Emerson reports fourth quarter and full year 2022 results; provides initial 2023 outlook
St. louis--(business wire)--emerson (nyse: emr) today reported results for its fourth quarter and fiscal year ended september 30, 2022. fourth quarter net sales were up 8 percent and underlying sales were up 12 percent. the americas were up 17 percent, europe was up 3 percent, and asia, middle east & africa was up 7 percent. china was up 9 percent. full year net sales were up 8 percent and underlying sales were up 9 percent. the americas were up 14 percent, europe was up 2 percent, and asia, middle east & africa was up 5 percent. china was up 7 percent. fourth quarter pretax margin of 16.9 percent was up 20 basis points. adjusted ebita margin3 was 23.3 percent, up 260 basis points. full year pretax margin of 20.8 percent was up 480 basis points. adjusted ebita margin was 21.6 percent, up 180 basis points. fourth quarter earnings per share were $1.24, up 12 percent. adjusted earnings per share were $1.53, up 16 percent. full year earnings per share were $5.41, up 42 percent. adjusted earnings per share were $5.25, up 16 percent. fourth quarter operating cash flow was $1.2 billion, up 42 percent, and free cash flow was $1.0 billion, up 63 percent. full year operating cash flow was $2.9 billion, down 18 percent, and free cash flow was $2.4 billion, down 20 percent. full year cash flow results reflected higher working capital due to increased sales and supply chain constraints throughout the year, and $153 million of tax payments on divestiture gains. “fiscal 2022 was a transformational year for emerson. we made significant progress on our portfolio and culture transformation while maintaining our world-class operational execution,” said emerson president and chief executive officer lal karsanbhai. “today's announcement to divest the climate technologies business is a critical milestone in positioning emerson to be a global pure-play automation leader. we are energized by the growth and value creation opportunities enabled by our leading capabilities in intelligent devices, control systems and software.” “emerson closed out a strong 2022 with 9 percent growth in underlying sales and a 16 percent increase in adjusted earnings per share,” karsanbhai continued. “continued strength in automation demand and our robust backlog give us confidence in our 2023 sales guidance. our operational execution will also lead to strong margins and cash flow conversion. finally, i would like to thank our global employees for their hard work throughout 2022 and i look forward to future success as a global automation leader.” business platform results automation solutions4 september trailing three-month underlying orders5 were up 6 percent and backlog of $5.8 billion was up 14 percent versus the prior year. fourth quarter net sales were up 7 percent, with underlying sales up 13 percent. the americas were up 21 percent, europe was flat and asia, middle east & africa was up 10 percent. china was up 14 percent. full year net sales were up 4 percent, with underlying sales up 7 percent. the americas were up 14 percent, europe was down 1 percent and asia, middle east & africa was up 5 percent. china was up 11 percent. fourth quarter segment ebit margin increased 290 basis points to 22.3 percent and adjusted segment ebita6 margin increased 190 basis points to 24.6 percent. full year segment ebit margin increased 270 basis points to 20.0 percent and adjusted segment ebita margin increased 190 basis points to 22.2 percent. commercial & residential solutions september trailing three-month underlying orders were up 7 percent and backlog of $1.2 billion was up 16 percent versus the prior year. fourth quarter net sales increased 2 percent, with underlying sales up 10 percent. the americas were up 12 percent, europe was up 12 percent and asia, middle east & africa was down 2 percent. china was down 8 percent. full year net sales increased 9 percent, with underlying sales up 13 percent. the americas were up 15 percent, europe was up 11 percent and asia, middle east & africa was up 5 percent. china was down 7 percent. fourth quarter segment ebit margin increased 230 basis points to 20.4 percent and adjusted segment ebita margin increased 250 basis points to 21.9 percent. full year segment ebit margin decreased 60 basis points to 19.9 percent and adjusted segment ebita margin decreased 70 basis points to 20.9 percent. aspentech7 fourth quarter net sales were $251 million. segment ebit margin was negative 15.2 percent, including $121 million of intangibles amortization, and adjusted segment ebita margin was 32.9 percent. full year net sales were $656 million. segment ebit margin was 1.9 percent and adjusted segment ebita margin was 38.0 percent. 