UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to __________________

Commission file number 1-278

EMERSON ELECTRIC CO.
(Exact name of registrant as specified in its charter)

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

      8000 W. Florissant Ave.
            P.O. Box 4100
       St. Louis, Missouri                       63136
(Address of principal executive offices)       (Zip Code)

Registrant's telephone number, including area code: (314) 553-2000

Securities registered pursuant to Section 12(b) of the Act:

                                             Name of each exchange
           Title of each class               on which registered

Common Stock of $.50 par value per share     New York Stock Exchange
                                             Chicago Stock Exchange

Preferred Stock Purchase Rights              New York Stock Exchange
                                             Chicago Stock Exchange

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

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, and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. [ ]

Aggregate market value of the voting stock held by nonaffiliates of the registrant as of close of business on October 29, 1999: $25,776 million.

Common stock outstanding at October 31, 1999: 432,429,882 shares.

Documents Incorporated by Reference

1. Portions of Emerson Electric Co. 1999 Annual Report to Stockholders (Parts I and II).

2. Portions of Emerson Electric Co. Notice of 2000 Annual Meeting of the Stockholders and Proxy Statement (Part III).


PART I

Item 1. Business

Emerson was incorporated in Missouri in 1890. Originally engaged in the manufacture and sale of electric motors and fans, Emerson subsequently expanded its product lines through internal growth and acquisitions. Emerson is now engaged principally in the worldwide design, manufacture and sale of a broad range of electrical, electromechanical and electronic products and systems.

The divisions of the Company are organized into the following business segments based on the nature of the products and services provided:
Process Control; Industrial Automation; Electronics and Telecommunications; Heating, Ventilating and Air Conditioning; and Appliance and Tools. Sales, earnings before interest and income taxes, and total assets attributable to each segment for the three years ended September 30, 1999, are set forth in Note 12 of Notes to Consolidated Financial Statements on page 45 of the 1999 Annual Report, which note is hereby incorporated by reference. Information with respect to acquisition and divestiture activities by Emerson is set forth in Note 2 of Notes to Consolidated Financial Statements on page 39 of the 1999 Annual Report, which note is hereby incorporated by reference.

PROCESS CONTROL

The Process Control segment provides a broad offering of instrumentation, valves and control systems for measurement and control of fluid flow, and integrated solutions for process and industrial applications. Products include various types of meters such as rotameters, positive displacement meters, magnetic flow meters, turbine meters, direct mass flow meters and instruments to measure water quality. Other products include solid state telemetering equipment, various types of pressure and vacuum relief valves, distributed control systems and personal computer-based software used for industrial automation applications. In addition, Emerson manufactures and sells temperature sensors, pressure sensors and transmitters used to measure and/or control temperature, pressure, level and rate and amount of flow. Also produced are process gas chromatographs, in-situ oxygen analyzers, infrared gas and process fluid analyzers, combustion analyzers and systems, and other analyzers which measure pH and conductivity. The Company also manufactures and sells sliding stem valves, rotary valves, plastic-lined plug valves, butterfly valves, pressure regulators, and related actuators and controllers. In addition, Emerson provides repair services for many of these products, as well as engineered solutions and consulting services. Brand names of this segment include Bettis, Brooks, Daniel, El-o-matic, Fisher, Fisher-Rosemount Systems, Intellution, Micro Motion, Rosemount, Westinghouse Process Control and Xomox. Products and services of this segment are provided to industrial end-users for process and industrial applications and solutions.

INDUSTRIAL AUTOMATION

The Industrial Automation segment provides industrial motors, drives, controls and equipment for industrial automation markets. Emerson's products for industrial automation include certain kinds of integral horsepower motors,

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gear drives, pump motors, alternators, and electronic variable speed drives. Emerson manufactures and sells components for the transmission and regulation of mechanical power, such as certain kinds of chains, sprockets, sheaves, gears, bearings, couplings and speed reducers, and a line of cam-operated index drives, programmable motion controllers and automation accessories. These products are used primarily in industrial and commercial applications requiring the transmission of mechanical motion or drive systems of various types. Emerson also manufactures a line of multi-purpose pressure and solenoid valves, and pressure, vacuum and temperature switches widely used in the automation of equipment and industrial processes. Emerson also manufactures electronic measurement, data acquisition and condition monitoring equipment for use in industrial processing. In addition, Emerson produces vibratory separating equipment used primarily in the chemical, mining, pharmaceutical, food processing, pulp and paper, ceramic and metal-working industries. Emerson also produces a variety of industrial and commercial ultrasonic products for applications such as cleaning, sealing, welding and flaw detection. Other products include material preparation and microstructure analysis equipment. Emerson also manufactures electric circulation heaters, fluid heat transfer systems and component heating elements. Emerson manufactures a broad line of components for current- and noncurrent- carrying electrical distribution devices such as panelboards, receptacles, fittings, cable handling reels and lighting products for use in hazardous and nonhazardous environments. Brand names of this segment include Appleton, ASCO, Branson, Browning, Buehler, CAMCO, Chromalox, Control Techniques, CSI, Joucomatic, Krautkramer, Leroy Somer, McGill, MORSE, O-Z/Gedney, Sweco and USEM. Products of this segment are sold to industrial distributors, original equipment manufacturers and end-users for automation applications.

ELECTRONICS AND TELECOMMUNICATIONS

The Electronics and Telecommunications segment provides power supplies and power distribution, protection and conversion equipment for computer, industrial and telecommunications markets. Emerson produces and services electronic uninterruptible and primary power supplies, power conditioning, conversion and distribution equipment, modular power systems, environmental control systems and electronic components used in communications and information processing applications. Emerson also provides electrical testing services and manufactures a line of automatic transfer switches, remote control switches and electric power and pump control systems for auxiliary power applications. Brand names of this segment include ASCO Switch, Astec, HIROSS, Liebert and Liebert Global Services. Products and services of this segment are provided to distributors and end-users for computer, industrial and telecommunications applications.

HEATING, VENTILATING AND AIR CONDITIONING

The Heating, Ventilating and Air Conditioning segment provides a variety of components and systems for refrigeration and comfort control markets. Emerson manufactures and sells hermetic and semi-hermetic, reciprocating and scroll compressors for refrigeration and air conditioning applications. The Company also produces terminals for hermetically sealed compressors, automatic

3

devices, monitoring equipment and pumps for gas and electric heating systems, refrigeration and air conditioning equipment. Brand names of this segment include Alco Controls, Copeland, Fusite, Therm-O-Disc and White-Rodgers. Products of this segment are sold to distributors and original equipment manufacturers for inclusion in end products and systems (ultimately sold through commercial and residential building construction channels).

APPLIANCE AND TOOLS

The Appliance and Tools segment provides motors, controls and other components for appliances, refrigeration and comfort control applications, as well as disposers, tools and storage products. Emerson manufactures and sells hermetic motors for hermetically sealed compressors, and fractional and sub- fractional horsepower motors for selected appliance, office equipment, ventilating equipment, pump, heater and other motor-driven machine applications. Emerson also manufactures and sells a variety of electric heating elements and electrostatic air cleaners. Emerson manufactures and sells a line of electrical products primarily for the residential markets, including electric waste disposers, hot water dispensers, ventilating equipment and exhaust fans. Emerson is a producer of selected professional and hardware tools and accessories, and service equipment, including certain kinds of wrenches, thread cutters, pipe cutters, reamers, vises, pipe and bolt threading machines and sewer and drain cleaning equipment. Emerson also manufactures power tool accessories such as drill, router and screwdriver bits, and saw blades. The principal markets for these professional tools and service equipment include plumbing, heating and air conditioning contractors, construction and maintenance companies, petroleum and gas producers, refiners and processors, and farm and home consumers. Emerson produces free-standing and wall-mounted ventilated shelving and specialty storage products. Also produced by Emerson for marketing by major retailers are shop vacuum cleaners, a line of bench power tools for home workshop use and a line of hand tools including adjustable wrenches, screwdrivers, pliers and chisels. Brand names of this segment include Chromalox, ClosetMaid, Digital Appliance Controls, Emerson, Gilmour, In-Sink-Erator, Mallory, METRO, RIDGID and Vermont American. Products of this segment are sold to distributors and original equipment manufacturers for inclusion in appliances, heating, ventilating, air conditioning and refrigeration equipment and to distributors and retailers for sale to consumers and the professional trades.

PRODUCTION

Emerson utilizes various production operations and methods. The principal production operations are metal stamping, forming, casting, machining, welding, plating, heat treating, painting and assembly. In addition, Emerson also 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 are well maintained.

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RAW MATERIALS AND ENERGY

Emerson's major requirements for basic raw materials include steel, copper, cast iron, aluminum and brass and, to a lesser extent, plastics and other petroleum-based chemicals. Emerson has multiple sources of supply for each of its major requirements and is not significantly dependent on any one supplier. The raw materials and various purchased components required for its products have generally been available in sufficient quantities. Emerson uses various forms of energy, principally natural gas and electricity, obtained from public utilities. A majority of the plants have the capability of being converted to use alternative sources of energy.

PATENTS, TRADEMARKS, LICENSES AND FRANCHISES

The Company has a number of patents, trademarks, licenses and franchises, none of which is considered material to any segment of its consolidated operations.

BACKLOG

The estimated consolidated order backlog of the Company was $2,160 million and $2,084 million at September 30, 1999 and 1998, respectively. Nearly all of the September 30, 1999 consolidated backlog amount is expected to be shipped within one year. The estimated backlog by business segment at September 30, 1999 and 1998, follows (dollars in millions):

                                            1999          1998
                                          -------       -------
Process Control                           $   567           449
Industrial Automation                         461           563
Electronics and Telecommunications            412           349
Heating, Ventilating and Air Conditioning     333           382
Appliance and Tools                           387           341
                                          -------       -------
     Consolidated Order Backlog           $ 2,160         2,084
                                          =======       =======

COMPETITION

Emerson's businesses are highly competitive, and Emerson competes on product performance, quality, service or price across the industries and markets served. A significant element of the Company's competitive strategy is its objective to manufacture high quality products at the lowest 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. Some of these companies have substantially greater sales and assets than Emerson, and Emerson also competes with many smaller companies. The number of Emerson's competitors varies by product line, and management believes that Emerson has a market leadership position in many of these product lines.

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RESEARCH AND DEVELOPMENT

Costs associated with Company-sponsored research, new product development and product improvement were $510.3 million in 1999, $491.3 million in 1998 and $445.1 million in 1997.

ENVIRONMENT

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

EMPLOYEES

Emerson and its subsidiaries had an average of approximately 116,900 employees during 1999. 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 is considered significant.

DOMESTIC AND FOREIGN OPERATIONS

International sales were $5,713 million in 1999, $5,345 million in 1998 and $5,208 million in 1997, including U.S. exports of $960 million, $968 million and $1,054 million in 1999, 1998 and 1997, respectively. Although there are additional risks attendant to foreign operations, such as nationalization of facilities, currency fluctuations and restrictions on the movement of funds, Emerson's financial position has not been materially affected thereby to date. See Note 12 of Notes to Consolidated Financial Statements on page 45 of the 1999 Annual Report for further information with respect to foreign operations.

Item 2. Properties

At September 30, 1999, Emerson had approximately 380 manufacturing locations worldwide, of which approximately 200 were located outside the United States, primarily in Europe and to a lesser extent in Asia-Pacific, Canada and Latin America. The approximate number of manufacturing locations by business segment are: Process Control, 90; Industrial Automation, 120; Electronics and Telecommunications, 40; Heating, Ventilating and Air Conditioning, 60; and Appliance and Tools, 70. The majority of the locations are owned, with the remainder occupied under operating or capital leases. The Company considers its facilities suitable and adequate for the purposes for which they are used.

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Item 3. Legal Proceedings

Emerson is a party to a number of pending legal proceedings, several of which claim substantial amounts of damages. There are no pending legal proceedings that management believes will be material in relation to the Company's business or financial position.

Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of security holders during the quarter ended September 30, 1999.


Executive Officers of the Registrant

The following sets forth certain information as of December 1999 with respect to Emerson's executive officers. These officers have been elected or appointed to terms which will expire February 1, 2000:

                                                                 First
                                                               Served as
   Name                 Position                         Age    Officer
   ----                 --------                         ---   ----------
C. F. Knight*     Chairman of the Board
                  and Chief Executive Officer             63      1972


G. W. Tamke*      Vice Chairman and
                  Co-Chief Executive Officer              52      1989


J. G. Berges*     President                               52      1989


D. N. Farr        Senior Executive Vice President
                  and Chief Operating Officer             44      1985


W. J. Galvin      Senior Vice President-Finance
                  and Chief Financial Officer             53      1984


A. E. Suter*      Chief Administrative Officer            64      1979


R. W. Staley*     Chairman-Emerson Electric Asia-Pacific  64      1975


W. W. Withers     Senior Vice President, Secretary
                  and General Counsel                     59      1989

*Also chairman and/or member of certain committees of the Board of Directors.

7

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

Each of the above has served as an officer or in a supervisory capacity with Emerson for the last five years.

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder

Matters

The information regarding the market for the Company's common stock, quarterly market price ranges and dividend payments set forth in Note 14 of Notes to Consolidated Financial Statements on page 46 of the 1999 Annual Report is hereby incorporated by reference. There were approximately 36,300 stockholders at September 30, 1999.

Item 6. Selected Financial Data

Years ended September 30
(Dollars in millions except per share amounts)

                       1999      1998      1997      1996      1995
                      ------    ------    ------    ------    ------

Net sales         $ 14,269.5  13,447.2  12,298.6  11,149.9  10,012.9

Net earnings      $  1,313.6   1,228.6   1,121.9   1,018.5     907.7

Basic earnings
 per common share $     3.03      2.80      2.52      2.27      2.03

Diluted earnings
 per common share $     3.00      2.77      2.50      2.25      2.01

Cash dividends
 per common share $     1.30      1.18      1.08       .98       .89

Long-term debt    $  1,317.1   1,056.6     570.7     772.6     208.6

Total assets      $ 13,623.5  12,659.8  11,463.3  10,481.0   9,399.0

Income before cumulative effect of change in accounting for postemployment benefits ($21.3 million, $.05 per share) was $929.0 million in 1995. Net earnings in 1995 include non-recurring items which were substantially offset by the accounting change.

See Note 2 of Notes to Consolidated Financial Statements on page 39 of the 1999 Annual Report for information regarding the Company's acquisition and divestiture activities.

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Item 7. Management's Discussion and Analysis of Financial Condition

and Results of Operations

Narrative discussion appearing under "Results of Operations" and "Financial Position, Capital Resources and Liquidity" on pages 28 through 32, and the "Safe Harbor Statement" on page 52 of the 1999 Annual Report are hereby incorporated by reference.

On December 14, 1999, the Company announced that it had reached a definitive agreement to acquire Jordan Telecommunication Products, Inc., a global provider of fiber optic conduit systems, CATV components, power protection systems, cellular site structures, custom cables and connectors for wireline, wireless and data communications equipment. Under the terms of the transaction, Emerson will pay approximately $440 million in cash and assume approximately $540 million in debt and other liabilities. The transaction is subject to regulatory approval and other customary conditions.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Narrative discussion appearing under "Financial Instruments" on page 32 of the 1999 Annual Report is hereby incorporated by reference.

Item 8. Financial Statements and Supplementary Data

The consolidated financial statements of the Company and its subsidiaries on pages 33 through 46 and the report thereon of KPMG LLP appearing on page 47 of the 1999 Annual Report are hereby incorporated by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting

and Financial Disclosure

None.

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PART III

Item 10. Directors and Executive Officers of the Registrant

Information regarding nominees and directors appearing under "Nominees and Continuing Directors" in the Emerson Electric Co. Notice of Annual Meeting of the Stockholders and Proxy Statement for the February 2000 annual stockholders' meeting (the "2000 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 2000 Proxy Statement is hereby incorporated by reference.

Item 11. Executive Compensation

Information appearing under "Director Compensation" and "Executive Compensation" in the 2000 Proxy Statement is hereby incorporated by reference.

Item 12. Security Ownership of Certain Beneficial Owners and

Management

The information regarding beneficial ownership of shares by nominees and continuing directors and by all directors and executive officers as a group appearing under "Nominees and Continuing Directors" in the 2000 Proxy Statement is hereby incorporated by reference.

Item 13. Certain Relationships and Related Transactions

Information appearing under "Certain Business Relationships" in the 2000 Proxy Statement is hereby incorporated by reference.

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PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on

Form 8-K

A) Documents filed as a part of this report:

1. The consolidated financial statements of the Company and its subsidiaries on pages 33 through 46 and the report thereon of KPMG LLP appearing on page 47 of the 1999 Annual Report.

2. Financial Statement Schedules

All schedules are omitted because they are not required, not applicable or the information is given in the financial statements or notes thereto contained in the 1999 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, 1997, 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, Exhibit 3(a).

3(b) Bylaws of Emerson Electric Co., as amended through November 3, 1998, incorporated by reference to Emerson Electric Co. 1998 Form 10-K, Exhibit 3(b).

4(a) Indenture dated as of April 17, 1991, between Emerson Electric Co. and The Boatmen's National Bank of St. Louis, Trustee, incorporated by reference to Emerson Electric Co. Registration Statement on Form S-3, File No. 33-62545, Exhibit 4.1.

4(b) 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, 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 Securities and Exchange Commission upon request.

