ABB Reports Improved Operating Performance; Accelerates Cost Reduction Program.Business Editors ZURICH, Switzerland--(BUSINESS WIRE)--Oct. 24, 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 (NYSE NYSE See: New York Stock Exchange :ABB): - "Financial Services" represents the accounts of all subsidiaries in ABB's Financial Services division, with net intercompany balances and certain capital contributions received from other ABB subsidiaries presented on a one-line basis. - "ABB Group" represents the accounts of ABB Ltd and all its subsidiaries other than those in ABB's Financial Services division, with net intercompany balances and ABB's investment in its Financial Services division presented on a one-line basis. For the purposes of this presentation, ABB's investment in its Financial Services division is accounted for under the equity method of accounting ABB said today revenues rose 9 percent and 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 EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). ) - excluding one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. capital gains - increased 15 percent in local currencies for the first nine months of 2001, reflecting continued strong operational performance. Seeing a decline in orders, ABB also said it will accelerate its cost-cutting program. "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 satisfied with our operating results this quarter," said Jorgen Centerman, 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. . "Given the weaker market conditions, it is a sign of our strength and stability to have improved our underlying operating performance, even after providing US$ 50 million for our reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. exposure following the terrorist attacks in the U.S." Centerman said ABB will accelerate its plans to cut 12,000 jobs. "We need to become leaner as fast as possible given the economic climate," Centerman said. "By taking more of the planned restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs earlier we will reduce earnings now, but we build competitiveness and gain productivity improvements that pay back over time."
US$ in millions,
except per share data Jan-Sept 2001 Jan-Sept 2000 Change Change in
local
currencies
----------------------------------------------------------------------
Orders 17,863 19,493 - 8% - 3%
Revenues 16,877 16,217 + 4% + 9%
Earnings before
interest and taxes
(EBIT), 763 698 + 9% + 15%
excluding one-time
capital gains
EBIT 766 1,038 - 26% - 21%
Income from continuing
operations 352 676 - 48%
Income from discontinued
operations and (63) 548
accounting changes
Net income 289 1,224 - 76%
Earnings per share (US$)
Income from continuing
operations: Basic 0.31 0.57
Diluted 0.31 0.57
Net income Basic 0.25 1.04
Diluted 0.25 1.03
EBITDA 1,349 1,613 - 16% - 11%
About one third of the job reductions is expected to come through natural attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: . The program is estimated to cost US$ 500 million in total. More costs will now be taken in 2001. Once the plan is fully implemented, costs will be reduced by about US$ 500 million per year. ABB also reported higher net cash from operating activities, up 36 percent when compared with the first nine months of 2000. "While our liquidity is sufficient, we have launched a special program to improve 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. by the end of the year," Centerman said. "This is a clear step toward reducing our debt levels in this economic environment." Financial highlights for the first nine months of 2001 Income statement and cash flow Orders decreased 8 percent to US$ 17,863 million or 3 percent expressed in local currencies. Base orders, defined as orders below US$ 15 million, now represent 86 percent of total orders. Despite the ongoing transformation and more difficult economic conditions, base orders remained flat 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 but increased 5 percent in local currencies when compared with the first nine months of last year. Large orders (above US$ 15 million) declined 39 percent in nominal terms or 33 percent in local currencies over the same period, mainly due to fewer large orders booked in the Oil, Gas and Petrochemicals division. Revenues increased to US$ 16,877 million, up 4 percent in nominal terms and 9 percent in local currencies. The 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. increased since yearend 2000 by 3 percent in nominal terms and 8 percent in local currencies to US$ 15,302 million. Reflecting the drop in third quarter orders, the order backlog declined slightly since June June: see month. 30. Excluding one-time capital gains, EBIT increased 9 percent to US$ 763 million compared to the first nine months of 2000, and 15 percent when expressed in local currencies. This includes license income together with income from equity accounted companies of US$ 136 million and 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. of US$ 33 million. Capital gains were US$ 340 million in the first nine months of last year versus US$ 3 million this year. Including these one-time capital gains, EBIT decreased 26 percent to US$ 766 million. The change in net income from 2000 is mainly due to last year's one-time gain of US$ 548 million from the sale of the former power generation business while this year there was a one-time charge of US$ 63 million which was required upon adoption of the new accounting standard FAS 133 under US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). from the beginning of 2001. After lower one-time capital gains in EBIT, interest expense associated with higher debt levels and an increased effective tax charge, net income for the first nine months decreased by 76 percent to US$ 289 million. ABB's net cash provided by operating activities was US$ 345 million for the first three quarters, up 36 percent from US$ 253 million for the same period last year. For the third quarter alone, net cash provided by operating activities was US$ 266 million, up from US$ 193 million last year. Balance Sheet and liquidity Cash and 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 totaled US$ 5,385 million at September September: see month. 30. Since the end of last year, net debt increased by US$ 4,514 million, mainly due to dividend payments, acquisitions (Eutech and Entrelec), significant investment in profitable 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. assets, and the purchase of Treasury shares. Net debt (cash and marketable securities less short, medium and long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. ) was US$ 6,271 million at September 30. In the third quarter, net debt increased by US$ 973 million. About 60 percent of the increase in net debt came from unrealized non-cash changes. The majority was translation of foreign currency debt into U.S. dollars, which is hedged. The rest of the net debt increase came from borrowings to finance capital expenditure, further investments in Financial Services asset portfolios, and a mandatory final conversion of existing options into Treasury shares. The company aims to reduce net debt substantially by December December: see month. 