ABB Reports Higher Q1 Revenues, Earnings.Business Editors ZURICH, Switzerland--(BUSINESS WIRE)--April 24, 2001 - ABB launched a bid to acquire Entrelec of France, a leading supplier of industrial automation and control equipment, and bought Eutech Engineering Solutions Ltd., a British consulting group specializing in the chemicals, petrochemicals and pharmaceutical industries. - ABB won orders with a total value well above US$ 400 million for subsea oil production systems, and orders worth almost US$ 100 million to improve the power network in London, England. - A new generator, Powerformer Light, was launched for use in gas and steam turbine power plants. It can be connected directly to the high-voltage grid, thus eliminating the need for any step-up transformer. The product was developed in parallel with the world's first ultra-high-voltage motor, Motorformer(TM), also connectable directly to the grid. - ABB's Industrial IT solutions portfolio recently received the Editor's Choice Award from Control Engineering magazine, identifying it as one of the most innovative products of 2000. Industrial IT-enabled products aim to significantly boost customer productivity by integrating information from all of a company's processes into a single real-time information management system. - On April 6, ABB listed American Depositary Shares on the New York Stock Exchange. The move aims to broaden the company's shareholder base in the United States. - In late March, ABB launched a program to buy back six million shares for cancellation, corresponding to about two percent of the company's total share capital. The buy-back plan is designed to create more value for shareholders. - Shareholders at ABB's Annual General Meeting in Zurich and Vasteras in March approved a 4-to-1 share split aimed at improving the liquidity of the share. The split is planned to take effect on May 7, 2001. ABB n. 1. Among weavers, yarn for the warp. Hence, Noun 1. ABB - an urban hit squad and guerrilla group of the Communist Party in the Philippines; formed in the 1980s said today that revenues and earnings rose in the first quarter of 2001, despite mixed current business conditions and a further strengthening of the U.S. dollar. ABB also achieved key growth strategy milestones, building up its customer-centric organization and strengthening its Industrial IT capability. US$ in millions, except per share data 1Q 2001 1Q 2000 Change 1) ---------------------------------------------------------------------- Orders 6,786 7,141 - 5 % Revenues 5,380 5,259 2 % Earnings before interest and taxes (EBIT) 334 315 6 % Income from continuing operations 201 206 - 2 % Net income 138 55 151 % Basic and diluted earnings per share (US$) from - Income from continuing operations 0.68 0.70 - Net income 0.47 0.19 EBITDA 524 514 1) In local currencies, orders are unchanged, revenues rose 8%, EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). was up 13%, and income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the rose 5% Orders decreased 5 percent to US$ 6,786 million, and were unchanged in local currencies, as the Power Distribution and Oil, Gas and Petrochemicals segments could not repeat their very strong order performance of the first quarter of 2000. Compared to the fourth quarter of 2000, total Group orders were up 14 percent in U.S. dollars. Revenues grew by 2 percent to US$ 5,380 million. When expressed in local currencies, revenues increased by 8 percent. Higher revenues in Oil, Gas and Petrochemicals more than offset decreases in Power Distribution and Power Transmission. Earnings before interest and taxes In financial and business accounting, earnings before interest and taxes (EBIT) is a measure of a firm's profitability that excludes interest and income tax expenses.[1] EBIT = Operating Revenue – Operating Expenses + Non-operating Income (EBIT) rose 6 percent to US$ 334 million compared to the first quarter of 2000, and 13 percent when expressed in local currencies This includes other income from equity accounted companies and licenses, a capital gain of US$ 2 million and a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of US$ 6 million. EBIT margin increased from 6 percent to 6.2 percent over the period, driven in large part by continued synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. gains from the integration of Elsag Bailey Bailey may refer to:
In the United Kingdom:
"I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in encouraged that we continue to improve our performance, especially as demand has been mixed and we are implementing a major transformation of the company," said ABB president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Jorgen Centerman. Income from continuing operations was down 2 percent - up 5 percent in local currencies - as interest expense increased due to somewhat higher debt levels throughout the last year. Net income more than doubled to US$ 138 million. However, most of this improvement came from the reduced impact of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . ABB's net cash provided by operating activities reversed from a positive US$ 23 million last year (first time ever that operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. was positive in the first quarter) to a negative US$ 217 million. This was primarily due to higher working capital, driven by an increased level of large order execution compared to last year, and more active trading by Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , with a net increase in marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has . As of March 31, 2001, ABB