ABB Reports Improved Earnings in 2000, Unveils Strategy to Drive Growth.Business Editors ZURICH, Switzerland--(BUSINESS WIRE)--Feb. 13, 2001 -- EBIT and operating margins rose in all segments except Power Transmission -- Orders in local currencies were up in all segments and all regions, except Asia -- ABB entered the alternative energy market with new technologies, such as wind power -- ABB completed the divestiture of its nuclear power activities and its share in ABB ALSTOM POWER 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 earnings rose 23 percent in 2000 despite a dip dip, in agriculture, method of treating animals (chiefly livestock) infested with skin parasites such as mites, ticks, and warbles. The animal is dipped into or forced to swim through a tank filled with an insecticide solution. in revenues and set out a strategy for sustainable growth over five years, based on its new customer-centric organization, continuing expansion in key areas and the broadening broad·en tr. & intr.v. broad·ened, broad·en·ing, broad·ens To make or become broad or broader. broad of its Industrial IT offerings across the entire customer base. "Our continuous shift towards higher-margin businesses and continued cost reductions helped us improve earnings," said ABB's 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. "But that is not good enough. Revenue development is still well below our potential. We are now aggressively targeting new ways to deliver more value to our customers, and are confident that we will generate better top-line and bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. performance." US$ in millions, except per share data 2000 1999 Change(a) U.S. GAAP Orders 25,440 24,633 + 3% Revenues 22,967 24,356 - 6% Gross profit 5,745 5,899 - 3% Earnings before interest and taxes (EBIT) 1,385 1,122 + 23% Income from continuing operations 881 643 + 37% Net Income 1,443 1,360 + 6% Basic earnings per share (US$) 4.89 4.59 + 7% Dividend per share (CHF) 3.00(b) 3.00 EBITDA 2,221 1,917 + 16% Note: Key figures according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. International Accounting Standards (IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. ) shown in Appendix appendix, small, worm-shaped blind tube, about 3 in. (7.6 cm) long and 1-4 in. to 1 in. (.64–2.54 cm) thick, projecting from the cecum (part of the large intestine) on the right side of the lower abdominal cavity. . a) In local currencies, orders increased 12%, revenues increased 2% and EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). increased 38%. b) Dividend per share as proposed. Highlights 2000 Reporting for the first time under U.S. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), ABB showed an increase by 23 percent to US$ 1,385 million in EBIT for the full year 2000, compared to the year before. Sluggish demand in some key markets in 2000 resulted in a 6-percent drop in revenues to US$ 22,967 million. In local currencies, revenues increased by 2 percent. 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 was up 37 percent. Net income was 6 percent higher at US$ 1,443 million (for IAS information, see Appendix). Other highlights for the year 2000: -- EBIT and operating margins rose in all segments except Power Transmission -- Orders in local currencies were up in all segments and all regions, except Asia -- ABB entered the alternative energy market with new technologies, such as wind power -- ABB completed the divestiture of its nuclear power activities and its share in ABB ALSTOM POWER Cash Flow and other key data ABB's net cash provided by operating activities amounted to US$ 1,022 million, down 35 percent from last year (1999: US$ 1,575 million). Net cash used in investing activities was US$ 1,713 million (1999: US$ 2,036 million). The difference was covered by net cash from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of US$ 949 million (1999: US$ 723 million), representing net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the sale of the remaining 50-percent shareholding in ABB ALSTOM Alstom (formerly GEC-Alsthom) (Euronext: ALO) is a large French multinational conglomerate whose businesses are power generation, railway signalling; and manufacturing trains (e.g. the TGV and Eurostar as well as Citadis trams) and the world's largest ships (e.g. POWER and the nuclear power business in 2000. Return on equity was 30.6 percent in 2000 (1999: 34.1 percent). As of December December: see month. 31, 2000, ABB employed 160,818 people compared to 161,430 at yearend 1999. Dividend proposal The Board of Directors will propose at the Annual General Meeting a dividend of 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. 