.

There are no family relationships among any of the executive officers and directors.

David N. Farr has been Chief Executive Officer since October 2000, was appointed Chairman of the Board in September 2004, and also served as President from November 2005 to October 2010. Frank J. Dellaquila was appointed Executive Vice President in November 2012 and Senior Vice President and Chief Financial Officer in February 2010. Prior to his current position, Mr. Dellaquila was Senior Vice President - Finance and Controller from August 2009 to February 2010 and Senior Vice President - Acquisitions and Development from 2004 to 2009. Edward L. Monser was appointed President in October 2010 and was Chief Operating Officer from November 2001 to January 2015. Edgar M. Purvis was appointed Chief Operating Officer in January 2015. Prior to his current position, Mr. Purvis was Executive Vice President responsible for the Climate Technologies business segment from 2008 to January 2015. Steven J. Pelch was appointed Senior Vice President in November 2015. Mr. Pelch was Vice President - Organization Planning and Development from November 2014 to November 2015, and prior to that was Vice President - Organization Planning from October 2012 to November 2014 and Vice President - Planning from October 2005 to October 2012. Charles A. Peters has been Senior Executive Vice President since October 2000. Richard J. Schlueter was appointed Controller in October 2011. He has been Vice President Accounting since 1999 and was appointed Chief Accounting Officer in February 2003.

12 #

PART II

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Information regarding the market for the Company's common stock, quarterly market price ranges and dividend payments is set forth in Note 19 of Notes to Consolidated Financial Statements of the 2015 Annual Report, which note is hereby incorporated by reference. There were approximately 20,130 stockholders of record at September 30, 2015.



Period	Total Number of Shares Purchased (000s)	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (000s)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (000s)
July 2015	6,200	$53.00	6,200	8,689
August 2015	2,661	$49.33	2,661	6,028
September 2015	—	$0.00	—	6,028
Total	8,861	$51.90	8,861	6,028

The 6.0 million shares available for purchase represent the remaining authorized shares under a 70 million share purchase program approved by the Board of Directors in May 2013. In November 2015, the Board of Directors authorized the purchase of an additional 70 million common shares.

ITEM 6 - SELECTED FINANCIAL DATA

Years ended September 30

(dollars in millions, except per share amounts)



	2011		2012 (a)	2013 (a)	2014 (a)	2015 (b)
Net sales	$	24,222	24,412	24,669	24,537	22,304
Earnings from continuing operations – common stockholders	$	2,454	1,968	2,004	2,147	2,710
Basic earnings per common share from continuing operations	$	3.26	2.68	2.78	3.05	4.01
Diluted earnings per common share from continuing operations	$	3.24	2.67	2.76	3.03	3.99
Cash dividends per common share	$	1.38	1.60	1.64	1.72	1.88
Long-term debt	$	4,324	3,787	4,055	3,559	4,289
Total assets	$	23,861	23,818	24,711	24,177	22,088

(a) Includes goodwill impairment and income tax charges as follows: 2014, $508 million and $0.72 per share; 2013, $566 million and $0.78 per share; 2012, $528 million and $0.72 per share.

(b) Includes gains from divestitures of businesses of $611 million and $0.90 per share and costs related to the spinoff of the network power systems business of $52 million and ($0.08) per share.

See Note 3 of Notes to Consolidated Financial Statements of the 2015 Annual Report, which note is hereby incorporated by reference, for information regarding the Company's acquisition and divestiture activities for the last three years.

13 #

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information from the 2015 Annual Report set forth in Exhibit 13 hereto under “Results of Operations,” “Business Segments,” “Financial Position, Capital Resources and Liquidity,” “Critical Accounting Policies,” "Other Items" and "Safe Harbor Statement" is hereby incorporated by reference.

Non-GAAP Financial Measures

To supplement the Company’s financial information presented in accordance with U.S. generally accepted accounting principles (U.S. GAAP), management periodically uses certain “non-GAAP financial measures,” as such term is defined in Regulation G under the rules of the SEC, to clarify and enhance understanding of past performance and prospects for the future. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in or excluded from the most directly comparable measure calculated and presented in accordance with U.S. GAAP. For example, non-GAAP measures may exclude the impact of certain items such as acquisitions, divestitures, gains, losses and impairments, or items outside of management’s control, such as foreign currency exchange rate fluctuations. Management believes that the following non-GAAP financial measures provide investors and analysts useful insight into the Company’s financial position and operating performance. Any non-GAAP measure provided should be viewed in addition to, and not as an alternative to, the most directly comparable measure determined in accordance with U.S. GAAP, as identified in italics below. Further, the calculation of these non-GAAP financial measures may differ from the calculation of similarly titled financial measures presented by other companies and therefore may not be comparable among companies.

Underlying sales, which exclude the impact of acquisitions, divestitures and fluctuations in foreign currency exchange rates during the periods presented, are provided to facilitate relevant period-to-period comparisons of sales growth by excluding those items that impact overall comparability (U.S. GAAP measure: net sales ).