11

4(c)    Rights Agreement dated as of November 1, 1998,
        between Emerson Electric Co. and ChaseMellon Shareholder
        Services, L.L.C. incorporated by reference to
        Emerson Electric Co. Form 8-A, dated October 6, 1998,
        Exhibit 1.

10(a)*  Employment Agreement made as of October 1, 1975, as
        amended January 9, 1987, and as further amended
        October 22, 1997, between Emerson Electric Co. and
        C. F. Knight, incorporated by reference to Emerson
        Electric Co. 1997 Form 10-K, Exhibit 10(c).

10(b)*  1986 Stock Option Plan, as amended, incorporated by
        reference to Emerson Electric Co. 1992 Form 10-K,
        Exhibit 10(e) and Form 10-Q for the quarter ended
        December 31, 1992, Exhibit 10(b).

10(c)*  1991 Stock Option Plan, as amended and restated effective
        October 1, 1997, incorporated by reference to Emerson
        Electric Co. 1997 Form 10-K, Exhibit 10(e).

10(d)*  1988 Incentive Shares plan, incorporated by
        reference to Emerson Electric Co. 1988 Proxy
        Statement dated December 18, 1987, Exhibit A, and
        Form 10-Q for the quarter ended December 31, 1992,
        Exhibits 10(d) and 10(e), and Amendments No. 3 and
        No. 4 thereto, incorporated by reference to Emerson
        Electric Co. 1993 Form 10-K, Exhibit 10(g).

10(e)*  Third Amendment to the Emerson Electric Co. 1993
        Incentive Shares Plan, as restated, incorporated by
        reference to Emerson Electric Co. 1996 Form 10-K,
        Exhibit 10(g).

10(f)*  Emerson Electric Co. Directors' Continuing
        Compensation Plan, incorporated by reference to
        Emerson Electric Co. 1987 Form 10-K, Exhibit 10(g),
        and Amendment incorporated by reference to Emerson
        Electric Co. 1996 Form 10-K, Exhibit 10(i).

10(g)*  Deferred Compensation Plan for Non-Employee Directors,
        as amended, incorporated by reference to Emerson
        Electric. Co. 1994 Form 10-K, Exhibit 10(k).

10(h)*  First Amendment to the Emerson Electric Co. Supplemental
        Executive Retirement Plan, filed herewith.

10(i)*  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, Exhibit 10(j).

10(j)*  Annual Incentive Plan incorporated by reference to
        Emerson Electric Co. 1995 Proxy Statement dated
        December 14, 1994, Appendix A.


                                  12

10(k)*  1997 Incentive Shares Plan, incorporated by reference to
        Emerson Electric Co. 1997 Proxy Statement dated
        December 6, 1996, Exhibit A.

10(l)*  1998 Stock Option Plan, incorporated by reference to Emerson
        Electric Co. 1998 Proxy Statement dated December 12, 1997,
        Appendix A.

12      Ratio of Earnings to Fixed Charges

13      Portions of Emerson Electric Co. Annual Report to
        Stockholders for the year ended September 30, 1999,
        incorporated by reference herein.

21      Subsidiaries of Emerson Electric Co.

23      Independent Auditors' Consent.

24      Power of Attorney.

27      Financial Data Schedule.

* Management contract or compensatory plan.

B) No reports on Form 8-K were filed during the quarter ended September 30, 1999.

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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/ W. J. Galvin
                                     -------------------------
                                     W. J. Galvin
                                     Senior Vice President -
                                     Finance and Chief Financial
                                     Officer (and Principal Accounting
                                     Officer)

Date:  December 17, 1999

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on December 17, 1999, by the following persons on behalf of the registrant and in the capacities indicated.

                 Signature                       Title
                 ---------                       -----

                   *
----------------------------------------   Chairman of the Board
             C. F. Knight                  and Chief Executive Officer
                                           and Director

         /s/ W. J. Galvin
----------------------------------------   Senior Vice President -
             W. J. Galvin                  Finance and Chief Financial
                                           Officer (and Principal Accounting
                                           Officer)

                   *
----------------------------------------   Director
             J. G. Berges

                   *
----------------------------------------   Director
             L. L. Browning, Jr.

                   *
----------------------------------------   Director
             A. A. Busch, III

                   *
----------------------------------------   Director
             D. C. Farrell

14

                   *
----------------------------------------   Director
             J. A. Frates

                   *
----------------------------------------   Director
             R. B. Horton

                   *
----------------------------------------   Director
             G. A. Lodge

                   *
----------------------------------------   Director
             V. R. Loucks, Jr.

                   *
----------------------------------------   Director
             R. B. Loynd

                   *
----------------------------------------   Director
             R. L. Ridgway

                   *
----------------------------------------   Director
             R. W. Staley

                   *
----------------------------------------   Director
             A. E. Suter

                   *
----------------------------------------   Director
             G. W. Tamke

                   *
----------------------------------------   Director
             W. M. Van Cleve

                   *
----------------------------------------   Director
             E. E. Whitacre, Jr.




*  By    /s/ W. J. Galvin
        --------------------------------
             W. J. Galvin
             Attorney-in-fact

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                               INDEX TO EXHIBITS
                               -----------------

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

Exhibit No.          Exhibit
-----------          -------

10(h)                First Amendment to the Emerson Electric Co. Supplemental
                     Executive Retirement Plan

12                   Ratio of Earnings to Fixed Charges

13                   Portions of Annual Report to Stockholders for
                     the year ended September 30, 1999, incorporated
                     by reference herein

21                   Subsidiaries of Emerson Electric Co.

23                   Independent Auditors' Consent

24                   Power of Attorney

27                   Financial Data Schedule

See Item 14(A)(3) for a list of exhibits incorporated by reference.

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Exhibit 10(h)
FIRST AMENDMENT TO THE
EMERSON ELECTRIC CO.
SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN

WHEREAS, Emerson Electric Co. previously adopted the Emerson Electric Co. Supplemental Executive Retirement Plan to provide for the payment of a competitive retirement income and thereby attract and retain selected executives; and
WHEREAS, Emerson Electric Co. desires to amend the Supplemental Executive Retirement Plan effective October 4, 1999; NOW, THEREFORE, effective as of October 4, 1999, the Emerson Electric Co. Supplemental Executive Retirement Plan is amended to read as follows:

SECTION I DEFINITIONS

A. "Beneficiary" means the Beneficiary designated by the Participant to receive a death benefit under the Plan.
B. "Change of Control" means any of the following: (a) the purchase or other acquisition (other than from the Company) by any person, entity or group of persons, within the meaning of Section 13(d) or 14(d) of the Exchange Act (excluding, for this purpose, the Company or its subsidiaries or any employee benefit plan of the Company or its subsidiaries), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the then-outstanding shares of common stock of the Company or the combined voting power of the Company's then-outstanding voting securities entitled to vote generally in the election of directors; (b) individuals who, as of the date hereof, constitute the Incumbent Board cease for any reason to constitute at least the majority of the Board of Directors of the Company, provided that any person who becomes a director subsequent to the date hereof whose election or nomination for election by the Company's stockholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an individual whose initial assumption of office is connection with an actual or threatened election contest relating to the election of directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act shall be, for purposes of This Section, considered as though such person were a member of the Incumbent Board; or (c) approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case with respect to which persons who were the stockholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of, respectively, the common stock and the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated corporation's then-outstanding voting securities, or of a liquidation or dissolution of the Company or of the sale of all or substantially all of the assets of the Company.
C. "Code" means the Internal Revenue Code of 1986, as amended.
D. "Committee" means the Compensation and Human Resources Committee of the Board of Directors of the Company.
E. "Company" means Emerson Electric Co., a Missouri corporation.
F. "Employee" means an Employee of an Employer.
G. "Employer" means the Company and any of its subsidiaries or affiliates which has, with the consent of the Board of Directors of the Company, adopted the Plan.
H. "Employment" means employment with an Employer.
I. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
J. "Incumbent Board" means the individuals who, as of the date of adoption of this Plan, constitute the Board of Directors of the Company.
K. "Normal Retirement Benefit" means the normal retirement benefit to which a Participant is entitled under Section 5-1 of Appendix 10 of the Retirement Plan, computed without regard to the limitations of Section 18.6 of the Retirement Plan and without regard to the limitation on the amount of compensation which may be taken into account under Section 401(a)(17) of the Code and by adding to compensation for each calendar year the amount which the Participant elected to defer under the Supplemental Executive Savings Investment Plan for such year.
L. "Normal Retirement Benefit Under the Retirement Plan" means the Normal Retirement Benefit to which a Participant is entitled under Section 5-1 of Appendix 10 of the Retirement Plan as limited by Section 18.6 of the Retirement Plan and by the amount of compensation which may be taken into account under Section 401(a)(17) of the Code.
M. "Participant" means an Employee eligible to participate in the Plan pursuant to Section II.
N. "Plan" means this Emerson Electric Co. Supplemental Executive Retirement Plan.
O. "Retirement Plan" means the Emerson Electric Co. Retirement Plan.
P. "Surviving Spouse" means the surviving spouse of a deceased Participant to whom such Participant had been married for at least one full year as of the date of the Participant's death.
Q. "Survivor Benefit" means a monthly benefit for the life of the Surviving Spouse equal to 50% of the monthly benefit to which the Participant would be entitled computed as if the Participant commenced receiving benefits on the date of his death in the form of a straight life annuity of equivalent actuarial value to the benefit accrued under Section III- A using the same actuarial assumptions as are used in computing equivalent actuarial values under the Retirement Plan.

SECTION II ELIGIBILITY

Participation in the Plan shall be limited to those Employees whom the Committee selects by written notice to the Participant.

SECTION III BENEFITS

A. A Participant who terminates Employment with a vested benefit under the Retirement Plan shall receive a monthly benefit under the Plan which, when expressed as a straight life annuity with sixty monthly payments guaranteed, is equal to his Normal Retirement Benefit reduced by his Normal Retirement Benefit Under the Retirement Plan.
B. Notwithstanding Section III-A the Committee, in its discretion, may direct that a different level of benefit shall be payable to any Participant.

SECTION IV TIME AND FORM OF PAYMENTS

A. Except as otherwise provided in Section VI, the benefit payable under Section III shall commence on the first day of the month coincident with or next following the later of (a) the date the Participant attains age 65 or (b) the date the Participant terminates Employment. The benefit shall be payable for the life of the Participant with sixty monthly payments guaranteed. If the Participant dies prior to receiving sixty monthly payments, the unpaid installments shall be paid to his Beneficiary.
B. Notwithstanding Section IV-A, the Committee may, in its discretion, direct that a benefit, of equivalent actuarial value to the benefit described in Section III-A (or of another value established by the Committee under Section III-B), shall be payable to any Participant in such form and payable at such times as the Committee shall determine. All equivalent actuarial values shall be determined by using the same actuarial assumptions as are used in computing equivalent actuarial values under the Retirement Plan.

SECTION V PRE-RETIREMENT DEATH BENEFIT

If a Participant dies in Employment leaving a Surviving Spouse, such Spouse shall receive the Survivor Benefit.

SECTION VI CHANGE OF CONTROL

Notwithstanding anything else contained in the Plan, in the event of a Change of Control, all accrual of benefits under this Plan shall cease and each Participant shall become fully vested in his accrued benefits as of the date of the Change of Control, even if he is not fully vested under the Retirement Plan. Each Participant shall be paid, at the Participant's election, (a) upon the Change of Control or (b) upon the Participant's termination of Employment occurring after the Change of Control. If the Participant elects to receive payment upon the Change of Control, payment shall be made in the form of a lump sum distribution which is the actuarial equivalent of such accrued benefits (using the same actuarial assumptions as are used in computing equivalent actuarial values under the Retirement Plan). If the Participant elects to receive payment upon the termination of Employment occurring after the Change of Control, the Participant shall make an additional election to receive payment in the form of either a lump sum distribution or the form of benefit provided under Section IV. At the commencement of participation in the Plan, each Participant shall make an irrevocable election as to the timing and form of any payments due under this
Section VI.

SECTION VII FORFEITURE OF BENEFITS

If any Participant entitled to a benefit under the Plan is discharged for cause, or enters into competition with the Company, or interferes with the relations between the Company and any customer, or engages in any activity that would result in any decrease of, or loss in, sales by the Company, the rights of such Participant to a benefit under the Plan, including the rights of a Surviving Spouse to a benefit, will be forfeited, unless the Committee determines that such activity is not detrimental to the best interests of the Company. However, if the individual ceases such activity and notifies the Committee of this action, then the Participant's right to receive a benefit, and any right of a Surviving Spouse to a benefit, may be restored within 60 days of said notification, unless the Committee in its sole discretion determines that the prior activity has caused serious injury to the Company, which determination shall be final and conclusive.

SECTION VIII ADMINISTRATION AND CLAIMS PROCEDURE

A. The Committee shall construe, interpret and administer all provisions of the Plan and a decision of a majority of the members of the Committee shall govern.
B. A decision of the Committee may be made by a written document signed by a majority of the members of the Committee or by a meeting of the Committee. The Committee may authorize any of its members to sign documents or papers on its behalf.
C. The Committee may appoint such agents, who need not be members of the Committee, as it may deem necessary for the effective exercise of its duties, and may, to the extent not inconsistent herewith, delegate to such agents any powers and duties, both ministerial and discretionary, as the Committee may deem expedient and appropriate.
D. No member of the Committee shall make any decision or take any action covering exclusively his own benefits under the Plan, but all such matters shall be decided by a majority of the remaining members of the Committee or, in the event of inability to obtain a majority, by the Board of Directors of the Company.
E. A Participant who believes that he is being denied a benefit to which he is entitled (hereinafter referred to as "Claimant") may file a written request for such benefit with the Committee setting forth his claim. The request must be addressed to: Compensation and Human Resources Committee, Emerson Electric Co., 8000 West Florissant, St. Louis, Missouri 63136.
F. Upon receipt of a claim the Committee shall advise the Claimant that a reply will be forthcoming within 90 days and shall in fact deliver such reply in writing within such period. The Committee may, however, extend the reply period for an additional 90 days for reasonable cause. If the claim is denied in whole or in part, the Committee will adopt a written opinion using language calculated to be understood by the Claimant setting forth:
1. the specific reason or reasons for denial,
2. the specific references to pertinent Plan provisions on which the denial is based,
3. a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation why such material or such information is necessary,
4. appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review, and
5. the time limits for requesting a review under Subsection G and for the review under Subsection H.
G. Within sixty days after the receipt by the Claimant of the written opinion described above, the Claimant may request in writing that the Chief Executive Officer of the Company review the determination of the Committee. Such request must be addressed to: Chief Executive Officer, Emerson Electric Co., 8000 West Florissant, St. Louis, Missouri 63136. The Claimant or his duly authorized representative may, but need not, review the pertinent documents and submit issues and comments in writing for consideration by the Chief Executive Officer. If the Claimant does not request a review of the Committee's determination by the Chief Executive Officer within such sixty-day period, he shall be barred and estopped from challenging the Committee's determination.
H. Within sixty days after the Chief Executive Officer's receipt of a request for review, he will review the Committee's determination. After considering all materials presented by the Claimant, the Chief Executive Officer will render a written opinion, written in a manner calculated to be understood by the Claimant, setting forth the specific reasons for the decision and containing specific references to the pertinent Plan provisions on which the decision is based. If special circumstances require that the sixty-day time period be extended, the Chief Executive Officer will so notify the Claimant and will render the decision as soon as possible but not later than 120 days after receipt of the request for review.

SECTION IX MISCELLANEOUS

A. Plan Year. The Plan Year shall be the calendar year.
B. Spendthrift. No Participant or beneficiary shall have the right to assign, transfer, encumber or otherwise subject to lien any of the benefits payable or to be payable under this Plan.
C. Incapacity. If, in the opinion of the Committee, a person to whom a benefit is payable is unable to care for his affairs because of illness, accident or any other reason, any payment due the person, unless prior claim therefor shall have been made by a duly qualified guardian or other duly appointed and qualified representative of such person, may be paid to some member of the person's family, or to some party who, in the opinion of the Committee, has incurred expense for such person. Any such payment shall be a payment for the account of such person and shall be a complete discharge of any liability.
D. Employee Rights. The Employer, in adopting this Plan, shall not be held to create or vest in any Employee or any other person any benefits other than the benefits specifically provided herein, or to confer upon any Employee the right to remain in the service of the Employer.
E. Service of Process and Plan Administrator.
1. The Vice President-Law of the Company shall be the agent for service of legal process.
2. The Company shall constitute the Plan Administrator.
F. Unfunded Plan. The Plan shall be unfunded. All payments to a Participant under the Plan shall be made from the general assets of the Employer. The rights of any Participant to payment shall be those of an unsecured general creditor of the Company.
G. Company Rights. The Company reserves the right to amend or terminate the Plan. Each Employer may terminate its participation in the Plan at any time.
H. Reemployment. If a Participant is receiving benefits under the Plan and is re-employed by an Employer, benefits shall cease until he is no longer employed by an Employer.
I. Governing Law. The Plan shall be governed and construed according to the laws of the State of Missouri. IN WITNESS WHEREOF, Emerson Electric Co. has caused this Amendment to be executed by one of its duly authorized officers this 4th day of October, 1999.
EMERSON ELECTRIC CO.

