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| Abb | ANN | London | Ordinary Share |
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| 0.00 | 0.00% | 1,356.41 | 01:00:00 |
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Posted at 26/4/2010 10:28 by ariane Shetrust you are well i hope you don't mind if i start a new thread showing ABBN as the new epic Ann tends to detract from abb as a great share enjoy your week |
Posted at 22/4/2010 10:41 by waldron Dividend information ABB's Board of Directors has proposed a dividend for 2009 of 0.51 Swiss francs per share, an increase of 0.03 Swiss francs per share, or 6 percent, compared to the prior year. The Board has also proposed that the dividend takes the form of a reduction in the nominal (par) value of the shares from 1.54 Swiss francs to 1.03 Swiss francs. The proposal is subject to approval by shareholders at the company's annual general meeting on April 26, 2010. If approved, the ex-dividend and payout date in Switzerland is expected in July 2010. |
Posted at 18/2/2010 06:36 by ariane ABB 4Q Net Profit Jumps To $540 Million, Increases Dividend By Goran Mijuk Of DOW JONES NEWSWIRES ZURICH (Dow Jones) ABB Ltd. (ABB) Thursday reported a more than twofold rise in fourth quarter net profit on the absence of crippling charges and as the Switzerland-based electrical engineering company benefited from cost cutting. The company said net profit for the three months to the end of December rose to $540 million, up from $213 million a year earlier when the company had to make legal provisions and take revamp charges. The figure beat the $447 million forecasts of 11 analysts polled by Dow Jones Newswires. "By acting quickly and decisively, we delivered a 2009 result well within our profitability target," said Chief Executive Joe Hogan. Thanks to strict cost controls and financial management, the company also boosted its operating cash flow 30.9% to $1.78 billion from $1.36 billion a year earlier, allowing ABB to lift its dividend 6% to CHF0.51 Swiss francs ($0.46) per share, up from CHF0.48. Looking ahead, Hogan said: "We'll continue to aggressively pursue growth in emerging markets...and at the same time, cost will remain a key focus." ABB said it will expand its cost savings target to $3 billion, up from about $2 billion previously. ABB's order development was strong. In the fourth quarter, orders rose 4% to $7.45 billion from $7.18 billion, partly helped by the weak dollar and still healthy demand in Asia. Orders are closely watched by the market as they indicate future revenue streams. Revenue, meanwhile, fell 4% to $8.76 million from $9.14 billion a year earlier. Web Site: -By Goran Mijuk, Dow Jones Newswires, +41 443 80 47; goran.mijuk@dowjones |
Posted at 27/4/2009 16:48 by grupo guitarlumber Dividend information The ABB Board of Directors will propose a dividend of 0.48 Swiss francs per share to the annual general meeting on May 5, 2009. The dividend is proposed to be paid by way of a nominal value reduction with the ex-date and payment date scheduled for the end of July 2009. Each shareholder will receive a cash payment and the par value of each ABB Ltd share will be reduced from CHF 2.02 to CHF 1.54. |
Posted at 28/2/2009 18:50 by waldron 2/28/2009 9:48:00 AM Barron's: The Smart Way To Play The Green Revolution On Main Street, Green is the new Black. On Wall Street, however, most green investments generated a sea of red ink last year. When the wheels came off stock markets around the globe in the fourth quarter of 2008, alternative-energy and clean-technology shares were among the hardest hit. The 88-stock WilderHill New Energy Global Innovation index, a popular green-industry benchmark, ended the year down 61%, versus a 38.5% slide in the Standard & Poor's 500. This year, the NEX -- a mix of mostly small- to mid-capitalization wind, solar, biofuel and energy-conservation leaders from 21 countries -- is off about 22%, lagging the S&P's 17% decline. Other clean-tech indexes, exchange-traded funds and mutual funds, including the vaunted Winslow Green Growth Fund (ticker: WGGFX), haven't fared much better, and in some cases have done worse, while venture-stage green companies have been starved of capital or blocked on their way to the public markets. Brian Fan, senior director of research for the Cleantech Group, cites 80 green companies in the latter boat, burning through a collective $2 billion of venture-capital money with little prospect of going public any time soon. "The companies we talk to are trying to stay solvent," says Fan. Indeed, the same might be said of their financial backers, and other green-oriented investors. A global recession and bear market deserve much of the blame for the carnage in green-tinged shares, as does a $100-a-barrel plunge in oil prices, which suddenly made the drive for sustainable-energy alternatives seem less pressing. Moreover, many clean-tech companies are small