Fourth Quarter 2008Earnings Conference CallNovember 4, 2008Safe Harbor Statement

Our commentary and responses to your questions may contain forward-looking statements, including our outlook for the remainder of the year, and Emerson undertakes no obligation to update any such statements to reflect later developments. Information on factors that could cause actual results to vary materially from those discussed today is available in our most recent Annual Report on Form 10-K as filed with the SEC.

Non-GAAP Measures

In this call we will discuss some non-GAAP measures (denoted with *) in talking about our company’s performance, and the reconciliation of those measures to the most comparable GAAP measures is contained within this presentation or available at our website www.emerson.com under Investor Relations.

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Fourth quarter sales up 11% to $6.7 billion with increases in four out of

five business segments

– Strong underlying* sales growth of 7%, led by Process Management,

Network Power and Industrial Automation

– Emerging markets continued to benefit growth

Operating profit margin* improved 70 basis points to 17.5%

Earnings per share from continuing operations of $0.88, up 13%

compared to $0.78 in the prior year quarter

Operating cash flow of $1,295 million and free cash flow* of $1,042

million, up 4% and 6% respectively

Operational efficiency initiatives continue, balance sheet is strong

– Trade Working Capital as a percent of sales to 15.9% from 16.2%

– Net Debt to Net Capital ratio at 23%

– Operating Cash Flow to Total Debt strong at 73%

Fourth Quarter 2008 Highlights

Well-Positioned Going Into an Uncertain 2009

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EmersonFourth Quarter Results($Mil excl. EPS) 2007 2008

Sales $6,028 $6,696

Operating Profit* $1,013 $1,174OP%* 16.8% 17.5%

Earnings - Continuing Ops. $621 $690Earnings% 10.3% 10.3%

Dil. Avg. Shares 800.0 781.4

EPS – Continuing Ops. $0.78 $0.88

Discontinued Ops. - -

EPS $0.78 $0.88

Up 11%• Increases in 4 of 5 business segments

• Process Mgmt. up +13%, Network Power up +19%,

Industrial Automation up +14%

• Underlying* up 7%; FX +2 pts; Acq/Div +2 pts

Up 16%• 70 basis point improvement driven by cost

containment programs, volume leverage and favorable business mix

Up 11%

Repurchased 8.6M shares for $398M in the qtr.

Up 13%

Actively Managing Business Portfolio: Sale of the European

Appliance Motor & Pump Business Closed Sept. 30th, 2008

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United States 1% 3%

Europe 6% 3%

Asia 17% 17%

Latin America 25% 18%

Canada 14% 8%

Middle East/Africa 14% 17%

Total International 13% 10%

Underlying Sales* +7% +7%

Currency +2 pts +4 pts

Acquisitions / Divestitures +2 pts +1 pt

Consolidated Sales +11% +12%

Underlying Sales AnalysisFourth Quarter & Fiscal 2008 Results

Emerging Markets Represented 30% of

Total Sales in 2008

4Q 2008 Fiscal Year 2008

EmersonFourth Quarter Detail

($Mil) 2007 2008

Gross Profit $2,248 $2,474

GP% 37.3% 37.0%

SG&A% 20.5% 19.5%

Operating Profit* $1,013 $1,174

OP%* 16.8% 17.5%

- Other Deductions, Net $60 $133

- Interest Expense, Net $50 $41

Pretax Earnings $903 $1,000Earnings% 15.0% 14.9%

- Taxes $282 $310

- Tax Rate 31.2% 31.0%

Up 10%Improvement from cost

containment programs and volume leverage

Lower incentive share expense

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Up 16%

$22M increase relating to restructuring, $22M charge related to the appliance control business

Up 11%

Full year rate of 31.7% in line with prior guidance

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Emerson’s Restructuring is Pay As We Go –Continuous Process

Emerson restructures continuously throughout the business cycle

Ongoing restructuring efforts support geographic expansion and best cost country programs to improve profitability

Restructuring actions accelerated throughout 2008, as 2009 economy looked tougher

$141$129

$110

$84 $83$98

$0

$20

$40

$60

$80

$100

$120

$140

$160

2003 2004 2005 2006 2007 2008

2007–2008 1

Quarterly Restructuring Expense2003-2008 1

Restructuring Expense

(U.S. $ Millions)

$16

$10

$24

$18$20

$25$23

$45

$0

$10

$20

$30

$40

$50

(U.S. $ Millions)

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2007 2008

1 Includes discontinued operations

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Fourth Quarter Cash Flow & Balance Sheet

($Mil) 2007 2008

Operating Cash Flow $1,242 $1,295

Capital Expenditures ($261) ($253)

Free Cash Flow* $981 $1,042

Cash Flow/Total Debt 79.9% 72.9%

Inventories $2,227 $2,348

Receivables $4,260 $4,618

Payables ($2,501) ($2,699)

Trade WC $3,986 $4,267

TWC % to sales 16.2% 15.9%

Up 4% in 4th Qtr

Up 6% in 4th Qtr151% FCF/Net Earnings* conversion

in Q4

Strong Balance Sheet

Execution on working capital initiatives drives improvement in the ratio

Strong Cash Flow and Strong Balance Sheet

Emerson has had continuous access to the commercial paper markets

High short-term credit rating (A1/P1)