Operating profit (defined as net sales less cost of sales and selling, general and administrative expenses) and operating profit margin (defined as operating profit divided by net sales) are indicative of short-term operational performance and ongoing profitability. Management closely monitors operating profit and operating profit margin of each business to evaluate past performance and actions required to improve profitability. EBIT (defined as earnings before deductions for interest expense, net and income taxes) and total segment EBIT, and EBIT margin (defined as EBIT divided by net sales) and total segment EBIT margin, are commonly used financial measures that exclude the impact of financing on the capital structure and income taxes. All these measures are utilized by management to evaluate performance (U.S. GAAP measures: pretax earnings or pretax profit margin ).

Earnings, earnings per share, return on common stockholders’ equity and return on total capital excluding certain gains and losses, impairments, costs associated with the planned spinoff of the network power systems business and other strategic repositioning actions, or other items provide additional insight into the underlying, ongoing operating performance of the Company and facilitate period-to-period comparisons by excluding the earnings impact of these items. Management believes that presenting earnings, earnings per share, return on common stockholders' equity and return on total capital excluding these items is more representative of the Company’s operational performance and may be more useful for investors (U.S. GAAP measures: earnings, earnings per share, return on common stockholders’ equity, return on total capital ).

Free cash flow (operating cash flow less capital expenditures) is an indicator of the Company’s cash generating capabilities after considering investments in capital assets which are necessary to maintain and enhance existing operations. The determination of operating cash flow adds back noncash depreciation expense to earnings and thereby does not reflect a charge for necessary capital expenditures. Management believes that free cash flow is

useful to both management and investors as a measure of the Company’s ability to generate cash (U.S. GAAP measure: operating cash flow ).

14 #

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information from the 2015 Annual Report set forth in Exhibit 13 hereto under "Financial Instruments" is hereby incorporated by reference.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements and accompanying notes of the Company and subsidiaries and the report thereon of KPMG LLP in the 2015 Annual Report, are hereby incorporated by reference.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A - CONTROLS AND PROCEDURES

The Company maintains a system of disclosure controls and procedures which is designed to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and is accumulated and communicated to management, including the Company’s certifying officers, as appropriate to allow timely decisions regarding required disclosure. Based on an evaluation performed, the Company's certifying officers have concluded that the disclosure controls and procedures were effective as of September 30, 2015 to provide reasonable assurance of achieving these objectives.

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 quarter ended September 30, 2015, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. Management’s report on internal control over financial reporting, and the related report of the Company’s auditor, KPMG LLP, an independent registered public accounting firm, appearing in the 2015 Annual Report are hereby incorporated by reference.

ITEM 9B - OTHER INFORMATION

None.

PART III

ITEM 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information regarding nominees and directors appearing under "Nominees and Continuing Directors" in the Emerson Electric Co. Notice of Annual Meeting of Stockholders and Proxy Statement for the February 2016 annual stockholders' meeting (the "2016 Proxy Statement") is hereby incorporated by reference. Information regarding executive officers is set forth in Part I of this report. Information appearing under "Section 16(a) Beneficial Ownership Reporting Compliance" in the 2015 Proxy Statement is hereby incorporated by reference. Information regarding the Audit Committee and Audit Committee Financial Expert appearing under "Board of Directors and Committees" in the 2016 Proxy Statement is hereby incorporated by reference.

The Company has adopted a Code of Ethics that applies to the Company's Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer; has posted such Code of Ethics on its Internet website; and intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K by posting such information on its Internet website. The Company has adopted Charters for its Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee and a Code of Business Ethics for directors, officers and employees, which are available on its Internet website and in print to any stockholder who requests them. The Company has also adopted Corporate Governance Principles and Practices, which are available on its Internet website and in print to any stockholder who requests them. The Corporate Governance section of the Company's Internet website may be accessed as follows: www.Emerson.com, Investor Relations, Corporate Governance.

15 #

ITEM 11 - EXECUTIVE COMPENSATION

Information appearing under “Board of Directors and Committees—Compensation Committee,” “Board of Directors and Committees—Corporate Governance and Nominating Committee,” “Director Compensation,” “Executive Compensation” (including, but not limited to, the information set forth under “Compensation Discussion and Analysis,” “Compensation Committee Report” and “Summary Compensation Table”) and “Compensation Committee Interlocks and Insider Participation” in the 2016 Proxy Statement is hereby incorporated by reference.

The information contained in “Compensation Committee Report” shall not be deemed to be filed with the SEC or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), except to the extent that the Company specifically incorporates such information into future filings under the Securities Act of 1933 or the Exchange Act.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information regarding beneficial ownership of shares by nominees and continuing directors, named executive officers, five percent beneficial owners, and by all directors and executive officers as a group appearing under, "Stock Ownership of Directors, Executive Officers and 5% Beneficial Owners" in the 2016 Proxy Statement, is hereby incorporated by reference.