31, 2001. Part of the plan is a rigorous cash flow generation initiative in all operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon , aimed at ensuring and accelerating the traditionally high cash flow generation in the fourth quarter. Positive signs were already seen in the third quarter, during which net working capital was reduced by almost US$ 100 million. The reduction of net debt through internal cash flow generation and asset sales is a key objective for the company. Stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. was US$ 2,912 million at September 30. Since the end of last year, equity declined as a result of dividends paid, the introduction of FAS 133, significant unrealized adverse currency movements versus the U.S. dollar, and the purchase of Treasury shares. The company has no plans for further share buybacks. Employees As of September 30, 2001, ABB employed 162,532 people compared to 160,818 at yearend 2000. Since June 30, excluding acquisitions and divestments, the number of people decreased by over 2,000 as the cost reduction program began to take effect. Asbestos asbestos, mineral asbestos, common name for any of a variety of silicate minerals within the amphibole and serpentine groups that are fibrous in structure and more or less resistant to acid and fire. update Cash settlements in connection with asbestos litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. in the U.S. are expected to run 9 percent above the payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. in 2000 on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis prior to insurance reimbursements. On an annualized basis, the number of new claims has increased by approximately 34 percent in comparison with 2000. Claims filed for the full year 2000 totaled 39,000. It is not yet possible to determine whether the increase in claims is a consequence of an accelerated filing of future claims or if it represents a 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. trend. Outlook(1) For 2001, revenues are expected to increase in comparison to 2000. Seeing a decline in orders, ABB is accelerating its cost reduction program which will lead to higher restructuring charges being taken in 2001. ABB also expects base orders to be lower in the fourth quarter. As a result, EBIT is now expected to be below last year, excluding capital gains for both years. Previously, EBIT excluding capital gains was expected to be well above last year's level. 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 is expected to be below last year, due to the high level of one-time capital gains in 2000. Net cash provided by operating activities is expected to increase. The target to grow revenues on average by 6 percent annually through 2005 (excluding major acquisitions and divestments) remains unchanged. EBIT margin is expected to reach 9-10 percent by 2005. (1) Assumes no major currency effects. Highlights of the third quarter 2001 - "Financial Services" represents the accounts of all subsidiaries in ABB's Financial Services division, with net intercompany balances and certain capital contributions received from other ABB subsidiaries presented on a one-line basis. - "ABB Group" represents the accounts of ABB Ltd and all its subsidiaries other than those in ABB's Financial Services division, with net intercompany balances and ABB's investment in its Financial Services division presented on a one-line basis. For the purposes of this presentation, ABB's investment in its Financial Services division is accounted for under the equity method of accounting Industrial IT progress report ABB made a strong first step in bringing its products and services in line with a common information architecture. As of September 30, approximately 800 products were ready for level 0 certification (common information architecture). SKYVA International, a majority owned subsidiary of ABB, signed a global agreement with International Business Machines (IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) ). IBM will incorporate portions of SKYVA's application development products as part of its WebSphere A family of Java development and Web application server products from IBM that run in an open, Eclipse-technology based environment on OS/390, OS/400, NT/2000, Linux and various Unix platforms. eBusiness See e-business. infrastructure software. In recent weeks, ABB released several important platforms to support the rollout of Industrial IT to all its business divisions. The Aspect Integrator (1) In electronics, a device that combines an input with a variable, such as time, and provides an analog output; for example, a watt-hour meter. (2) See systems integrator. Platform (AIP AIP acute intermittent porphyria. AIP Acute intermittent porphyria ) 1.0, Operate IT 1.2, and Control IT 2.2 all support the ongoing Industrial IT business by extending functionality and offering additional connections to older systems. They also serve as a basis for broader development efforts. ABB also received advance notice that a patent has been granted for the Aspect Directory - one of the core concepts behind the Industrial IT software architecture - which provides the intelligence to connect and manage the information flows between all objects and aspects of Industrial IT products. Process Industries launched the Operate IT and Control IT product suites, which include software for information exchange across business enterprises. Similar research is being carried out to further support ABB's 10-year strategic agreement with The Dow Chemical Company The Dow Chemical Company (NYSE: DOW TYO: 4850 ) is an American multinational corporation headquartered in Midland, Michigan. Overview The Dow Chemical Company is currently the second largest chemical manufacturer in the World (after BASF)[1]. . ABB's corporate research centers have shifted resources, both financial and physical, toward Industrial IT. In addition, they have further developed two new Industrial IT centers in Asia. The centers, first announced earlier this year, will soon be open in India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. and Singapore Singapore (sĭng`gəpôr, sĭng`ə–, sĭng'gəpôr`), officially Republic of Singapore, republic (2005 est. pop. 4,426,000), 240 sq mi (625 sq km). . Transformation update ABB's new organization is in place in almost all markets. The organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. underpinning un·der·pin·ning n. 1. Material or masonry used to support a structure, such as a wall. 2. A support or foundation. Often used in the plural. 3. Informal The human legs. Often used in the plural. the transformation as announced at the beginning of January January: see month. 2001 is complete. The transformation is based on the creation of four divisions serving utilities, process industries, manufacturing and consumer industries, the oil, gas and petrochemicals sectors - and two divisions going to market through ABB's four industry divisions as well as external channel partners with power technology and automation technology products. ABB's Financial Services division remains unchanged. 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. is supported by common group processes and infrastructure throughout ABB in key areas such as front-end front-end adj. 1. Of or relating to the initial phase of a project: a front-end investment. 2. Of or relating to the forward parts of a vehicle: a front-end alignment. , project execution, supply chain management, eBusiness and information systems. One of the main elements of the customer-centric organization is the build-up build·up also build-up n. 1. The act or process of amassing or increasing: a military buildup; a buildup of tension during the strike. 2. of a key account management structure for ABB's strategic and major accounts. As of September 30, 168 key account managers had been appointed. First indications of the impact of the customer centric organization is promising, as orders from ABB's largest 100 customers have increased by 4 percent since yearend. Division reviews 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 strengthened against most of ABB's local currencies since last year. The strengthened dollar continued to unfavorably impact results during the third quarter. All figures reflect the first nine months' activity and, except for EBIT margins, comments refer to local currency figures. EBIT excluding capital gains is shown below only if the aggregate of such gains is material (in any case, if capital gains represent more than 10 percent of divisional EBIT).