and speculative in nature, and serve end markets that depend on government subsidies -- not a particularly attractive investment attribute. Former solar-energy highfliers such as First Solar (FSLR) and LDK Solar (LDK) faced additional challenges last year from sharply escalating prices for polysilicon, the raw material used in solar cells. In toting up the losses, it is tempting to wonder whether green-themed investing was just a sustainable version of sock puppets -- that is, another Wall Street fad. But such musings couldn't be more misguided. In the U.S., President Barack Obama has just pledged to spend billions on environmentally friendly technologies, while Congress is planning to put more money and muscle behind the search for energy alternatives and pollution controls (see page 28). Energy Secretary Steven Chu recently told Barron's sister publication, The Wall Street Journal, that his agency intends to fast-track billions of dollars in loans for alternative-energy projects already "in the pipeline," and that he will try to get roughly half the $37 billion already set aside for clean-tech capital projects distributed within the year. That is just a down payment on much more ambitious economic initiatives, and is mirrored by similar endeavors abroad. Greater government funding bodes well for some pure plays in the solar, wind, ethanol and biomass industries. But it bodes even better, near term, for well-established, diversified and financially healthy companies like Switzerland's ABB (ABB), Florida utility FPL Group (FPL), Waste Management (WMI), Jacobs Engineering (JEC) and electrical-products supplier Eaton (ETN). All are visible and increasingly powerful players in areas given spending priority: energy conservation, infrastructure renewal and the build-out of a "smarter" power grid. To be sure, more public and private spending will benefit alternative-energy giants like General Electric (GE), the biggest U.S. supplier of wind turbines, and United Technologies (UTX), a leader in making buildings more energy-efficient. Johnson Controls (JCI), Honeywell (HON), AES (AES) and others that make sensors and systems needed to optimize HVAC (heating, ventilating and air-conditioning) also belong on any list of likely green winners. So do a handful of midsized players in the fast-growing wind-energy-generati But we consider ABB, Waste Management, FPL, Jacobs and Eaton a sort of green dream team, for all the reasons, and then some, explained below. They probably aren't the first names that come to mind when you think "green," but they have the products, technologies and, not least, the financial strength to deliver for investors. Even better, their stocks are bargains. A provider of power and automation systems, ABB tops most shortlists of companies likely to benefit from large-scale energy projects and conservation initiatives. Among other things, the 125-year-old industrial giant is one of the world's biggest builders of electricity grids. With credit frozen and demand constrained, ABB faces the same challenges as other industrial outfits. But the company, profiled favorably in Barron's last spring ("The GE of Europe is a Major Power Player," May 19, 2008), is better positioned to benefit from more government and industry spending on infrastructure upgrades around the world, says Van Eck's Mitby. Headquartered in Zurich, ABB sells large-scale electrical circuitry, robotics and energy-monitoring and automation systems. It seems to land one multimillion-dollar infrastructure contract after another, including a recent $63 million deal to upgrade a power station in Saudi Arabia. Renewable-energy projects will need ABB's products and services, and its technology, including power-management sensors and load-balancing systems, has kept it ahead of most competitors, says Morningstar analyst Daniel Holland. ABB's shares have been cut by almost two-thirds, to 12, from their high last May, and now trade for nine times 2009 estimated earnings of $1.32 a share, a discount to the S&P 500's price/earnings multiple. Granted, last year's earnings were higher, at $1.74 a share, slightly exceeding expectations. Morningstar puts the company's fair value at 19 a share, some 62% above last week's close. Investors can collect a 46-cent annual dividend (for a current yield of 3.8%) while waiting for the global economy to jump-start. ABB recently shed some poorly performing assets in an efficiency drive of its own. The company boasts a strong balance sheet, and net cash (cash minus debt) of $5.4 billion, or $2.40 a share, Holland notes. It has used excess cash to boost its payout and buy in shares. Twelve-month return on equity of 28.39% is more than three times that of its peer group, which includes industrial outfits such as Emerson Electric (EMR) and Danaher (DHR). "We are in the sweet spot of energy efficiency and of climate change," chief financial officer Michel Demare told Barron's last spring. For ABB, it is about to get sweeter. As the nation's leading producer of energy from wind and solar power, FPL Group is at the forefront of commercialization of these technologies. The Juno Beach, Fla.