The following table sets forth aggregate information regarding the Company’s equity compensation plans as of September 30, 2015:



	Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights	Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights	Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
Plan Category	(a)	(b)	(c)
Equity compensation plans approved by security holders (1)	19,456,212	$55.40	29,869,851
Equity compensation plans not approved by security holders	—	—	—
Total	19,456,212	$55.40	29,869,851

(1)

Includes the Stock Option and Incentive Shares Plans previously approved by the Company's security holders. Included in column (a) are: (i) 13,646,089 reserved for outstanding stock option awards, (ii) 5,782,114 shares reserved for performance shares awards awarded in 2013, (iii) 26,942 reserved for outstanding restricted stock unit awards and (iv) 1,067 shares which have been earned under prior performance share programs but for which participants elected to defer payment. As provided by the Company’s Incentive Shares Plans, performance shares awards represent a commitment to issue such shares without cash payment by the employee, contingent upon achievement of the performance objectives and continued service by the employee. The price in column (b) represents the weighted-average exercise price for outstanding options. Included in column (c) are: (i) 13,488,909 shares remaining available for award under the previously approved 2011 Stock Option Plan, (ii) 12,000,000 shares remaining available for award under the previously approved 2015 Incentive Shares Plan, (iii) 4,158,987 shares remaining available for award under the previously approved 2006 Incentive Shares Plan and (iv) 221,955 shares remaining available under the previously approved Restricted Stock Plan for Non-Management Directors.

Information regarding stock option plans and incentive shares plans set forth in Note 14 of Notes to Consolidated Financial Statements of the 2015 Annual Report is hereby incorporated by reference.

16 #

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information appearing under “Director Independence” in the 2016 Proxy Statement is hereby incorporated by reference.

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information appearing under "Fees Paid to KPMG LLP" in the 2016 Proxy Statement is hereby incorporated by reference.

PART IV

ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

A) Documents filed as a part of this report:


1.	The consolidated financial statements and accompanying notes of the Company and subsidiaries and the report thereon of KPMG LLP in the 2015 Annual Report.


2.	Financial Statement Schedules - All schedules are omitted because they are not required, not applicable or the required information is provided in the financial statements or notes thereto contained in the 2015 Annual Report.


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

3(a)

Restated Articles of Incorporation of Emerson Electric Co., incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended March 31, 2001, File No. 1-278, Exhibit 3(a); Termination of Designated Shares of Stock and Certificate of Designation, Preferences and Rights of Series B Junior Participating Preferred Stock, incorporated by reference to Emerson Electric Co. 1998 Form 10-K, File No. 1-278, Exhibit 3(a).


3(b)	Bylaws of Emerson Electric Co., as amended through November 4, 2014, incorporated by reference to Emerson Electric Co. Form 8-K filed November 5, 2014, Exhibit 3.1.


4(a)	Indenture dated as of December 10, 1998, between Emerson Electric Co. and The Bank of New York, Trustee, incorporated by reference to Emerson Electric Co. 1998 Form 10-K, File No. 1-278, Exhibit 4(b).

No other long-term debt instruments are filed since the total amount of securities authorized under any such instrument does not exceed 10 percent of the total assets of Emerson Electric Co. and its subsidiaries on a consolidated basis. Emerson Electric Co. agrees to furnish a copy of such instruments to the SEC upon request.


10(a)*	Third Amendment to the Emerson Electric Co. 1993 Incentive Shares Plan, as restated, incorporated by reference to Emerson Electric Co. 1996 Form 10-K, File No. 1-278, Exhibit 10(g), and Fourth Amendment thereto, incorporated by reference to Emerson Electric Co. 2001 Form 10-K, File No. 1-278, Exhibit 10(d).


10(b)*	Amended and Restated Emerson Electric Co. Continuing Compensation Plan for Non-Management Directors, incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(c).


10(c)*	Amended and Restated Deferred Compensation Plan for Non-Employee Directors and Forms of Payment Election Form, Initial Notice of Election and Notice of Election Change, incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(d).

17 #


10(d)*	First Amendment to the Emerson Electric Co. Supplemental Executive Retirement Plan, incorporated by reference to Emerson Electric Co. 1999 Form 10-K, File No. 1-278, Exhibit 10(h), and Form of Change of Control Election, incorporated by reference to Emerson Electric Co. Form 8-K dated October 1, 2004, Exhibit 10.9 (applicable only with respect to benefits vested as of December 31, 2004).


10(e)*	Amended and Restated Emerson Electric Co. Pension Restoration Plan dated October 6, 2015; Forms of Participation Award Letter, Acceptance of Award and Benefit Election Forms (applicable only with respect to benefits after January 1, 2005), incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(f); and Lump Sum Distribution Election Forms.

10(f)*

Fifth Amendment to the Supplemental Executive Savings Investment Plan, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended March 31, 1999, File No. 1-278, Exhibit 10(j), and Form of Participation Agreement and Form of Annual Election, incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.8 (applicable only with respect to benefits vested as of December 31, 2004).

10(g)*

Amended and Restated Emerson Electric Co. Savings Investment Restoration Plan and Forms of Participation Agreement, Annual Election Form and Payment Election Form (applicable only with respect to benefits after January 1, 2005), incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(h), and First Amendment to Emerson Electric Co. Savings Investment Restoration Plan, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended March 31, 2008, File No. 1-278, Exhibit 10.1.