2023 updated outlook following the announcement of its climate technologies divestiture, emerson will report financial results for climate technologies, insinkerator and therm-o-disc as discontinued operations for all periods presented, beginning in 2023. the earnings from discontinued operations for 2023 are expected to be $10 billion to $11 billion, or $17 to $19 per share, including the net gains on 2023 divestitures. the company's 2023 continuing operations after the climate technologies divestiture (assumed to close march 31, 2023 for the purposes of guidance) will include interest income from the $2.25 billion note receivable from climate technologies and reflect the 45% common equity ownership in the income, or loss, of climate technologies. emerson will not control climate technologies post-closing and is therefore unable to estimate the amount of its 45% share of climate technologies' post-close results. the company will exclude the interest income from the note receivable from climate technologies and its share of climate technologies' operations in its calculation of 2023 adjusted earnings per share. also excluded from adjusted earnings per share is the interest income on any undeployed net proceeds. the effect of emerson's 45% share of climate technologies is expected to be immaterial to post-closing cash flows. the 2023 outlook assumes approximately $1.2 billion of dividend payments and approximately $2 billion to be returned to shareholders through share repurchases. the following tables summarize 2022 financials for continuing operations8 and fiscal year 2023 guidance framework for continuing operations8. guidance figures are approximate. 2022 results 2022 q1 reported 2022 q1 continuing operations8 2022 reported 2022 continuing operations8 net sales $4,473m $3,156m $19,629m $13,804m earnings per share $1.50 $1.25 $5.41 $3.16 adjusted earnings per share $1.05 $0.79 $5.25 $3.64 2023 guidance - continuing operations8 2023 q1 2023 net sales growth 6% - 8% 7% - 9% underlying sales growth 6% - 8% 6.5% - 8.5% earnings per share9 $0.67 - $0.71 $3.51 - $3.66 restructuring / related costs ~$0.03 ~$0.13 amortization of intangibles ~$0.15 ~$0.61 interest on note receivable from climate technologies --- ~($0.10) interest income on undeployed proceeds --- ~($0.15) adjusted earnings per share $0.85 - $0.89 $4.00 - $4.15 notes: 1 underlying sales excludes the impact of currency translation, and acquisitions and divestitures completed through september 30, 2022 including therm-o-disc, heritage aspentech and emerson's businesses contributed to aspentech. 2 adjusted eps excludes restructuring, a gain on subordinated interest, first year purchase accounting, transaction and aspentech pre-closing costs and charges, a gain from the therm-o-disc divestiture, write-offs associated with emerson's announced russia exit, investment-related gains, an aspentech micromine purchase price hedge and intangibles amortization expense. 3 adjusted ebita margin excludes restructuring, a gain on subordinated interest, first year purchase accounting, transaction and aspentech pre-closing costs and charges, a gain from the therm-o-disc divestiture, write-offs associated with emerson's announced russia exit, investment-related gains, an aspentech micromine purchase price hedge and intangibles amortization expense. 4 automation solutions net sales, backlog, segment ebit margin and adjusted segments ebita margin does not include emerson's businesses contributed to aspentech, which have been reclassified to the aspentech segment. 5 trailing three-month underlying orders does not include therm-o-disc (divested and previously reported in commercial & residential solutions) or emerson's businesses contributed to aspentech (previously reported in automation solutions). 6 adjusted segment ebita margin excludes restructuring and intangible amortization expense. 