-based company also is the largest power generator in one of the nation's most populated states. Its regulated utility arm, Florida Power & Light, serves 4.5 million customers and contributes just over half of revenue, which totaled $16 billion last year. A slightly smaller, but faster-growing revenue stream flows from FPL's recently re-christened NextEra Energy Resources subsidiary. This unregulated clean-energy producer sells power throughout the U.S., using a diverse set of low-cost generation assets strategically situated around the country to balance the load. Last year, 38% of Next- Era's capacity came from wind power, which has benefited from the recent extension of production tax credits. NextEra's net income roughly tripled in 2008. The credit crisis and weakening consumer demand have led NextEra to slow the pace of expansion in its wind-power operations, but the company "already controls a fourth of this nation's installed wind-energy capacity," notes Morningstar analyst Ryan McLean. "Nationwide, total capacity is somewhere around 25,000MW [megawatts], and NextEra has 6,375MW and growing." Wind is a relatively low-cost and profitable revenue stream for the company, which expects total profit to grow by double-digits through 2010. FPL reported adjusted earnings of $3.84 a share last year, of which Next- Era contributed $2.04. The company could $4.07 this year, and $4.54 in 2010. Although its regulated utility has experienced reduced demand, FPL is better-positioned than most. Moreover, Florida's relatively favorable regulatory environment encourages additional investments in capacity that could boost the utility's earnings. FPL emits less carbon than most other utilities, and will benefit from a "greenhouse gas-constrained regulatory environment," says Ken Stern, a San Diego money manager. But the company stands to profit most from national initiatives to expand wind-energy generation and bolster transmission facilities. "Transmission development had double-digit growth prospects before the credit crunch, and now, favorable legislation is coming in terms of taxes and the fast-tracking of capex [capital-spending] opportunities," says Van Eck's Mitby. The company recently launched a new venture: hybrid hydraulic/electric alternatives for fleet-vehicle propulsion, including one system built with the U.S. Environmental Protection Agency (EPA). Designs vary, but basically capture energy from braking and other subsystems to augment or replace the traditional diesel engine. Particularly promising for city buses, delivery trucks and other vehicles that start and stop frequently, the EPA estimates such powertrains could produce fuel savings of 20% to 40%, and cut carbon emissions by as much as 40%. So far, those vehicles are limited to pilot programs, but the "pilots" include big customers like United Parcel Service, Federal Express and Wal-Mart, as well as school buses used as far away Melbourne, Australia and Guangzhou, China. Eaton has many competitors, but unlike others that dream of replacing the combustion engine, it has been an automotive-technolog With 2008 sales of $15.4 billion, the Cleveland-based company has the design, manufacturing and financing in place to scale its ideas. Its truck group alone sells $2.3 billion of transmission and hybrid-power and exhaust systems for trucks, buses and agricultural equipment. Eaton knows its customers, and the costs and challenges of operating in 150 different countries. But its strengths also raise concerns. "I like Eaton, but I'm worried about its earnings [expectations] earnings being overly optimistic due to its heavy exposure to the auto industry," says Ken Stern, the San Diego investment manager. Morningstar analyst John Kearney is more upbeat, noting an aggressive acquisition strategy has diversified the company's revenue and profits. Draconian cost-cutting measures also have helped. Eaton earned $6.83 a share in 2008. This year, management is guiding profit expectations downward to between $4.20 and $5.20 a share; the wide range reflects economic uncertainties. Eaton has paid a dividend for 85 years, and yields 5.41%. Its current payout, $2 a share, must have been of some comfort to investors, whose shares have lost about half their value in the past year, and now trade around 36. At least one savvy holder used the opportunity to snap up more stock: Warren Buffett's Berkshire Hathaway (BRKA) upped its stake in Eaton in the fourth quarter to 3.2 million shares, from 2.9 million. Like Buffett, we don't know where Eaton will trade in a month or a year, only that the products, services and ingenuity of Eaton and companies like it are making the world greener and cleaner. When the smoke -- or is it carbon? -- clears, they and their shareholders are likely to rewarded. |