employed 161,374 people compared to 160,818 at yearend 2000. Outlook(1) The outlook for the full year 2001 remains unchanged: Revenues are expected to increase in comparison to 2000, and EBIT, income from continuing operations and cash flow from operating activities are expected to be well above last year's levels, assuming current mixed business conditions continue. For the first six months of 2001, EBIT growth is expected to lag revenue growth due to the high level of one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. items in the first half of 2000. The second half of 2001 is expected to see higher comparative earnings growth. Mid-term targets remain unchanged. Highlights of the first quarter 2001 - ABB launched a bid to acquire Entrelec of France, a leading supplier of industrial automation and control equipment, and bought Eutech Engineering Solutions Ltd., a British consulting group specializing in the chemicals, petrochemicals and pharmaceutical industries. - ABB won orders with a total value well above US$ 400 million for subsea oil production systems, and orders worth almost US$ 100 million to improve the power network in London, England. - A new generator, Powerformer Light, was launched for use in gas and steam turbine power plants. It can be connected directly to the high-voltage grid, thus eliminating the need for any step-up transformer. The product was developed in parallel with the world's first ultra-high-voltage motor, Motorformer(TM), also connectable directly to the grid. - ABB's Industrial IT solutions portfolio recently received the Editor's Choice Award from Control Engineering magazine, identifying it as one of the most innovative products of 2000. Industrial IT-enabled products aim to significantly boost customer productivity by integrating information from all of a company's processes into a single real-time information management system. - On April 6, ABB listed American Depositary Shares on the New York Stock Exchange. The move aims to broaden the company's shareholder base in the United States. - In late March, ABB launched a program to buy back six million shares for cancellation, corresponding to about two percent of the company's total share capital. The buy-back plan is designed to create more value for shareholders. - Shareholders at ABB's Annual General Meeting in Zurich and Vasteras in March approved a 4-to-1 share split aimed at improving the liquidity of the share. The split is planned to take effect on May 7, 2001. Accounting change: FAS 133 Recently, the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). (FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). )(2) changed the accounting rules for all companies reporting under US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). regarding derivative instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. and hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. activities (FAS 133), which ABB was required to adopt effective January January: see month. 1, 2001. As communicated earlier, ABB had to record a one-time, non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. . The income statement was negatively affected by US$ 63 million, recorded below income from continuing operations, and equity was reduced by US$ 41 million under the heading "other comprehensive income." Transformation update The transformation of ABB into a customer-centric organization, which began in mid-January n. 1. the middle part of January. Noun 1. mid-January - the middle part of January period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue period" 2001, is proceeding according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. plan and the new organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. is expected to be in place in most markets by mid-year 2001. The realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. began in 19 countries where ABB's presence is strongest, representing about 80 percent of global revenues. ABB said it will begin to report its financial results according to its new organizational structure by the third quarter of this year. The company also plans to report quarterly on the progress of its transformation. Measurements are being defined which will track important parameters like customer penetration, key customer accounts and certification of Industrial IT products. The transformation is based on the creation of six new customer-based divisions serving utilities, process industries, manufacturing and consumer industries, the oil, gas and petrochemicals sectors, and external channel partners for power as well as for automation technology products. The previous Financial Services segment remains unchanged. A Group Processes division provides and supports the implementation of efficient best-practice business tools and processes across all divisions, while the Transformation team drives the change process, allowing front-line people to focus on serving the needs of customers rather than managing the transformation. Industrial IT expansion continues The company won a number of orders for Industrial IT-based systems in the first quarter. For example, Visy Industries Visy Industries was established in Melbourne, Australia in 1948 and has grown to become one of the world’s largest privately-owned paper recycling and packaging companies. In 2003, Visy employed more than 8000 people. Total manufacturing revenues exceeded $2. of Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. ordered Industrial IT systems - including manufacturing execution and supply chain management solutions - for its five pulp and