7 the aspentech segment includes the full year results for emerson's businesses contributed to aspentech and the heritage aspentech business as of may 16, 2022, the date upon which the company acquired its majority equity ownership interest in aspentech. 8 following the announcement of its climate technologies divestiture, emerson will report financial results for climate technologies, insinkerator and therm-o-disc as discontinued operations for all periods presented, beginning in 2023. the earnings from discontinued operations for 2023 are expected to be $10 billion to $11 billion, or $17 to $19 per share, including the net gains on 2023 divestitures. the company's 2023 continuing operations after the climate technologies divestiture (assumed to close march 31, 2023 for the purposes of guidance) will include interest income from the $2.25 billion note receivable from climate technologies and reflect the 45% common equity ownership in the income, or loss, of climate technologies. emerson will not control climate technologies post-closing and is therefore unable to estimate the amount of its 45% share of climate technologies' post-close results. the company will exclude the interest income from the note receivable from climate technologies and its share of climate technologies' operations in its calculation of 2023 adjusted earnings per share. also excluded from adjusted earnings per share is the interest income on any undeployed net proceeds. the effect of emerson's 45% share of climate technologies is expected to be immaterial to post-closing cash flows. 9 2023 earnings per share guidance from continuing operations excludes any potential impact from the 45% common equity ownership in climate technologies' income or loss post-close. emerson will not control climate technologies post-closing and is therefore unable to estimate the probable significance or impact on our earnings per share results from the 45% share of climate technologies' post-close results. emerson will exclude its 45% share of climate technologies' post-close operations from the calculation of its 2023 adjusted earnings per share. upcoming investor events today, beginning at 7:00 a.m. central time / 8:00 a.m. eastern time, emerson management will discuss the fourth quarter results, fiscal year results and its climate technologies divestiture during an investor conference call. participants can access a live webcast available at www.emerson.com/en-us/investors at the time of the call. a replay of the call will be available for 90 days. conference call slides will be posted in advance of the call on the company website. emerson will hold an in-person and virtual investor conference on tuesday, nov. 29 in new york city. a live webcast of the investor conference will begin at 8:00 a.m. central time / 9:00 a.m. eastern time. a link to register and attend the webcast is available at www.emerson.com/en-us/investors. the webcast will remain available for 90 days. forward-looking and cautionary statements statements in this press release that are not strictly historical may be “forward-looking” statements, which involve risks and uncertainties, and emerson undertakes no obligation to update any such statements to reflect later developments. these risks and uncertainties include the company's ability to successfully complete on the terms and conditions contemplated, and the financial impact of, the proposed climate technologies transaction, the proposed sale of its insinkerator food waste disposal business, the scope, duration and ultimate impacts of the covid-19 pandemic and the russia-ukraine conflict, as well as economic and currency conditions, market demand, including related to the pandemic and oil and gas price declines and volatility, pricing, protection of intellectual property, cybersecurity, tariffs, competitive and technological factors, inflation, among others, as set forth in the company's most recent annual report on form 10-k and subsequent reports filed with the sec. the outlook contained herein represents the company's expectation for its consolidated results, other than as noted herein. (tables attached) table 1 emerson and subsidiaries consolidated operating results (amounts in millions except per share, unaudited) quarter ended sept 30 percent 2021 2022 change net sales $4,947 $5,360 8% cost of sales 2,951 3,043 sg&a expenses 1,054 1,136 gain on sale of business — (3) other deductions, net 75 227 interest expense, net 39 53 earnings before income taxes 828 904 9% income taxes 154 196 net earnings 674 708 less: noncontrolling interests in subsidiaries 4 (32) net earnings common stockholders $670 $740 10% diluted avg. shares outstanding 600.5 594.5 diluted earnings per share common share $1.11 $1.24 12% quarter ended sept 30 2021 2022 other deductions, net amortization of intangibles $77 $134 restructuring costs 39 36 other (41) 57 total $75 $227 table 2 emerson and subsidiaries consolidated operating results (amounts in millions except per share, unaudited) year ended sept 30 percent 2021 2022 change net sales $18,236 $19,629 8% cost of sales 10,673 11,441 sg&a expenses 4,179 4,248 gain on subordinated interest — (453) gain on sale of business — (486) other deductions, net 318 601 interest expense, net 154 193 earnings before income taxes 2,912 4,085 40% income taxes 585 855 net earnings 2,327 3,230 less: noncontrolling interests in subsidiaries 24 (1) net earnings common stockholders $2,303 $3,231 40% diluted avg. shares outstanding 601.8 596.3 diluted earnings per share common share $3.82 $5.41 42% year ended sept 30 2021 2022 other deductions, net amortization of intangibles $300 $357 restructuring costs 150 86 other (132) 158 total $318 $601 other for the year end september 30, 2022 includes a charge of $135 related to the company exiting its business in russia, acquisition/divestiture costs of $110 and a loss of $50 in the fourth quarter related to aspentech’s micromine purchase price hedge. table 3 emerson and subsidiaries consolidated balance sheets (dollars in millions, unaudited) quarter ended sept 30 2021 2022 assets cash and equivalents $2,354 $1,804 receivables, net 2,971 3,008 inventories 2,050 2,191 other current assets 1,057 1,503 total current assets 8,432 8,506 property, plant & equipment, net 3,738 3,361 goodwill 7,723 14,662 other intangible assets 2,877 6,724 other 1,945 2,419 total assets $24,715 $35,672 liabilities and equity short-term borrowings and current maturities of long-term debt $872 $2,115 accounts payable 2,108 2,028 accrued expenses 3,266 3,634 total current liabilities 6,246 7,777 long-term debt 5,793 8,259 other liabilities 2,753 3,320 equity common stockholders' equity 9,883 10,364 noncontrolling interests in subsidiaries 40 5,952 total equity 9,923 16,316 total liabilities and equity $24,715 $35,672 table 4 emerson and subsidiaries consolidated statements of cash flows (dollars in millions, unaudited) year ended sept 30 2021 2022 operating activities net earnings $2,327 $3,230 adjustments to reconcile net earnings to net cash provided by operating activities: depreciation and amortization 969 1,039 stock compensation 224 144 pension expense 28 2 pension funding (41) (43) changes in operating working capital 203 (515) gain on subordinated interest — (453) gain on sale of business — (486) other, net (135) 4 cash provided by operating activities 3,575 2,922 investing activities capital expenditures (581) (531) purchases of businesses, net of cash and equivalents acquired (1,611) (5,702) divestitures of businesses 34 601 proceeds from subordinated interest — 438 other, net 38 (140) cash used in investing activities (2,120) (5,334) financing activities net increase in short-term borrowings (504) 1,241 proceeds from short-term borrowings greater than three months 71 1,162 payments of short-term borrowings greater than three months (71) (1,165) proceeds from long-term debt — 2,975 payments of long-term debt (308) (522) dividends paid (1,210) (1,223) purchases of common stock (500) (500) other, net 100 80 cash provided by (used in) financing activities (2,422) 2,048 effect of exchange rate changes on cash and equivalents 6 (186) increase (decrease) in cash and equivalents (961) (550) beginning cash and equivalents 3,315 2,354 ending cash and equivalents $2,354 $1,804 table 5 emerson and subsidiaries segment sales and earnings (dollars in millions, unaudited) quarter ended sept 30 2021 2022 sales measurement & analytical instrumentation $860 $919 valves, actuators & regulators 961 1,000 industrial solutions 610 660 systems & software 669 728 automation solutions 3,100 3,307 aspentech 79 251 climate technologies 1,289 1,316 tools & home products 486 487 commercial & residential solutions 1,775 1,803 eliminations (7) (1) net