Posted at 21/2/2009 18:50 by ariane ex divi date apparently end of july |
Posted at 14/2/2009 09:51 by grupo guitarlumber February 12, 2009 - 9:46 PM ABB accelerates move to cheaper markets Image caption: Hogan is prepared to grasp the nettle (Keystone)Swiss-Swed The firm said it must reduce costs and exploit higher demand for its services in countries including Mexico and Poland after profits and orders fell appreciably last year. ABB announced on Thursday that net profits tumbled by 17 per cent in 2008 to $3.1 billion (SFr3.6 billion). This included an 88 per cent fall in fourth-quarter net profit to $213 million. The company that specialises in equipment and services for the energy and automotive sectors also cautioned that orders had fallen by about ten per cent in the last three months of 2008 particularly large scale projects. It plans to reduce costs by $1.3 billion in the next two years. ABB revealed that it has built or expanded 30 plants in emerging markets in the last year. Staff in countries including Estonia, Vietnam, Brazil and Egypt now make up 44 per cent of total headcount compared with 30 per cent four years ago. No evacuation New chief executive Joe Hogan would not comment directly on how this could affect jobs in developed markets, including the home bases of Switzerland and Sweden. But he told swissinfo that the focus was on expanding operations in cost efficient countries. "It's going to accelerate. We have to do that in the sense of the economic environment that we are faced with," he said. "Obviously when order rates are down ten per cent in the fourth quarter, with some businesses down 30 per cent, then we have to take cost actions." Hogan, who joined the group a year ago after the shock departure of former CEO Fred Kindle, added that cost reductions would only be made in underperforming divisions in countries with low demand. "This will not be a complete evacuation from high-cost to low-cost countries," he said. ABB increased its staff by 8,000 last year to 120,000. The company also hopes to cash in on infrastructure projects in developed countries financed by a raft of government stimulus packages. Positive signs Annual profits were hit by a previously announced $870 million provision largely to cover the costs of investigations in the United States and Europe into suspect payments and alleged anti-competitive practices between 2004 and 2007. Of that sum, $140 million was earmarked for restructuring costs. ABB said it would halt its SFr2.2 billion ($1.9 billion) share buyback scheme until further notice to safeguard its $5.4 billion cash stockpile. The firm spent $650 million on company takeovers last year and said it would continue to look at small to mid-sized targets. Hogan admitted that the immediate future was uncertain, but insisted that the company would not cut its previously announced growth targets until 2011. ABB has enjoyed a remarkable turnaround in fortunes after facing bankruptcy at the turn of the century. "Orders were down as customers delayed projects or cut capital expenditures. But the long-term drivers of our business to increase energy efficiency, secure reliable power and improve industrial productivity have not changed," he said. swissinfo, Matthew Allen in Zurich ABB 2008 FULL-YEAR RESULTSNet profit: $3.1 billion ($3.76 billion in 2007) Revenues. $34.9 billion ($29.2 billion) EBIT (earnings before interest and tax): $4.55 billion ($4 billion) Total staff: 120,000 (112,000) A shareholder dividend of SFr0.48 per share has been proposed. -------------------- ABB IN EMERGING MARKETSABB employed 52,659 staff in emerging markets (EMs) in 2008, compared with just under 30,000 in 2004. The proportion of total group headcount rose from 30% to 44%. Some 45% of all manufacturing employees are based in EMs. The group has increased its sourcing spending (procurement of goods, materials and services) from EMs by $5 billion since 2005. EMs will provide 40% of the group's total sourcing by 2010, according to ABB plans. ABB built or expanded 30 manufacturing plants in EMs last year. The company plans to expand both manufacturing and engineering capacity in these countries in future. -------------------- LINKSABB ( ABB statement ( ABB share price ( -------------------- -------------------- URL of this story: |