paper mills in Australia and two mills in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . ABB also expanded its product capabilities and geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. scope to support growth in its Industrial IT offerings. The acquisition of Eutech brings ABB expert knowledge of the chemical, petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. and pharmaceutical industries. The planned acquisition of Entrelec would add considerable industry expertise, advanced technology and improved coverage in key European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. and American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of markets. Together, they allow ABB to deliver a wider range of Industrial IT offerings to more customers. Regional market review Demand for ABB's products and services in the first quarter of 2001 varied widely by country and business compared to last year. For the European markets as a whole, orders were 3 percent higher in nominal Trifling, token, or slight; not real or substantial; in name only. Nominal capital, for example, refers to extremely small or negligible funds, the use of which in a particular business is incidental. NOMINAL. Relating to a name. terms (+10 percent in local currencies) and revenues were up 1 percent (+8 percent). In the Americas A·mer·i·cas , the See America. , demand was mixed, with order intake intake /in·take/ (in-tak´) the substances, or the quantities thereof, taken in and utilized by the body. intake, n the substance or quantities thereof taken in and used by the body. down 7 percent nominally nom·i·nal adj. 1. a. Of, resembling, relating to, or consisting of a name or names. b. Assigned to or bearing a person's name: nominal shares. 2. Existing in name only. (-4 percent) while revenues rose 5 percent (+7 percent). In Asia, orders grew by 6 percent (+14 percent), reflecting stronger economies in certain countries, while revenues were down 7 percent (unchanged). Orders from the Middle East and Africa were 38 percent lower (-32 percent) compared to an unusually high volume of large order bookings in the Oil, Gas and Petrochemicals segment last year. As these flowed through to revenues this year, ABB saw a first-quarter 14-percent revenue increase in the region. Segment review The ABB Group's reporting currency Reporting Currency The currency used in published reports and financial documents. Notes: All annual and quarterly reports state the currency in which their results are listed. is the U.S. dollar, which continued to strengthen against most of ABB's local currencies. The impact of the strengthened dollar, noted in earlier quarters, continued to unfavorably impact results during the first quarter. All figures reflect first quarter activity.
Automation
2001 2000 Nominal Local
---- ---- ------- -----
US$ in millions, except
where indicated
Orders 2,148 2,134 + 1% + 7%
Revenues 1,765 1,742 + 1% + 7%
EBIT 113 95 + 19% + 25%
EBIT Margin 6.4% 5.5%
Demand in process automation markets was flat, offset by growth in substation automation Introduction Need for substation automation See also IEC 61850 IEC 60870-5-103 Intelligent Grid External Links
adj. Being between 10 and 99 percent: double-digit inflation. growth offsetting downturns in others. Total revenues were similarly flat, although again on mixed markets. Strong revenue growth was recorded in Drives and Flexible Automation, while other businesses were flat or negative. EBIT improved by 19 percent. Productivity gains from the successful integration of Elsag Bailey contributed to significant earnings growth in Instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. and Control systems, along with Pulp, Paper, Metals, Minerals and Utilities. Earnings growth was also supported by Drives and Electrical Machines Electrical machine is a device that convert either mechanical energy to electrical energy or vice versa, and change AC voltage from one level to another level. Electrical machines are divided into three parts: Generator .
Power Transmission
2001 2000 Nominal Local
---- ---- ------- -----
US$ in millions, except
where indicated
Orders 1,132 1,013 + 12% + 18%
Revenues 699 751 - 7% - 1%
EBIT 60 55 + 9% + 13%
EBIT Margin 8.6% 7.3%
Driven by concerns about the adequacy of energy supply, demand continued to strengthen in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , with Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia Pacific
activity also up. As a result, first quarter orders grew strongly by 12
percent.
Revenues were down from last year, reflecting both a lower order intake in the second half of 2000, as well as the comparison with high revenues in the first quarter of last year. EBIT improved, leading to a margin of 8.6 percent for the quarter.
Power Distribution
2001 2000 Nominal Local
---- ---- ------- -----
US$ in millions, except
where indicated
Orders 703 922 - 24% - 20%
Revenues 605 650 - 7% - 2%
EBIT 30 35 - 14% - 16%
EBIT Margin 5.0% 5.4%
Regional demand presented a mixed picture in the first quarter, with increased investment from Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , continued activity in Europe, and a slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in North America. Orders across all business areas were 24 percent down in comparison to the first quarter of 2000. First quarter revenues were also down, as volume increases in Distribution Transformers and Medium-Voltage Equipment did not make up for the drop in Power Distribution Solutions. Similarly, earnings were below last year's level due to higher base commodity prices and lower volume.