By /s/ J. A. Harmon
   ----------------

   Senior Vice President
   ---------------------


EXHIBIT 12

EMERSON ELECTRIC CO. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)

                                                            YEAR ENDED SEPTEMBER 30,
                                    ------------------------------------------------------------------------
                                        1995           1996           1997           1998           1999
                                    ------------   ------------   ------------   ------------   ------------
Earnings:
   Income before income taxes <F1>  $     1,457.2<F2>    1,611.3      1,821.7         2,002.3        2,064.0
   Fixed charges                            168.4          182.2        176.5           218.2          258.1
                                    -------------   ------------   ----------    ------------   ------------
      Earnings, as defined          $     1,625.6        1,793.5      1,998.2         2,220.5        2,322.1
                                    =============   ============   ==========    ============   ============
Fixed charges:
   Interest expense                 $       123.0          132.3        124.2           161.4          199.0
   One-third of all rents                    45.4           49.9         52.3            56.8           59.1
                                    -------------   ------------   ----------    ------------   ------------
      Total fixed charges           $       168.4          182.2        176.5           218.2          258.1
                                    =============   ============   ==========    ============   ============

Ratio of Earnings to Fixed Charges            9.7x           9.8x        11.3x           10.2x           9.0x
                                    =============   ============   ==========    ============   ============

<F1>
Represents income before income taxes, cumulative effects of changes in accounting principles, and minority
interests in the income of consolidated subsidiaries with fixed charges.

<F2>
Includes non-recurring items of $34.3 million in 1995.  Excluding these items, the ratio of earnings to fixed
charges would have been 9.4x in 1995.


EXHIBIT 13

28

FINANCIAL REVIEW

RESULTS OF OPERATIONS

Net Sales
Sales for 1999 were a record $14.3 billion, an increase of $822 million, or 6.1 percent, from 1998. The solid sales increase reflected modest underlying sales growth and the contribution of acquisitions. All businesses reported sales increases. United States sales increased approximately $455 million, or 6 percent, while international sales increased approximately $368 million, or 7 percent. Underlying sales growth in the consumer-related businesses continued at a moderate pace in the U.S. and internationally, led by strong growth in the Heating, Ventilating and Air Conditioning (HVAC) business. Underlying sales of the capital goods-related businesses were flat in 1999. Strong sales growth in the Electronics and Telecommunications business was offset by global weakness in the Industrial Automation and Process Control businesses. New product sales, from products introduced in the past five years, increased approximately $570 million, or 13 percent, to a record $5.0 billion, representing 35 percent of sales. Acquisitions completed throughout fiscal 1999 are expected to have total sales of nearly $800 million in fiscal 2000.

In 1998, sales were $13.4 billion, up $1.1 billion, or 9.3 percent, from 1997. The strong sales growth reflected underlying gains from all businesses and the contribution of acquisitions. This growth was achieved despite the impact of a stronger dollar that reduced reported sales growth by more than 2 percent. Slightly more than half of the sales increase was attributable to solid underlying U.S. growth and modest international demand. U.S. sales increased approximately $1.0 billion, or 14 percent, benefiting from very strong gains in Electronics and Telecommunications and HVAC and acquisitions. International sales increased approximately $137 million, or 3 percent. Demand was solid throughout the year in the United States and Europe, which account for more than three-quarters of consolidated revenue. New product sales increased approximately $490 million, or 13 percent, to $4.4 billion, representing 33 percent of sales.

International Sales
International sales, including U.S. exports, increased approximately 7 percent to a record $5.7 billion in 1999, representing 40 percent of the Company's total sales. Underlying growth in Europe, Asia and other regions more than offset the impact of weakness in Latin America. Sales by non-U.S. subsidiaries were $4.8 billion in 1999, up 9 percent from 1998. U.S. exports decreased 1 percent to $960 million, primarily reflecting weakness in Latin America and Japan. International subsidiary sales increased approximately 2 percent excluding acquisitions and divestitures.

In 1998, international sales increased 3 percent to $5.3 billion, representing 40 percent of total sales. Solid demand in Europe and the strong growth in other regions of the world, led by Latin America, more than offset the impact of significant weakness in Asian economies. Sales by non-U.S. subsidiaries were $4.4 billion in 1998, up 5 percent from 1997. U.S. exports decreased 8 percent to $968 million in 1998 compared with 1997, reflecting weakness in Asia. International subsidiary sales increased approximately 6 percent excluding acquisitions and the unfavorable impact of currency translation of approximately $250 million.


29

Business Segment Sales - 1999 vs. 1998
The Process Control business increased sales 7 percent to $2.9 billion in 1999. This solid sales increase was driven by the strong growth of the PlantWeb initiative, and the Westinghouse Process Control and Daniel Industries acquisitions. Underlying sales decreased, reflecting the impact of weak oil prices on U.S. and Asian demand for process-related equipment, which more than offset modest growth in Europe. Sales of the Industrial Automation business were $3.4 billion in 1999. Despite widespread softness in end markets, the Industrial Automation business realized a small increase in sales due to the contribution of acquisitions. The global weakness in capital spending, largely due to weak oil pricing earlier this year, has had a substantial impact on this business. These results exclude the impact of the F.G. Wilson divestiture. The Electronics and Telecommunications business increased sales 32 percent, to $2.1 billion in 1999. This outstanding performance, particularly in the U.S. and Europe, was achieved due to rapid growth in power protection and environmental equipment, as well as in the service business that monitors and maintains this equipment. This business also benefited from a significant recovery in the market for power supply products, driven by recovery in Asia and robust growth in the computing and telecommunications infrastructure. The increase in the Electronics and Telecommunications business sales was also aided by the 1998 acquisitions of Nortel's Advanced Power Systems operations and Hiross environmental systems in Europe. Sales of the HVAC business were $2.4 billion in 1999, an increase of 11 percent from 1998. Underlying sales of the HVAC business increased substantially, driven by a dramatic recovery in residential and light commercial construction in China, a warm summer in the United States, and continued market adoption of scroll technology. Sales of the Appliance and Tools business were $3.5 billion in 1999, compared with $3.4 billion in 1998. Underlying sales of the Appliance and Tools business grew slightly, with the results varying by geography and product area. In the United States, strong construction activity drove growth in several consumer-related areas, while European sales declined due to weakness in appliance products. During 1999, this business also made substantial gains in sales to home centers, such as The Home Depot and Lowe's, which are experiencing dramatic growth. Also in 1999, the Company contributed its Louisville Ladder operations into a joint venture with Grupo Imsa SA of Mexico and obtained an equity interest in the venture.

Business Segment Sales - 1998 vs. 1997
The Process Control business increased sales to $2.7 billion in 1998 from $2.6 billion in 1997. Excluding the effects of currency translation, this business reported moderate sales growth as demand was balanced across the major geographic regions it serves. Sales of the Industrial Automation business were $3.3 billion in 1998, an increase of 9 percent from 1997. The Industrial Automation business increase was the result of modest underlying sales growth on a fixed rate basis, the majority-owned joint venture formed with General Signal's Electrical Group in September 1997, and the Computational Systems, Inc. acquisition. The Electronics and Telecommunications business increased sales 30 percent to $1.6 billion in 1998. This business showed very strong underlying sales growth, reflecting broad strength across product lines and service offerings. In addition, sales of the business benefited from the acquisition of Hiross, an Italian manufacturer of precision environmental control and site monitoring products. Sales of the HVAC business were $2.1 billion in 1998. The HVAC business reported modest sales growth, as very strong demand in the U.S. and Europe was partially offset by the impact of weak Asian economies on U.S. export sales. Sales of the Appliance and Tools business were up 12 percent to $3.4 billion in 1998. Sales of the underlying Appliance and Tools business grew solidly, benefiting from solid demand in the U.S. and Europe. The increase in sales also reflected the 1997 acquisition of InterMetro Industries.


30

Total Costs and Expenses
Cost of sales for 1999 was $9.2 billion, an increase of 7.0 percent, due primarily to increased sales volume. In 1998, cost of sales was $8.6 billion, compared with $7.9 billion in 1997, an increase of 9.3 percent. Cost of sales as a percent of net sales was 64.4 percent in 1999 compared to 63.9 percent and 64.0 percent in 1998 and 1997, respectively. The 1999 gross profit margin was impacted by the effect of recent acquisitions, partially offset by the Company's ongoing commitment to cost reduction and containment efforts and productivity improvement programs.

Selling, general and administrative (SG&A) expenses were $2.8 billion, $2.7 billion, and $2.5 billion in 1999, 1998, and 1997, respectively. As a percent of net sales, SG&A expenses were 19.4 percent in 1999, and 19.9 percent in 1998 and 1997. The decrease in SG&A as a percent of net sales was the result of ongoing cost reduction efforts, partially offset by new product development and other revenue growth programs and acquisitions. The Company continued its commitment to new product development by increasing engineering and development expense 4 percent to a record $510 million in 1999, compared to $491 million in 1998 and $445 million in 1997.

Interest expense increased to $190 million in 1999 from $152 million in 1998, reflecting higher average borrowings resulting from acquisitions and share repurchases. In 1998, interest expense increased from $121 million in 1997, reflecting higher average borrowings.

Other deductions, net, including amortization of intangibles, were $95 million in 1999, compared with $100 million and $78 million in 1998 and 1997, respectively. Fiscal 1999 included a gain of $64 million from the disposition of the Company's interest in F.G. Wilson. The fourth quarter of 1997 included a gain of approximately $80 million from the formation of the joint venture between Emerson's Appleton Electric division and General Signal's Electrical Group. These gains were offset by other non-recurring items. See note 2 for additional information.

Income Before Income Taxes
Income before income taxes increased $97 million, or 5.1 percent, to $2.0 billion in 1999, reflecting increased sales and improvement in underlying margins, partially offset by increased interest expense. The base company (excluding acquisitions and divestitures) realized an outstanding performance in 1999, increasing underlying operating margins approximately 0.5 points. This improvement was offset by the acquisition of businesses with lower margins. Earnings before interest and income taxes in the Process Control business were $313 million in 1999, a decrease from 1998, reflecting weak demand associated with lower oil prices and higher expenditures for cost reduction efforts and productivity improvement programs. The Industrial Automation business income increased $17 million to $448 million in 1999, driven by cost containment measures that mitigated the impact of a challenging economic environment. Income of the Electronics and Telecommunications business increased $87 million, or 58 percent, to $237 million in 1999, due to strong sales growth and the acquisition of the Advanced Power Systems business. Income of the HVAC business increased $45 million, or 14 percent, to $361 million in 1999, reflecting strong sales growth in both U.S. and international markets. The Appliance and Tools business income increased $16 million to $577 million in 1999, reflecting varying results by geography and product area.

Income before income taxes increased $140 million, or 7.8 percent, to $1.9 billion in 1998, reflecting increased sales and improvement in underlying margins, partially offset by increased interest expense. Earnings before interest and income taxes in the Process Control business increased $24 million, or 8 percent, to $343 million in 1998, due to moderate worldwide sales growth. Income of the Industrial Automation business was $431 million in 1998, a decrease from 1997, due to non-recurring costs in this business. Income of the Electronics and Telecommunications business increased $34 million, or 29 percent, from 1997 to 1998, reflecting strong underlying sales growth. The HVAC business increased income to $316 million in 1998, due to modest sales growth. Income of the Appliance and Tools business increased $81 million, or 17 percent, to $561 million in 1998, reflecting solid U.S. demand and acquisitions. See note 12 for additional information by business segment and geographic area.


31

Income Taxes
Income taxes were $707 million, $695 million and $662 million in 1999, 1998 and 1997, respectively. The effective income tax rate was 35.0 percent in 1999, compared with 36.1 percent in 1998 and 37.1 percent in 1997, reflecting the continued implementation of global tax planning strategies and the impact of acquisitions and divestitures.

Net Earnings and Return on Equity
Net earnings for 1999 were a record $1.3 billion, up 6.9 percent from $1.2 billion in 1998. Net earnings as a percent of sales was 9.2 percent in 1999 compared with 9.1 percent in 1998. Diluted earnings per common share were a record $3.00 in 1999, up 8.3 percent from $2.77 in 1998. Earnings per share excluding goodwill amortization, a metric that management believes is more indicative of cash operating performance, were $3.27 in 1999, up 9.4 percent from $2.99 in the prior year. Emerson achieved a return on average stockholders' equity of 21.9 percent in 1999 and 1998 compared to 20.8 percent in 1997. Net earnings for 1998 were up 9.5 percent from $1.1 billion in 1997. Diluted earnings per common share in 1998 increased 10.8 percent from $2.50 in 1997. Earnings per share excluding goodwill amortization in 1998 were up 11.2 percent from $2.69 in the prior year.

FINANCIAL POSITION, CAPITAL RESOURCES AND LIQUIDITY

The Company continues to generate substantial cash from operations and remains in a strong financial position with resources available for reinvestment in existing businesses, strategic acquisitions and managing the capital structure on a short- and long-term basis.

Cash Flow
Emerson generated record operating cash flow of $1.8 billion in 1999, an increase of 10 percent compared to 1998. Operating cash flows were $1.7 billion and $1.5 billion in 1998 and 1997, respectively. Operating working capital was approximately 16 percent of sales in 1999, and 17 percent of sales in 1998 and 1997.

Capital expenditures were $592 million, $603 million and $575 million in 1999, 1998 and 1997, respectively. These expenditures increase the Company's global capacity to leverage opportunities within the heating, ventilating and air conditioning industries, as well as improve manufacturing productivity in a number of our businesses. In 1999, construction of a ninth scroll production facility was completed. This plant, located in China, will become operational in early fiscal 2000. Cash paid in connection with Emerson's purchase acquisitions was $1,202 million, $573 million and $319 million in 1999, 1998 and 1997, respectively.

Dividends were a record $566 million ($1.30 per share) in 1999, compared with $521 million ($1.18 per share) in 1998 and $481 million ($1.08 per share) in 1997. In November 1999, the Board of Directors voted to increase the quarterly cash dividend 10 percent to an annualized rate of $1.43 per share.

Leverage/Capitalization
Total debt increased to $3.3 billion in 1999, from $2.6 billion in 1998 and $2.0 billion in 1997, reflecting the impact of acquisitions and the Company's share repurchase program. The repurchase program, initiated in fiscal 1997, authorizes the repurchase of up to 40 million shares of the Company's outstanding common stock, with nearly 23 million shares repurchased through September 30, 1999. Net purchases of treasury stock totaled $324 million and $499 million in 1999 and 1998, respectively. See notes 2, 3 and 4 for additional information.

The total debt-to-capital ratio was 34.6 percent at year-end 1999, compared with 30.8 percent in 1998 and 27.1 percent in 1997. At September 30, 1999, net debt (total debt less cash and equivalents and short-term investments) was 32.7 percent of net capital, compared with 29.0 percent in 1998 and 24.9 percent in 1997. The Company's interest coverage ratio (income before income taxes, non- recurring items and interest expense divided by interest expense) was 11.7 times in 1999, compared with 13.7 times in 1998 and 15.8 times in 1997, as a result of higher average borrowings in 1999, partially offset by increased earnings.


32

At year-end 1999, the Company and its subsidiaries maintained lines of credit amounting to $2.4 billion to support commercial paper and had available non-U.S. bank credit facilities of $630 million to support non-U.S. operations. Lines of credit totaling $900 million are effective until 2003, with the remainder through June 2000. These lines of credit and bank credit facilities assure the availability of funds at prevailing interest rates. In addition, as of September 30, 1999, the Company could issue up to $2 billion of additional debt securities under its shelf registration with the Securities and Exchange Commission.

Financial Instruments
The Company is exposed to market risk related to changes in interest rates and European and other foreign currency exchange rates, and selectively uses derivative financial instruments, including forwards, swaps and purchased options, to manage these risks. The Company does not hold derivatives for trading purposes. The value of market risk sensitive derivative and other financial instruments is subject to change as a result of movements in market rates and prices. Sensitivity analysis is one technique used to evaluate these impacts. Based on a hypothetical ten-percent increase in interest rates or ten- percent weakening in the U.S. dollar across all currencies, the potential losses in future earnings, fair value and cash flows are immaterial. This methodology has limitations; for example, a weaker U.S. dollar would benefit future earnings through favorable translation of non-U.S. operating results. See notes 1, 3, 4 and 5.

Year 2000 Readiness
The Company developed a comprehensive Year 2000 plan that includes assessment, hardware and software remediation, and testing. The Company's divisions have completed all phases of the plan, which addressed internal computer applications and information systems, products, facilities and equipment, as well as products and services provided by third parties. Numerous third parties were contacted to assess and monitor their compliance and remediation efforts, with particular emphasis placed on more than 3,000 key suppliers. The estimated costs of the Year 2000 compliance program are not material to the Company's operating results or financial condition.

The Company has supplemented existing emergency recovery plans to mitigate the impact of any unsuccessful remediation or third-party failures. These contingency plans include the identification of alternative suppliers, possible increases in inventory levels, and other backup procedures. In addition, the Company has established global, regional and divisional command centers to address Year 2000-related issues that may arise and respond, as appropriate, to minimize the potential impact. Management believes that the diversity of the Company's operations and systems reduces overall exposure and expects that the consequences of any unsuccessful remediation will not be significant. However, there can be no assurance that the Company's efforts or those of other entities will be successful, or that any potential failure would not have a material adverse effect on the Company's operating results or financial condition.