Posted at 03/11/2008 12:02 by grupo guitarlumber News and commentaryWhen the Economy Turns, ABB Will Be Among the First in Line By Judy Alster Updated: Monday, November 03 2008 01:11:AM (Close This) Look on the bright side: Eventually the lights will have to go on again all over the world, which is why investors should be positioned in one or two industrial stocks that pay them while they're waiting. A stock we took a profit in from the now-closed 21st Century Investor Mid-Cap Value Portfolio deserves a look: Swiss-Swedish power and automation giant ABB, Ltd. (NYSE: ABB). Recent performance has been very good, with third quarter revenue up 22%, profit up over 25% and earnings per share up 32%. The company says it benefited from continuing demand for reliable electrical power generation and environmental technologies, leading to 7% growth in total orders. So why is the stock fully 60% off its May high? The usual gang of suspects: the global credit mess, falling commodity prices and economic worries in general have affected orders for large-scale projects, knocking organic growth down to 1%. ABB is essentially a play on global growth, which cannot stay down forever. ABB leads in electrical transmission and distribution for companies who want to increase generation and transmission capabilities, replace inefficient systems or integrate new possibilities such as wind farms into the grid. It also provides process control for energy and mining, robotics for the automotive industry (it too will revive, albeit in a condensed version), and motors, drives and electrical products for countless industrial companies. When the global economy gets moving, it is precisely ABB's customers who will wake up first, making it a good candidate for further research. The company's price to sales ratio is a low 0.88, it's drenched in cash, hasn't much debt at all for a firm its size, and its 38% return on equity runs lazy circles around the competition. At Friday's $13.15 it's paying a 47-cent or 3.5% dividend, which is paid annually, as is the case with many non-US companies. Those who don't mind losing a few basis points of yield might wait until the stock closes consistently above $14, as there's no guarantee it has reached a floor. |
Posted at 05/9/2007 04:29 by waldron ABB May Opt for Big Purchase, Spurning Calls for Cash Return By Antonio Ligi Sept. 5 (Bloomberg) -- ABB Ltd. Chief Executive Officer Fred Kindle may be ready to make a big acquisition after returning the world's largest electrical-grid maker to profitability and amassing more than $2 billion in cash. That might be a big mistake, said Thomas Lusetti, a Zurich- based fund manager at VP Bank AG who helps manage the equivalent of $26 billion including ABB. ``I would like a share buyback a lot more,'' Lusetti said. ``There are shareholders who stood by during the difficult times. They certainly would appreciate a biscuit in the form of an increased dividend.'' Kindle, 48, has increasingly hinted that he's leaning toward a takeover of ``many billions.'' He's promised not to repeat the mistakes of the 1990s, when ABB snapped up more than 200 companies during a spending spree that pushed it close to bankruptcy. Asbestos claims also contributed to the financial crisis. Of 28 analysts surveyed by Bloomberg, 22 rate the shares ``buy.'' That may change if investors don't like what Kindle has to say when he updates them on his strategy today in Zurich. ``ABB has a very bad track record in acquisitions,'' said Panagiotis Spiliopoulos, an analyst at Bank Vontobel in Zurich who has a ``buy'' rating on the stock. ``Kindle should wait. It isn't the right time yet.'' ABB shares have more than tripled since the company's last major purchase in September 2001, outpacing Munich-based Siemens AG, Europe's largest engineering company. That's given ABB a market value of 68.4 billion francs ($56.5 billion). Dividend Yield Under Kindle, ABB has posted a profit the past two years after four years of losses. The company had net cash of $2.4 billion as of June 30. A recent disposal may increase that by almost $1 billion and one analyst said the company may have $8.6 billion in cash, including a possible share issue, by the end of 2007. In 2006, ABB was able to pay a dividend for the first time in five years. Its dividend of 24 cents a share paid out this year is one-sixth of Siemens's. ``The dividend yield isn't big,'' said Dieter Buchholz, a fund manager who helps oversee $107 billion at AIG Private Bank Ltd. in Zurich including ABB shares. ``They could do more.'' ABB's dividend yield is 0.81 percent, compared with St. Louis-based Emerson Electric Co., the world's largest maker of power equipment for oil companies, at 2.12 percent, and France's Schneider Electric SA, the world's biggest maker of circuit breakers, at 3.03 percent, according to Bloomberg data. Dividend yield is used to evaluate return on a stock excluding the effect of price appreciation. Final Milestone Formed in 1988 through the merger of BBC Brown Boveri of Switzerland and ASEA AB of Sweden, ABB makes components and systems to transmit and distribute electricity, motors and generators as well as robots. Its workforce has shrunk to about 111,000 from a peak of 219,000 in mid-1998 as units including paper-making equipment and water treatment were jettisoned. ``A look at the past shows that they bought too much and too fast,'' Buchholz said. ``To invest in their own business is better. Big acquisitions are always difficult to integrate.'' ABB on Aug. 27 agreed to sell its U.S.