Building Technologies
2001 2000 Nominal Local
---- ---- ------- -----
US$ in millions, except
where indicated
Orders 1,734 1,824 - 5% + 3%
Revenues 1,413 1,390 + 2% + 9%
EBIT 90 95 - 5% + 1%
EBIT Margin 6.4% 6.8%
Market demand showed signs of slowing on fears of a downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the business cycle. Orders were down in nominal terms, although as always this segment's largely European business was especially affected by the strength of the U.S. dollar. All business areas reported modest order increases except for Building Systems, which had a particularly large order booked in first quarter 2000. Revenues increased slightly in nominal terms, with all business areas except Service (which divested its U.S. workshops in 2000) contributing to growth. Earnings were down in nominal terms, but improved when expressed in local currencies. All businesses showed earnings growth except Service and Air Handling Equipment.
Oil, Gas and Petrochemicals
2001 2000 Nominal Local
---- ---- ------- -----
US$ in millions, except
where indicated
Orders 961 1,117 - 14% - 12%
Revenues 754 529 + 43% + 49%
EBIT 41 30 + 37% + 43%
EBIT Margin 5.4% 5.7%
Oil prices remained firm during the first quarter, although the average price was lower than the 2000 average. There was good activity in the upstream From the consumer to the provider. See downstream. (networking) upstream - Fewer network hops away from a backbone or hub. For example, a small ISP that connects to the Internet through a larger ISP that has their own connection to the backbone is downstream from the larger business, with a large number of deep water prospects under development, and particularly strong demand from West Africa West Africa A region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century. West African adj. & n. , the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east , and Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. . Downstream From the provider to the customer. Downloading files and Web pages from the Internet is the downstream side. The upstream is from the customer to the provider (requesting a Web page, sending e-mail, etc.). markets were also active, but more cautious given uncertainty about global economic trends and their potential impact on downstream industry financial performance. Orders declined in comparison with the high order intake in the first quarter of 2000. Upstream orders increased significantly on strong demand, but were offset by the downstream business. In contrast, revenues were substantially up across both the downstream and upstream businesses, reflecting the higher order backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at the end of last year. Earnings also increased significantly on strong revenue growth, while EBIT margin was slightly down. This was largely due to lower margins on large downstream engineering, procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. and contracting (EPC (1) (Entertainment PC) See HTPC. (2) (Electronic Product Code) A standard code for RFID tags administered by EPCglobal Inc. (www.epcglobalinc.org). ) projects, which typically contain non-ABB products.
Financial Services
2001 2000 Nominal Local
---- ---- ------- -----
US$ in millions, except
where indicated
Revenues 479 453 + 6% + 10%
EBIT 84 84 0% + 7%
Interest rates and currency markets were volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. and credit spreads widened in the first quarter of 2001, reflecting widespread concern about borrower BORROWER, contracts. He to whom a thing is lent at his request. 2. The contract of loan confers rights, and imposes duties on the borrower' 1. In general, he has the right to use the thing borrowed, during the time and for the purpose intended between the credit quality. These market developments presented opportunities for ABB's Financial Services, which were reflected in higher revenues and earnings. In particular, Structured Finance and Equity Ventures reported strong earnings growth on their loan, leasing and investment portfolios. Reporting dates The remaining quarterly reporting dates in 2001 for ABB Ltd are scheduled for July July: see month. 24 and October October: see month. 24. The company will host a conference call for analysts and investors to discuss its first quarter results today at 16:00 Central European time Central European Time Noun the standard time adopted by Western European countries one hour ahead of Greenwich Mean Time, corresponding to British Summer Time Abbrev: (CET) . Teleconference callers should dial +41 91 610 4111 in Europe and (412) 858 4600 in the U.S. This facility is also available to the media on a "listen only" basis. This press release includes forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for ABB Ltd and ABB Ltd's lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects", "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are major markets for ABB's businesses, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in ABB's filings with the U.S. Securities and Exchange Commission. Although ABB Ltd believes that its expectations reflected in any such forward looking statement are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved.