10(h)*	Amended and Restated Emerson Electric Co. Annual Incentive Plan and Form of Acceptance of Award, incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(i).

10(i)*

1997 Incentive Shares Plan, incorporated by reference to Emerson Electric Co. 1997 Proxy Statement dated December 6, 1996, File No. 1-278, Exhibit A, and First Amendment thereto, incorporated by reference to Emerson Electric Co. 2001 Form 10-K, File No. 1-278, Exhibit 10(j), Amendment for 409A Compliance, incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(j), Form of Performance Share Award Certificate, Forms of Acceptance of Award and Change of Control Election, incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.5, and Form of Restricted Shares Award Agreement, incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.6.

10(j)*

1998 Stock Option Plan, incorporated by reference to Emerson Electric Co. 1998 Proxy Statement dated December 12, 1997, File No. 1-278, Appendix A, and Amendment No. 1 thereto, incorporated by reference to Emerson Electric Co. 2000 Form 10-K, File No. 1-278, Exhibit 10(l), Form of Notice of Grant of Stock Options and Option Agreement and Form of Incentive Stock Option Agreement, incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.1, and Form of Notice of Grant of Stock Options and Option Agreement and Form of Nonqualified Stock Option Agreement, incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.2.

18 #

10(k)*

2001 Stock Option Plan, incorporated by reference to Emerson Electric Co. 2002 Proxy Statement dated December 12, 2001, File No. 1-278, Appendix A, Form of Notice of Grant of Stock Options and Option Agreement and Form of Incentive Stock Option Agreement, incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.3 (used on or prior to September 30, 2011), Forms of Notice of Grant of Stock Options, Option Agreement and Incentive Stock Option Agreement, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2011, File No. 1-278, Exhibit 10.1 (used after September 30, 2011), Form of Notice of Grant of Stock Options and Option Agreement and Form of Nonqualified Stock Option Agreement, incorporated by reference to Emerson Electric Co. Form 8-K filed October 1, 2004, Exhibit 10.4 (used on or prior to September 30, 2011), Forms of Notice of Grant of Stock Options, Option Agreement and Nonqualified Stock Option Agreement, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2011, File No. 1-278, Exhibit 10.2 (used after September 30, 2011).


10(l)*	Emerson Electric Co. Description of Split Dollar Life Insurance Program Transition, incorporated by reference to Emerson Electric Co. Form 8-K filed September 2, 2005, Exhibit 10.1.

10(m)*

Amended and Restated Restricted Stock Plan for Non-Management Directors, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2009, File No. 1-278, Exhibit 10.1, Form of Restricted Stock Award Letter under the Emerson Electric Co. Restricted Stock Plan for Non-Management Directors, incorporated by reference to Emerson Electric Co. Form 8-K filed February 1, 2005, Exhibit 10.2, and Form of Restricted Stock Unit Award Letter under the Emerson Electric Co. Restricted Stock Plan for Non-Management Directors, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2009, File No. 1-278, Exhibit 10.1.


10(n)*	Description of Non-Management Director Compensation, incorporated by reference to Emerson Electric Co. 2012 Form 10-K, File No. 1-278, Exhibit 10(n).


10(o)*	Description of Named Executive Officer Compensation, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2004, Exhibit 10.1.

10(p)*

Emerson Electric Co. 2006 Incentive Shares Plan, incorporated by reference to Emerson Electric Co. 2006 Proxy Statement dated December 16, 2005, Appendix C, Amendment for 409A Compliance, incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(q), Forms of Performance Share Award Certificate and Acceptance of Award (used on or prior to September 30, 2009) and Restricted Share Award Agreement (used on or prior to September 30, 2011), incorporated by reference to Emerson Electric Co. 2007 Form 10-K, File No. 1-278, Exhibit 10(q), Amendment to Emerson Electric Co. 2006 Incentive Shares Plan, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended June 30, 2008, File No. 1-278, Exhibit 10.1, Forms of Performance Share Award Certificate, Acceptance of Award and 2010 Performance Shares Program Award Summary, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2009 (used after September 30, 2009 and on or prior to September 30, 2011), File No. 1-278, Exhibit 10.2, Forms of Performance Share Award Certificate and Acceptance of Award, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2011, File No. 1-278, Exhibit 10.3 (used after September 30, 2011), and Form of Restricted Share Award Agreement, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended December 31, 2011, File No. 1-278, Exhibit 10.4 (used after September 30, 2011).


10(q)	Credit Agreement dated as of April 30, 2014, incorporated by reference to Emerson Electric Co. Form 8-K filed May 2, 2014, Exhibit 10.1.