3.00 (1999: CHF 3.00). The Board will also propose to buy back six million ABB Ltd shares, corresponding to approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. CHF 1 billion, for cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. . U.S. Listing As earlier communicated, the company intends to list its shares 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. during the second quarter of 2001. Outlook(c) For the full-year 2001, revenues are expected to increase. EBIT, net income from continuing operations and cash flow from operating activities are expected to be well above last year's level. ABB is targeting a minimum average revenue growth of 6 percent per year through 2005 (excluding major acquisitions and divestments). EBIT margin is targeted to increase an average 15 percent per year, reaching 12 percent by 2005. The company also aims to reduce its cost of capital. Growth strategy ABB's strategy for top-line and bottom-line growth builds on: -- The new customer-centric organization -- The broadening of ABB's Industrial IT offering -- Expansion in new growth areas The transformation of ABB along customer lines aims to boost growth by helping customers become more successful in a business environment of accelerating globalization globalization Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation , deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. , consolidation and technology advances. ABB builds on leading positions across its products and services offerings to manufacturing and consumer industries, process industries and utilities in more than 100 countries, and intimate knowledge of its customers' business drivers, success factors and processes, Centerman said. "Our number one growth opportunity lies in our existing customer base," Centerman said. "Today some 30 percent of ABB's annual sales come from our 200 top customers alone. So far, they have mostly been sold only one line of ABB's products. With our new structure, they will have easy access to our entire range. And even small increases in sales to these customers would mean substantial growth in volumes, margins and cash flow." ABB said the organizational transformation into a customer-centric structure would be self-financed at the divisional level, and not incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. any restructuring charges 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. . The new organization will be implemented in most markets by mid-year 2001. ABB has created nine Group divisions - seven customer divisions, and two divisions to drive performance improvements. The Group Transformation division will simplify organizational structures  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. driven by shared objectives globally as well as in each local market. The Group Processes division will create and implement common processes and will also be responsible for the optimal use of infrastructure. Four customer divisions - Utilities, Process Industries, Manufacturing and Consumer Industries, and Oil, Gas and Petrochemicals - will provide end users with faster and easier access to the full range of ABB's products, services and solutions. Two customer divisions - Power Technology Products and Automation Technology Products - are responsible for all generic Generic Describes the characteristics and/or experience of the total universe of a coupon of MBS sector type; that is, in contrast to a specific pool or collateral group, as in a specific CMO issue. products in ABB, and serve external channel partners, such as wholesalers, distributors, original equipment manufacturers (OEMs) and system integrators See systems integrator. . The 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. division serves both internal and external customers with a full range of financing solutions. Instead of multiple ABB product units serving the same customer, often working with different terms and conditions, customers will be served by dedicated units representing ABB's total offering of products, systems, services and solutions. "The cultural change to a fully customer-centric organization is considerable," Centerman said. "In the new Group Transformation division we have senior managers with broad global experience, knowledge of local markets, customer needs and the challenges of organizational change. They will ensure that we retain our market focus during the transformation." Industrial IT ABB is embarking on a Group-wide program to further exploit information technology and the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . The company is creating one single architecture for its entire range of technologies and services, called Industrial IT. ABB is making all its own products Industrial IT-enabled, to ensure that the entire range of its offering can be easily combined to suit customers' requirements. With last year's acquisition of U.S. software company SKYVA International, ABB has the technology to create dedicated online communities linking manufacturers', suppliers' and customers' business processes. "This is called collaborative col·lab·o·rate intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. commerce. It will radically change the way companies operate and thereby create opportunities to improve productivity and efficiency that we can as yet barely imagine," Centerman said. Overall, the Internet allows the targeted mass customization of information, products, services and real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. collaboration Working together on a project. See collaborative software. to suit individual customers' needs. New growth areas A new business area, New Ventures Ltd, has been established to identify and invest in promising new technologies, business innovations and in new partnerships. New Ventures will speed up commercialization of ABB's product and business development, through three units - ABB Industrial IT Venture Capital Fund, ABB Incubation incubation /in·cu·ba·tion/ (in?ku-ba´shun) 1. the provision of proper conditions for growth and development, as for bacterial or tissue cultures. 