sales $4,947 $5,360 earnings automation solutions $601 $738 aspentech (6) (39) climate technologies 234 284 tools & home products 88 85 commercial & residential solutions 322 369 stock compensation (33) (37) unallocated pension and postretirement costs 23 23 corporate and other (40) (100) gain on sale of business — 3 interest expense, net (39) (53) earnings before income taxes $828 $904 restructuring costs automation solutions $29 $19 aspentech — (1) climate technologies 7 5 tools & home products 3 10 commercial & residential solutions 10 15 corporate — 3 total $39 $36 the table above does not include $27 and $17 of costs related to restructuring actions that were reported in cost of sales and selling, general and administrative expenses for the three months ended september 30, 2021 and 2022, respectively. depreciation and amortization automation solutions $144 $131 aspentech 24 123 climate technologies 47 41 tools & home products 17 13 commercial & residential solutions 64 54 corporate and other 17 9 total $249 $317 table 6 emerson and subsidiaries segment sales and earnings (dollars in millions, unaudited) year ended sept 30 2021 2022 sales measurement & analytical instrumentation $3,071 $3,206 valves, actuators & regulators 3,483 3,604 industrial solutions 2,266 2,403 systems & software 2,472 2,545 automation solutions 11,292 11,758 aspentech 319 656 climate technologies 4,748 5,200 tools & home products 1,905 2,033 commercial & residential solutions 6,653 7,233 eliminations (28) (18) net sales $18,236 $19,629 earnings automation solutions $1,955 $2,356 aspentech (7) 12 climate technologies 965 1,038 tools & home products 399 402 commercial & residential solutions 1,364 1,440 stock compensation (224) (144) unallocated pension and postretirement costs 94 99 corporate and other (116) (424) gain on subordinated interest — 453 gain on sale of business — 486 interest expense, net (154) (193) earnings before income taxes $2,912 $4,085 restructuring costs automation solutions $121 $52 aspentech 2 — climate technologies 15 10 tools & home products 7 11 commercial & residential solutions 22 21 corporate 5 13 total $150 $86 the table above does not include $38 and $43 of costs related to restructuring actions that were reported in cost of sales and selling, general and administrative expenses for the twelve months ended september 30, 2021 and 2022, respectively. depreciation and amortization automation solutions $537 $514 aspentech 95 242 climate technologies 191 177 tools & home products 76 71 commercial & residential solutions 267 248 corporate and other 70 35 total $969 $1,039 table 7 emerson and subsidiaries adjusted ebita & eps supplemental (amounts in millions except per share, unaudited) the following tables, which show results on an adjusted ebita basis and diluted earnings per share on an adjusted basis, are intended to supplement the company's discussion of its results of operations herein. the company defines adjusted ebita as earnings excluding interest expense, net, income taxes, intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction fees, and certain gains, losses or impairments. adjusted earnings per share excludes intangibles amortization expense, restructuring expense, first year purchase accounting related items and transaction fees, and certain gains, losses or impairments. adjusted ebita, adjusted ebita margin, and adjusted earnings per share are measures used by management and may be useful for investors to evaluate the company's operational performance. quarter ended sept 30 2021 2022 pretax earnings $828 $904 percent of sales 16.7% 16.9% interest expense, net 39 53 restructuring and related costs 66 52 amortization of intangibles 85 174 gain on sale of business — (3) russia business exit — 19 acquisition/divestiture costs — 13 aspentech micromine purchase price hedge — 50 investment-related gains — (14) osi first year acquisition accounting charges 9 — adjusted ebita $1,027 $1,248 percent of sales 20.7% 23.3% quarter ended sept 30 2021 2022 gaap earnings per share $1.11 $1.24 restructuring and related costs 0.08 0.07 amortization of intangibles 0.11 0.15 russia business exit — 0.03 acquisition/divestiture costs and interest on aspentech debt — 0.02 aspentech micromine purchase price hedge — 0.04 investment-related gains — (0.02) osi first year acquisition