19 #

10(r)*

2011 Stock Option Plan, incorporated by reference to Emerson Electric Co. 2011 Proxy Statement dated December 10, 2010, File No. 1-278, Appendix B, 2011 Stock Option Plan as Amended and Restated Effective October 1, 2012, incorporated by reference to Emerson Electric Co. 2012 Form 10-K, File No. 1-278, Exhibit 10(r), Forms of Notice of Grant of Stock Options, Option Agreement and Incentive Stock Option Agreement under the 2011 Stock Option Plan, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended March 31, 2012, File No. 1-278, Exhibit 10.1 and Forms of Notice of Grant of Stock Options, Option Agreement and Nonqualified Stock Option Agreement under the 2011 Stock Option Plan, incorporated by reference to Emerson Electric Co. Form 10-Q for the quarter ended March 31, 2012, File No. 1-278, Exhibit 10.2.


10(s)*	Letter Agreement effective as of February 5, 2013 by and between Emerson Electric Co. and Walter J. Galvin, incorporated by reference to Emerson Electric Co. Form 8-K filed February 8, 2013, Exhibit 10.1.


10(t)*	Consulting Agreement made and entered into as of February 5, 2013 by and between Emerson Electric Co. and Walter J. Galvin, incorporated by reference to Emerson Electric Co. Form 8-K filed February 8, 2013, Exhibit 10.2.


10(u)*	Emerson Electric Co. 2015 Incentive Shares Plan, incorporated by reference to Emerson Electric Co. 2015 Proxy Statement dated December 12, 2014, Appendix B, Form of Performance Shares Award Certificate and Acceptance of Award, 2016 Performance Shares Program Award Summary and Form of Restricted Shares Award Agreement.

10(v)* Letter Agreement effective as of October 1, 2013 between Emerson Electric Co. and Edgar M. Purvis.


12	Ratio of Earnings to Fixed Charges


13	Portions of Emerson Electric Co. Annual Report to Stockholders for the year ended September 30, 2015, incorporated by reference herein


21	Subsidiaries of Emerson Electric Co.


23	Consent of Independent Registered Public Accounting Firm


24	Power of Attorney


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 XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Earnings for the years ended September 30, 2013, 2014 and 2015, (ii) Consolidated Statements of Comprehensive Income for the years ended September 30, 2013, 2014, and 2015 (iii) Consolidated Balance Sheets at September 30, 2014 and 2015, (iv) Consolidated Statements of Equity for the years ended September 30, 2013, 2014 and 2015, (v) Consolidated Statements of Cash Flows for the years ended September 30, 2013, 2014 and 2015, and (vi) Notes to Consolidated Financial Statements for the year ended September 30, 2015.

* Management contract or compensatory plan.

20 #

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



		EMERSON ELECTRIC CO.

	By	/s/ F. J. Dellaquila

		F. J. Dellaquila
		Executive Vice President and
		Chief Financial Officer
		November 18, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on November 18, 2015 , by the following persons on behalf of the registrant and in the capacities indicated.



Signature		Title

/s/ D. N. Farr		Chairman of the Board and Chief Executive Officer
D. N. Farr

/s/ F. J. Dellaquila		Executive Vice President and Chief Financial Officer
F. J. Dellaquila

/s/ R. J. Schlueter		Vice President, Controller and Chief Accounting Officer
R. J. Schlueter

*		Director
C. A. H. Boersig

*		Director
J. B. Bolten

*		Director
A. A. Busch III

*		Director
A. F. Golden

*		Director
W. R. Johnson

*		Director
C. Kendle

*		Director
M. S. Levatich

21 #



*		Director
C. A. Peters

*		Director
J. W. Prueher

*		Director
R. L. Stephenson

*		Director
J. S. Turley



* By	/s/	F. J. Dellaquila
		F. J. Dellaquila
		Attorney-in-Fact

22 #

INDEX TO EXHIBITS

Exhibits are listed by numbers corresponding to the Exhibit Table of Item 601 in Regulation S-K.



Exhibit No.			Exhibit
10(e)			Amended and Restated Emerson Electric Co. Pension Restoration Plan dated October 6, 2015 and Lump Sum Distribution Election Forms

10(u)			Form of Performance Shares Award Certificate and Acceptance of Award, 2016 Performance Shares Program Award Summary under the Emerson Electric Co. 2015 Incentive Shares Plan and Form of Restricted Shares Award Agreement.

10(v)			Letter Agreement effective as of October 1, 2013 between Emerson Electric Co. and Edgar M. Purvis

12			Ratio of Earnings to Fixed Charges

13			Portions of Emerson Electric Co. Annual Report to Stockholders for the year ended September 30, 2015, incorporated by reference herein

21			Subsidiaries of Emerson Electric Co.

23			Consent of Independent Registered Public Accounting Firm

24			Power of Attorney

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 XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Earnings for the years ended September 30, 2013, 2014 and 2015, (ii) Consolidated Statements of Comprehensive Income for the years ended September 30, 2013, 2014 and 2015, (iii) Consolidated Balance Sheets as of September 30, 2014 and 2015, (iv) Consolidated Statements of Equity for the years ended September 30, 2013, 2014 and 2015, (v) Consolidated Statements of Cash Flows for the years ended September 30, 2013, 2014 and 2015, and (vi) Notes to Consolidated Financial Statements for the year ended September 30, 2015.