Able to place paper with 30-day duration or longer at normal Emerson

rates

Liquidity

Emerson has a $2.8B backup credit line expiring April 2011 that has never

been drawn against

Cash available throughout world

Liquidity Position Remains Strong and Flexible

$1,777M

Commercial

Paper

$665M

Current

Maturities

$467M

Other $89M

$0

$500

$1,000

$1,500

$2,000

Short-Term Debt Cash

42%

55% 53%

62%

80%73%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2003 2004 2005 2006 2007 2008

Term Debt Maturities

9/30/08

Operating Cash Flow to Debt

(U.S. $ Millions)

(U.S. $ Millions)

$1,221M

S-T Debt vs. Cash

500

250

467

599

30

256 251 251 251 252

407

250

0

250

500

750

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2032

Floating Fixed

9/30/08

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Business Segment EarningsFourth Quarter Results

($Mil) 2007 2008

Business Segment EBIT* $1,023 $1,086Margin 16.6% 15.8%

Diff. In Accounting Methods $54 $60

Corporate & Other ($124) ($105)

Interest Expense, Net ($50) ($41)

Pretax Earnings $903 $1,000

15.0% 14.9%

Up 6%Impacted by $22M restructuring

increase, $22M appliance control business impairment charge and dilutive impact of acquisitions

Up $6 million

Down $19 million

Lower incentive share expense

Down $9 million, lower rates

and strong cash generation

Up 11%

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Process Management Fourth Quarter Results($Mil) 2007 2008Sales $1,665 $1,888

EBIT $341 $416Margin 20.5% 22.0%

Restructuring $7 $4

EBIT Excl. Rest.* $348 $420Margin* 20.9% 22.2%

Up 13%– Underlying* +12%; FX +2 pts; Div/Acq. -1 pt.

• U.S. up 9%, Asia up 23%, Europe up 8%,

Middle East/Africa up 5%

– Strength across the segment

Up 22%– Cost reduction programs and sales volume

leverage drove margin improvement

– Continued investment in new technologies

and global expansion

Longer Cycle Projects Provide Favorable Business

Outlook As We Enter Fiscal Year 2009

Process Management delivered an exceptional year—sales up 17%

to $6.7B and EBIT up 23%

Have not seen increased levels of project cancellations

9/30/08 Backlog increased 14% to $2.9B over 9/30/07

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Industrial Automation Fourth Quarter Results($Mil) 2007 2008Sales $1,123 $1,280

EBIT $187 $199Margin 16.7% 15.6%

Restructuring $3 $8

EBIT Excl. Rest.* $190 $207Margin* 17.0% 16.2%

Up 14%– Underlying* up 9%; FX +5 pts

• U.S. up 11%, Europe up 4%, Asia up 22%

– Strong sales performance in the power

generating alternator, fluid automation and

materials joining businesses

Up 6%– Margin down 110 basis points

– Sales volume leverage and pricing more

than offset by material inflation

– Increased level of restructuring

Fifth consecutive year of double-digit sales increases

Another strong year of underlying* sales growth, up 7% in fiscal year 2008

9/30/08 Backlog increased 27% to $760M over 9/30/07

2009 Demand Expected to Slow Due to Slowing Global

Gross Fixed Investment and Tougher Comparisons

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Network Power Fourth Quarter Results($Mil) 2007 2008Sales $1,438 $1,714

EBIT $204 $215Margin 14.2% 12.6%

Restructuring $9 $12

EBIT Excl. Rest.* $213 $227Margin* 14.8% 13.3%

Up 19%– Underlying* up 9%; Acq +8 pts; FX +2 pts

• U.S. flat, Asia up 19%, Europe up 2%

– Strong growth across the power systems

businesses

Up 6%– Margin down 160 basis points

– Acquisitions had dilutive impact of approx.

150 basis points

Continued expansion of served market through strategic acquisitions

such as Aperture

New Emerson data center will feature the latest breakthrough technologies

in energy efficiency and reliability from Emerson Network Power

9/30/08 Backlog increased 13% to $1.2B over 9/30/07

Moderating Demand Expected as Global Gross Fixed

Investment Weakens as 2009 Progresses

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Climate TechnologiesFourth Quarter Results($Mil) 2007 2008Sales $938 $1,013

EBIT $133 $138Margin 14.2% 13.6%

Restructuring $0 $12

EBIT Excl. Rest.* $133 $150Margin* 14.2% 14.8%

Up 8%– Underlying* up 5%; FX +3 pts

• U.S. up 3%, Europe up 13%, Asia down 3%

– Europe growth driven by the increase in

heat pump compressor sales

Our technology and industry leadership will provide continued

opportunities as the world demands energy responsible solutions

Geographic diversity of business continues to improve in 2008

with 45% of FY2008 sales outside the U.S.