Utilities
US$ in millions, Jan-Sept 2001 Jan-Sept 2000 Change Change
except where indicated in local
currencies
----------------------------------------------------------------------
Orders 4,816 4,710 + 2% + 7%
Revenues 3,974 3,898 + 2% + 6%
EBIT(1) 122 196 - 38% - 37%
EBIT Margin 3.1% 5.0%
(1) Excluding capital gains, EBIT for the first nine months of 2000 was US$ 150 million and the EBIT margin was 3.8 percent. The ABB Utilities division serves electric, gas and water industries - whether state-owned state-owned adj → estatal, del estado state-owned adj → étatisé(e) state-owned state adj → or private, global or local, operating in liberalized or regulated markets A regulated market is the provision of goods or services that is regulated by a government appointed body. The regulation may cover the terms and conditions of supplying the goods and services and in particular the price allowed to be charged. - through a portfolio of capabilities, from products to services and systems. The Utilities division has approximately 16,000 employees. Demand in Asia continues to be high for utilities, while the Americas A·mer·i·cas , the See America. , Europe, the Middle East and Africa Europe, the Middle East and Africa, usually abbreviated to EMEA, is a regional designation used for government, marketing and business purposes. It is particularly common amongst North American based companies, who often divide their international operations into the is stable. Utility markets have not noticeably no·tice·a·ble adj. 1. Evident; observable: noticeable changes in temperature; a noticeable lack of friendliness. 2. Worthy of notice; significant. weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. in the aftermath AFTERMATH. A right to have the last crop of grass or pasturage. 1 Chit. Pr. 181. of September 11. Orders
increased 7 percent on growth in both large and base orders. All
business areas reported moderate single-digit order increases, except
Utility Automation which was flat.
Revenues were up 6 percent. All business areas reported moderate or strong double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth, except Utility Services which recorded higher revenues last year for the ComEd project in Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. . Excluding one-time capital gains, EBIT fell 18 percent as a result of delayed project awards and execution timing in large power system projects. As a result, EBIT margin decreased from 3.8 to 3.1 percent.
Process Industries
----------------------------------------------------------------------
US$ in millions, Jan-Sept 2001 Jan-Sept 2000 Change Change
except where indicated in local
currencies
Orders 2,632 2,818 - 7% - 2%
Revenues 2,391 2,422 - 1% + 3%
EBIT 94 75 +25% +31%
EBIT Margin 3.9% 3.1%
The ABB Process Industries division serves the chemical, pharmaceutical, petroleum, gas, marine, metals, minerals, mining, cement cement, binding material used in construction and engineering, often called hydraulic cement, typically made by heating a mixture of limestone and clay until it almost fuses and then grinding it to a fine powder. , pulp, paper and printing industries with a variety of power, automation and unique process industry technology products. The division has strong domain expertise and uses its automation, power, supply chain and service portfolio to create Industrial IT solutions focused on these customers. The division has approximately 16,000 employees. The economic 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 Americas and more recently 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). is significantly impacting metal, pulp and paper, and mining industries.
There has been less impact on chemical, pharmaceutical and marine
industries.
Overall, orders were down 2 percent. Double-digit decreases in metal and paper sectors were partially offset by increased orders from the chemical and pharmaceutical industries. Marine orders were down in comparison with a high order intake last year, but are still at good levels. Revenues increased 3 percent on execution of the order backlog from last year. EBIT grew 31 percent as a result of increased contract profitability and early cost savings actions. EBIT margin increased from 3.1 to 3.9 percent.