2. , and ABB Operational Ventures. In alternative energy solutions, ABB is working with a broad range of products, including renewable technologies such as wind power, microturbines and microgrids for distributed clean electricity generation. ABB is targeting additional growth in manufacturing and consumer industries, telecom, logistic lo·gis·tic also lo·gis·ti·cal adj. 1. Of or relating to symbolic logic. 2. Of or relating to logistics. [Medieval Latin logisticus, of calculation automation and the deregulated utility markets. Managing for value With the weighted average cost of capital Weighted average cost of capital (WACC) Expected return on a portfolio of all a firm's securities. Used as a hurdle rate for capital investment. Often the weighted average of the cost of equity and the cost of debt The weights are determined by the relative proportions of equity (WACC WACC See: Weighted average cost of capital ) established for individual ABB businesses in each key market, the company has created an economic yardstick for measuring the potential value of a business strategy, as well as for allocating resources and assessing performance. Going forward, ABB will integrate free cash flow calculations into all of its business planning, from Group goals for value creation to each individual business. Overall goals for value creation are translated into value driver targets, prioritized and broken down into specific actions linked to increasing value. ABB has also reoriented its reporting systems to emphasize dynamic, 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. performance measures. Constantly reviewing business performance against leading indicators Leading Indicator A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators are used to predict changes in the economy, but are not always accurate. of value creation helps managers prioritize pri·or·i·tize v. pri·or·i·tized, pri·or·i·tiz·ing, pri·or·i·tiz·es Usage Problem v.tr. To arrange or deal with in order of importance. v.intr. their daily actions. Rewarding performance Recognizing that employees who contribute to increased shareholder value should share in it, ABB's Management Incentive Program rewards performance with stock options. A key benchmark A performance test of hardware and/or software. There are various programs that very accurately test the raw power of a single machine, the interaction in a single client/server system (one server/multiple clients) and the transactions per second in a transaction processing system. is cash flow generation on a global performance basis. In 2001, ABB will extend the principle of rewarding exceptional performance to a broad base of employees with the planned Employee Share Ownership Program. Commitment to sustainability ABB reached a number of environmental and sustainability targets in 2000. The company also issued a comprehensive social policy, formally recognizing the importance of social performance management in its corporate strategy. Segment overview 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 throughout 2000.
Automation
Local Nominal 2000 1999
----- ------- ---- ----
Orders + 4% - 4% 7,821 8,119
Revenues - 2% - 9% 7,465 8,236
EBIT + 31% + 19% 486 408
EBIT Margin 6.5% 5.0%
Customers focused on increasing productivity and profitability by making their business processes more efficient. Advances in information technology and software development continued to be key drivers of customer demand. Regionally, demand was strongest in Asia, 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. and the Middle East and somewhat lower in the U.S. 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. in 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). was
flat. Business areas Automation Power Products and Marine and
Turbochargers showed significant order growth.Revenues were lower due to several small divestments and a low opening 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. in the systems business. The increase in EBIT reflects cost reductions and efficiency improvements over the past 12 to 18 months.
Power Transmission
Local Nominal 2000 1999
----- ------- ---- ----
Orders + 9% + 1% 3,958 3,918
Revenues - 4% - 11% 3,315 3,712
EBIT - 10% - 15% 262 309
EBIT Margin 7.9% 8.3%
Privatization privatization: see nationalization. privatization Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned and deregulation of electricity markets in the Americas A·mer·i·cas , the See America. stimulated stim·u·late v. stim·u·lat·ed, stim·u·lat·ing, stim·u·lates v.tr. 1. To rouse to activity or heightened action, as by spurring or goading; excite. See Synonyms at provoke. 2. demand for grid interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. projects and associated services needed to upgrade existing power transmission systems. Demand for complete systems and applications packages also continued to rise. Orders recovered strongly during the fourth quarter, led by increased demand for new installations in developing countries, particularly the Middle East. A lower order intake from Latin America in 1999 resulted in reduced revenues, particularly in Power Systems and High Voltage The term high voltage characterizes electrical circuits, in which the voltage used is the cause of particular safety concerns and insulation requirements. High voltage is used in electrical power distribution, in cathode ray tubes, to generate X-rays and particle beams, to Products and Substations. This reduction was only partially offset by increased sales in the Service and Support and Power Transformers businesses. Reduced revenues and costs associated with capacity reductions pushed EBIT and the EBIT margin lower.