accounting charges 0.02 — adjusted earnings per share $1.32 $1.53 table 8 emerson and subsidiaries adjusted ebita & eps supplemental (amounts in millions except per share, unaudited) year ended sept 30 2021 2022 pretax earnings $2,912 $4,085 percent of sales 16.0% 20.8% interest expense, net 154 193 restructuring and related costs 188 119 amortization of intangibles 327 451 gain on subordinated interest — (453) gain on sale of business — (486) russia business exit — 181 acquisition/divestiture costs — 110 aspentech micromine purchase price hedge — 50 investment-related gains (17) (14) osi first year acquisition accounting charges and fees 50 — adjusted ebita $3,614 $4,236 percent of sales 19.8% 21.6% year ended sept 30 2021 2022 gaap earnings per share $3.82 $5.41 restructuring and related costs 0.24 0.15 amortization of intangibles 0.41 0.48 gain on subordinated interest — (0.60) gain on sale of business — (0.72) russia business exit — 0.32 acquisition/divestiture costs, aspentech interest on debt — 0.19 aspentech micromine purchase price hedge — 0.04 investment-related gains (0.03) (0.02) osi first year acquisition accounting charges and fees 0.07 — adjusted earnings per share $4.51 $5.25 table 9 emerson and subsidiaries segment ebita (dollars in millions, unaudited) quarter ended sept 30 2021 2022 automation solutions automation solutions ebit $601 $738 percent of sales 19.4% 22.3% restructuring and related costs 52 35 amortization of intangibles 50 42 automation solutions ebita $703 $815 percent of sales 22.7% 24.6% aspentech aspentech ebit $(6) $(39) percent of sales (7.5%) (15.2%) restructuring and related costs — (1) amortization of intangibles 22 121 aspentech ebita $16 $81 percent of sales 20.8% 32.9% commercial & residential solutions commercial & residential solutions ebit $322 $369 percent of sales 18.1% 20.4% restructuring and related costs 11 16 amortization of intangibles 13 11 commercial & residential solutions ebita $346 $396 percent of sales 19.4% 21.9% table 10 emerson and subsidiaries segment ebita (dollars in millions, unaudited) year ended sept 30 2021 2022 automation solutions automation solutions ebit $1,955 $2,356 percent of sales 17.3% 20.0% restructuring and related costs 146 89 amortization of intangibles 186 167 automation solutions ebita $2,287 $2,612 percent of sales 20.3% 22.2% aspentech aspentech ebit $(7) $12 percent of sales (2.3%) 1.9% restructuring and related costs 2 — amortization of intangibles 89 237 aspentech ebita $84 $249 percent of sales 26.2% 38.0% commercial & residential solutions commercial & residential solutions ebit $1,364 $1,440 percent of sales 20.5% 19.9% restructuring and related costs 26 24 amortization of intangibles 52 47 commercial & residential solutions ebita $1,442 $1,511 percent of sales 21.6% 20.9% reconciliations of non-gaap financial measures & other table 11 q4 2022 underlying sales change auto solns comm & res solns emerson reported (gaap) 7 % 2 % 8 % (favorable) / unfavorable fx 6 % 3 % 5 % acquisitions — % — % (3) % divestitures — % 5 % 2 % underlying* 13 % 10 % 12 % 2022 underlying sales change auto solns comm & res solns emerson reported (gaap) 4 % 9 % 8 % (favorable) / unfavorable fx 3 % 2 % 2 % acquisitions — % — % (2) % divestitures — % 2 % 1 % underlying* 7 % 13 % 9 % 2023e november guidance underlying sales change q1 fy23e fy23e reported (gaap) 6% - 8% 7% - 9% (favorable) / unfavorable fx ~ 6% ~ 3.5% (acquisitions) / divestitures ~ (6)% ~ (4)% underlying* 6% - 8% 6.5% - 8.5% q4 earnings per share q4 fy21 q4 fy22 change earnings per share (gaap) $ 1.11 $ 1.24 12 % restructuring and related costs 0.08 0.07 (1) % amortization of intangibles 0.11 0.15 2 % russia business exit — 0.03 2 % acquisition/divestiture costs — 0.02 1 % aspentech micromine purchase price hedge — 0.04 2 % investment-related gains — (0.02) (1) % osi purchase accounting items 0.02 — (1) % adjusted earnings per share* $ 1.32 $ 1.53 16 % earnings per share fy21 fy22 change earnings per share (gaap) $ 3.82 $ 5.41 42 % restructuring and related costs 0.24 0.15 (5) % amortization of intangibles 0.41 0.48 (2) % gain on subordinated interest — (0.60) (13)% gain on sale of therm-o-disc — (0.72) (16)% russia business exit — 0.32 7 % acquisition/divestiture costs and interest on pre-acquisition aspentech debt — 0.19 4 % aspentech micromine purchase price