Manufacturing and Consumer Industries
US$ in millions, Jan-Sept 2001 Jan-Sept 2000 Change Change
except where indicated in local
currencies
----------------------------------------------------------------------
Orders 3,435 4,283 - 20% - 15%
Revenues 3,464 3,665 - 5% +/-0%
EBIT(2) 88 137 - 36% - 34%
EBIT Margin 2.5% 3.7%
(2) Excluding capital gains, EBIT for the first nine months of 2000 was US$ 116 million and the EBIT margin was 3.2 percent. The Manufacturing and Consumer Industries division sells products, solutions and services to improve customer productivity and competitiveness in areas like automotive industries Automotive Industries, Ltd. (Hebrew: תעשיות רכב נצרת עלית, תע"ר , telecom, product manufacturing, electronics, airports, parcel and cargo distribution, public and commercial buildings. It also provides air handling solutions for industrial and environmental processes. The division employs approximately 31,000 people. The manufacturing and consumer industries have been most negatively affected by the economic 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 the Americas. Demand has been volatile and investment spending has been deferred, particularly in the automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. . European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. construction markets have weakened and in telecom, the rollout of UMTS networks Beginning in 2003 under the name 3, Hutchison Whampoa, a large port operator, has gradually launched their startup UMTS networks worldwide including Australia, Austria, Denmark, Hong Kong, Italy, United Kingdom, Ireland and Sweden. remains on hold. Poor demand resulted in a 15 percent drop in orders. Revenues were flat, with growth in Building Systems offsetting the decline in Automotive. Excluding capital gains, EBIT fell 22 percent as a result of low volume in the Airport and Automotive businesses, as well as in some parts of Building Systems. EBIT margin decreased from 3.2 to 2.5 percent.
Oil, Gas and Petrochemicals
US$ in millions, Jan-Sept 2001 Jan-Sept 2000 Change Change
except where indicated in local
currencies
----------------------------------------------------------------------
Orders 2,602 3,197 - 19% - 17%
Revenues 2,450 1,829 +34% +38%
EBIT 119 101 +18% +21%
EBIT Margin 4.9% 5.5%
The Oil, Gas and Petrochemicals division focuses on systems, technologies, products and services for oil and gas exploration and development, gas processing, refineries and 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. plants for the hydrocarbon hydrocarbon (hī'drōkär`bən), any organic compound composed solely of the elements hydrogen and carbon. The hydrocarbons differ both in the total number of carbon and hydrogen atoms in their molecules and in the proportion of hydrogen industry worldwide. The division employs approximately 13,000 people. Oil prices have continued to slip downwards down·ward adv. or down·wards 1. In, to, or toward a lower place, level, or position: floating downward. 2. and are now at the lower end of the OPEC OPEC: see Organization of Petroleum Exporting Countries. OPEC in full Organization of the Petroleum Exporting Countries Multinational organization established in 1960 to coordinate the petroleum production and export policies of its band. 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 still shows a high activity level even after the terrorist attack in the U.S. Lower gas prices in U.S. markets have reduced interest in gas exploration and production projects in 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 . In 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.). , demand has fallen off in 2001, especially in the petrochemicals industry. Upgrading of refineries and gas processing plants is continuing and demand for clean fuels is expected to grow, but some awards are being deferred into 2002. Orders dropped 17 percent, compared with a particularly high intake in 2000. High tendering activity in Upstream is currently fuelling its order growth, with several large projects booked that have partly offset the decline in Downstream. Revenues increased 38 percent, generated by the large order backlog at the beginning of the year. Umoe, the oil and gas service company acquired last year, also made a positive contribution. EBIT grew 21 percent on higher volumes. EBIT margin was lower at 4.9 percent due to some delays and cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor .
Power Technology Products
US$ in millions, Jan-Sept 2001 Jan-Sept 2000 Change Change
except where indicated in local
currencies
----------------------------------------------------------------------
Orders 3,272 3,059 + 7% +13%
Revenues 2,877 2,626 +10% +15%
EBIT 190 170 +12% +17%
EBIT Margin 6.6% 6.5%
----------------------------------------------------------------------
The Power Technology Products division produces transformers, switchgear The term switchgear, used in association with the electric power system, or grid, refers to the combination of electrical disconnects, fuses and/or circuit breakers used to isolate electrical equipment. , breakers, capacitors, cables as well as other products and technologies for high- and medium-voltage applications. The products are used in industrial, commercial and utility applications and sold through ABB end-user (job) end-user - The person who uses a computer application, as opposed to those who developed or support it. The end-user may or may not know anything about computers, how they work, or what to do if something goes wrong. divisions as well as through external channel partners - original equipment manufacturers (OEMs), system integrators See systems integrator. , and distributors. The division has approximately 28,000 employees. Strong demand continued in the Americas - particularly for transmission products - and parts of Asia. European markets are mixed, while the Middle East and Africa are showing signs of improvement. Orders increased 13 percent, led by Power Transformers 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, which reported double-digit growth while Distribution Transformers and Medium Voltage Products recorded single-digit increases. Revenues were up 15 percent, led by double-digit growth in High Voltage Products, while all other business areas showed single-digit growth. Fuelled by higher revenues and productivity improvements, EBIT grew 17 percent. EBIT margin improved from 6.5 to 6.6 percent.