Power Distribution
Local Nominal 2000 1999
----- ------- ---- ----
Orders + 20% + 12% 3,116 2,778
Revenues + 5% - 2% 2,830 2,875
EBIT + 5% + 1% 182 181
EBIT Margin 6.4% 6.3%
Increased customer demand in privatized and deregulated electricity markets for efficient power distribution systems, together with new electrification e·lec·tri·fy tr.v. e·lec·tri·fied, e·lec·tri·fy·ing, e·lec·tri·fies 1. To produce electric charge on or in (a conductor). 2. a. in developing countries, continued to drive order growth. Demand grew substantially in the Americas, but was up only slightly in Europe, where deregulation and privatization in some countries are less advanced. Revenues and EBIT were flat as higher volumes helped to offset price pressures. Increased production efficiency, reduced product In model theory, a branch of mathematical logic, the reduced product is a construction that generalizes both direct product and ultraproduct. duplication duplication /du·pli·ca·tion/ (doo-pli-ka´shun) 1. the act or process of doubling, or the state of being doubled. 2. and increased standardization standardization In industry, the development and application of standards that make it possible to manufacture a large volume of interchangeable parts. Standardization may focus on engineering standards, such as properties of materials, fits and tolerances, and drafting allowed our Medium Voltage The force, or pressure, of electricity. Also known as "potential." "Voltage drop" is the difference in voltage from one end of an electrical circuit to the other. For instructional purposes, voltage is often compared to water pressure. See volt-amps and current. Equipment business to sell larger volumes without increasing costs. These benefits were somewhat offset by increased development costs for new technologies.
Oil, Gas and Petrochemicals
Local Nominal 2000 1999
----- ------- ---- ----
Orders + 40% + 29% 3,923 3,030
Revenues - 2% - 9% 2,796 3,086
EBIT + 8% + 2% 169 165
EBIT Margin 6.0% 5.3%
Demand in both 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 and 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 increased in 2000. Oil prices recovered and customers renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. investment in both the resource recovery and the petrochemicals and 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 markets. Orders growth was driven by larger orders with high pass-through pass-through n. 1. An opening between two rooms, especially a shelved space between a kitchen and dining room that is used for passing food. 2. A route through which something is permitted to pass. 3. , and thereby lower margins. Revenues, although down for the year, actually recovered during the fourth quarter as earlier order bookings were realized as sales. Both EBIT and the EBIT margin increased, reflecting a small capital gain.
Building Technologies
Local Nominal 2000 1999
----- ------- ---- ----
Orders + 4% - 6% 6,201 6,630
Revenues + 4% - 7% 5,889 6,324
EBIT + 28% + 16% 456 394
EBIT Margin 7.7% 6.2%
With 80 percent of its business in Europe, the translation effect was strongest in this segment. Demand in Europe was moderate in most sectors, but particularly strong in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and Internet infrastructure market. The North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. economy remained robust, resulting in high demand for low voltage Low voltage is an electrical engineering term that broadly identifies safety considerations of an electricity supply system based on the voltage used. While different definitions exist for the exact voltage range covered by "low voltage", the most commonly used ones include "mains products and industrial fans. Generally improved economic conditions in Asia, the Middle East, Africa and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. fuelled increased demand for our product offerings. Revenues reflect the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of the general contracting business and the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of non-core service workshops. Low Voltage Products and Systems showed good growth, principally as a result of improved market conditions in Europe. Significant increases in the product business, as the result of higher volumes and improved efficiency, pushed the segment's EBIT and EBIT margin significantly higher.