See Item 15(A) 3. for a list of exhibits incorporated by reference.

23 #



TO:
FROM:	Compensation Committee (the "Committee")
DATE:
FILE:	[2015] Incentive Shares Plan (the "Plan")
RE:	Award of Restricted Shares



AGREED:		FOR EMERSON:
/s/ Edgar M. Purvis		/s/ Cynthia G. Heath

October 24, 2013		January 15, 2014
Date		Date



	Year Ended September 30,
	2011		2012	2013	2014	2015
Earnings:
Earnings from continuing operations before income taxes	$	3,631	3,115	3,196	3,348	4,161
Fixed charges	370		373	373	355	331
Earnings, as defined	$	4,001	3,488	3,569	3,703	4,492

Fixed Charges:
Interest expense	$	246	241	234	218	200
One-third of all rents	124		132	139	137	131
Total fixed charges	$	370	373	373	355	331

Ratio of Earnings to Fixed Charges	10.8X		9.4X	9.6X	10.4X	13.6X



	2013			2014		2015		Change '13 - '14		Change '14 - '15

Net sales	$	24,669		24,537		22,304		(1	)%	(9	)%
Gross profit	$	9,952		10,158		9,048		2	%	(11	)%
Percent of sales	40.3		%	41.4	%	40.6	%

SG&A	$	5,648		5,715		5,184
Percent of sales	22.9		%	23.3	%	23.3	%
Gains on divestitures of businesses	$	—		—		1,039
Goodwill impairment	$	528		508		—
Other deductions, net	$	362		393		571
Interest expense, net	$	218		194		171

Earnings before income taxes	$	3,196		3,348		4,161		5	%	24	%
Percent of sales	13.0		%	13.6	%	18.7	%
Net earnings common stockholders	$	2,004		2,147		2,710		7	%	26	%
Percent of sales	8.1		%	8.7	%	12.2	%
Diluted EPS – Net earnings	$	2.76		3.03		3.99		10	%	32	%

Return on common stockholders' equity	19.2		%	20.7	%	29.8	%
Return on total capital	16.4		%	17.5	%	22.8	%



PROCESS MANAGEMENT
(dollars in millions)	2013			2014		2015		Change '13 - '14		Change '14 - '15

Sales	$	8,610		9,189		8,516		7	%	(7	)%
Earnings	$	1,809		1,918		1,493		6	%	(22	)%
Margin	21.0		%	20.9	%	17.5	%


•	The actual payout earned will be based on Company performance during the Performance Period beginning [October 1, 2016] and ending on [September 30, 2018].


•	Payout will range from [0 to 115%] of Performance Share Award Units.


•	Quarterly dividend equivalents on [100%] of the Performance Share Award Units will be ACCRUED to a nominal account for the Participant, commencing with the next regularly scheduled quarterly dividend payment date after the award.


◦	The accrued dividend equivalents on any unearned units will be forfeited.


•	The EARNED payout percentage under the plan will be determined and the EARNED units (if any) paid following the end of the Performance Period; this payment is subject to your continued employment with the company during the performance period, up to and including the final approval by Emerson Electric Co - Board of Directors’ Compensation Committee and actual payout date.


2.	You agree to keep the terms of this letter agreement in strictest confidence and will not divulge such terms to anyone other than members of your immediate family, your attorneys, and/or your financial advisors, whom you will ensure will comply with this provision. Failure to comply with the preceding sentence will result in the forfeiture of the incentive bonus.


3.	I f you leave the employ of Emerson or any Emerson business unit, for any reason, prior to the end of the Eligibility period, any unpaid incentive payment under the Program, will be cancelled.


4.	Unless specifically approved by the Company in advance, if you voluntarily leave the employ of Emerson or any Emerson business unit within one (1) year after any payment made to you under the Program, you will be required to pay back to the Company 100% of such payment.



/s/ David N. Farr		/s/ Frank J. Dellaquila
David N. Farr		Frank J. Dellaquila
Chairman of the Board		Executive Vice President
and Chief Executive Officer		and Chief Financial Officer



CASH FLOW
(dollars in millions)	2013			2014		2015

Operating Cash Flow	$	3,649		3,692		2,529
Percent of sales	14.8		%	15.0	%	11.3	%
Capital Expenditures	$	678		767		685
Percent of sales	2.7		%	3.1	%	3.1	%
Free Cash Flow (Operating Cash Flow less Capital Expenditures)	$	2,971		2,925		1,844
Percent of sales	12.0		%	11.9	%	8.3	%
Operating Working Capital	$	1,686		1,729		1,748
Percent of sales	6.8		%	7.0	%	7.8	%



LEVERAGE/CAPITALIZATION
(dollars in millions)	2013			2014		2015

Total Assets	$	24,711		24,177		22,088
Long-term Debt	$	4,055		3,559		4,289
Common Stockholders' Equity	$	10,585		10,119		8,081