Automation Technology Products
US$ in millions, Jan-Sept 2001 Jan-Sept 2000 Change Change
except where indicated in local
currencies
----------------------------------------------------------------------
Orders 3,959 4,184 - 5% +/-0%
Revenues 3,925 3,796 + 3% + 9%
EBIT 330 337 - 2% + 3%
EBIT Margin 8.4% 8.9%
------------------------------------------------------------------------------------
----------------
The Automation Technology Products division provides products, systems, software and services for the automation and optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. of discrete A component or device that is separate and distinct and treated as a singular unit. , process and batch manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. plus related business aspects. Key technologies include measurement control, instrumentation instrumentation, in music: see orchestra and orchestration. instrumentation In technology, the development and use of precise measuring, analysis, and control equipment. , process analysis, drives and motors, power electronics, robots, and 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; all geared toward one common Industrial IT architecture for 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. automation and information solutions across the business enterprise. These technologies are sold both through third-party channels (OEM's, system integrators, distributors) and through the ABB end-user divisions. It has approximately 41,000 employees. Slowdown in European and Asian markets (with the exception of China) followed the earlier economic downturn in the U.S., and the terrorist attack is clouding the outlook. The construction market has significantly weakened in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , reducing 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, 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 . Orders were stable despite generally difficult trading conditions, as moderate growth in parts of Drives and Low Voltage Products offset flat or lower intake in other business areas. Revenues grew 9 percent as growth was particularly strong in Drives and Power Electronics, Electrical Machines, and Low Voltage Products which all recorded double-digit increases. Moderate growth was reported in Controls. Instrumentation & Metering as well as Robotics robotics, science and technology of general purpose, programmable machine systems. Contrary to the popular fiction image of robots as ambulatory machines of human appearance capable of performing almost any task, most robotic systems are anchored to fixed positions recorded lower revenues, particularly Robotics as a result of the continued downturn in the automotive industry. EBIT increased 3 percent on stronger earnings in all business areas except Instrumentation & Metering and Robotics. EBIT margin was down from 8.9 to 8.4 percent.
Financial Services
----------------------------------------------------------------------
US$ in millions, Jan-Sept 2001 Jan-Sept 2000 Change Change
except where indicated in local
currencies
Revenues 1,428 1,318 + 8% +14%
EBIT 233 250 - 7% + 3%
The ABB Financial Services division supports its customers with innovative financial solutions in structured finance, leasing, project development and equity participations, financial consulting, insurance and treasury services Treasury services is a function of an investment bank which provides transaction, investment and information services for chief financial officers, treasurers. Treasury services concentrates and invests client money, and provides trade finance and logistics solutions as well as . The division employs approximately 1,200 people. Revenues rose 14 percent on strong trading operations in Treasury Centers and the recent expansion of the leasing portfolio by Structured Finance. Under US GAAP, most of Equity Ventures income from equity-accounted investments does not appear in revenues but is instead recognized in EBIT. EBIT increased 3 percent, even after providing US$ 50 million for estimated reinsurance claims following the terrorist attack in the U.S. All business areas reported double-digit earnings growth except Insurance. Total assets rose 39 percent to US$ 17,713 million since yearend 2000. The main reason was increased lending to ABB companies and expansion in financing receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed . Receivables, net and financing receivables mainly include loans and leases to non-ABB customers in the Structured Finance business, and almost all are secured by real property and equipment. The loan and lease portfolio is balanced, with governments, municipalities and banks accounting for about half of all credit exposures. Historical loan loss experience has been less than 0.1 percent per year. Reporting dates The company will host a conference call to discuss its nine month results today at 15.00 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) (CET CET abbr. Central European Time CET Central European Time CET n abbr (= Central European Time) → hora de Europa central CET abbr ). Teleconference callers should dial +41 91 610 4111 in Europe and +1 412 858 4600 for all other callers. Presentation material for the conference call is available on ABB's Web site: www.abb.com/investorrelations. Quarterly reporting dates in 2002 are scheduled for February February: see month. 13, April 24, July July: see month. 24 and October October: see month. 24. The Annual General meeting of ABB Ltd will be held on Tuesday Tuesday: see week. , March 12, 2002. ABB (www.abb.com) is a global leader in power and automation technologies that enable utility and industry customers to improve performance while lowering their environmental impact. ABB has 160,000 employees in more than 100 countries. 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.