Financial Services
Local Nominal 2000 1999
----- ------- ---- ----
Revenues + 23% + 17% 1,966 1,687
EBIT + 12% + 4% 349 337
As the designated center of financial expertise within the Group, Financial Services actively manages the company's interest rate and foreign exchange exposures. During the year, short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. continued to increase while long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. bond yields declined. Most currencies depreciated Depreciated may refer to:
In 2000, Financial Services revenues increased in almost all business areas. Earnings rose as a result of higher net interest income from the growing lease and loan portfolio, ABB's acquisition of a 35 percent stake in Swedish Export Credit (SEK SEK In currencies, this is the abbreviation for the Swedish Krona. 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. ), and higher earnings from investments in special-purpose infrastructure companies. Insurance earnings decreased as a consequence of reduced investment income and underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. results. Earnings in Treasury Centers were higher due to a strong trading performance. ABB Group Annual Report The Annual Report will be distributed to shareholders and available at our head office in Oerlikon Oerlikon may refer to:
Annual General Meeting and other important dates The Annual General Meeting of ABB Ltd will be held on Tuesday Tuesday: see week. March 20, 2001 in Zurich with a live transmission to Vasteras Väs·ter·ås A city of eastern Sweden west-northwest of Stockholm. Founded before 1000, it was an important medieval city and a center of the Swedish Reformation. Population: 100,000. , Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. . The 2001 quarterly reporting dates for ABB Ltd are scheduled for April 24, July July: see month. 24 and October October: see month. 24. ABB's annual press conference will be held today at 10:30 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) and broadcast live over the Internet (www.abb.com). Journalists are welcome to use the email facility to ask questions. The company will hold its annual meeting for investors and analysts today at 15:00 Central European time. Teleconference callers should dial +41 91 610 4111 in Europe and (412) 858 4600 in the U.S. For questions on technical accounting issues, a telephone meeting will be held from 07:00 to 07:30 Central European time using the same telephone numbers as those above. c) Assumes no major currency effects. This press release includes forward-looking 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 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. areas and industries that are major markets for ABB's businesses, market acceptance of new products and services, changes in governmental regulations, interest rates, and fluctuation Fluctuation A price or interest rate change. in currency exchange rates. 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
(U.S. dollar amounts in millions unless otherwise indicated)
Consolidated Income Statement
Year ended December 31,
2000 1999 1998
(in millions, except per share data)
Revenues $ 22,967 $ 24,356 $ 22,944
Cost of sales (17,222) (18,457) (17,204)
Gross profit 5,745 5,899 5,740
Selling, general and administrative
expenses (4,417) (4,682) (4,297)
Amortization expense (219) (189) (75)
Other income (expense), net 276 94 (42)
Earnings before interest and taxes 1,385 1,122 1,326
Interest and dividend income 565 608 608
Interest expense (644) (708) (659)
Income from continuing operations
before taxes and minority interest 1,306 1,022 1,275
Provision for taxes (377) (343) (337)
Minority interest (48) (36) (15)
Income from continuing operations 881 643 923
Income (loss) from discontinued
operations, net of tax 1) 562 717 (441)
Net income $ 1,443 $ 1,360 $ 482
Weighted average shares outstanding 295 296 298
Dilutive potential shares 1 1 -
Diluted weighted average shares
outstanding 296 297 298
Basic earnings per share:
Income from continuing operations $ 2.99 $ 2.17 $ 3.10
Income (loss) from discontinued
operations 1.90 2.42 (1.48)
Net income $ 4.89 $ 4.59 $ 1.62
Diluted earnings per share:
Income from continuing operations $ 2.97 $ 2.17 $ 3.10
Income (loss) from discontinued
operations 1.90 2.41 (1.48)
Net income $ 4.87 $ 4.58 $ 1.62
1) Consists mainly of gains from dispositions of discontinued
operations (Power Generation business in 2000 and 1999, Adtranz
in 1999), offset by operating losses.
ABB Ltd
(U.S. dollar amounts in millions unless otherwise indicated)
Consolidated Balance Sheets
December 31,
--------------------
2000 1999
--------- --------
(in millions, except per
share data)
Cash and equivalents $ 1,397 $ 1,615
Marketable securities 4,209 4,771
Receivables, net 8,328 7,804
Inventories, net 3,192 3,265
Prepaid expenses and other 1,585 1,602
Total current assets 18,711 19,057
Financing receivables 3,875 3,427
Property, plant and equipment, net 3,243 3,813
Goodwill and other intangible assets, net 3,155 2,904
Investments and other 1,978 1,377
Total assets $ 30,962 $ 30,578
Accounts payable, trade $ 3,375 $ 3,194
Accounts payable, other 2,363 2,686
Short-term borrowings and current
maturities of long-term borrowings 3,587 3,367
Accrued liabilities and other 6,127 6,635
Total current liabilities 15,452 15,882
Long-term borrowings 3,776 3,586
Pension and other related benefits 1,790 1,954
Deferred taxes 1,528 1,656
Other liabilities 2,924 2,912
Total liabilities 25,470 25,990
Minority interest 321 317
Stockholders' equity:
Capital stock and additional
paid-in capital, par value CHF 10,
300,002,358 shares 2,082 2,071
Retained earnings 4,628 3,716
Accumulated other comprehensive loss (1,122) (1,031)
Less:
Treasury stock, at cost(4,133,233
and 5,452,550 shares at December
31, 2000 and 1999, respectively) (417) (485)
Total stockholders' equity 5,171 4,271
Total liabilities and stockholders'
equity $ 30,962 $ 30,578
ABB Ltd.