ABB Ltd
Consolidated Income Statements
Three months ended March 31
(Unaudited)
---------------------------------------
2001 2000
------------------- --------------
(in millions, except per share data)
Revenues $ 5,380 $ 5,259
Cost of sales (3,982) (3,859)
------------ -----------
Gross profit 1,398 1,400
Selling, general and
administrative expenses (1,054) (1,065)
Amortization expense (58) (55)
Other income (expense), net 48 35
------------ ----------
Earnings before interest and taxes 334 315
Interest and dividend income 142 139
Interest expense (180) (154)
------------ ----------
Income from continuing operations
before taxes and minority interest 296 300
Provision for taxes (87) (89)
Minority interest (8) (5)
------------ ----------
Income from continuing operations 201 206
Income (loss) from discontinued
operations, net of tax -- (151)
Change in accounting principles
(introduction of FAS 133) (63) --
------------ ----------
Net income $ 138 $ 55
============ ==========
Weighted average shares outstanding 293 295
Dilutive potential shares 2 1
------------ ----------
Diluted weighted
average shares outstanding 295 296
============ ==========
Basic earnings per share:
Income from continuing operations $0.68 $ 0.70
Income (loss) from
discontinued operations -- (0.51)
Change in accounting principles (0.21) --
------------ ----------
Net income $ 0.47 $ 0.19
============ ==========
Diluted earnings per share:
Income from
continuing operations $ 0.68 $ 0.70
Income (loss) from
discontinued operations -- (0.51)
Change in accounting principles (0.21) --
------------ ----------
Net income $ 0.47 $ 0.19
============ ===========
ABB Ltd
Consolidated Balance Sheets
At March 31, At December 31,
2001 2000
---------------- ----------------------
(Unaudited)
(in millions, except share data)
Cash and equivalents $ 1,860 $ 1,397
Marketable securities 3,781 4,209
Receivables, net 8,356 8,328
Inventories, net 3,485 3,192
Prepaid expenses and other 2,674 1,585
------------- -----------
Total current assets 20,156 18,711
Financing receivables 4,088 3,875
Property, plant
and equipment, net 3,045 3,243
Goodwill and other
intangible assets, net 3,153 3,155
Investments and other 1,942 1,978
------------ -----------
Total assets $ 32,384 $ 30,962
============ ===========
Accounts payable, trade $ 3,456 $ 3,375
Accounts payable, other 2,493 2,363
Short-term borrowings and
current maturities of
long-term borrowings 5,500 3,587
Accrued liabilities and other 6,960 6,127
------------ ----------
Total current liabilities 18,409 15,452
Long-term borrowings 3,985 3,776
Pension and other
related benefits 1,688 1,790
Deferred taxes 1,364 1,528
Other liabilities 2,743 2,924
------------ -----------
Total liabilities 28,189 25,470
Minority interest 292 321
Total stockholders' equity 3,903 5,171
------------ ------------
Total liabilities
and stockholders' equity $ 32,384 $ 30,962
============ ============
ABB Ltd
Consolidated Statements of Cash Flows
Three months ended March 31
(Unaudited)
-----------------------------------------
2001 2000
------------------- ------------------
(in millions)
Operating Activities
Income from continuing operations $ 201 $ 206
Adjustments to reconcile income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 190 199
Restructuring charges (8) 10
Pension and
post-retirement benefits 1 (4)
Deferred taxes 26 12
Net gain from sale of property,
plant and equipment (2) (25)
Other (61) (31)
Changes in operating assets
and liabilities
Marketable securities - trading (36) 57
Other assets - liabilities (528) (401)
---------- -----------
Net cash provided
by operating activities (217) 23
========== ===========
Investing Activities
Changes in financing receivables (540) 10
Purchases of marketable securities
(other than trading) (890) (899)
Purchases of property,
plant and equipment (189) (120)
Acquisitions of businesses
(net of cash acquired) (19) (45)
Proceeds from sales of
marketable securities
(other than trading) 1,022 618
Proceeds from sales of property,
plant and equipment 23 13
Proceeds from sales of businesses
(net of cash disposed) 8 78
--------- ---------
Net cash used
in investing activities (585) (345)
--------- ---------
Financing Activities
Changes in borrowings 2,476 1,230
Treasury and
capital stock transactions (579) --
Dividends paid (502) (531)
Other (24) (15)
---------- -----------
Net cash provided by
(used in) financing activities 1,371 684
---------- ----------
Net cash provided
by discontinued operations (62) --
Effects of exchange rate
changes on cash and equivalents (44) (43)
----------- -----------
Net change in cash and equivalents 463 319
Cash and
equivalents-beginning of year 1,397 1,615
----------- -----------
Cash and
equivalents-end of period $ 1,860 $ 1,934
=========== ===========
Interest paid $ 177 $ 157
Taxes paid 122 95