Consolidated Income Statements
January - September July - September
2001 2000 2001 2000
---------------------- ---------------------
(Unaudited)
(in millions, except per share data)
------------------------------------------------
Revenues $16,877 $ 16,217 $ 5,778 $ 5,149
Cost of sales (12,896) (12,188) (4,566) (3,962)
Gross profit 3,981 4,029 1,212 1,187
Selling, general and
administrative expenses(3,146) (3,150) (1,038) (1,027)
Amortization expense (175) (154) (59) (52)
Other income (expense),
net 106 313 25 139
Earnings before
interest and taxes 766 1,038 140 247
Interest and dividend
income 445 427 161 129
Interest and other
finance expense (637) (459) (224) (168)
Income from continuing
operations before
taxes and minority
interest 574 1,006 77 208
Provision for taxes (185) (297) (39) (59)
Minority interest (37) (33) (15) (17)
Income from continuing
operations 352 676 23 132
Income from discontinued
operations, net of tax -- 548 -- --
Change in accounting principles
(introduction of FAS 133)(63) -- -- --
Net income $ 289 $ 1,224 $ 23 $ 132
Weighted average
shares outstanding 1,139 1,178 1,116 1,184
Dilutive potential
shares 3 6 -- 4
Diluted weighted average
shares outstanding 1,142 1,184 1,116 1,188
Basic earnings per share:
Income from continuing
operations $ 0.31 $ 0.57 $ 0.02 $ 0.11
Income from discontinued
operations -- 0.47 -- --
Change in accounting
principles (0.06) -- -- --
Net income $ 0.25 $ 1.04 $ 0.02 $ 0.11
Diluted earnings per share:
Income from continuing
operations $ 0.31 $ 0.57 $ 0.02 $ 0.11
Income from discontinued
operations -- 0.46 -- --
Change in accounting
principles (0.06) -- -- --
Net income $ 0.25 $ 1.03 $ 0.02 $ 0.11
Consolidated Balance Sheets
At September 30, At December 31,
2001 2000
---------------------------------
Cash and equivalents $ 2,232 $ 1,397
Marketable securities 3,153 4,209
Receivables, net 8,621 8,328
Inventories, net 3,644 3,192
Prepaid expenses and other 2,668 1,585
----------------------------------
Total current assets 20,318 18,711
Financing receivables, non-current 4,599 3,875
Property, plant and equipment, net 3,108 3,243
Goodwill and other
intangible assets, net 3,491 3,155
Investments and other 2,193 1,978
----------------------------------
Total assets $ 33,709 $ 30,962
==================================
Accounts payable, trade $ 3,775 $ 3,375
Accounts payable, other 2,317 2,363
Short-term borrowings and
current maturities of
long-term borrowings 6,789 3,587
Accrued liabilities and other 7,086 6,127
----------------------------------
Total current liabilities 19,967 15,452
Long-term borrowings 4,867 3,776
Pension and other related benefits 1,742 1,790
Deferred taxes 1,357 1,528
Other liabilities 2,565 2,924
----------------------------------
Total liabilities 30,498 25,470
Minority interest 299 321
Total stockholders' equity 2,912 5,171
Total liabilities and ----------------------------------
stockholders' equity $ 33,709 $ 30,962
==================================
Consolidated Statements of Cash Flows
January - September
-------------------
2001 2000
-------------------
(Unaudited)
(US$ in millions)
Operating Activities
Income from continuing operations $ 352 $ 676
Adjustments to reconcile income from
continuing operations to net cash provided by
operating activities:
Depreciation and amortization 583 575
Changes in restructuring provisions (39) (21)
Pension and post-retirement benefits 14 (32)
Deferred taxes 13 129
Net gain from sale of
property, plant and equipment (13) (227)
Other 2 (41)
Changes in operating
assets and liabilities
Marketable securities - trading 79 (239)
Trade receivables (134) 128
Inventories (549) (361)
Trade payables 444 (190)
Other assets and
liabilities, net (407) (144)
--------- --------
Net cash provided
by operating activities $ 345 $ 253
--------- --------
Investing Activities
Changes in financing receivables (1,105) (557)
Purchases of marketable securities
(other than trading) (2,248) (1,519)
Purchases of property,
plant and equipment (560) (435)
Acquisitions of businesses
(net of cash acquired) (575) (404)
Proceeds from sales of marketable
securities (other than trading) 2,768 1,587
Proceeds from sales of property,
plant and equipment 80 138
Proceeds from sales of businesses
(net of cash disposed) 31 139
--------- --------
Net cash used in investing activities $(1,609) $(1,051)
--------- --------
Financing Activities
Changes in borrowings 4,300 1,133
Treasury and capital stock transactions (1,433) 245
Dividends paid (502) (531)
Other (61) (60)
--------- --------
Net cash provided
by financing activities $ 2,304 $ 787
--------- --------
Net cash provided by
discontinued operations (158) 1,229
Effects of exchange rate
changes on cash and equivalents (47) (128)
--------- --------
Net change in cash and equivalents 835 1,090
Cash and equivalents-beginning of year 1,397 1,615
--------- --------
Cash and equivalents-end of period $ 2,232 $2,705
========= ========
Interest paid $ 579 $ 485
Taxes paid $ 263 $ 235
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) (US$ in millions, except per share amounts) Note 1 Developments in the nine months ended September 30, 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 became effective as of May 7, 2001. - Treasury and capital stock At our annual general meeting held on March 20, 2001 our shareholders approved a 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. of 24 million shares, which corresponds to approximately 2% of our nominal share capital. During the first half of 2001 all of the 24 million shares were purchased using a second trading line. 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. In addition, at September 30, 2001, we owned approximately 63 million treasury shares for purposes such as hedging management incentive plans (MIP MIP See: Monthly income preferred security ). In June 2001, the Company settled its outstanding written put options by repurchasing 18.5 million of its own shares. The Company further issued call options that give a counterparty Counterparty The other participant, including intermediaries, in a swap or contract. the right to acquire up to 18.5 million shares of the Company at an average rate of CHF 41 per share. The call options expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. in periods ranging from 2004 to 2006 and were recorded as equity instruments in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation 00-19, Accounting for Derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock. These transactions are linked to the management of the Company's MIP. The market value of the ABB shares as of September 30, 2001 was CHF 11.60 (approximately US$ 7.18) per share. - 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 successfully completed an exchange offer giving holders of restricted ADSs the opportunity to exchange to our new ADSs that are eligible for trading on the New York Stock Exchange. One new ADS represents one registered 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 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. (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 September 30, 2001 should be read in conjunction with the December 31, 2000 financial statements contained in the Annual Report and our registration statement on Form 20-F for the U.S. listing. Introduction of FAS 133 In June 1998, the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. 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 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 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 1, 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 $41 million in other comprehensive income.