(U.S. dollar amounts in millions unless otherwise indicated)
Consolidated Statements of Cash Flows
Year ended December 31,
-----------------------
2000 1999 1998
---- ---- ----
(in millions)
Operating Activities
Income from continuing operations $881 $643 $923
Adjustments to reconcile income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 836 795 648
Restructuring charges (73) (52) 76
Pension and post-retirement benefits (57) (38) (73)
Deferred taxes 102 10 18
Net gain from sale of property, plant
and equipment (247) (47) (102)
Other (119) (147) (108)
Changes in operating assets and
liabilities:
Marketable securities-trading 10 151 (344)
Trade receivables 77 (328) (237)
Inventories (136) (7) (901)
Trade payables 266 433 187
Other assets and liabilities, net (518) 162 713
----- ----- -----
Net cash provided by operating
activities 1,022 1,575 800
===== ===== ====
Investing Activities
Changes in financing receivables (833) (655) (385)
Purchases of marketable securities
(other than trading) (2,239) (973) (1,043)
Purchases of property, plant and
equipment (553) (839) (768)
Acquisitions of businesses (net of
cash acquired) (893) (1,720) (271)
Proceeds from sales of marketable
securities (other than
trading) 2,292 1,307 979
Proceeds from sales of property,
plant and equipment 238 488 242
Proceeds from sales of businesses
(net of cash disposed) 275 356 229
---- ----- -----
Net cash used in investing
activities (1,713) (2,036) (1,017)
----- ----- ------
Financing Activities
Changes in borrowings with maturities
of 90 days or less 609 383 327
Increases in other borrowings 3,626 3,570 3,266
Repayment of other borrowings (4,279) (4,478) (2,360)
Treasury and capital stock
transactions 244 (165) (155)
Dividends paid (531) (503) (460)
Other (61) 6 (31)
----- ---- -----
Net cash provided by (used in)
financing activities (392) (1,187) 587
----- ----- -----
Net cash provided by discontinued
operations 949 723 741
Effects of exchange rate changes on
cash and equivalents (84) (100) 28
----- ----- -----
Net change in cash and equivalents (218) (1,025) 1,139
Cash and equivalents-beginning of
year 1,615 2,640 1,501
----- ----- -----
Cash and equivalents-end of year $1,397 $1,615 $2,640
===== ===== =====
ABB Ltd
(U.S. dollar amounts in millions unless otherwise indicated)
Quarterly information (unaudited)
Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4
1999 2000 2000 2000 2000
Revenues $ 6,904 $ 5,259 $ 5,809 $ 5,149 $ 6,750
Cost of sales (5,303) (3,859) (4,367) (3,962) (5,034)
Gross profit 1,601 1,400 1,442 1,187 1,716
Selling, general and
administrative
exp. (1,257) (1,065) (1,058) (1,027) (1,267)
Amortization expense (44) (55) (47) (52) (65)
Other income
(expense), net 77 35 139 139 (37)
Earnings before interest
and tax 377 315 476 247 347
Interest and dividend
income 132 139 159 129 138
Interest expense (133) (154) (137) (168) (185)
Income from
continuing
operations
before taxes and
minority interest 376 300 498 208 300
Provision for taxes (129) (89) (149) (59) (80)
Minority interest (6) (5) (11) (17) (15)
Income from continuing
operations 241 206 338 132 205
Income (loss) from
discontinuing
operations,
net of tax (21) (151) 699 -- 14
Net income $ 220 $ 55 $ 1,037 $ 132 $ 219
Weighted average
shares
outstanding 295 295 293 296 296
Dilutive effect of
potentially dilutive
securities 1 1 2 1 1
Diluted weighted
average