ABB Ltd notes to consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge (Unaudited) (Dollars in millions except per share amounts) Note 1 The Company ABB Ltd is a global technology company organized in five industrial business segments and a financial services segment, with each segment having global responsibility for its business strategies and its manufacturing and product development activities, as applicable. Development in the three months ended March 31st, 2001: - Share split At our annual general meeting held on March 20, 2001, our shareholders approved a four-for-one share split to reduce the nominal value Nominal Value The stated value of an issued security that remains fixed, as opposed to its market value, which fluctuates. Notes: When referring to fixed-income securities, the nominal value is also the face value. of our shares from CHF CHF In currencies, this is the abbreviation for the Swiss Franc. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 10 each to CHF 2.50 each. The share split will become effective shortly after the effectiveness of a change to the Swiss Code of Obligations allowing such a share split. We expect that the change in law will occur on May 1, 2001. - Share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. At our annual general meeting held on March 20, 2001 our shareholders approved a share repurchase of 6,000,000 shares (24,000,000 shares after the share split has been implemented), which corresponds to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 2% of our nominal share capital. We intend to propose to our shareholders at next year's annual general meeting a reduction of our nominal share capital for the purpose of canceling such shares. By March 31, 2001 we have purchased 637,000 out of the 6,000,000 shares using our newly opened second trading line. Additionally, between January 1, 2001 and March 31, 2001, we purchased a total of approximately 6,769,000 shares in open markets purchases that we hold as treasury shares. We may make additional purchases of shares from time to time in the future, e.g. to hedge employee option programs. - Listing New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of On April 6, 2001 we listed our American Depositary Shares American Depositary Share (ADS) Foreign stock issued in the US and registered in the ADR system. (ADSs) on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . Simultaneously, we have launched an exchange offer aimed at giving holders of restricted ADSs the opportunity to exchange to our new ADSs that are eligible for trading on the New York Stock Exchange. Four new ADSs will represent one registered share. Once the share split becomes effective, each new ADS will represent one ABB share. Our new ADSs are traded under the symbol "ABB". Note 2 Significant Accounting Policies The consolidated financial statements are prepared on the basis of United States (U.S.) generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and are presented in U.S. dollars ($) unless otherwise stated. Par value of capital stock is denominated in Swiss francs Noun 1. Swiss franc - the basic unit of money in Switzerland franc - the basic monetary unit in many countries; equal to 100 centimes centime - a fractional monetary unit of several countries: France and Algeria and Belgium and Burkina Faso and Burundi and (CHF). The financial information as of March 31, 2001 should be read in conjunction with the December December: see month. 31, 2000 financial statements contained in our registration statement on form 20-F and the Annual Report. Introduction on FAS 133 In June June: see month. 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, which is required to be adopted in years beginning after June 15, 2000. The Company has adopted the new Statement with effect from January 1, 2001. The Statement requires us to recognize all derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. on the balance sheet at fair value. Derivatives that are not hedges must be adjusted to fair value through income. If the derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. is a hedge, depending on the nature of the hedge, changes in the fair value of derivatives will either be offset against the change in fair value of the hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Based on the Company's derivative positions at December 31, 2000, the Company has upon adoption at January 1st, 2001 recorded a loss from the cumulative effect of an accounting change of $63 million in the consolidated income statement consolidated income statement An income statement that combines the income statements of two or more organizations. As with other consolidated statements, a consolidated income statement eliminates any funds owed to or due from firms within the same group. and a reduction of $41 million in other comprehensive income.
