Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Emerson Electric Co., consolidated income statement

US$ in millions

12 months ended:	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017	Sep 30, 2016	Sep 30, 2015	Sep 30, 2014
Net sales	18,372)	17,408)	15,264)	14,522)	22,304)	24,537)
Cost of sales	(10,557)	(9,948)	(8,860)	(8,260)	(13,256)	(14,379)
Gross profit	7,815)	7,460)	6,404)	6,262)	9,048)	10,158)
Selling, general and administrative expenses	(4,457)	(4,258)	(3,618)	(3,464)	(5,184)	(5,715)
Gains on divestitures of businesses	—)	—)	—)	—)	1,039)	—)
Goodwill impairment	—)	—)	—)	—)	—)	(508)
Amortization of intangibles (intellectual property and customer relationships)	(238)	(211)	(136)	(84)	(214)	(225)
Restructuring costs	(95)	(65)	(78)	(96)	(211)	(55)
Other	8)	(100)	(72)	(114)	(146)	(113)
Other deductions, net	(325)	(376)	(286)	(294)	(571)	(393)
Earnings from continuing operations before interest and income taxes	3,033)	2,826)	2,500)	2,504)	4,332)	3,542)
Interest income	27)	43)	36)	27)	29)	24)
Interest expense	(201)	(202)	(201)	(215)	(200)	(218)
Interest expense, net of interest income	(174)	(159)	(165)	(188)	(171)	(194)
Earnings from continuing operations before income taxes	2,859)	2,667)	2,335)	2,316)	4,161)	3,348)
Income taxes	(531)	(443)	(660)	(697)	(1,428)	(1,164)
Earnings from continuing operations	2,328)	2,224)	1,675)	1,619)	2,733)	2,184)
Discontinued operations, net of tax	—)	—)	(125)	45)	—)	—)
Net earnings	2,328)	2,224)	1,550)	1,664)	2,733)	2,184)
Noncontrolling interests in earnings of subsidiaries	(22)	(21)	(32)	(29)	(23)	(37)
Net earnings common stockholders	2,306)	2,203)	1,518)	1,635)	2,710)	2,147)

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

Net Sales: Net sales exhibited a downward trend from 24,537 million US dollars in 2014 to a low of 14,522 million US dollars in 2016. Thereafter, net sales showed a gradual recovery, reaching 18,372 million US dollars by 2019.
Cost of Sales: Cost of sales followed a similar pattern to net sales, declining significantly between 2014 and 2016, from 14,379 million to 8,260 million US dollars. Thereafter, it steadily increased to 10,557 million US dollars in 2019. Overall, the cost of sales remained proportionally lower relative to net sales during the decline period.
Gross Profit: Gross profit decreased sharply from 10,158 million US dollars in 2014 to 6,262 million US dollars in 2016, reflecting the reduction in net sales. However, it recovered modestly thereafter, reaching 7,815 million US dollars in 2019, indicating a moderate improvement in profitability at the gross level.
Selling, General and Administrative Expenses (SG&A): SG&A expenses declined from 5,715 million US dollars in 2014 to 3,464 million US dollars in 2016. Following this decline, expenses increased gradually, reaching 4,457 million US dollars by 2019. The initial reduction may reflect cost control measures in response to lower sales volumes, with a moderate rise accompanying the recovery in sales.
Special Items: A notable gain on divestitures of businesses was recorded in 2015, amounting to 1,039 million US dollars. Goodwill impairment was recognized in 2014 with a charge of 508 million US dollars but was absent in subsequent years. Amortization of intangibles fluctuated but remained relatively stable, ranging between 84 and 238 million US dollars annually. Restructuring costs fluctuated moderately without a clear trend. Other deductions, net, varied but generally showed negative values, indicating ongoing adjustments or charges with some recovery observed in 2019 when a positive value of 8 million US dollars was noted.
Earnings from Continuing Operations Before Interest and Income Taxes: This measure declined substantially from 3,542 million US dollars in 2014 to 2,504 million in 2016, then exhibited a slow upward trend reaching 3,033 million US dollars in 2019. This pattern mirrors the trends in gross profit and operating expenses.
Interest Income and Expense: Interest income generally increased from 24 million US dollars in 2014 to a peak of 43 million in 2018 before falling back to 27 million in 2019. Interest expense remained relatively stable, fluctuating slightly between 201 and 218 million US dollars annually. Net interest expense decreased moderately from 194 million US dollars in 2014 to 159 million in 2018, then increased slightly to 174 million US dollars in 2019.
Earnings Before Income Taxes: Consistent with operating earnings, earnings before income taxes declined from 3,348 million US dollars in 2014 to 2,316 million US dollars in 2016. After 2016, earnings before taxes showed a gradual recovery up to 2,859 million US dollars in 2019.
Income Taxes: Income taxes decreased significantly from 1,164 million US dollars in 2014 to a low of 443 million in 2018, then slightly increased to 531 million US dollars in 2019. The decline broadly reflects reduced taxable income during the period of decreased earnings.
Earnings from Continuing Operations: Net earnings from continuing operations mirrored earnings before taxes, initially dropping from 2,184 million US dollars in 2014 to 1,619 million US dollars in 2016. Earnings subsequently increased steadily, reaching 2,328 million US dollars in 2019.
Discontinued Operations: Discontinued operations had minimal impact with a small gain recorded in 2016 and a loss in 2017. No other values are reported for these periods.
Net Earnings: Net earnings followed a trajectory similar to continuing operations earnings, declining to 1,550 million US dollars in 2017 before rebounding to 2,328 million US dollars by 2019, reflecting the recovery phase experienced by the company.
Noncontrolling Interests: Noncontrolling interests remained fairly consistent, with minor fluctuations around 20 to 37 million US dollars in negative impact each year.
Net Earnings Common Stockholders: Net earnings attributable to common stockholders tracked overall net earnings closely, showing a decline from 2,147 million US dollars in 2014 to 1,518 million in 2017, and then a recovery to 2,306 million US dollars in 2019.

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Emerson Electric Co. (NYSE:EMR)

Income Statement