shares outstanding 296 296 295 297 297
Basic earnings per
share:
Income from continuing
operations $ 0.82 $ 0.70 $ 1.15 $ 0.45 $ 0.69
Income (loss) from
discontinued
operations (0.08) (0.51) 2.39 -- 0.05
Net income $ 0.74 $ 0.19 $ 3.54 $ 0.45 $ 0.74
Diluted earnings
per share:
Income from continuing
operations $ 0.81 $ 0.70 $ 1.15 $ 0.44 $ 0.69
Income (loss)
from discontinued
operations (0.07) (0.51) 2.37 -- 0.05
Net income $ 0.74 $ 0.19 $ 3.52 $ 0.44 $ 0.74
ABB Ltd
(U.S. dollar amounts in millions unless otherwise indicated)
Geographic data
Orders received
2000 1999 1998
Europe $ 12,979 $ 13,875 $ 13,911
Americas 6,644 5,257 5,374
Asia 2,865 3,094 2,283
Middle East and Africa 2,952 2,407 2,167
Total $ 25,440 $ 24,633 $ 23,735
Revenues
2000 1999 1998
Europe $ 12,570 $ 13,893 $ 13,012
Americas 5,702 5,675 5,134
Asia 2,770 2,763 2,768
Middle East and Africa 1,925 2,025 2,030
Total $ 22,967 $ 24,356 $ 22,944
Orders received and revenues have been reflected in the regions based
on the location of the customer
Segment Data
Orders received
2000 1999 1998
Automation $ 7,821 $ 8,119 $ 7,024
Power Transmission 3,958 3,918 4,423
Power Distribution 3,116 2,778 2,680
Building Technologies 6,201 6,630 6,464
Oil, Gas and Petrochemicals 3,923 3,030 3,319
Financial Services 1,966 1,687 1,653
Corporate/Other (1,545) (1,529) (1,828)
Total $ 25,440 $ 24,633 $ 23,735
Revenues
2000 1999 1998
Automation $ 7,465 $ 8,236 $ 7,045
Power Transmission 3,315 3,712 4,033
Power Distribution 2,830 2,875 2,615
Building Technologies 5,889 6,324 6,385
Oil, Gas and Petrochemicals 2,796 3,086 2,856
Financial Services 1,966 1,687 1,653
Corporate/Other (1,294) (1,564) (1,643)
Total $ 22,967 $ 24,356 $ 22,944
EBIT (Operating income)
2000 1999 1998
Automation $ 486 $ 408 $ 461
Power Transmission 262 309 292
Power Distribution 182 181 153
Building Technologies 456 394 379
Oil, Gas and Petrochemicals 169 165 167
Financial Services 349 337 410
Corporate/Other (519) (672) (536)
Total $ 1,385 $ 1,122 $ 1,326
Depreciation and amortization
2000 1999 1998
Automation $ 303 $ 291 $ 164
Power Transmission 96 90 106
Power Distribution 62 59 51
Building Technologies 131 132 141
Oil, Gas and Petrochemicals 69 55 49
Financial Services 23 17 13
Corporate/Other 152 151 124
Total $ 836 $ 795 $ 648
Number of employees
2000 1999 1998
Automation 45,226 49,554 43,384
Power Transmission 20,766 22,338 26,927
Power Distribution 17,396 16,378 16,511
Building Technologies 55,560 54,941 53,753
Oil, Gas and Petrochemicals 11,549 8,941 8,774
Financial Services 1,125 1,049 894
Corporate/Other 9,196 8,229 9,499
Total 160,818 161,430 159,742
ABB Ltd
(U.S. dollar amounts in millions unless otherwise indicated)
Appendix
Financial Statements according to International Accounting Standards
(pro-forma, for information purposes only)
Year ended December 31, Change
------------------------
2000 1999 2000 vs. in local
------------ 1999 currencies
(Unaudited)
------------ ---------- -------- ----------
Revenues $ 22,544 $ 24,216 -7% +1%
Total Expenses (20,585) (22,356)
Operating earnings
after depreciation 1,959 1,860 +5% +13%
Financial Net (197) (160)
Income Taxes (511) (508)
Minority Interests (40) (29)
Net income from
continuing operations 1,211 1,163 +4% +13%
Income (loss) from
discontinuing
operations, net
of tax 496 451
Net income $ 1,707 $ 1,614 +6% +11%
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