Weak Residential Markets Expected to

Continue Throughout 2009

Up 3%– Margin down 60 basis points

– Price increases more than offset by

material inflation

– Increased restructuring ahead of a

challenging 2009

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Appliance and Tools Fourth Quarter Results ($Mil) 2007 2008Sales $1,013 $975

EBIT $158 $118Margin 15.6% 12.1%

Restructuring $2 $7

EBIT Excl. Rest.* $160 $125

Margin* 15.9% 12.8%

Down 4%– Underlying* down 3%; Divestiture -2 pts; FX +1 pt

• U.S. down 6%, Europe down 4%, Asia up

26%

Down 25%– Margin decrease of 350 basis points

– $22M charge in appliance control business had a

dilutive impact of approx. 230 basis points

– Cost reductions programs and pricing more than

offset by material inflation and volume deleverage

Improved mix of businesses in Appliance and Tools segment through

divestitures and restructuring of businesses

Excluding impact of the charges related to the appliance control

business, EBIT margins expanded in 2008 in a difficult market environment

Market Conditions Will Remain Very Challenging--

No Consumer or Residential Market Recovery

Expected in 2009

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EmersonFiscal Year 2008 Results

($Mil excl. EPS) 2007 2008

Sales $22,131 $24,807

Operating Profit* $3,496 $4,082

OP%* 15.8% 16.5%

EPS – Continuing Ops. $2.65 $3.11

Reported EPS $2.66 $3.06

Dividend per Share $1.05 $1.20

Operating Cash Flow $3,016 $3,293

Return on Total Capital 20.1% 21.8%

Up 12%• Underlying* up 7%, Emerging Markets 30%

of total sales, International 54% of total sales

Up 17%• Volume leverage and cost reductions drive

margin improvement

Up 17%, fifth year of double-digit increase

Up 15%

Up 14%, Dec. dividend increased 10%

Up 9%, $2.1B (63%) of cash flow returned to shareholders via dividends and repurchases

Record high ROTC, target remains 17% -22% depending on acquisition activity

Strongly Positioned to Outperform Core Markets as

We Enter a Challenging 2009

Fiscal Year 2009 Guidance: Very Uncertain and Challenging Global Economics in 2009

Delta

2007-08 2008 2009 Forecast (11/4/08)

Sales +12% $24.8B $23.5 to $25.5B

Operating Margin* +70 basis 16.5% 16.0 – 16.6%points

EPS (continuing operations) +17% $3.11 $2.80 to $3.20

Operating Cash Flow 9% $3.3B $3.3B to $3.5B

Capital Expenditures 5% $714M $680 - $725M

Underlying* sales growth: -4% to +4%

Currency Unfavorable: ~$1.1B (-5%)–Euro to USD$ exchange rate: ~1.28

Assumed future and completed acquisitions +4%

Restructuring: $125 to $150M

Pension Expense: approx. neutral; cash funding up to $200M

Assumptions:

Gross Fixed Investment (GFI)2008-2009

US: Residential (15%) to (20%)

US: Non-residential (3%) to (5%)Europe (1%) to 2%Japan (1%) to 1%China 10% to 12%India 8% to 12%Latin America 5% to 7%

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Emerson delivered an outstanding fiscal year 2008, and our businesses and financial position remain very strong as we finished this record year

Emerson is well positioned as we move into an uncertain fiscal year 2009

– Strong global footprint

– International sales 54% of total business

– Emerging markets 30% of total business

– Good mix of businesses – we have continued to actively manage the portfolio

– Financial strength to invest internally and do acquisitions where appropriate

Summary

The Global Management Team is Prepared for an

Uncertain and Declining Global Economy

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Emerson Business Summary Reconciliation of Non-GAAP Financial Measures

Fiscal 2008

Underlying Sales * 7%

Foreign Currency Translation 4 pts

Acquisitions/Divestitures 1 pt

Net Sales 12%

Forecasted

Fiscal 2009

Underlying Sales * (4) to 4%

Foreign Currency Translation (5) pts

Assumed Future and Completed Acquisitions 4 pts

Net Sales (5) to 3%

Industrial Automation Fiscal 2008

Underlying Sales * 7%

Foreign Currency Translation 7 pts

Net Sales 14%

Forecasted

Fiscal 2009

Operating Profit* ~$3,765-$4,225

% Sales* 16.0%-16.6%

Interest Expense and

Other Deductions, Net ~$ 600

Pretax Earnings ~$3,165-$3,625

% Sales 13.5%-14.2%

Operating Profit FY 2007 FY 2008 % Change

Net Sales 22,131$ 24,807$ 12%

Cost of Sales 14,066 15,668

SG&A Expense 4,569 5,057

Operating Profit * 3,496 4,082 17%

O.P. % * 15.8% 16.5%

Other Deductions, Net 175 303

Interest Expense, Net 228 188

Pretax Earnings 3,093$ 3,591$ 16%

Earnings % 14.0% 14.5%

This information reconciles non-GAAP measures with the most directly comparable

GAAP measure ($M)

4Q 2008 Cash Flow 4Q 2008

Operating Cash Flow 1,295$

Capital Expenditures (253)

Free Cash Flow (Non-GAAP) 1,042

Net Earnings 688

% Net Earnings

Operating Cash Flow 188%

Capital Expenditures (37%)

Free Cash Flow (Non-GAAP) 151%