Note 3 Statement of Consolidated Common Stockholders' Equity
(US$ in millions)
Balance at January 1, 2001 $ 5,171
Comprehensive income:
Net income 289
Foreign currency translation
adjustments (374)
Unrealized loss on
available-for-sale securities (129)
Change in accounting principles
(FAS 133) at January 1, 2001 (41)
FAS 133 effect through
September 30, 2001 (84)
-------
Total comprehensive income (loss) (339)
Dividends paid (502)
Treasury stock transactions (1,433)
Other 15
---------
Balance at September 30, 2001 $ 2,912
=========
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. We have realigned our worldwide business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets to increase our responsiveness to our customers' needs. The new customer-focused structure is intended to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. our extensive knowledge of our customers' industries and their business processes. It is based on the premise that our primary growth opportunity lies in our existing customer base. Our new business structure will enhance our ability to expand our existing customer relationships into additional sales of products, systems and services. Our focus on customer groups should also facilitate the building of new customer relationships. For all periods presented, the division data reflects the new customer-centric structure: Utilities: Serves electric, gas and water industries - whether state-owned or private, global or local, operating in liberalized or regulated markets - through a portfolio of capabilities, from essential products to comprehensive services and systems. Process Industries: Serves the chemical, pharmaceutical, petroleum, gas, marine, metals, minerals, mining, cement, pulp, paper and printing industries with a variety of power and automation technology products. The division has a strong domain expertise and uses its automation, power, supply chain and service portfolio to create industrial IT solutions focused on these customers. Manufacturing and Consumer Industries: Sells products, solutions and services to improve customer productivity and competitiveness in areas like automotive industries, telecom, product manufacturing, electronics, airports, parcel and cargo distribution, public and commercial buildings. It also provides air handling solutions for industrial and environmental processes. Oil, Gas and Petrochemicals: Focuses on systems, products and services for oil and gas drilling both offshore and onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. , and the development and supply of offshore production installations, refineries and petrochemical plants worldwide. Power Technology Products: Covers the entire spectrum of technology for power transmission and power distribution. It includes transformers, switchgear, breakers, capacitors, cables as well as other products and technologies for high- and medium-voltage applications. All products are currently developed to fit into a common industrial IT architecture. The increased use of IT, including online product configurators, enables ABB Power Technology Products to deliver within best-in-class See best-of-class. cycle times. The division focuses on customers such as industrial, commercial, utilities and external channel partners, e.g. distributors, system integrators, contractors and original equipment manufacturers (OEMs). Automation Technology Products: Provides products, systems, software and services for the automation and optimization of discrete, process and batch manufacturing operations plus related business aspects. Key technologies include measurement control, instrumentation, process analysis, drives and motors, power electronics, robots, and low-voltage products, all geared toward one common industrial IT architecture for real-time automation and information solutions across the business enterprise. These technologies are sold both through third-party channels (OEMs, system integrators, distributors) and through the ABB end-user divisions. Financial Services: Supports its internal and external customers with innovative financial solutions in structured finance, leasing, project development and ownership, financial consulting, insurance and treasury activities. 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 Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. and other items.