-based Lummus Global energy services' unit to Chicago Bridge & Iron Co. for $950 million, capping six years of divestitures. Kindle, who took over in January 2005, called the transaction the ``final milestone'' of ABB's strategy of selling units to focus on power and automation technology. Proceeds from the deal will add to ABB's cash holdings, which Gerard Moore of Societe General estimates may reach as much as $8.6 billion by the end of 2007. In May, investors approved a proposal to increase the share capital by a maximum of 200 million shares with a par value of 2.5 francs each. The sale must take place no later than May 3, 2009. Asbestos Action Lummus Global was the last of ABB's divisions to be sold that had been weighed down with asbestos-related claims that almost sank the company in 2002. The unit had filed for bankruptcy in 2006 to resolve remaining asbestos actions. Another U.S. unit, Combustion Engineering, was the target of more than 430,000 lawsuits by claimants who said their health was impaired by exposure to asbestos from its boilers. ABB resolved the bulk of those claims last year with a $1.43 billion settlement plan. After shedding Lummus, ABB should have almost $3.4 billion in net cash, said analyst Alessandro Migliorini of Pictet & Cie.'s Helvea SA brokerage unit in Geneva. That will increase to more than $4.5 billion by years' end, he said. ``We expect the company to provide an indication of whether it will retain the cash pile for potential acquisitions, or start making share buybacks,'' said Migliorini, who rates ABB ``neutral.'' A buyback would help sustain an already ``pretty high share price,'' Lusetti said. Potential Targets ABB's shares, which closed at 29.88 francs on the Swiss Stock Exchange yesterday in Zurich, trade at an estimated price- earnings ratio of 22.22. That compares with Emerson Electric at 18.90 and Schneider Electric SA at 14.87, according to Bloomberg data. Some analysts, including Societe General's Moore, say acquisitions will add more shareholder value than a buyback. ``The key issue for the shares to continue outperform is the ability to use its fast-expanding net cash position to make accretive acquisitions,'' Paris-based Moore wrote in a research note. He has a ``hold'' rating on the stock. ABB last spent more than $1 billion on a takeover eight years ago when it bought Elsag Bailey Process Automation NV for $2.1 billion from Finmeccanica SpA. France's Legrand SA and Milwaukee-based Rockwell Automation Inc. are now Kindle's main potential targets, Moore wrote. Too Expensive Legrand, the world's biggest maker of switches and plugs for homes and offices, has a market value of 7 billion euros ($9.53 billion) while Rockwell, a maker of factory automation equipment, is valued at $10.9 billion. ABB would benefit from Limoges-based Legrand's strength in the ``highly'' profitable ultra-low voltage market, Moore said. Rockwell would fit as well because ABB is rather ``weak'' in automation sales in the U.S., where it gets 14 percent of its revenue. Mark Troman, a Merrill Lynch & Co. analyst in London who has a ``buy'' rating on ABB, wrote in a May 29 note that a purchase of Legrand or Rockwell is ``unlikely'' because they are too costly. Kindle has said several times that he's targeting companies for ABB's automation and power-products units, and that the most attractive markets are Asia and North America. Spiliopoulos said a buyback announcement by Kindle is unlikely ``as acquisition opportunities may still arise.'' ``I don't think they should prove that they can do a big acquisition,'' he said. ``Legrand and Rockwell aren't running away. I think they will do some smaller acquisitions and, rather later, a share buyback.'' To contact the reporter on this story: Antonio Ligi in Zurich at aligi@bloomberg.net . Last Updated: September 4, 2007 18:10 EDT |
Posted at 15/2/2007 07:02 by ariane Abb Final ResultsRNS Number:3042R ABB Ltd 15 February 2007 ABB 2006 net income rises 89% to $1.4 billion * 2006 earnings before interest and taxes (EBIT) up 45% at $2.6 billion * Full-year EBIT margin advances to 10.6% * Strong Q4 helps lift full-year orders by 22%, revenues by 11% * 2006 cash flow from operations doubles to $2 billion * Board of Directors will propose a dividend of CHF 0.24 per share Zurich, Switzerland, February 15, 2007 - ABB's net income rose 89 percent to $1,390 million in 2006 amid strong demand for technology to increase power grid reliability, industrial productivity and energy efficiency. Revenues for 2006 reached $24,412 million, an increase of 11 percent (10 percent in local currencies) over 2005, while orders were 22 percent higher (22 percent in local currencies) at $28,401 million. The order backlog stood at $16,953 million at the end of 2006, up $5 billion or 42 percent (33 percent in local currencies) compared to a year earlier. Growing