Total Debt-to-Total Capital Ratio	34.8		%	37.3	%	45.8	%
Net Debt-to-Net Capital Ratio	18.3		%	22.1	%	31.3	%
Operating Cash Flow-to-Debt Ratio	64.7		%	61.3	%	37.0	%
Interest Coverage Ratio	14.6X			16.3X		21.8X



	Amounts Due By Period
(dollars in millions)	Total		Less Than 1 Year	1 - 3 Years	3 - 5 Years	More Than 5 Years

Long-term Debt (including Interest)	$	6,169	477	871	1,388	3,433
Operating Leases	855		263	304	135	153
Purchase Obligations	1,021		873	104	36	8
Total	$	8,045	1,613	1,279	1,559	3,594



	2014			2015
ASSETS
Current assets
Cash and equivalents	$	3,149		3,054
Receivables, less allowances of $114 in 2014 and $128 in 2015	5,019			4,319
Inventories	2,057			1,847
Other current assets	642			829
Total current assets	10,867			10,049

Property, plant and equipment, net	3,802			3,585

Other assets
Goodwill	7,182			6,653
Other intangible assets	1,689			1,526
Other	637			275
Total other assets	9,508			8,454
Total assets	$	24,177		22,088

LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings and current maturities of long-term debt	$	2,465		2,553
Accounts payable	2,951			2,358
Accrued expenses	2,876			2,803
Income taxes	162			86
Total current liabilities	8,454			7,800

Long-term debt	3,559			4,289

Other liabilities	1,997			1,871

Equity
Common stock, $0.50 par value; authorized, 1,200,000,000 shares; issued, 953,354,012 shares; outstanding, 696,605,222 shares in 2014; 654,608,521 shares in 2015	477			477
Additional paid-in-capital	161			170
Retained earnings	19,867			21,308
Accumulated other comprehensive income (loss)	(575		)	(1,617	)
	19,930			20,338
Less: Cost of common stock in treasury, 256,748,790 shares in 2014; 298,745,491 shares in 2015	9,811			12,257
Common stockholders’ equity	10,119			8,081
Noncontrolling interests in subsidiaries	48			47
Total equity	10,167			8,128
Total liabilities and equity	$	24,177		22,088

See accompanying Notes to Consolidated Financial Statements.



	2014		2015
Finished products	$	741	680
Raw materials and work in process	1,316		1,167
Total inventories	$	2,057	1,847



	2014		2015
Land	$	275	251
Buildings	2,355		2,254
Machinery and equipment	6,353		6,011
Construction in progress	428		415
Property, plant and equipment, at cost	9,411		8,931
Less: Accumulated depreciation	5,609		5,346
Property, plant and equipment, net	$	3,802	3,585



Other deductions, net are summarized as follows:
	2013		2014	2015
Amortization of intangibles (intellectual property and customer relationships)	$	220	225	214
Rationalization of operations	78		55	211
Other	64		113	146
Total	$	362	393	571



	2014		Expense	Paid/Utilized	2015
Severance and benefits	$	20	174	89	105
Lease and other contract terminations	1		3	3	1
Asset write-downs	—		3	3	—
Vacant facility and other shutdown costs	—		12	9	3
Start-up and moving costs	1		19	17	3
Total	$	22	211	121	112



	Customer Relationships			Intellectual Property		Capitalized Software		Total
	2014		2015	2014	2015	2014	2015	2014	2015
Gross carrying amount	$	1,594	1,508	1,052	1,051	1,190	1,178	3,836	3,737
Less: Accumulated amortization	643		693	613	649	891	869	2,147	2,211
Net carrying amount	$	951	815	439	402	299	309	1,689	1,526



		Gain (Loss) to Earnings							Gain (Loss) to OCI
		2013			2014		2015		2013		2014		2015
	Location
Commodity	Cost of sales	$	(15	)	(12	)	(24	)	(22	)	(16	)	(43	)
Foreign currency	Sales, cost of sales	24			10		(12	)	4		15		(61	)
Foreign currency	Other deductions, net	(5		)	(3	)	14
Total		$	4		(5	)	(22	)	(18	)	(1	)	(104	)



	2014		2015
Current maturities of long-term debt	$	522	291
Commercial paper	1,938		2,261
Payable to banks	5		1
Total	$	2,465	2,553

Interest rate for weighted-average short-term borrowings at year end	0.2%		0.2%



	2014		2015
5.0% notes due December 2014	250		—
4.125% notes due April 2015	250		—
4.75% notes due October 2015	250		250
5.125% notes due December 2016	250		250
5.375% notes due October 2017	250		250
5.25% notes due October 2018	400		400
5.0% notes due April 2019	250		250
4.875% notes due October 2019	500		500
4.25% notes due November 2020	300		300
2.625% notes December due 2021	—		500
2.625% notes due February 2023	500		500
3.15% notes due June 2025	—		500
6.0% notes due August 2032	250		250
6.125% notes due April 2039	250		250
5.25% notes due November 2039	300		300
Other	81		80
Long-term debt	4,081		4,580
Less: Current maturities	522		291
Total, net	$	3,559	4,289