33

CONSOLIDATED STATEMENTS OF EARNINGS

Emerson Electric Co. and Subsidiaries

Years ended September 30
(Dollars in millions except per share amounts)

                                                    1999       1998      1997
                                                  ---------  --------  --------
Net sales                                         $14,269.5  13,447.2  12,298.6
                                                  ---------  --------  --------
Costs and expenses:
 Cost of sales                                      9,193.8   8,595.6   7,865.6
 Selling, general and administrative expenses       2,770.2   2,676.7   2,450.9
 Interest expense                                     189.7     151.7     120.9
 Other deductions, net                                 94.9      99.7      77.6
                                                  ---------  --------  --------
   Total costs and expenses                        12,248.6  11,523.7  10,515.0
                                                  ---------  --------  --------
Income before income taxes                          2,020.9   1,923.5   1,783.6
Income taxes                                          707.3     694.9     661.7
                                                  ---------  --------  --------
Net earnings                                      $ 1,313.6   1,228.6   1,121.9
                                                  =========  ========  ========
Basic earnings per common share                   $    3.03      2.80      2.52
                                                  =========  ========  ========
Diluted earnings per common share                 $    3.00      2.77      2.50
                                                  =========  ========  ========

See accompanying notes to consolidated financial statements.


34

CONSOLIDATED BALANCE SHEETS

Emerson Electric Co. and Subsidiaries

September 30
(Dollars in millions except per share amounts)

Assets
                                                                 1999      1998
                                                              ---------  --------
Current assets
 Cash and equivalents                                         $   266.1     209.7
 Receivables, less allowances of $60.5 in 1999
   and $54.6 in 1998                                            2,516.3   2,416.1
 Inventories:
   Finished products                                              871.5     858.6
   Raw materials and work in process                            1,049.6   1,137.9
                                                              ---------  --------
     Total inventories                                          1,921.1   1,996.5
 Other current assets                                             420.9     379.0
                                                              ---------  --------
   Total current assets                                         5,124.4   5,001.3
                                                              ---------  --------
Property, plant and equipment
 Land                                                             216.5     173.4
 Buildings                                                      1,287.1   1,205.5
 Machinery and equipment                                        4,497.2   4,373.5
 Construction in progress                                         377.0     318.3
                                                              ---------  --------
                                                                6,377.8   6,070.7
 Less accumulated depreciation                                  3,223.4   3,059.1
                                                              ---------  --------
   Property, plant and equipment, net                           3,154.4   3,011.6
                                                              ---------  --------

Other assets
 Goodwill, less accumulated amortization of $714.4 in 1999
   and $617.5 in 1998                                           4,263.0   3,702.7
 Other                                                          1,081.7     944.2
                                                              ---------  --------
   Total other assets                                           5,344.7   4,646.9
                                                              ---------  --------
                                                              $13,623.5  12,659.8
                                                              =========  ========

See accompanying notes to consolidated financial statements.


35

 Liabilities and Stockholders' Equity
                                                                         1999                   1998
                                                                      ---------               ---------
Current liabilities
 Short-term borrowings and current
   maturities of long-term debt                                       $ 1,953.7                 1,524.4
 Accounts payable                                                       1,068.8                 1,036.7
 Accrued expenses                                                       1,304.8                 1,252.7
 Income taxes                                                             263.1                   207.9
                                                                      ---------               ---------
   Total current liabilities                                            4,590.4                 4,021.7
                                                                      ---------               ---------
Long-term debt                                                          1,317.1                 1,056.6
                                                                      ---------               ---------
Other liabilities                                                       1,535.5                 1,778.2
                                                                      ---------               ---------
Stockholders' equity
 Preferred stock of $2.50 par value per share.
   Authorized 5,400,000 shares; issued - none                                --                      --
 Common stock of $.50 par value per share. Authorized
   1,200,000,000 shares; issued 476,677,006 shares in
   1999 and 1998                                                          238.3                   238.3
 Additional paid-in capital                                                23.9                    27.9
 Retained earnings                                                      7,803.7                 7,056.5
 Accumulated other nonstockholder changes in equity                      (271.6)                 (236.2)
                                                                      ---------               ---------
                                                                        7,794.3                 7,086.5
 Less cost of common stock in treasury, 43,632,708
   shares in 1999 and 38,452,823 shares in 1998                         1,613.8                 1,283.2
                                                                      ---------               ---------
   Total stockholders' equity                                           6,180.5                 5,803.3
                                                                      ---------               ---------
                                                                      $13,623.5                12,659.8
                                                                      =========               =========


36

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Emerson Electric Co. and Subsidiaries

Years ended September 30
(Dollars in millions except per share amounts)

                                                           1999           1998          1997
                                                         ---------      --------      -------
Common stock                                             $   238.3         238.3        238.3
                                                         ---------      --------      -------

Additional paid-in capital
 Beginning balance                                            27.9           3.3         12.3
 Stock plans                                                  (3.5)        (43.4)        (2.8)
 Treasury stock issued for acquisitions and other              (.5)         68.0         (6.2)
                                                         ---------      --------      -------
 Ending balance                                               23.9          27.9          3.3
                                                         ---------      --------      -------

Retained earnings
 Beginning balance                                         7,056.5       6,348.9      5,707.7
 Net earnings                                              1,313.6       1,228.6      1,121.9
 Cash dividends (per share:  1999, $1.30;
   1998, $1.18; 1997, $1.08)                                (566.4)       (521.0)      (480.7)
                                                         ---------      --------      -------
 Ending balance                                            7,803.7       7,056.5      6,348.9
                                                         ---------      --------      -------

Accumulated other nonstockholder changes in equity
 Beginning balance                                          (236.2)       (205.9)       (29.2)
 Translation adjustments                                     (35.4)        (30.3)      (176.7)
                                                         ---------      --------      -------
 Ending balance                                             (271.6)       (236.2)      (205.9)
                                                         ---------      --------      -------

Treasury stock
 Beginning balance                                        (1,283.2)       (963.9)      (575.7)
 Acquired                                                   (361.2)       (498.4)      (427.2)
 Issued under stock plans                                     27.9         108.5         18.3
 Issued for acquisitions and other                             2.7          70.6         20.7
                                                         ---------      --------      -------
 Ending balance                                           (1,613.8)     (1,283.2)      (963.9)
                                                         ---------      --------      -------

Total stockholders' equity                               $ 6,180.5       5,803.3      5,420.7
                                                         =========      ========      =======

Nonstockholder changes in equity
(Net earnings and Translation adjustments)               $ 1,278.2       1,198.3        945.2
                                                         =========      ========      =======

See accompanying notes to consolidated financial statements.


37

CONSOLIDATED STATEMENTS OF CASH FLOWS

Emerson Electric Co. and Subsidiaries

Years ended September 30
(Dollars in millions)
                                                                               1999        1998      1997
                                                                             ---------    -------   -------
Operating activities
   Net earnings                                                              $ 1,313.6    1,228.6   1,121.9
   Adjustments to reconcile net earnings to net cash
     provided by operating activities:
       Depreciation and amortization                                             637.5      562.5     511.6
       Changes in operating working capital                                       35.7      (81.0)    (42.6)
       Gains on divestitures, pension funding and other                         (176.3)     (58.5)    (92.3)
                                                                             ---------    -------   -------
        Net cash provided by operating activities                              1,810.5    1,651.6   1,498.6
                                                                             ---------    -------   -------
Investing activities
   Capital expenditures                                                         (591.6)    (602.6)   (575.4)
   Purchases of businesses, net of cash and equivalents acquired              (1,202.0)    (572.9)   (319.2)
   Divestiture of businesses and other, net                                      215.5       76.2      34.0
                                                                             ---------    -------   -------
        Net cash used in investing activities                                 (1,578.1)  (1,099.3)   (860.6)
                                                                             ---------    -------   -------
Financing activities
   Net increase in short-term borrowings                                         503.5      145.4     321.8
   Proceeds from long-term debt                                                  470.9      452.0       5.8
   Principal payments on long-term debt                                         (257.0)    (132.5)    (13.1)
   Net purchases of treasury stock                                              (323.7)    (499.4)   (376.6)
   Dividends paid                                                               (566.4)    (521.0)   (480.7)
                                                                             ---------    -------   -------
        Net cash used in financing activities                                   (172.7)    (555.5)   (542.8)
                                                                             ---------    -------   -------
Effect of exchange rate changes on cash and equivalents                           (3.3)      (8.2)    (23.1)
                                                                             ---------    -------   -------
Increase (decrease) in cash and equivalents                                       56.4      (11.4)     72.1

Beginning cash and equivalents                                                   209.7      221.1     149.0
                                                                             ---------    -------   -------
Ending cash and equivalents                                                  $   266.1      209.7     221.1
                                                                             =========    =======   =======
Changes in operating working capital
   Receivables                                                               $   (23.1)     (76.1)   (117.3)
   Inventories                                                                    69.0      (27.7)    (64.4)
   Other current assets                                                          (12.2)      19.7     (19.5)
   Accounts payable                                                              (25.4)        .9      28.0
   Accrued expenses                                                              (31.5)      (2.8)     88.6
   Income taxes                                                                   58.9        5.0      42.0
                                                                             ---------    -------   -------
                                                                             $    35.7      (81.0)    (42.6)
                                                                             =========    =======   =======

See accompanying notes to consolidated financial statements.


38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Emerson Electric Co. and Subsidiaries

(Dollars in millions except per share amounts)

(1) Summary of Significant Accounting Policies

Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its controlled affiliates. All significant intercompany transactions, profits and balances are eliminated in consolidation. Other investments of 20 to 50 percent are accounted for by the equity method. Investments of less than 20 percent are carried at cost.

Foreign Currency Translation
The functional currency of nearly all of the Company's non-U.S. subsidiaries is the local currency. Adjustments resulting from the translation of financial statements are reflected as a separate component of stockholders' equity.

Cash Equivalents
Cash equivalents consist of highly liquid investments with original maturities of three months or less.

Inventories
Inventories are stated at the lower of cost or market. The majority of inventory values are based upon standard costs which approximate average costs, while the remainder are principally valued on a first-in, first-out basis. Standard costs are revised at the beginning of the fiscal year, and variances incurred during the year are allocated between inventories and cost of sales.

Property, Plant and Equipment
The Company records investments in land, buildings, and machinery and equipment at cost. Depreciation is computed principally using the straight-line method over estimated service lives. Service lives for principal assets are 30 to 40 years for buildings and 8 to 12 years for machinery and equipment.

Goodwill
Assets and liabilities related to business combinations accounted for as purchase transactions are recorded at their respective fair values. Goodwill is amortized on a straight-line basis to other deductions over the periods estimated to be benefited, not exceeding 40 years. Long-lived assets are reviewed for impairment whenever events and changes in business circumstances indicate the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values.

Revenue Recognition
The Company recognizes nearly all of its revenues through the sale of manufactured products as shipped.

Financial Instruments
The net amount to be paid or received under interest rate swap agreements is accrued over the life of the agreement as a separate component of interest expense. Gains and losses on purchased currency option and forward exchange contracts that qualify for deferral accounting are recognized in income with the underlying hedged transactions; otherwise, the contracts are recorded in the balance sheet, and changes in fair value are recognized immediately in other deductions, net. Currency fluctuations on non-U.S. dollar obligations that have been designated as hedges of non-U.S. net asset exposures are included in accumulated other nonstockholder changes in equity.

Income Taxes
No provision is made for U.S. income taxes on the undistributed earnings of non- U.S. subsidiaries (approximately $1,140 at September 30, 1999), primarily because retention of a significant portion of these earnings is considered essential for continuing operations. In those cases in which distributions have been made, additional income taxes, if any, have been minimal due to available foreign tax credits.

Nonstockholder Changes in Equity
In 1999, the Company adopted Statement of Financial Accounting Standards No. 130, which requires the reporting of changes in stockholders' equity that do not result from transactions with stockholders. Nonstockholder changes in equity are comprised of net earnings and foreign currency translation adjustments. The adoption of this statement had no impact on the Company's results of operations or financial condition.


39

Financial Statement Presentation
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates. Certain prior year amounts have been reclassified to conform to the current year presentation.

(2) Acquisitions and Divestitures

Cash paid in connection with the Company's purchase acquisitions, which include several smaller businesses, follows:

                                                        1999    1998   1997
                                                      --------  -----  -----
Fair value of assets acquired......................   $1,475.7  947.0  359.4
Less liabilities assumed...........................      271.4  214.5   38.2
Less notes and common stock issued to sellers......        2.3  159.6    2.0
                                                      --------  -----  -----
 Cash paid (net of cash and equivalents acquired)..   $1,202.0  572.9  319.2
                                                      ========  =====  =====

During the first quarter of 1999, the Company purchased the Westinghouse Process Control Division ("WPC") from CBS Corporation for approximately $260. WPC is a supplier of process controls for the power generation, water and wastewater treatment industries. In addition, in the first and second quarters of 1999, the Company paid $230 to acquire the remaining ownership interest in Astec (BSR) Plc. In the third quarter of 1999, the Company acquired Daniel Industries, Inc. through a cash tender offer of approximately $435 plus assumed debt. Daniel is a provider of measurement and control products and services for the oil and gas industry. In addition, the Company acquired MagneTek's alternator operations; Kato Engineering, an alternator business; and a number of smaller businesses in 1999. The companies acquired in 1999 had annualized sales of approximately $760.

During 1999, the Company received $226 from the disposition of its interest in F.G. Wilson, resulting in a pretax gain of $64 ($30 net of income taxes). The Company also incurred costs for the rationalization of other operations that more than offset this gain. In addition, the Company will receive a percentage of future F.G. Wilson revenue and expects a maximum of $100 by 2002. F.G. Wilson had sales of approximately $410 in 1998.

During the first quarter of 1998, the Company purchased Computational Systems, Inc. ("CSI") for approximately $160, primarily in common stock. CSI is a supplier of condition monitoring and diagnostic products and services for motors and other rotational equipment. During the fourth quarter of 1998, Astec (BSR) Plc, a subsidiary of Emerson, purchased the Advanced Power Systems ("APS") business from Northern Telecom Limited for approximately $325. APS manufactures power conversion products for a wide variety of telecommunications applications. In addition, the Company purchased Plaset SpA, a European manufacturer of appliance drain pumps, and acquired a majority interest in Hiross, an Italian manufacturer of precision environmental control and site monitoring products. Several smaller businesses were also purchased in 1998. The companies acquired in 1998 had annualized sales of approximately $775.

During the second quarter of 1997, Emerson acquired a majority interest in Astec (BSR) Plc through additional share purchases and began consolidating its results. Astec had annual sales of approximately $600 in calendar 1996. During the fourth quarter of 1997, the Company purchased InterMetro Industries for approximately $275 and acquired Clairson International Corporation. These two companies produce free-standing and wall-mounted ventilated shelving and specialty storage products. Emerson previously owned a controlling interest in Clairson. InterMetro and Clairson had combined annual sales of more than $300. Several smaller businesses were also purchased or sold in 1997.

In addition, in the fourth quarter of 1997, the Company and General Signal Corporation formed a joint venture combining Emerson's Appleton Electric operations and General Signal's Electrical Group. Emerson holds a controlling interest in this venture, and the transaction resulted in a pretax gain of approximately $80, which was substantially offset by costs arising from relocation of several production facilities, asset impairments and litigation.

The results of operations of these businesses have been included in the Company's consolidated results of operations since the respective dates of the acquisitions and prior to the dates of divestiture.

(3) Short-term Borrowings and Lines of Credit

Short-term borrowings and current maturities of long-term debt are summarized as follows:

                                                              1999      1998
                                                            --------   -------
Commercial paper.........................................   $1,358.3     992.7
Payable to banks.........................................       83.6     258.3
Other....................................................      511.8     273.4
                                                            --------   -------
 Total...................................................   $1,953.7   1,524.4
                                                            ========   =======
Weighted average interest rate at year end...............       5.2%      5.3%
                                                            ========   =======

                                                                              40

In 1999, the Company issued $250 of 5.125%, one-year notes that were simultaneously swapped to floating interest rates at a cost less than the Company's U.S. commercial paper, with an effective interest rate of 5.3 percent at September 30, 1999. In 1998, the Company entered into an interest rate agreement which capped the rate on $250 of commercial paper at 6.0 percent through September 1999. In 1997, the Company entered into a five-year interest rate swap which fixed the rate on $250 of commercial paper at 6.1 percent. The Company had 151 million and 152 million of British pound notes with interest rates of 5.3 and 7.5 percent swapped to $256 and $257 at U.S. commercial paper rates at September 30, 1999 and 1998, respectively.

The Company and its subsidiaries maintained lines of credit amounting to $2,375 with various banks at September 30, 1999, to support commercial paper and to assure availability of funds at prevailing market interest rates. Lines of credit totaling $900 are effective until 2003 with the remainder through June 2000. There were no borrowings against U.S. lines of credit in the last three years. The Company's non-U.S. subsidiaries maintained bank credit facilities in various currencies approximating $700 ($630 unused) at September 30, 1999. In some instances, borrowings against these credit facilities have been guaranteed by the Company to assure availability of funds at favorable interest rates. In addition, as of September 30, 1999, the Company could issue up to $2,000 of additional debt securities under its shelf registration with the Securities and Exchange Commission.

(4) Long-term Debt

Long-term debt is summarized as follows:

                                                                    1999     1998
                                                                  --------  -------
Commercial paper with a weighted average interest rate of
 5.6 percent at September 30, 1999..............................  $  254.0    252.6
6.3% notes due 2006.............................................     250.0    250.0
5 1/2% notes due 2008...........................................     250.0    250.0
5% notes due 2008...............................................     175.0        -
5.85% notes due 2009............................................     250.0        -
Term loan with a weighted average interest rate of 6.0 percent
 at September 30, 1998..........................................         -    200.0
Other...........................................................     147.2    117.9
                                                                  --------  -------
                                                                   1,326.2  1,070.5
Less current maturities.........................................       9.1     13.9
                                                                  --------  -------
 Total..........................................................  $1,317.1  1,056.6
                                                                  ========  =======

The Company has the ability to refinance commercial paper on a long-term basis through its credit lines, and the obligation is included in long-term debt. In 1999, the Company issued $250 of 5.85%, ten-year notes that were simultaneously swapped to U.S. commercial paper rates, with an effective interest rate of 5.4 percent at September 30, 1999.