Segment data
Data per Business Division Orders received Revenues
(US$ in millions) --------------------- -------------------
January - September January -September
----------------------------------------------------------------------
2001 2000 2001 2000
Utilities.....................$ 4,816 $ 4,710 $ 3,974 $3,898
Process Industries............ 2,632 2,818 2,391 2,422
Mfg and Consumer Industries... 3,435 4,283 3,464 3,665
Oil, Gas and Petrochemicals... 2,602 3,197 2,450 1,829
Power Technology Products..... 3,272 3,059 2,877 2,626
Automation Technology Products 3,959 4,184 3,925 3,796
Financial Services............ 1,428 1,318 1,428 1,318
Corporate/ Other.............. (4,281) (4,076) (3,632) (3,337)
---------------------------------------
Total.........................$17,863 $19,493 $ 16,877 $16,217
======================================================================
Data per Business Division EBIT Depreciation
(operating income) and amortization
(US$ in millions) ----------------------------------------
January - September January -September
----------------------------------------------------------------------
2001 2000 2001 2000
Utilities.....................$ 122 $ 196 $ 54 $ 50
Process Industries............ 94 75 53 51
Mfg and Consumer Industries... 88 137 35 41
Oil, Gas and Petrochemicals... 119 101 55 45
Power Technology Products..... 190 170 88 92
Automation Technology Products 330 337 172 162
Financial Services............ 233 250 19 17
Corporate/Other............... (410) (228) 107 117
---------------------------------------
Total.........................$ 766 $ 1,038 $ 583 $ 575
======================================================================
Data per Business Division Number of employees
September 30, December 31,
2001 2000
Utilities...................... 16,418 15,826
Process Industries............. 16,314 15,997
Mfg and Consumer Industries.... 31,245 33,449
Oil, Gas and Petrochemicals.... 13,424 11,549
Power Technology Products...... 28,237 27,785
Automation Technology Products. 41,375 41,332
Financial Services............. 1,191 1,125
Corporate/Other................ 14,328 13,755
---------------------------------
Total.......................... 162,532 160,818
=================================
Geographic Information
======================================================================
Data per Region Orders received Revenues
(US$ in millions) January - September January - September
--------------------- --------------------------
2001 2000 2001 2000
--------------------- --------------------------
Europe.................$ 9,321 $ 9,880 $ 9,164 $ 9,157
The Americas........... 4,367 4,866 4,277 3,822
Asia................... 2,255 2,247 1,875 1,913
Middle East and Africa. 1,920 2,500 1,561 1,325
--------------------- --------------------------
Total..................$17,863 $ 19,493 $ 16,877 $ 16,217
======================================================================
Orders received and revenues have been reflected in the regions based
on the location of the customer.
Note 5 Balance sheets of ABB Ltd Consolidated, ABB Group and Financial Services (unaudited) In the balance sheet data appearing on this page, "ABB Ltd Consolidated" means the accounts of ABB Ltd and all its subsidiaries presented on the basis of US GAAP, with all significant intercompany balances eliminated in consolidation.The balance sheet data for "Financial Services" and "ABB Group" is reported on the same basis as management uses to evaluate segment performance which includes the following adjustments:
- "Financial Services" represents the accounts of all subsidiaries in ABB's
Financial Services division, with net intercompany balances and certain capital
contributions received from other ABB subsidiaries presented on a one-line
basis.
- "ABB Group" represents the accounts of ABB Ltd and all its subsidiaries other
than those in ABB's Financial Services division, with net intercompany balances
and ABB's investment in its Financial Services division presented on a one-line
basis. For the purposes of this presentation, ABB's investment in its Financial
Services division is accounted for under the equity method of accounting
ABB Ltd Consolidated ABB Group(1) Financial Services
US $ in
millions Sep 30, Dec 31, Sep 30, Dec 31, Sep 30, Dec31,
2001 2000 2001 2000 2001 2000
Cash, cash
equiva-
lents and
market-
able se-
curities 5,385 5,606 1,526 1,285 3,859 4,321
Receiv-
ables,
net 8,621 8,328 6,497 6,652 2,124 1,676
Inventor-
ies, net 3,644 3,192 3,644 3,192 - -
Prepaid
expenses
and other 2,668 1,585 1,300 1,067 1,368 518
--------------- ---------------- ------------------
Total cur-
rent
assets 20,318 18,711 12,967 12,196 7,351 6,515
=============== ================ ==================
Financing
receiv-
ables 4,599 3,875 466 541 4,133 3,334
Property,
plant
and
equip-
ment,
net 3,108 3,243 3,021 3,177 87 66
Goodwill
and
other
intang-
ible
assets,
net 3,491 3,155 3,413 3,067 78 88
Invest-
ments
and
other 2,193 1,978 1,521 1,350 672 628
Net inter-
company
balances - - - - 5,392 2,105
--------------- ---------------- ------------------
Total
assets 33,709 30,962 21,388 20,331 17,713 12,736
=============== ================ ==================
Accounts
pay-
ables,
trade 3,775 3,375 3,750 3,347 25 28
Accounts
pay-
ables,
other 2,317 2,363 1,408 1,512 909 851
Short term
borrow-
ings (2) 6,789 3,587 318 397 6,471 3,190
Accrued
liabil-
ities
and
other 7,086 6,127 4,211 4,303 2,875 1,824
--------------- ---------------- ------------------
Total cur-
rent
liabil-
ities 19,967 15,452 9,687 9,559 10,280 5,893
=============== ================ ==================
Long term
borrow-
ings 4,867 3,776 735 509 4,132 3,267
Pensions
and
other
related
benefits 1,742 1,790 1,735 1,783 7 7
Deferred
taxes 1,357 1,528 615 694 742 834
Other
liabil-
ities 2,565 2,924 2,082 2,350 483 574
Net inter-
company
balances - - 3,423 44 - -
--------------- ---------------- ------------------
Total
liabil-
ities 30,498 25,470 18,277 14,939 15,644 10,575
=============== ================ ==================
Minority
interest 299 321 199 221 100 100
Total
stock-
holders'
equity 2,912 5,171 2,912 5,171 1,969 2,061
--------------- ---------------- ------------------
Total
liabil-
ities
and
stock-
holders'
equity 33,709 30,962 21,388 20,331 17,713 12,736
=============== ================ ==================
(1) ABB Industrial operations/holdings with equity accounting of
participation in Financial Services
(2) Includes current maturities of long-term borrowings
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