	U.S. Plans							Non-U.S. Plans
	2013			2014		2015		2013		2014		2015
Defined benefit plans:
Service cost (benefits earned during the period)	$	70		59		69		31		32		37
Interest cost	167			182		182		46		53		46
Expected return on plan assets	(280		)	(286	)	(303	)	(50	)	(58	)	(58	)
Net amortization and other	226			153		174		18		18		20
Net periodic pension expense	183			108		122		45		45		45
Defined contribution plans	113			119		111		63		59		61
Total retirement plans expense	$	296		227		233		108		104		106



	Level 1		Level 2	Level 3	Total	%
2015
U.S. equities	$	956	460	257	1,673	34	%
International equities	502		677	—	1,179	24	%
Emerging market equities	—		211	—	211	4	%
Corporate bonds	—		628	—	628	13	%
Government bonds	2		674	—	676	14	%
High-yield bonds	—		175	—	175	4	%
Other	140		67	114	321	7	%
Total	$	1,600	2,892	371	4,863	100	%

2014
U.S. equities	$	1,097	535	184	1,816	33	%
International equities	589		767	—	1,356	25	%
Emerging market equities	—		279	—	279	5	%
Corporate bonds	—		594	—	594	11	%
Government bonds	2		720	—	722	13	%
High-yield bonds	—		181	—	181	3	%
Other	209		180	124	513	10	%
Total	$	1,897	3,256	308	5,461	100	%



	2014			2015
Level 3, beginning	$	250		308
Gains (Losses) on assets held	(18		)	18
Gains (Losses) on assets sold	21			(20	)
Purchases, sales and settlements, net	55			65
Level 3, ending	$	308		371



	2014			2015
Benefit obligation, beginning	$	278		248
Service cost	1			1
Interest cost	11			9
Actuarial (gain) loss	(12		)	(12	)
Benefits paid	(17		)	(18	)
Plan amendments	(13		)	—
Divestitures	—			(15	)
Benefit obligation, ending (recognized in balance sheet)	$	248		213



	2014			2015
Unrecognized tax benefits, beginning	$	127		120
Additions for current year tax positions	9			7
Additions for prior year tax positions	25			8
Reductions for prior year tax positions	(19		)	(9	)
Reductions for settlements with tax authorities	(4		)	—
Reductions for expiration of statutes of limitations	(18		)	(42	)
Unrecognized tax benefits, ending	$	120		84



	2014			2015
Deferred tax assets:
Net operating losses and tax credits	$	238		207
Accrued liabilities	311			270
Postretirement and postemployment benefits	93			86
Employee compensation and benefits	196			180
Pensions	28			194
Other	137			173
Total	$	1,003		1,110

Valuation allowances	$	(154	)	(160	)

Deferred tax liabilities:
Intangibles	$	(649	)	(648	)
Property, plant and equipment	(258		)	(260	)
Other	(98		)	(51	)
Total	$	(1,005	)	(959	)

Net deferred income tax liability	$	(156	)	(9	)



	Weighted- Average Exercise Price Per Share		Shares		Total Intrinsic Value of Shares		Average Remaining Life (Years)
Beginning of year	$	54.19	13,908
Options granted	$	60.16	1,378
Options exercised	$	41.85	(1,016	)
Options canceled	$	61.02	(624	)
End of year	$	55.40	13,646		$	15	5.8
Exercisable at end of year	$	51.68	9,147		$	15	4.6



	Shares		Average Grant Date Fair Value Per Share
Beginning of year	6,404		$	47.81
Granted	437		$	61.96
Earned/vested	(151	)	$	37.36
Canceled	(313	)	$	49.02
End of year	6,377		$	48.97



Activity in accumulated other comprehensive income (loss) attributable to common stockholders is shown below:

Foreign currency translation	2013			2014		2015
Beginning balance	$	466		504		171
Other comprehensive income (loss)	38			(341	)	(793	)
Purchase of noncontrolling interest	—			8		—
Ending balance	504			171		(622	)

Pension and postretirement
Beginning balance	(1,213		)	(692	)	(746	)
Actuarial gains (losses) deferred during the period	375			(152	)	(315	)
Amortization of deferred actuarial losses into earnings	146			98		109
Ending Balance	(692		)	(746	)	(952	)

Cash flow hedges
Beginning balance	16			(1	)	—
Gains (Losses) deferred during the period	(11		)	(1	)	(66	)
Reclassifications of realized (gains) losses to sales and cost of sales	(6		)	2		23
Ending balance	(1		)	—		(43	)

Accumulated other comprehensive income (loss)	$	(189	)	(575	)	(1,617	)
Activity above is shown net of income taxes for 2015, 2014 and 2013, respectively, as follows: deferral of pension and postretirement actuarial gains (losses): $192, $87 and $(233); amortization of pension and postretirement deferred actuarial losses: $(59), $(52) and $(85); deferral of cash flow hedging gains (losses): $38, $ - and $7; reclassification of realized cash flow hedging (gains) losses: $(13), $ - and $3.