Long-term debt maturing during each of the four years after 2000 is $24, $23, $262 and $4, respectively. Total interest paid related to short-term borrowings and long-term debt was approximately $185, $138 and $108 in 1999, 1998 and 1997, respectively.

(5) Financial Instruments

The Company selectively uses derivative financial instruments to manage interest costs and minimize currency exchange risk. The Company does not hold derivatives for trading purposes. No credit loss is anticipated as the counterparties to these agreements are major financial institutions with high credit ratings.

As part of its currency hedging strategy, the Company utilizes purchased option and forward exchange contracts to minimize the impact of currency fluctuations on transactions, cash flows and firm commitments. The Company and its subsidiaries had approximately $405 and $335 of contracts outstanding at September 30, 1999 and 1998, respectively. These contracts for the sale or purchase of European and other currencies generally mature within one year, and deferred gains and losses are not material.

Fair values of the Company's financial instruments are estimated by reference to quoted prices from market sources and financial institutions, as well as other valuation techniques. At September 30, 1999 and 1998, the Company had outstanding 8% convertible subordinated debentures due through 2011 with a market value of $40 and $44, compared to the related carrying value of $9 and $10, respectively. Common stock has been reserved for the conversion of these debentures (see note 9). The fair values of derivative financial instruments were not material at September 30, 1999 and 1998, and the estimated fair value of each of the Company's other classes of financial instruments approximated the related carrying value at September 30, 1999 and 1998.


41

(6) Retirement Plans

Retirement plan expense includes the following components:

                                                               U.S. Plans                   Non-U.S. Plans
                                                     -----------------------------   ----------------------------
                                                       1999       1998       1997     1999       1998       1997
                                                     -------    -------    -------   -------    -------   -------
Defined benefit plans:
 Service cost (benefits earned during the period)..  $  38.6       33.2       31.7       9.1        7.9       8.0
 Interest cost.....................................    112.5      106.1       94.3      16.9       16.4      16.3
 Expected return on plan assets....................   (161.4)    (152.2)    (134.6)    (19.0)     (17.0)    (16.0)
 Net amortization..................................      1.6       (2.3)      (3.6)      0.2        (.7)      (.1)
 Settlement gains..................................        -          -          -         -          -      (2.0)
                                                     -------    -------    -------   -------    -------   -------
   Net periodic pension (income) expense...........     (8.7)     (15.2)     (12.2)      7.2        6.6       6.2
Defined contribution and multiemployer plans.......     59.4       54.6       48.5       8.5        9.4       8.1
                                                     -------    -------    -------   -------    -------   -------
 Total retirement plan expense.....................  $  50.7       39.4       36.3      15.7       16.0      14.3
                                                     =======    =======    =======   =======    =======   =======

The reconciliations of the actuarial present value of the projected benefit obligations and of the fair value of plan assets follow:

                                                                       U.S. Plans        Non-U.S. Plans
                                                                   ------------------   ----------------
                                                                     1999      1998      1999      1998
                                                                   --------  --------   ------    ------
Benefit obligation, beginning...................................   $1,437.9   1,248.4    263.2     231.1
Service cost....................................................       38.6      25.2      8.0       7.3
Interest cost...................................................      112.5      80.3     15.2      14.3
Actuarial (gains) losses........................................      (42.8)    100.1     25.1      13.1
Benefits paid...................................................      (63.5)    (44.4)   (11.1)    (11.3)
Acquisitions/divestitures, net..................................       61.1      28.3     14.2         -
Foreign currency and other......................................        2.0         -     (8.3)      8.7
                                                                   --------  --------   ------    ------
Benefit obligation, ending......................................   $1,545.8   1,437.9    306.3     263.2
                                                                   ========  ========   ======    ======

Fair value of plan assets, beginning............................   $1,513.8   1,544.1    232.6     205.3
Actual return on plan assets....................................       78.3     (20.9)    20.1      26.9
Employer contributions..........................................       75.5       6.0      6.4       6.2
Benefits paid...................................................      (63.5)    (44.4)   (11.1)    (11.3)
Acquisitions/divestitures, net..................................       29.7      29.0     15.2         -
Foreign currency and other......................................        1.2         -     (3.5)      5.5
                                                                   --------  --------   ------    ------
Fair value of plan assets, ending...............................   $1,635.0   1,513.8    259.7     232.6
                                                                   ========  ========   ======    ======

Plan assets in excess of (less than) benefit obligation.........   $   89.2      75.9    (46.6)    (30.6)
Unamortized transition amount...................................      (22.0)    (29.2)    (1.6)     (2.0)
Unrecognized net loss (gain)....................................      127.5      89.3    (10.8)    (32.4)
Unrecognized prior service costs................................       20.4      23.7      2.9       1.6
Adjustment for fourth quarter contributions.....................         .6       1.7       .5         -
                                                                   --------  --------   ------    ------
 Net pension asset (liability) recognized in the balance sheet..   $  215.7     161.4    (55.6)    (63.4)
                                                                   ========  ========   ======    ======

Weighted average assumptions:
 Discount rate..................................................       7.75%     7.50%     6.1%      6.8%
 Expected return on plan assets.................................      10.50%    10.50%     8.5%      8.6%
 Rate of compensation increase..................................       4.25%     4.00%     3.3%      3.7%

At September 30, 1999 and 1998, the pension assets recognized in the balance sheet were $271.3 and $205.9 and the pension liabilities recognized in the balance sheet were $111.2 and $107.9, respectively. The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the retirement plans with accumulated benefit obligations in excess of plan assets were $380.6, $353.5, and $208.6, respectively, as of September 30, 1999, and $301.0, $284.6, and $160.9, respectively, as of September 30, 1998.


42

In 1998, the Company changed the measurement date for the defined benefit pension plans from September 30 to June 30 to improve administrative efficiencies and the timeliness and accuracy of its financial reporting and planning process. The effect of the change on retirement plan expense was immaterial. The fair value of plan assets decreased approximately $145 in the quarter ended September 30, 1998, reflecting the impact of the equity market decline; this change was offset by an increase in the unrecognized net loss. The 1998 reconciliations of benefit obligations and of the fair value of plan assets include nine months of activity.

(7) Postretirement Plans

The Company sponsors unfunded postretirement benefit plans (primarily health care) for U.S. retirees and their dependents. Net postretirement plan expense for the years ended September 30, 1999, 1998 and 1997, follows:

                                                                            1999     1998    1997
                                                                           ------   ------  ------
Service cost...........................................................    $  4.5      4.1     3.6
Interest cost..........................................................      21.6     20.2    19.0
Net amortization.......................................................      (3.1)    (3.6)   (4.2)
                                                                           ------   ------  ------
 Net postretirement plan expense.......................................    $ 23.0     20.7    18.4
                                                                           ======   ======  ======

The reconciliations of the actuarial present value of accumulated postretirement benefit obligations follow:

                                                                            1999     1998
                                                                           ------   ------
Benefit obligation, beginning..........................................    $279.6    260.0
Service cost...........................................................       4.5      4.1
Interest cost..........................................................      21.6     20.2
Actuarial losses.......................................................       6.0     12.8
Benefits paid..........................................................     (20.4)   (20.3)
Acquisitions/divestitures and other....................................      21.8      2.8
                                                                           ------   ------
Benefit obligation, ending.............................................     313.1    279.6
Unrecognized net gain..................................................      17.8     25.0
Unrecognized prior service benefit.....................................       5.9      8.2
                                                                           ------   ------
 Postretirement benefit liability recognized in the balance sheet......    $336.8    312.8
                                                                           ======   ======

The assumed discount rates used in measuring the obligations as of September 30, 1999 and 1998, were 7.5 percent and 7.25 percent, respectively. The assumed health care cost trend rate for 2000 was 6.5 percent, declining to 4.5 percent in the year 2004. A one-percentage-point increase or decrease in the assumed health care cost trend rate for each year would increase or decrease the obligation as of September 30, 1999, and the 1999 postretirement plan expense by less than 5 percent.

(8) Earnings Per Common Share

Basic earnings per common share consider only the weighted average of common shares outstanding while diluted earnings per common share consider the dilutive effects of stock options, incentive shares and convertible securities. Reconciliations of basic earnings per common share and diluted earnings per common share follow (shares in millions):

                                  1999                             1998                             1997
                    --------------------------------  -------------------------------  -------------------------------
                                Weighted    Earnings             Weighted    Earnings             Weighted    Earnings
                                 Average      Per                 Average      Per                 Average      Per
                    Earnings     Shares      Share    Earnings    Shares      Share    Earnings    Shares      Share
                    --------    --------    --------  --------   --------    --------  --------   --------    --------
Basic.............  $1,313.6       433.8    $   3.03  $1,228.6      439.2    $   2.80  $1,121.9      445.0    $   2.52
                                            ========                         ========                         ========
Convertible debt..        .5          .7                    .6         .9                    .9        1.3
Stock plans.......                   3.9                              4.0                              3.2
                    --------    --------              --------   --------              --------   --------
Diluted...........  $1,314.1       438.4    $   3.00  $1,229.2      444.1    $   2.77  $1,122.8      449.5    $   2.50
                    ========    ========    ========  ========   ========    ========  ========   ========    ========


43

(9) Common Stock

The Company has various stock option plans that permit certain officers and employees to purchase common stock at specified prices. Options are granted at 100 percent of the market value of the Company's common stock on the date of grant, generally vest one-third each year and expire ten years from the date of grant. At September 30, 1999, 5.4 million options were available for grant under these plans. Changes in the number of shares subject to option during 1999, 1998 and 1997, follow (shares in thousands):

                                                                    1999                     1998                     1997
                                                            --------------------     --------------------     --------------------
                                                            Average                  Average                  Average
                                                             Price        Shares      Price        Shares      Price        Shares
                                                            -------       ------     -------       ------     -------       ------
Beginning of year........................................    $39.02        6,608      $34.77        6,698      $25.47        4,523
 Options granted.........................................     54.95        3,026       57.71          974       45.09        3,398
 Assumed options of acquired company.....................     34.02           71       26.08          330           -            -
 Options exercised.......................................     29.29       (1,025)      25.91       (1,198)      22.55         (794)
 Options canceled........................................     55.25         (176)      45.23         (196)      41.02         (429)
                                                                          ------                   ------                   ------
End of year..............................................     45.48        8,504       39.02        6,608       34.77        6,698
                                                                          ======                   ======                   ======
Exercisable at year end..................................                  3,952                    3,479                    2,727
                                                                          ======                   ======                   ======

Summarized information regarding stock options outstanding and exercisable at September 30, 1999, follows (shares in thousands):

                                                                        Outstanding                             Exercisable
                                                            -------------------------------------          ----------------------
   Range of                                                               Average         Average                         Average
Exercise Prices                                             Shares    Contractual Life     Price           Shares          Price
---------------                                             ------    ----------------    -------          ------         -------
 up to $25...............................................      554           1.8 years     $16.91             554          $16.91
 $26 to 43...............................................    1,495           5.0            31.15           1,442           31.00
 $44 to 65...............................................    6,455           8.2            51.25           1,956           46.96
                                                            ------                                         ------
     Total...............................................    8,504           7.3            45.48           3,952           36.92
                                                            ======                                         ======

The Company's Incentive Shares Plans authorize the distribution of common stock to key management personnel. At September 30, 1999, 1,916,549 shares are outstanding with restriction periods of three to ten years, including 59,500 shares issued in 1999. In addition, 2,292,440 rights to receive common shares have been awarded, including 57,147 shares awarded in 1999, which are contingent upon accomplishing certain objectives by 2001. At September 30, 1999, approximately 6 million shares remained available for award under these plans.

The Company applies Accounting Principles Board Opinion No. 25 in accounting for its stock plans. The compensation expense charged against income for the Company's incentive shares plans was immaterial. Had compensation expense for the Company's stock plans been determined in accordance with Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation," net earnings and diluted earnings per common share, respectively, would have been $1,293 and $2.95 per share in 1999, $1,215 and $2.74 per share in 1998, and $1,110 and $2.47 per share in 1997. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants: risk- free interest rate of 4.7 percent, 5.7 percent and 6.4 percent, dividend yield of 2.1 percent, 2.0 percent and 2.4 percent, expected volatility of 17 percent, 16 percent and 16 percent for 1999, 1998 and 1997, respectively, and expected life of 5 years for all years. The weighted average fair value of options granted was $10.38, $12.01 and $9.46 for 1999, 1998 and 1997, respectively.

At September 30, 1999, 22,834,153 shares of common stock were reserved, including 22,201,609 shares for issuance under the Company's stock plans and 632,544 shares for conversion of the outstanding 8% convertible subordinated debentures at a price of $13.49 per share. During 1999, 6,097,200 treasury shares were acquired, and 917,315 treasury shares were issued.

Approximately 1.2 million preferred shares are reserved for issuance under a Preferred Stock Purchase Rights Plan. Under certain conditions involving acquisition of or an offer for 20 percent or more of the Company's common stock, all holders of Rights, except an acquiring entity, would be entitled (i) to purchase, at an exercise price of $260, common stock of the Company or an acquiring entity with a value twice the exercise price, or (ii) at the option of the Board, to exchange each Right for one share of common stock. The Rights remain in existence until November 1, 2008, unless earlier redeemed (at one-half cent per Right), exercised or exchanged under the terms of the plan.


44

(10) Income Taxes

Income before income taxes consists of the following:

                                                                                                        1999      1998      1997
                                                                                                      --------   -------   -------
United States......................................................................................   $1,567.7   1,496.4   1,357.1
Non-U.S............................................................................................      453.2     427.1     426.5
                                                                                                      --------   -------   -------
 Income before income taxes........................................................................   $2,020.9   1,923.5   1,783.6
                                                                                                      ========   =======   =======
The principal components of income tax expense follow:
                                                                                                        1999       1998      1997
                                                                                                      --------   -------   -------
Federal:
 Current...........................................................................................   $  417.3     453.4     447.8
 Deferred..........................................................................................       77.5      35.9      10.1
State and local....................................................................................       49.8      51.4      48.2
Non-U.S............................................................................................      162.7     154.2     155.6
                                                                                                      --------   -------   -------
 Income tax expense................................................................................   $  707.3     694.9     661.7
                                                                                                      ========   =======   =======


The federal corporate statutory rate is reconciled to the Company's effective income tax rate as
 follows:
                                                                                                        1999       1998      1997
                                                                                                      --------   -------   -------
Federal corporate statutory rate...................................................................       35.0%     35.0%     35.0%
 State and local taxes, less federal tax benefit...................................................        1.6       1.7       1.8
 Foreign Sales Corporation benefit and other.......................................................       (1.6)      (.6)       .3
                                                                                                      --------   -------   -------
Effective income tax rate..........................................................................       35.0%     36.1%     37.1%
                                                                                                      ========   =======   =======

The principal components of deferred tax assets (liabilities) follow:

                                                                                                         1999     1998
                                                                                                      ---------  -------
Property, plant and equipment and intangibles......................................................   $ (357.0)   (344.1)
Leveraged leases...................................................................................     (181.0)   (185.4)
Pension............................................................................................      (92.9)    (69.3)
Accrued liabilities................................................................................      249.5     255.9
Postretirement and postemployment benefits.........................................................      145.1     129.1
Employee compensation and benefits.................................................................      109.1      99.4
Other..............................................................................................       81.6      84.0
                                                                                                      --------   -------
 Total deferred tax assets (liabilities)...........................................................   $  (45.6)    (30.4)
                                                                                                      ========   =======

At September 30, 1999 and 1998, respectively, net current deferred tax assets were $261.7 and $248.3, and net noncurrent deferred tax liabilities were $307.3 and $278.7. Total income taxes paid were approximately $580, $665 and $645 in 1999, 1998 and 1997, respectively.

(11) Contingent Liabilities and Commitments

At September 30, 1999, there were no known contingent liabilities (including guarantees, pending litigation, taxes and other claims) that management believes will be material in relation to the Company's financial position, nor were there any material commitments outside the normal course of business.