hedge — 0.04 1 % investment-related gains (0.03) (0.02) -% osi purchase accounting 0.07 — (2) % adjusted earnings per share* $ 4.51 $ 5.25 16 % earnings per share fy23e q1 fy23e earnings per share (gaap) $3.51 - $3.66 $0.67 - $0.71 restructuring and related costs 0.13 0.03 amortization of intangibles 0.61 0.15 interest on note receivable from climate technologies (0.10) — interest income on undeployed proceeds (0.15) — adjusted earnings per share* $4.00 - $4.15 $0.85 - $0.89 ebita margin q4 fy21 q4 fy22 change pretax margin (gaap) 16.7 % 16.9 % 20 bps interest expense, net 0.8 % 1.0 % 20 bps restructuring and related costs 1.2 % 1.0 % (20) bps amortization of intangibles 1.7 % 3.2 % 150 bps gain on sale of therm-o-disc — % (0.1) % (10) bps russia business exit — % 0.3 % 30 bps acquisition/divestiture costs — % 0.3 % 30 bps aspentech micromine purchase price hedge — % 1.0 % 100 bps investment-related gains — % (0.3) % (30) bps osi purchase accounting items 0.3 % — % (30) bps adjusted ebita margin* 20.7 % 23.3 % 260 bps ebita margin fy21 fy22 change pretax margin (gaap) 16.0 % 20.8 % 480 bps interest expense, net 0.8 % 1.0 % 20 bps restructuring and related costs 1.0 % 0.6 % (40) bps amortization of intangibles 1.8 % 2.3 % 50 bps gain on sale of therm-o-disc — % (2.5) % (250) bps gain on subordinated interest — % (2.3) % (230) bps russia business exit — % 0.9 % 90 bps acquisition/divestiture costs — % 0.6 % 60 bps aspentech micromine purchase price hedge — % 0.3 % 30 bps investment-related gains (0.1) % (0.1) % - bps osi purchase accounting items 0.3 % — % (30) bps adjusted ebita margin* 19.8 % 21.6 % 180 bps sales - continuing operations fy22 q1 fy22 reported sales (gaap) $ 19,629 $ 4,473 divested businesses (5,825) (1,317) continuing operations sales* $ 13,804 $ 3,156 earnings per share - continuing operations fy22 q1 fy22 reported earnings per share (gaap) $ 5.41 $ 1.50 divested businesses (2.25) (0.25) continuing operations earnings per share* 3.16 1.25 restructuring and related costs 0.14 0.02 amortization of intangibles 0.45 0.09 gain on subordinated interest (0.60) (0.60) russia business exit 0.32 — acquisition/divestiture costs and pre-acquisition interest on aspentech debt 0.15 0.03 aspentech micromine purchase price hedge 0.04 — investment-related gains (0.02) — adjusted earnings per share continuing operations* $ 3.64 $ 0.79 q4 automation solutions segment ebit margin q4 fy21 q4 fy22 change automation solutions segment ebit margin (gaap) 19.4 % 22.3 % 290 bps restructuring and related costs 1.7 % 1.1 % (60) bps amortization of intangibles impact 1.6 % 1.2 % (40) bps automation solutions adjusted segment ebita margin* 22.7 % 24.6 % 190 bps automation solutions segment ebit margin fy21 fy22 change automation solutions segment ebit margin (gaap) 17.3 % 20.0 % 270 bps restructuring and related costs 1.3 % 0.8 % (50) bps amortization of intangibles impact 1.7 % 1.4 % (30) bps automation solutions adjusted segment ebita margin* 20.3 % 22.2 % 190 bps q4 commercial & residential solutions ebit margin q4 fy21 q4 fy22 change commercial & residential ebit margin (gaap) 18.1 % 20.4 % 230 bps restructuring and related costs 0.6 % 0.9 % 30 bps amortization of intangibles impact 0.7 % 0.6 % (10) bps commercial & residential adjusted ebita margin* 19.4 % 21.9 % 250 bps commercial & residential solutions ebit margin fy21 fy22 change commercial & residential ebit margin (gaap) 20.5 % 19.9 % (60) bps restructuring and related costs 0.3 % 0.3 % - bps amortization of intangibles impact 0.8 % 0.7 % (10) bps commercial & residential adjusted ebita margin* 21.6 % 20.9 % (70) bps aspentech ebit margin fy22 q4 fy22 aspentech ebit margin (gaap) 1.9 % (15.2) % restructuring and related costs — % (0.2) % amortization of intangibles impact 36.1 % 48.3 % aspentech adjusted ebita margin* 38.0 % 32.9 % q4 cash flow q4 fy21 q4 fy22 change operating cash flow (gaap) $ 855 $ 1,217 42 % capital expenditures (231) (196) 21 % free cash flow* $ 600 $ 1,021 63 % year-to-date cash flow fy21 fy22 change operating cash flow (gaap) $ 3,575 $ 2,922 (18) % capital expenditures (581) (531) (2) % free cash flow* $ 2,994 $ 2,391 (20) % note 1: underlying sales and orders exclude the impact of acquisitions, divestitures and currency translation. note 2: all fiscal year 2023e figures are approximate, except where range is given.