Note 3 Statement of Consolidated
Common Stockholders' Equity
(Dollars in millions)
Balance at January 1, 2001 $ 5,171
Comprehensive income:
Net income 138
Foreign currency translation
adjustments (111)
Unrealized loss on available-for-sale
securities (51)
Change in accounting principles (FAS 133)
as per January 1, 2001 (41)
FAS 133 effect on Q1 2001 (122)
-------------
Total comprehensive income (187) (187)
Dividends paid (502)
Treasury stock transactions (579)
----------
Balance at March 31, 2001 $ 3,903
Note 4 Segment and Geographic Data Geographic data is about much more than electronic pictures of maps. The geographic data that describes our world allows for city planning, flood prediction and relief, emergency service routing, environmental assessments, wind pattern monitoring and many other applications. For all periods presented, the Company was organized into the following business segments: Automation: Offers products, solutions and services focused on improving quality and efficiency as well as reducing environmental impacts in industrial and utility plants. The Company provides knowledge-based, value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: solutions for the automation needs of customers in these industries. Power Transmission: Provides electrical power transmission products, solutions and services. The Company's customers are mainly electrical utilities, owners and operators of power transmission systems and energy traders Traders Individuals who take positions in securities and their derivatives with the objective of making profits. Traders can make markets by trading the flow. When they do this, their objective is to earn the bid/ask spread. , who deliver high-voltage adj. 1. having, operating on, or powered by high voltage; as, a high-voltage generator; a high-voltage line s>. 2. same as high-powered. Adj. 1. electricity from power plants to the distribution networks providing electrical power to end users. Power Distribution: Provides a broad offering of products, solutions and services, including transformers, substations and circuit breakers Circuit breakers Measures instituted by exchanges to stop trading temporarily when the market has fallen by a certain percentage in a specified period. They are intended to prevent a market free fall by permitting buy and sell orders to rebalance. , to power network management services, for the distribution of electricity from the transmission grid to the end consumer. The Company's principal customers are utilities that own or operate networks, commercial institutions, such as airports, hospitals and supermarkets Supermarkets, past and present, include: Transnational Originating (HQ) country first. The rest in alphabetical order.
Building Technologies: Provides a wide range of products and comprehensive service and maintenance solutions for industrial, commercial and public facilities, including low-voltage adj. 1. (Electricity) subjected to or capable of operating under relative low voltage, usually considered as no greater than 250 volts. Contrasted with high-voltage nt>. Adj. 1. products, such as switches, fuses, air handling and lighting systems, as well as programmable facility management systems that can automatically operate building systems. Oil, Gas and Petrochemicals: Provides technologies to customers in the upstream exploration and production of oil and gas, and downstream refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar and petrochemical processing. Financial Services: Offers a wide range of financing, sales support, risk management services and insurance both within the Company and to third-parties. The Company evaluates performance based on earnings before interest and taxes (EBIT), which excludes interest income and expense, taxes, minority interests, the results from discontinued operations and other items.
Segment data
Data per Business Segment Orders received Revenues
(US$ in millions) --------------------------------------------
January - March January - March
2001 2000 2001 2000
Automation $ 2,148 $ 2,134 $ 1,765 $ 1,742
Power Transmission 1,132 1,013 699 751
Power Distribution 703 922 605 650
Building Technologies 1,734 1,824 1,413 1,390
Oil, Gas and
Petrochemicals 961 1,117 754 529
Financial Services 479 453 479 453
Corporate/Other (371) (322) (335) (256)
================================================
Total $ 6,786 $ 7,141 $ 5,380 $ 5,259
Data per Business Segment EBIT (operating income) Depreciation
(US$ in millions) and amortization
January - March January - March
-----------------------------------------------
2001 2000 2001 2000
Automation $ 113 $ 95 $ 71 $ 69
Power Transmission 60 55 23 24
Power Distribution 30 35 15 16
Building Technologies 90 95 29 33
Oil, Gas and
Petrochemicals 41 30 17 15
Financial Services 84 84 6 7
Corporate/Other (84) (79) 29 35
===============================================
Total $ 334 $ 315 $ 190 $ 199
Geographic Information
Data per Region Orders received Revenues
(US$ in millions) ------------------------------------------------
January - March January - March
2001 2000 2001 2000
Europe $ 3,699 $ 3,598 $ 2,940 $ 2,904
The Americas 1,828 1,966 1,400 1,329
Asia 685 646 564 608
Middle East and Africa 574 931 476 418
Total $ 6,786 $ 7,141 $ 5,380 $ 5,259
Orders received and revenues have been reflected in the regions
based on the location of the customer.
--------------
(1) Assumes no major currency effects
(2) FASB is the key body governing US GAAP standards and accounting.
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