45

(12) Business Segment Information

The Company is engaged principally in the worldwide design, manufacture and sale of a broad range of electrical, electromechanical and electronic products and systems. In 1999, the Company adopted Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information," which establishes standards for reporting operating segments and related disclosures. The divisions of the Company are primarily organized based on the nature of the products and services provided. The Process Control segment includes measurement and analytical instrumentation, valves, control systems, and factory automation software. The Industrial Automation segment includes integral horsepower industrial motors, variable-speed and index drives, mechanical power transmission equipment, predictive maintenance systems, ultrasonic welding and cleaning, solids separation, fluid control, materials testing, and heating and lighting equipment. The Electronics and Telecommunications segment consists of uninterruptible power supplies, power conditioning equipment, environmental control systems, site monitoring systems, and electrical switching equipment. The Heating, Ventilating and Air Conditioning (HVAC) segment consists of compressors, hermetic terminals, thermostats, and valves. The Appliance and Tools segment includes fractional horsepower motors, controls, and heating elements, as well as hand, plumbing and bench power tools and accessories, and disposers. Summarized information about the Company's operations by business segment and by geographic area follows:

Business Segments                                                       Earnings Before Interest
(See note 2)                                      Sales                     and Income Taxes                Total Assets
                                         ------------------------      ------------------------     --------------------------
                                          1999     1998     1997         1999     1998    1997        1999     1998      1997
                                         -------  ------   ------      -------   -----   ------     -------   ------    ------
Process Control.......................   $ 2,878   2,684    2,645          313     343      319       3,489    2,643     2,654
Industrial Automation.................     3,380   3,346    3,084          448     431      438       3,269    3,067     2,721
Electronics and Telecommunications....     2,136   1,617    1,246          237     150      116       1,510    1,328       823
HVAC..................................     2,385   2,149    2,122          361     316      312       1,819    1,698     1,568
Appliance and Tools...................     3,533   3,440    3,060          577     561      480       2,641    2,589     2,410
                                         -------  ------   ------      -------   -----   ------     -------   ------    ------
                                          14,312  13,236   12,157        1,936   1,801    1,665      12,728   11,325    10,176
Divested businesses...................       343     557      464           29      45       50           -      531       450
Differences in accounting methods.....                                     161     156      138
Interest income, corporate and other..                                      85      74       52         896      804       837
Sales eliminations/Interest expense...      (385)   (346)    (322)        (190)   (152)    (121)
                                         -------  ------   ------      -------   -----   ------     -------   ------    ------
 Total................................   $14,270  13,447   12,299        2,021   1,924    1,784      13,624   12,660    11,463
                                         =======  ======   ======      =======   =====   ======     =======   ======    ======

                                                                         Depreciation and
                                            Intersegment Sales         Amortization Expense        Capital Expenditures
                                           ---------------------       --------------------       -----------------------
                                            1999    1998    1997       1999    1998    1997       1999     1998      1997
                                           -----    ----    ----       ----    ----    ----       ----     ----      ----
Process Control.......................     $   4       2       1        166     147     146         78       83        85
Industrial Automation.................        28      25      17        144     130     115         99      115       116
Electronics and Telecommunications....        11      16       3         59      35      28         54       42        31
HVAC..................................        30      27      26         97      86      81        177      147       155
Appliance and Tools...................       312     275     273        155     143     124        159      162       149
Divested businesses...................         -       1       2          8      14      12         17       39        21
Corporate and other...................                                    9       8       6          8       15        18
                                           -----     ---     ---        ---     ---     ---        ---      ---       ---
 Total................................     $ 385     346     322        638     563     512        592      603       575
                                           =====     ===     ===        ===     ===     ===        ===      ===       ===

The primary income measure used for assessing performance and making operating decisions is earnings before interest and income taxes. Intersegment sales approximate market prices. Accounting method differences between segment reporting and the consolidated financial statements primarily include management fees allocated to segments based on a percentage of sales and the accounting for pension and other retirement plans. Corporate assets primarily include cash and equivalents, investments, pensions, deferred charges, and certain fixed assets. Divested businesses include F.G. Wilson and other smaller businesses.

Geographic                                           Sales by Destination       Property, Plant and Equipment
                                                    ----------------------      -----------------------------
                                                     1999    1998    1997        1999       1998        1997
                                                    ------  ------  ------      ------     ------      ------
United States....................................  $ 8,557   8,102   7,091       2,312      2,120       1,980
Europe...........................................    3,064   2,869   2,647         527        627         534
Asia.............................................    1,211   1,096   1,328         205        169         138
Latin America....................................      458     484     402          88         77          65
Other regions....................................      980     896     831          22         19          18
                                                   -------  ------  ------      ------     ------      ------
 Total...........................................  $14,270  13,447  12,299       3,154      3,012       2,735
                                                   =======  ======  ======      ======     ======      ======


46

(13) Other Financial Data

Items reported in earnings during the years ended September 30, 1999, 1998 and 1997, included the following:

                                                                                                             1999      1998    1997
                                                                                                           --------   ------  ------
Depreciation and other amortization......................................................................  $  508.1    459.4   421.0
Goodwill amortization....................................................................................     129.4    103.1    90.6
Research, new product development and product improvement costs..........................................     510.3    491.3   445.1
Rent expense.............................................................................................     177.4    170.4   156.9
Interest revenue.........................................................................................      16.1     25.1    18.4

Other assets, other are summarized as follows:                                                               1999      1998
                                                                                                           --------   ------
 Equity and other investments............................................................................  $  235.1    187.9
 Retirement plans........................................................................................     271.3    205.9
 Leveraged leases........................................................................................     185.5    187.5
 Other...................................................................................................     389.8    362.9
                                                                                                           --------   ------
    Total................................................................................................  $1,081.7    944.2
                                                                                                           ========   ======

Other liabilities are summarized as follows:                                                                 1999      1998
                                                                                                           --------   ------
 Minority interest.......................................................................................  $  297.2    619.9
 Postretirement plans, excluding current portion.........................................................     313.1    292.7
 Deferred taxes..........................................................................................     333.9    306.6
 Other...................................................................................................     591.3    559.0
                                                                                                           --------  -------
    Total................................................................................................  $1,535.5  1,778.2
                                                                                                           ========  =======

Accrued expenses include employee compensation of $316.8 and $295.2 at September 30, 1999 and 1998, respectively. The Company leases computers, transportation equipment and various other property under operating lease agreements. The minimum annual rentals under noncancelable long-term leases, exclusive of maintenance, taxes, insurance and other operating costs, will approximate $83 in 2000 and decline substantially thereafter.

(14) Quarterly Financial Information (Unaudited)

Financial Results                                        Net Sales                    Gross Profit                 Net Earnings
                                                    -------------------            -------------------         -------------------
                                                      1999       1998                1999       1998             1999       1998
                                                    ---------  --------            --------   --------         --------   --------
First Quarter....................................   $ 3,426.7   3,171.5             1,215.1    1,141.7          302.4        282.3
Second Quarter...................................     3,588.7   3,382.4             1,278.9    1,222.7          325.9        307.6
Third Quarter....................................     3,634.0   3,465.2             1,294.0    1,254.1          345.1        324.8
Fourth Quarter...................................     3,620.1   3,428.1             1,287.7    1,233.1          340.2        313.9
                                                    ---------  --------            --------   --------        -------      -------
 Fiscal Year.....................................   $14,269.5  13,447.2             5,075.7    4,851.6        1,313.6      1,228.6
                                                    =========  ========            ========   ========        =======      =======

                                                     Basic Earnings per            Diluted Earnings per            Dividends per
                                                        Common Share                   Common Share                 Common Share
                                                     ------------------            --------------------            --------------
                                                      1999        1998              1999          1998             1999      1998
                                                     ------      ------            ------        ------            ----      ----
First Quarter....................................    $  .69         .64               .69           .64            .325      .295
Second Quarter...................................       .75         .70               .74           .69            .325      .295
Third Quarter....................................       .80         .74               .79           .73            .325      .295
Fourth Quarter...................................       .79         .72               .78           .71            .325      .295
                                                     ------      ------            ------        ------            ----      ----
 Fiscal Year.....................................    $ 3.03        2.80              3.00          2.77            1.30      1.18
                                                     ======      ======            ======        ======            ====      ====

See Note 2 for information regarding non-recurring items and the Company's acquisition and divestiture activities.


Stock Prices
(per common share)                                                                  1999                             1998
                                                                            --------------------               -------------------
                                                                              High         Low                   High         Low
                                                                            ---------    -------               --------    -------
First Quarter..........................................................     $66 15/16    58 5/16                58 1/4      49 3/4
Second Quarter.........................................................      65          51 7/8                 66 1/4      55 1/2
Third Quarter..........................................................      71 7/16     51 7/16                67 7/16     58 9/16
Fourth Quarter.........................................................      65 7/8      59 1/8                 63 3/4      54 1/2
 Fiscal Year...........................................................     $71 7/16     51 7/16                67 7/16     49 3/4

Emerson Electric Co. common stock (symbol EMR) is listed on the New York Stock Exchange and Chicago Stock Exchange.


47

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Emerson Electric Co.:

We have audited the accompanying consolidated balance sheets of Emerson Electric Co. and subsidiaries as of September 30, 1999 and 1998, and the related consolidated statements of earnings, stockholders' equity, and cash flows for each of the years in the three-year period ended September 30, 1999. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Emerson Electric Co. and subsidiaries as of September 30, 1999 and 1998, and the results of their operations and their cash flows for each of the years in the three-year period ended September 30, 1999, in conformity with generally accepted accounting principles.

/s/ KPMG LLP

St. Louis, Missouri
November 1, 1999


52

SAFE HARBOR STATEMENT

This Annual Report contains various forward-looking statements and includes assumptions concerning Emerson's operations, future results and prospects. These forward-looking statements are based on current expectations, are subject to risk and uncertainties and Emerson undertakes no obligation to update any such statement to reflect later developments. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, Emerson provides the following cautionary statement identifying important economic, political and technological factors, among others, the absence of which could cause the actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions.

Such factors include the following: (i) continuation of the current and projected future business environment, including interest rates and capital and consumer spending; (ii) competitive factors and competitor responses to Emerson initiatives; (iii) successful development and market introductions of anticipated new products; (iv) stability of government laws and regulations, including taxes; (v) stable governments and business conditions in emerging economies; (vi) successful penetration of emerging economies; (vii) continuation of the favorable environment to make acquisitions, domestic and foreign, including regulatory requirements and market values of candidates and
(viii) timely resolution of the Year 2000 issues by the Company, its customers and suppliers.


EXHIBIT 21

SUBSIDIARIES OF EMERSON ELECTRIC CO.

