EMERSON ELECTRIC CO: changes pension accounting to mark-to-market

What happened

• Emerson announced that, effective for the fiscal year ended Sep 30, 2026, it has elected to change its method of accounting for actuarial gains and losses associated with its defined benefit pension and other postretirement benefit plans to mark-to-market accounting.
• Beginning in the 4th quarter of fiscal 2026, the company will recognize actuarial gains and losses annually in the 4th quarter based on the plans' Sep 30 annual measurement date.
• The company expects to record a pretax gain of less than $5 for the mark-to-market adjustment in the 4th quarter of fiscal 2026 based on current actuarial assumptions and estimated plan asset returns; actual results could differ. The change increased earnings for the nine months ended Jun 30, 2026 by $8 ($6 after-tax, $0.01 per share) due to reversal of amortized losses out of accumulated other comprehensive income.

Key details

• The company said it will exclude the annual mark-to-market adjustment from adjusted earnings per share because the adjustment is subject to significant variability from market conditions and actuarial assumptions.
• The annual adjustment will be reported in consolidated results but will not be allocated to reportable segments.
• The filing states the change will have no impact on total cash flows, the funded status of the plans, the company’s funding requirements or benefits payable to plan participants.
• The accounting change is required to be applied retrospectively to all periods presented.

Why it may matter

• This item was reported as Item 2.02 (results of operations and financial condition) and covers a change in how Emerson recognizes actuarial gains and losses for its pension and other postretirement benefit plans. The filing explains the timing, estimated preliminary effect for fiscal 2026 and that the adjustment will be excluded from adjusted earnings per share. The filing does not show why the insider traded or why the company acted.