SEPTEMBER 30, 1999

                                                                Jurisdiction
                                                                    of
Legal Name                                                      Incorporation
----------                                                      -------------
ADI Control Techniques Drives, Inc.                              California
Alco Controls S.A. de C.V.                                       Mexico
Applied Concepts, Inc.                                           Pennsylvania
Astec International Holdings Limited                             UK
     Astec America Inc.                                          Delaware
          AAI Export Inc.                                        Barbados
          BI Technologies Corporation                            Delaware
               BI Technologies S.A. de C.V.                      Mexico
          ENI Technology Inc.                                    Delaware
          Emersub LXXV, Inc.                                     Delaware
     Astec America de Mexico, S.A. de C.V.                       Mexico
     Astec Electronics (Malaysia) Sdn Bhd                        Malaysia
     Astec Germany GmbH                                          Germany
     Astec International Limited                                 Hong Kong
          Astec Advanced Power Systems B.V.                      Netherlands
               Astec Advanced Power Systems Ltd.                 Canada
          Astec Advanced Power Systems Ltda.                     Brazil
          Astec Advanced Power Systems (Malaysia) Sdn Bhd        Malaysia
               Astec Advanced Power Systems (Penang) Sdn Bhd     Malaysia
          Astec Agencies Limited                                 Hong Kong
          Astec Custom Power (Hong Kong) Limited                 Hong Kong
          Astec Custom Power (Philippines) Inc.                  Philippines
          Astec Custom Power (Singapore) Pte Ltd                 Singapore
          Astec Electronics Company Limited                      China
          Astec Electronics (Luoding) Co. Ltd.                   China
          Astec Japan Limited                                    Japan
          Astec Pekan Sdn Bhd                                    Malaysia
          Astec Power Supply (Shenzhen) Co. Ltd.                 China
          BI Technologies Corporation Sdn Bhd                    Malaysia
          BI Technologies Pte Ltd.                               Singapore
          ENI Taiwan Limited                                     Taiwan
     Astec Power Inc.                                            BVI
     BI Technologies GmbH                                        Germany
     BI Technologies S.r.l.                                      Italy
     BI Technologies Japan Limited                               Japan
          ENI Japan Limited                                      Japan
     Stourbridge Holdings (UK) Limited                           UK
          BI Technologies Limited                                UK
          Brandenburg Limited                                    UK
          Mirroware Manufacturing Limited                        UK
               Astec Europe Ltd.                                 UK
                         Astec International PLC                 UK
                         Astec France S.A.R.L.                   France
                              BI Technologies S.A.R.L.           France
Branson Ultrasonic S.A.                                          Switzerland
Brooks Instrument Canada Limited                                 Canada
Buehler Ltd.                                                     Illinois
     Buehler Holdings                                            Delaware
     Wirtz-Buehler Corporation                                   Delaware
Clairson International Corp.                                     Florida
     Clairson, Inc.                                              Delaware
     Clairson de Mexico, S.A. de C.V.                            Mexico
     Clairson (Hong Kong) Limited                                Hong Kong
Commercial Cam Co., Inc.                                         Delaware
Compania de Motores Domesticos S.A. de C.V.                      Mexico
Computational Systems, Incorporated                              Tennessee
     CSI Services, Inc.                                          Tennessee
     CSI Technology, Inc.                                        Delaware
     CTL Japan                                                   Japan
     Canada Systems de Mexico                                    Mexico
     Computational Systems, Inc. Europe                          Belgium
          Data Analysis Products, N.V.                           Belgium
Controles Electromecanicos de Mexico S.A. de C.V.                Mexico
Control Techniques (USA) Inc.                                    Delaware
     Control Techniques Drives, Inc.                             Delaware
          Control Techniques Drives Limited                      Canada
Control Techniques Iberia S.A.                                   Spain
Daniel Industries, Inc.                                          Delaware
     Bettis Corporation                                          Delaware
          Bettis Canada Ltd.                                     Canada
          Bettis Electric Actuator Corporation                   Delaware
          Bettis Foreign Sales Corp.                             Barbados
          Bettis France SARL                                     France
          Bettis GmbH                                            Germany
          Bettis Holdings, Ltd.                                  UK
               Bettis UK Ltd.                                    UK
               Prime Actuator Control Systems Ltd.               UK
               Prime Actuator Control Systems UK Ltd.            UK
          Dantorque A/S                                          Denmark
               Dantorque UK Ltd.                                 UK
          Hytork Controls, Inc.                                  Delaware
          Prime Actuator Control Systems, Inc.                   Delaware
          Shafer Valve Company                                   Ohio
               Shafer Valve Company of Houston                   Texas
               Shafer Valve Company de Mexico                    Mexico
     Daniel Automation Company                                   Delaware
     Daniel de Mexico, S.A. de C.V.                              Mexico
     Daniel Industrial, Inc.                                     Delaware
     Daniel En-Fab Systems, Inc.                                 Delaware
     Daniel International Ltd.                                   UK
          Daniel Europe Ltd.                                     UK
               Spectra-Tek International Limited                 UK
                    Daniel Asia Pacific Ltd.                     Singapore
                    Greenfield (UK) Ltd.                         UK
                         Wagon Greenfield Sdn. Bhd.              Malaysia
               Spectra-Tek Holdings Ltd.                         UK
               Spectra-Tek UK Ltd.                               UK
     Daniel Measurement and Control, Inc.                        Delaware
          Daniel Industries Canada Inc.                          Canada
     Daniel Measurement Services, Inc.                           Delaware
          Metco Services, Ltd.                                   UK
     Daniel Valve Company                                        Delaware
          Oilfield Fabricating & Machine, Inc.                   Texas
     Danmasa S.A. de C.V.                                        Mexico
     Hytork International plc                                    UK
          Hytork Controls, Inc.                                  Florida
          Hytork Controls Ltd.                                   UK
          Hytork Controls (Australia) Pty. Ltd.                  Australia
          Hytork LLC                                             Delaware
          Hytork Services Limited                                UK
          Valcon Limited                                         UK
Digital Appliance Controls Manufacturing (Singapore) Pte Ltd.    Singapore
     DACM SDN BHD                                                Malaysia
EECO, Inc.                                                       Delaware
     Apple JV Holding Corp.                                      Delaware
          EGS Electrical Group LLC                               Delaware
               Appleton Electric LLC                             Delaware
                    Appleton Electric, S.A. de C.V.              Mexico
                    Appleton Holding Corp.                       Delaware
                         EGS Electrical Group Canada Ltd.        Canada
                         Easy Heat Ltd.                          Canada
                EGS Holding S.A.R.L.                             France
                    ATX S.A.                                     France
               Easy Heat, Inc.                                   Delaware
               GSEG LLC                                          Delaware
                    O-Z Gedney LLC                               Delaware
               Easy Heat Holding B.V.                            Netherlands
                    Easy Heat Europe B.V.                        Netherlands
                         Easy Heat Polska Sp. z.o.o.             Poland
     Conameter Corporation                                       New Jersey
     Copeland Corporation                                        Delaware
          CDP International, Inc.                                Delaware
          Computer Process Controls, Inc.                        Georgia
          Copeland Access +, Inc.                                Delaware
          CopelandBitzer L.P.                                    Delaware
          CopelandBitzer Management LLC                          Delaware
          Copeland de Mexico S.A. de C.V.                        Mexico
          Copeland Redevelopment Corporation                     Missouri
          Newcope, Inc.                                          Delaware
     Electro-Test, Inc.                                          California
     El-O-Matic USA, Inc.                                        Delaware
     Emerson Electric (U.S.) Holding Corporation                 Delaware
          Automatic Switch Company                               Delaware
               Asco Investment Corp.                             New Jersey
                    Angar Scientific Company, Inc.               New Jersey
                    Asco Controls A.G.                           Switzerland
                         Asco Controls B.V.                      Netherlands
                              Asco Mideast B.V.                  Netherlands
                              Asco Magnesszelep Kft.             Hungary
                              Asco/Joucomatic SP. z.o.o.         Poland
                              Asco/Joucomatic Czech Republic     Czech Republic
                              Asco/Joucomatic Zuid Afrika B.V.   Netherlands
                    Asco Electrical Products Co., Inc.           New Jersey
                    Ascomation Pty. Ltd.                         Australia
                         Ascomation (NZ) Limited                 New Zealand
                    Asco Sweden AB                               Sweden
               Asco (Japan) Company Ltd.                         Japan
               Asco Services, Inc.                               New Jersey
               ASCO Valve Enterprises LLC                        Delaware
               ASCO Valve Investment, Inc.                       Delaware
                    ASCO Valve, L.P.                             Delaware
               ASCO Valve Manufacturing, Inc.                    Delaware
               ASCO Valve Sales, Inc.                            Delaware
               Ascomatica S.A. de C.V.                           Mexico
               Ascoval Industria E Commercio Ltda.               Brazil
               Firetrol, Inc.                                    North Carolina
               Joucomatic Controls, Inc.                         North Carolina
          Branson Ultrasonics Corporation                        Delaware
               American Technology, Inc.                         Connecticut
                    Amtech S.a.r.L.                              France
               Branson Korea Co., Inc.                           Korea
               Branson Ultrasonics S.A.                          Sweden
               Branson Ultrasonidos S.A.E.                       Spain
               Branson Ultrasons S.A.                            France
                    Krautkramer France S.A.                      France
          Camco Vertriebs-GmbH                                   Germany
               Camco Vertriebs-GmbH & Co.                        Germany
          Chromalox GmbH                                         Germany
          Copeland GmbH                                          Germany
               Copeland France S.A.                              France
               Copeland Corporation Limited                      UK
               Copeland Italia S.a.R.l.                          Italy
               Copeland Iberica CIB S.A.                         Spain
               Copeland Refrigeration Europe S.A.                Belgium
               Copeland S.A.                                     Belgium
          El-O-Matic GmbH                                        Germany
          Emerson Electric GmbH                                  Germany
               Emerson Electric GmbH & Co.                       Germany
          Emerson Electric Overseas Finance Corp.                Delaware
               Emerson Electric de Colombia, LTDA                Colombia
               Motores U.S. de Mexico, S.A. de C.V.              Mexico
                    U.S.E.M. de Mexico S.A. de C.V.              Mexico
          Emerson Technologies Verwaltungs GmbH                  Germany
               AmTech American Technologies GmbH & Co.           Germany
               Emerson Technologies GmbH & Co.                   Germany
          Fisher-Rosemount GmbH                                  Germany
               Fisher-Rosemount GmbH & Co.                       Germany
          Heraeus Sensor GmbH                                    Germany
          KVT Technologies, GmbH                                 Germany
               KVT Technologies GmbH & Co.                       Germany
          Krautkramer GmbH                                       Germany
               Krautkramer GmbH & Co.                            Germany
          Liebert GmbH                                           Germany
               Liebert A.G.                                      Switzerland
          PEPT Investment Corporation                            Delaware
               Skil Europe Corporation                           Delaware
          Reglerwerk Dresden GmbH                                Germany
          Ridge Tool GmbH                                        Germany
               Ridge Tool GmbH & Co.                             Germany
                    RIDGID Peddinghaus Werkzeug GmbH             Germany
          Rosemount Inc.                                         Minnesota
               Dieterich Standard, Inc.                          Delaware
               Dieterich Technology Holding Corp.                Delaware
               Fisher-Rosemount AB                               Sweden
               Fisher-Rosemount AS (Norway)                      Norway
               Fisher-Rosemount, S.A.                            Spain
                    Rosemount Portugal Instrumentos Lda.         Portugal
               Fisher-Rosemount Holding AG                       Switzerland
                    Fisher-Rosemount AG                          Switzerland
                              Fisher Rosemount Proses Kontrol
                               Ticaret Limited Sirketi           Turkey
                              Fisher-Rosemount Sro               Czech Republic
                    Fisher-Rosemount A/S                         Denmark
                    Fisher-Rosemount Ges. M.B.H.                 Austria
                         Westinghouse Electric GES m.b.H.        Austria
                    Rosemount Poland Ltd.                        Poland
                         Westinghouse Electric Poland Sp. z.o.o. Poland
                    Westinghouse Process Control (Asia) S.A.     Switzerland
               Fisher-Rosemount Instruments Pty. Ltd.            Australia
                    Emerson Electric Australia Co. Pty. Ltd.     Australia
                    Fisher-Rosemount Ltd.                        New Zealand
               Fisher-Rosemount Japan Co. Ltd.                   Japan
               Fisher-Rosemount Korea Ltd.                       Korea
               Fisher-Rosemount Middle East, Inc.                Delaware
               Fisher-Rosemount Singapore Private Limited        Singapore
                    Fisher-Rosemount Manufacturing (M) SDN BHD   Malaysia
                    Rosemount Shanghai International Trade
                     Co. Ltd.                                    China
                    Westinghouse Electric (Singapore) Ltd.       Singapore
               Fisher-Rosemount Taiwan, Ltd.                     Taiwan
                    Rosemount Instruments Corporation            BVI
               P I Components Corp.                              Texas
               Rosemount Analytical Inc.                         Delaware
               Rosemount China Inc.                              Minnesota
               Rosemount Nuclear Instruments, Inc.               Delaware
               Rosemount Shanghai Co. Ltd.                       China
               Tekmar Company                                    Ohio
          Wirtz-Buehler GmbH                                     Germany
          Xomox Corporation                                      Ohio
               Fisher-Rosemount do Brasil
                Industria e Comercio Ltda.                       Brazil
               Fisher-Rosemount S.A. de C.V.                     Mexico
               Flow Technology, Inc. (Taiwan)                    Ohio
               Flow Technology S.A. de C.V.                      Mexico
               Xomox France S.A.                                 France
               Xomox A.G.                                        Switzerland
               Xomox Chihuahua S.A. de C.V.                      Mexico
               Xomox Corporation de Venezuela, C.A.              Venezuela
               Xomox South America S.A.                          Uruguay
               Xomox Uruguay S.A.                                Uruguay
          Xomox International GmbH                               Germany
               Xomox International GmbH & Co.                    Germany
                    Pfannenschmidt GmbH                          Germany
     Emerson Power Transmission Corporation                      Delaware
          Emerson Chain, Inc.                                    Delaware
          Emerson Motion Control, Inc.                           Minnesota
          Emerson Power Transmission Drives and
           Components, Inc.                                      Delaware
          Emerson Power Transmission Ithaca, Inc.                Delaware
          McGill Manufacturing Company, Inc.                     Indiana
               Emerson Power Transmission Bearings, Inc.         Delaware
                    Emerson Power Transmissions
                     Manufacturing, L.P.                         Missouri
               Emersub LXXII, Inc.                               Delaware
               McGill International, Inc.                        Taiwan
     Environmental Remediation Management, Inc.                  Delaware
     Krautkramer-Branson, Incorporated                           Connecticut
     Liebert Corporation                                         Ohio
          Control Concepts Corporation                           Delaware
          Computersite-Preparations, Inc.                        Ohio
          Global Energy Services, Inc.                           Delaware
          Liebert Asia Ltd.                                      Hong Kong
               Wuhan Liebert Computer Power Support System
                Limited                                          China
          Liebert Corporation Australia Pty, Ltd.                Australia
               Atlas Air Australia Pty. Ltd.                     Australia
               Rougemont Enterprises Pte. Ltd.                   Singapore
          Liebert Far East Pte. Ltd.                             Singapore
               Atlas Air (S.E.A.) Pte Ltd.                       Singapore
               Liebert (Malaysia) Sdn. Bhd.                      Malaysia
          Liebert Field Services, Inc.                           Delaware
          Liebert Global Services, Inc.                          Delaware
          Liebert International B.V.                             Netherlands
          Liebert North America, Inc.                            Delaware
          Liebert Property Holdings, LLC                         Delaware
          Liebert Tecnologia Ltda.                               Brazil
          Liebert (Thailand) Co. Ltd.                            Thailand
          Northeast Electrical Testing, Inc.                     Delaware
     Micro Motion, Inc.                                          Colorado
     Ridge Tool Company                                          Ohio
          Emerson Electric SRL                                   Italy
          Ridge Tool (Australia) Pty., Ltd.                      Australia
          Ridge Tool Manufacturing Company                       Delaware
          Ridge Tool Pattern Company                             Delaware
          Ridge Werkzeuge AG                                     Switzerland
          Ridgid, Inc.                                           Delaware
     Therm-O-Disc, Incorporated                                  Ohio
          Componentes Avanzados de Mexico, S.A. de C.V.          Mexico
          Controles de Temperatura S.A. de C.V.                  Mexico
E.G.P. Corporation                                               Delaware
Electronic Control Systems, Inc.                                 West Virginia
     Fairmont Building and Investment Corp.                      West Virginia
Emermex S.A. de C.V.                                             Mexico
Emerson Electric (Asia) Limited                                  Hong Kong
     Branson Ultrasonics (Asia Pacific) Co. Ltd.                 Hong Kong
     Emerson Electric (South Asia/Pacific) Pte. Ltd.             Singapore
Emerson Electric II, C.A.                                        Venezuela
     Emerson Electric, C.A.                                      Venezuela
Emerson Electric Foreign Sales Corporation                       Virgin Islands
Emerson Electric International, Inc.                             Delaware
Emerson Electric Ireland Ltd.                                    Bermuda
     Emersub Treasury Ireland                                    Ireland
Emerson Electric (Mauritius) Ltd.                                India
     Emerson Electric Company India Private Ltd.                 India
     Westinghouse Electric Private Ltd. (India)                  India
     Westinghouse Electric Private Ltd. (Mauritius)              India
Emerson Electric Nederland B.V.                                  Netherlands
     Branson Ultrasonics B.V.                                    Netherlands
     Beckman Industrial B.V.                                     Netherlands
     Brooks Instrument B.V.                                      Netherlands
          Emerson Computer Power B.V.                            Netherlands
     Capax Electrische Apparatenfabriek B.V.                     Netherlands
     Crouzet Appliance Controls D.O.O.                           Slovenia
     Emerson Electric RG                                         Russia
     Emerson Electric Slovakia Limited                           Slovakia
     Vuma a.s.                                                   Czech Republic
     Emerson Electric, SpoL, s.r.o.                              Czech Republic
     Fisher-Rosemount B.V.                                       Netherlands
          Fisher-Rosemount Manufacturing B.V.                    Netherlands
     Fisher-Rosemount Temperature B.V.                           Netherlands
     Fusite, B.V.                                                Netherlands
     New-Tech Cuijk B.V.                                         Netherlands
          El-O-Matic B.V.                                        Netherlands
               El-O-Matic Valve Actuators (F.E.) Pte. Ltd.       Singapore
               El-O-Matic S.A. (Proprietary) Ltd.                South Africa
                    Va-con (Pty.) Ltd.                           South Africa
     Therm-O-Disc Europe B.V.                                    Netherlands
Emerson Electric Puerto Rico, Inc.                               Delaware
     Emerson Puerto Rico, Inc.                                   Delaware
Emerson Electric (Taiwan) Company Limited                        Taiwan
Emerson Finance Co.                                              Delaware
     Emersub XIX, Inc.                                           Delaware
Emerson Global Finance Company                                   Missouri
Emerson Middle East, Inc.                                        Delaware
Emerson Pacific Pte. Ltd.                                        Singapore
Emerson Sice S.p.A.                                              Italy
     Branson Ultrasuoni S.P.A.                                   Italy
     C.E. Set S.R.L.                                             Italy
          CODI S.p.A.                                            Italy
          Plaset, S.p.A.                                         Italy
     Fisher-Rosemount Italia S.R.L.                              Italy
     Hiross Holding AG                                           Austria
          Hiross International Corporation BV                    Netherlands
               Hiross Management SA                              Switzerland
          Hiross S.p.A.                                          Italy
               Hiross AG                                         Switzerland
               Hiross Ltd.                                       UK
               Hiross SA                                         France
               Hiross Austria GmbH                               Austria
                    Hiross Hungaria Kft                          Hungary
               Hiross Batliboi Ltd.                              India
               Hiross Deutschland GmbH                           Germany
               Hiross Flexible Space System S.r.l.               Italy
               Mecanotronic GmbH                                 Austria
     Suvretta S.p.A.                                             Italy
          Sirai Elettromeccanica s.r.l.                          Italy
               Sirai Deutschland GmbH                            Germany
     Xomox Italia S.R.L.                                         Italy
Emersub XLIII, Inc.                                              Ohio
Emersub XLV, Inc.                                                Delaware
     Valycontrol, S.A. de C.V.                                   Mexico
          Filcore, Inc.                                          Texas
Emersub XLVI, Inc.                                               Nevada
     Wilson Investment 2, Inc.                                   Delaware
     Copesub, Inc.                                               Delaware
          Alliance Compressors LLC                               Delaware
Emersub LII, Inc.                                                Delaware
Emersub LIV, Inc.                                                Delaware
Emersub LXVI, Inc.                                               Nevada
Emersub LXXIII, Inc.                                             Illinois
Emersub LXXVI, Inc.                                              Delaware
     Lipe-Rollway Corporation                                    New York
          Lipe-Rollway International Ltd.                        Delaware
               Lipe-Rollway Australia Pty. Ltd.                  Australia
               Lipe-Rollway de Mexico, S.A. de C.V.              Mexico
               Lipe-Rollway Deutschland GmbH                     Germany
               Lipe-Rollway N.V.                                 Belgium
Emersub LXXVIII, Inc.                                            Delaware
Emersub LXXIX, Inc.                                              Delaware
Emersub LXXX, Inc.                                               Delaware
Emersub LXXXIV, Inc.                                             Delaware
Emersub LXXXV, Inc.                                              Delaware
Emersub LXXXVI, Inc.                                             Delaware
Emersub LXXXVII, Inc.                                            Delaware
Emersub LXXXVIII, Inc.                                           Delaware
Emsub, Inc.                                                      Delaware
EMR Foundation, Inc.                                             Delaware
EMR Holdings, Inc.                                               Delaware
     Branson de Mexico, S.A. de C.V.                             Mexico
     Copeland Compresores Hermeticos, S.A. de C.V.               Mexico
     Copeland Korea, Inc.                                        Korea
     Digital Appliance Controls, S.A. de C.V.                    Mexico
     EMR Manufacturing (M) Sdn Bhd                               Malaysia
     Emerson Argentina S.A.                                      Argentina
     Emerson Electric Canada Limited                             Canada
          Ascolectric Limited                                    Canada
               Ascolectric Brantford Ltd.                        Canada
          Fisher Controls Inc. (Controles Fisher Inc.)           Canada
          Fisher-Rosemount Instruments Ltd.                      Canada
          KVT Technologies, Inc.                                 Canada
          Tech-Met Canada Limited                                Canada
          Thermo-O-Disc (Canada) Limited                         Canada
          Xomox Canada Ltd.                                      Canada
     Emerson Electric Chile Ltda.                                Chile
     Emerson Electric (China) Holdings Ltd.                      China
          Beijing Rosemount Far East Instrument Co., Ltd.        China
          Clairson (Jiangmen) Storage Limited                    China
          Emerson Electric (Suzhou) Co. Ltd.                     China
          Emerson Electric (Tianjin) Co., Ltd.                   China
          Emerson Engineering System (Shanghai) Co., Limited     China
          Emerson Electric (Shenzhen) Co., Limited               China
          Emerson Machinery & Equipment (Shenzhen) Co. Ltd.      China
          Emerson Trading (Shanghai) Co. Ltd.                    China
          Emerson Fusite Electric (Shenzhen) Co. Ltd.            China
          Emerson White-Rodgers Electric (Xiamen) Co., Ltd.      China
          Ridge Tool (Hangzhou) Co., Ltd.                        China
          Shanghai Branson Ultrasonics Co., Ltd.                 China
          Shenyang Copeland Refrigeration Co., Ltd.              China
     Emerson Electric de Mexico S.A. de C.V.                     Mexico
          Ascotech, S.A. de C.V.                                 Mexico
          Motores Reynosa, S.A. de C.V.                          Mexico
     Emerson Electric do Brasil Ltda.                            Brazil
          Copeland do Brasil Ltda.                               Brazil
     Emerson Electric Hungary Ltd.                               Hungary
     Emerson Electric Korea Ltd.                                 Korea
     Emerson Electric (M) SDN BHD                                Malaysia
     Emerson Electric Poland Sp. z.o.o.                          Poland
     Emerson Electric (Thailand) Limited                         Thailand
     Emerson Europe S.A.                                         France
          Asco Joucomatic S.A.                                   France
               Asco Joucomatic GmbH                              Germany
                    Asco Joucomatic GmbH & Co.                   Germany
               Joucomatic Controls Pty. Limited                  Australia
               Asco Joucomatic S.p.A.                            Italy
               Asco Joucomatic N.V.                              Belgium
               Fluidocontrol S.A.                                Spain
               Sotrac S.r.l.                                     Italy
          Crouzet Appliance Controls S.A.                        France
               Crouzet Appliance Controls SpA                    Italy
          Francel S.A.                                           France
               CD GAZ Systemes S.A.                              France
          Leroy-Somer S.A.                                       France
               Bertrand Polico S.A.                              France
               Comercial Leroy-Somer Ltda.                       Chile
               Constructions Electriques DeBeaucourt S.A.S.      France
               Electronique du Sud-Quest S.A.                    France
                    Atelier de Bobinage de Moteurs Electriques
                     S.a.r.L.                                    France
                    Diffusion Mecanique Electricite S.A.         France
                    Electro Maintenance Courbon S.A.             France
                    Etablissements Belzon & Richardot S.A.R.L.   France
                    Etablissements de Cocard S.A.                France
                    Etablissements J. Michel S.A.R.L.            France
                    Etablissements Suder et Fils S.A.R.L.        France
                    Houssin S.A.R.L.                             France
                    Leroy-Somer Canada Ltd.                      Canada
                    Lorraine Services Electrique Electronique
                     Electromecanique S.a.r.l.                   France
                    M.I.S. Kerebel Provence S.A.R.L.             France
                    M.I.S. Poitouraine S.A.R.L.                  France
                    M.I.S. SPIRE S.A.R.L.                        France
                    M.L.S. Holice Spol. s.r.o.                   Czech Republic
                    Maintenance Industrie Service S.a.r.L.       France
                    Maintenance Industrie Service Flandres SARL  France
                    Maintenance Industrie Services Rennes
                     S.a.r.L.                                    France
                    Maintenance Industrie Services Rhone-Alpes
                     S.A.R.L.                                    France
                    Maintenance Industrie Services Toulouse
                     S.a.r.L.                                    France
                    Marcel Oury S.A.R.L.                         France
                    MEZIERES S.A.R.L.                            France
                    Navarre Services S.A.R.L.                    France
                    Ouest Electro Service S.A.R.L.               France
                    Poteau Moderne du Sud-Ouest S.A.             France
                    Radiel Bobinage S.A.R.L.                     France
                    Societe Nouvelle Paillet Services S.A.R.L.   France
                    Societe Nouvelle Silvain S.A.R.L.            France
                    Societe DeReparation Electro-Mecanique
                     S.A.R.L.                                    France
                    Sud Bobinage S.A.R.L.                        France
                    Viet Services S.A.R.L.                       France
               Etablissements Sevenier S.A.                      France
               Etablissements Trepeau S.A.                       France
               Girard Transmissions S.A.                         France
               IMI Kft                                           Hungary
               La Francaise de Manutention S.A.                  France
               Leroy-Somer AB                                    Sweden
               Leroy-Somer A/S                                   Denmark
               Leroy-Somer A/S                                   Norway
               Leroy-Somer BV                                    Netherlands
               Leroy-Somer Elektroantriebe GmbH                  Austria
               Leroy-Somer Elektromotoren GmbH                   Germany
               Leroy-Somer Ltd.                                  UK
               Leroy-Somer Maroc S.A.                            Morocco
               Leroy-Somer Motores E Sistemas Electromecanicos
                Ltda.                                            Portugal
               Leroy-Somer N.V.                                  Belgium
               Leroy-Somer OY                                    Finland
               Leroy-Somer Pty. Ltd.                             South Africa
               Leroy-Somer (Pty) Ltd.                            Australia
               Leroy-Somer S.A.                                  Switzerland
               Leroy-Somer S.A.                                  Spain
               Leroy-Somer (SEA) Pte. Ltd.                       Singapore
               Leroy-Somer S.p.A.                                Italy
               Maintenance Industrielle de Vierzon S.A.          France
               MLS Industries Inc.                               Delaware
                    Yorba Linda International Inc.               Delaware
               Motadour S.A.                                     France
               Moteurs Leroy-Somer S.A.                          France
               Moteurs Patay S.A.                                France
               Societe Anonyme de Mecanique et D'outillage du
                Vivarais S.A.                                    France
               Societe Commerciale des Ateliers de Constructions
                Electriques Dorleans S.A.                        France
               Societe Confolentaise de Metalurgie S.A.          France
               Societe de Mecanique et D'Electrothermie des
                Pays de L'Adour S.A.                             France
          Liebert France S.A.                                    France
          Ridgid France S.A.                                     France
     Emerson Holding AG                                          Switzerland
          Fisher-Rosemount Europe Middle East & Africa GmbH      Switzerland
          Fisher-Rosemount Systems GmbH                          Switzerland
     Emerson Laminaciones de Acero de Monterrey, S.A. de C.V.    Mexico
     Emersub Mexico, Inc.                                        Nevada
          Emersub 1 LLC                                          Delaware
          Intermetro de Mexico, S. de R.L. de C.V.               Mexico
     Emersub XXXVI, Inc.                                         Delaware
          Digital Appliance Controls (UK) Limited                UK
               Control Techniques Ltd.                           UK
                    Control Techniques (Holding) GmbH            Germany
                         Control Techniques GmbH                 Germany
                         INAG Industrielle Antriebs-systeme
                          GmbH                                   Germany
                         Reta Anlagenbau GmbH                    Germany
                         Reta Elektronic GmbH                    Germany
                    Control Techniques Asia-Pacific Pte. Ltd.    Singapore
                         Control Techniques Drives (Malaysia)
                          Sdn Bhd                                Malaysia
                         Control Techniques Singapore Pte
                          Limited                                Singapore
                         Control Techniques (Thailand) Limited   Thailand
                         PT Kontrol Teknik Indonesia             Indonesia
                    Control Techniques Australia Pty Ltd.        Australia
                    Control Techniques Bermuda Limited           Bermuda
                    Control Techniques Drives Limited            UK
                         K.T.K. (Newton) Limited                 UK
                    Control Techniques Dynamics Limited          UK
                         Evershed Powerotor Limited              UK
                         Moore Reed & Company Limited            UK
                    Control Techniques Italia srl                Italy
                    Control Techniques Precision Systems
                     Limited                                     UK
                    Control Techniques SKS Oy                    Finland
                         Dynamec KY                              Finland
                         Mechatronics OY                         Finland
                         Sofftpoint KY                           Finland
                    Control Techniques SpA                       Italy
                    Control Techniques Sweden AB                 Sweden
                    Control Techniques Worldwide BV              Netherlands
                         Control Technika Kft.                   Hungary
                    Control Techniques Automation BV             Netherlands
                    Control Techniques BV                        Netherlands
                    Control Techniques Brno s.r.o.               Czech Republic
                    Control Techniques China Pte. Ltd.           Hong Kong
                    Control Techniques Denmark A/S               Denmark
                    Control Techniques Elpro Automation Limited  India
                    Control Techniques Endustriyel Control
                     Sistemieri Sanayii Ve Ticaret A.S.          Turkey
                    Control Techniques GesbmH                    Austria
                    Control Techniques India Limited             India
                    Control Techniques Norway A/S                Norway
                    Control Techniques NV/SA                     Belgium
                    Control Techniques Vietnam Limited           Vietnam
                    CTS Control Techniques Antriebsregelungen
                     GmbH                                        Switzerland
                    DrivesShop Limited                           UK
               Electric Drives Limited                           Ireland
                    Electric Drives Manufacturing Limited        Ireland
               Foray 600 Limited                                 UK
               Foray 606 Limited                                 UK
               Siliconics (Pty) Ltd.                             South Africa
          Emerson Holding Company Limited                        UK
               Asco Joucomatic Ltd.                              UK
                    Joucomatic Controls Ltd.                     UK
               Computational Systems, Limited                    UK
               Copeland Ltd.                                     N. Ireland
               El-O-Matic Limited                                UK
               Emerson Electric (U.K.) Limited                   UK
                    Liebert Ltd.                                 UK
                    Liebert Swindon Ltd.                         UK
               Fisher-Rosemount Limited                          UK
                    Emerson U.K. Trustees Limited                UK
                    Farris Engineering Ltd.                      UK
                    Fisher-Rosemount Manufacturing Ltd.          UK
                    Fisher Governor Company Ltd.                 UK
                    Westinghouse Process Control UK Ltd.         UK
                    Xomox Limited                                UK
               Pactrol Control Limited                           UK
               Switched Reluctance Drives Ltd. (SDRL)            UK
                    SR Drives Manufacturing Ltd.                 UK
                    Reluctance Motors Ltd.                       UK
     F-R Technologias de Flujo, S.A. de C.V.                     Mexico
     Fisher-Rosemount del Peru S.A.C.                            Peru
     Fisher-Rosemount Hungary Ltd.                               Hungary
     Fisher-Rosemount Manufacture Ltd.                           Hungary
     Liebert Europe Espana S.A.                                  Spain
     Motoreductores U.S., S.A. de C.V.                           Mexico
     P.T. Emerson Electric Indonesia                             Indonesia
     Rey-Lam, S. de R.L. de C.V.                                 Mexico
     Rotores S.A. de C.V.                                        Mexico
     Termotec de Chihuahua S.A. de C.V.                          Mexico
     Wilson Investment 1, Inc.                                   Delaware
Etirex S.A.                                                      France
Fisher Controls International, Inc.                              Delaware
     Exac Corporation                                            California
     Fisher Controles Industria E Commercio Ltda.                Brazil
     Fisher-Rosemount Do Brasil Ltda.                            Brazil
     Fisher Controls De Mexico, S.A. de C.V.                     Mexico
     Fisher-Rosemount China Limited                              Hong Kong
          Tianjin Fisher Controls Valve Co. Ltd.                 China
     Fisher Controls Pty. Limited                                Australia
     Fisher Service Company                                      Delaware
     Fisher-Rosemount Systems, Inc.                              Delaware
          Orion CEM, Inc.                                        Delaware
          Westinghouse Process Control, Inc.                     Delaware
               Westinghouse International Process Control Corp.  Delaware
     Fisher-Rosemount de Venezuela S.A.                          Venezuela
     Fro-Mex, S.A. de C.V                                        Mexico
     H.D. Baumann Inc.                                           Delaware
     Mountain Controls Group Co.                                 West Virginia
     Nippon Fisher Company Ltd.                                  Japan
          Fisco Ltd. (Fisco Kabushiki Kaisha)                    Japan
Fisher Rosemount, Inc.                                           Delaware
Fisher-Rosemount N.V./S.A.                                       Belgium
     Senpro N.V.                                                 Belgium
Fisher-Rosemount S.A.                                            France
Fusite Corporation                                               Ohio
     Emerson Japan, Ltd.                                         Japan
          F-R Intex Co. Ltd.                                     Japan
          Taiyo Emerson Ltd. Japan                               Japan
Fusite Land Company                                              Delaware
High Voltage Maintenance Corporation                             Ohio
Humboldt Hermetic Motor Corp.                                    Delaware
Innoven III Corporation                                          Delaware
Intellution, Inc.                                                Massachusetts
     Intellution Australia Pty Ltd.                              Australia
     Intellution GmbH                                            Germany
     Intellution Korea Limited                                   Korea
     Intellution K.K. (Japan) Incorporated                       Japan
     Intellution Limited                                         UK
     Intellution SARL                                            France
     Intellution South Asia Pte. Ltd.                            Singapore
     Wizdom Controls, Inc.                                       Delaware
Kato Engineering, Inc.                                           Delaware
Kop-Flex, Inc.                                                   Delaware
     Kop-Flex Canada Limited                                     Canada
Louisville Ladder Holding Corp.-Nevada                           Nevada
     Louisville Holding Corp.- Delaware                          Delaware
MagneTek China Limited                                           Cayman Islands
     MagneTek Fuzhou Generator Company Limited                   China
Metaloy, Inc.                                                    Massachusetts
Metropolitan International, Inc.                                 Nevada
     InterMetro Industries Corporation                           Nevada
     InterMetro Industries Corporation                           Delaware
          Metro Industries, Inc.                                 Nevada
          Metropolitan Wire (Canada) Ltd.                        Canada
          Metropolitan Wire Corporation                          Pennsylvania
Motores Hermeticos del Sur, S.A. de C.V.                         Mexico
PC & E, Inc.                                                     Missouri
Ridge Tool Europe NV                                             Belgium
     Ridgid Scandinavia A/S                                      Denmark
Ridge Tool Europe S.A.                                           Belgium
     Ridgid Vaerktoj A/S                                         Denmark
Ridgid Ferramentas E. Maquinas, Ltda.                            Brazil
SWECO Europe, S.A.                                               Belgium
Termocontroles de Juarez S.A. de C.V.                            Mexico
The Sulton Company, Inc.                                         Delaware
Transmisiones de Potencia Emerson S.A. de C.V.                   Mexico
Vermont American Corporation                                     Delaware
     Carbbits, Inc.                                              South Carolina
     Credo Tool Company                                          Delaware
          Carbide Blast Joints, Inc.                             Texas
          DML Industrial Products, Inc.                          North Carolina
          Vermont American Corporation, Fountain Inn             Delaware
          Primark DML, Inc.                                      North Carolina
          VAC Data Management, Inc.                              Delaware
          VAC Services LP                                        Kentucky
     Gilmour Enterprises, Inc.                                   Delaware
          Gilmour Manufacturing Company                          Pennsylvania
               Gilmour, Inc.                                     Delaware
     VA Export, Ltd.                                             Virgin Islands
     VA Holding Company                                          Delaware
     VA (Hong Kong) Limited                                      Hong Kong
     Vermont American Asia-Pacific, Inc.                         Delaware
     Vermont American (Australia) Ltd.                           Nevada
     Vermont American Canada Inc.                                Canada
     Vermont American Tool Company                               Delaware
     Vermont Westa Werkzeugbau GmbH                              Germany
Wer Canada Inc.                                                  Canada
Western Forge Corporation                                        Delaware
White-Rodgers Limited                                            Canada
Wiegand S.A. de C.V.                                             Mexico


Exhibit 23

INDEPENDENT AUDITORS' CONSENT

The Board of Directors
Emerson Electric Co.:

We consent to incorporation by reference in Registration Statement Nos. 333-46919, 333-72591, 333-44163, 33-57161, 33-38805, 33-34948 33-34633, 33-57985, 33-60399 and 33-2739 on Form S-8 and Registration Statement Nos. 333-84673, 333-66865, 33-62545 and 33-39109 on Form S-3 of Emerson Electric Co. of our report dated November 1, 1999, relating to the consolidated balance sheets of Emerson Electric Co. and subsidiaries as of September 30, 1999 and 1998, and the related consolidated statements of earnings, stockholders' equity, and cash flows for each of the years in the three-year period ended September 30, 1999, which report is incorporated by reference in the September 30, 1999 annual report on Form 10-K of Emerson Electric Co.

/s/ KPMG LLP

St. Louis, Missouri
December 17, 1999


Exhibit 24

POWER OF ATTORNEY

The undersigned members of the Board of Directors and

Executive Officers of Emerson Electric Co., a Missouri corporation

with principal offices at 8000 West Florissant Avenue, St. Louis,

Missouri 63136, hereby appoint W. J. Galvin as their Attorney-in-

Fact for the purpose of signing Emerson Electric Co.'s Securities

and Exchange Commission Form 10-K (and any and all amendments

thereto) for the fiscal year ended September 30, 1999.

Dated:           October 5, 1999.
                -----------------

     Signature                           Title
     ---------                           -----


/s/C. F. Knight                    Chairman of the Board and Chief Executive
-----------------------------      Officer and Director
C. F. Knight


/s/W. J. Galvin                    Senior Vice President of Finance and Chief
-----------------------------      Financial Officer
W. J. Galvin


/s/J. G. Berges                    Director
-----------------------------
J. G. Berges


/s/L. L. Browning, Jr.             Director
-----------------------------
L. L. Browning, Jr.


/s/A. A. Busch, III                Director
-----------------------------
A. A. Busch, III


/s/D. C. Farrell                   Director
-----------------------------
D. C. Farrell


/s/J. A. Frates                    Director
-----------------------------
J. A. Frates


/s/R. B. Horton                    Director
-----------------------------
R. B. Horton


/s/G. A. Lodge                     Director
-----------------------------
G. A. Lodge


/s/R. B. Loynd                     Director
-----------------------------
R. B. Loynd


/s/V. R. Loucks, Jr.               Director
-----------------------------
V. R. Loucks, Jr.


/s/R. L. Ridgway                   Director
-----------------------------
R. L. Ridgway


/s/R. W. Staley                    Director
-----------------------------
R. W. Staley


/s/A. E. Suter                     Director
-----------------------------
A. E. Suter


/s/G. W. Tamke                     Director
-----------------------------
G. W. Tamke


/s/W. M. Van Cleve                 Director
-----------------------------
W. M. Van Cleve


/s/E. E. Whitacre, Jr.             Director
-----------------------------
E. E. Whitacre, Jr.


ARTICLE 5
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 1999 EMERSON ELECTRIC CO. CONSOLIDATED STATEMENT OF EARNINGS AND CONSOLIDATED BALANCE SHEET FILED WITH THE COMPANY'S 1999 FORM 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
MULTIPLIER: 1,000


PERIOD TYPE YEAR
FISCAL YEAR END SEP 30 1999
PERIOD END SEP 30 1999
CASH 266,100
SECURITIES 0
RECEIVABLES 2,576,800
ALLOWANCES 60,500
INVENTORY 1,921,100
CURRENT ASSETS 5,124,400
PP&E 6,377,800
DEPRECIATION 3,223,400
TOTAL ASSETS 13,623,500
CURRENT LIABILITIES 4,590,400
BONDS 1,317,100
COMMON 238,300
PREFERRED MANDATORY 0
PREFERRED 0
OTHER SE 5,942,200
TOTAL LIABILITY AND EQUITY 13,623,500
SALES 14,269,500
TOTAL REVENUES 14,269,500
CGS 9,193,800
TOTAL COSTS 9,193,800
OTHER EXPENSES 0
LOSS PROVISION 0
INTEREST EXPENSE 189,700
INCOME PRETAX 2,020,900
INCOME TAX 707,300
INCOME CONTINUING 0
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET INCOME 1,313,600
EPS BASIC 3.03
EPS DILUTED 3.00