revenues, higher capacity utilization and further cost reductions all contributed to a 45-percent increase in EBIT to a record $2,586 million in 2006. The EBIT margin, or EBIT as a percentage of revenues, increased to 10.6 percent from 8.1 percent in 2005. "We have the right technology and market positions to take advantage of the growing global demand for reliable power and higher industrial efficiency," said Fred Kindle, ABB President and Chief Executive Officer. "Our order backlog has grown significantly and improved business execution is allowing us to capture more of that growth in our bottom line. We are heading into 2007 in a strong position." In the fourth quarter ending December 31, 2006, orders rose 36 percent (30 percent in local currencies) while revenues were 21 percent higher (up 16 percent in local currencies) than in the fourth quarter of 2005. Fourth-quarter EBIT increased 43 percent to $744 million, producing an EBIT margin of 10.4 percent. Net income in the quarter was $422 million, up 90 percent from the same period a year ago. 2006 Q4 and full-year key figures Q4 06 Q4 051 Change 2006 20051 Change -------------- ------- ------ --------- ------- ------ --------- ------ ------ $ millions US$ Local US$ Local unless ------- ------ ------ ------ ------- ------ ------ ------ otherwise indicated -------------- Orders 7,479 5,502 36% 30% 28,401 23,194 22% 22% -------------- ------- ------ ------ ------ ------- ------ ------ ------ Order backlog (end 16,953 11,956 42% 33% Dec.) -------------- ------- ------ ------ ------ ------- ------ ------ ------ Revenues 7,188 5,917 21% 16% 24,412 22,012 11% 10% -------------- ------- ------ ------ ------ ------- ------ ------ ------ EBIT 744 522 43% 2,586 1,778 45% -------------- ------- ------ ------ ------ ------- ------ ------ ------ as % of 10.4% 8.8% 10.6% 8.1% revenues -------------- ------- ------ ------ ------ ------- ------ ------ ------ Net income 422 222 90% 1,390 735 89% -------------- ------- ------ ------ ------ ------- ------ ------ ------ as % of 5.9% 3.8% 5.7% 3.3% revenues -------------- ------- ------ ------ ------ ------- ------ ------ ------ Diluted earnings per 0.19 0.11 0.63 0.36 share ($) -------------- ------- ------ ------ ------ ------- ------ ------ ------ Dividend per share 0.24 0.12 100% in CHF (proposed) -------------- ------- ------ ------ ------ ------- ------ ------ ------ Cash flow from operations 1,040 695 1,939 1,012 -------------- ------- ------ ------ ------ ------- ------ ------ ------ Free cash flow2 1,598 902 -------------- ------- ------ ------ ------ ------- ------ ------ ------ as % of net 115% 123% income2 -------------- ------- ------ ------ ------ ------- ------ ------ ------ Return on capital 20% 14% employed2 -------------- ------- ------ ------ ------ ------- ------ ------ ------ 1 Adjusted to reflect the reclassification of activities to Discontinued operations; 2 Reported only on annual results Summary of Q4 and full-year 2006 results Orders received and revenues The strong full-year and fourth-quarter order growth was driven by favorable demand in most businesses and regions. Utility customers in OECD countries continued to invest in power grid upgrades and interconnections to increase the efficiency and reliability of their networks. In Asia, utilities invested in building new infrastructure to support economic growth, while in the Middle East, demand was supported by the need for power infrastructure to support growth in the oil and gas sector. Demand from industrial customers in all regions was driven by the need to improve efficiency in the face of high energy and raw materials prices, and was supported by the current strength in the global economy. In the power business, industrial customers increasingly require equipment to reliably manage large power flows in, for example, factories, refineries and marine applications. The Power Systems and Power Products divisions both benefited from strong demand in the fourth quarter. Large power grid investments, for example in the Middle East and Canada, produced an increase in large orders of more than $800 million in the Power Systems division compared to the same quarter a year earlier. In the Power Products division, volume growth and price increases to offset higher raw materials costs drove the higher order value. The Automation Products division gained from an increase in large orders from the rail transportation and wind energy sectors in the fourth quarter, and orders were up across all businesses and regions. Price increases related to higher raw material costs also contributed to the increase in the value of orders. Orders in the Process Automation division were up only slightly (flat in local currencies) as large system orders won in the fourth quarter of 2005 could not be repeated in the same quarter in 2006. Orders were higher in the Robotics division in the fourth quarter due to increased demand from the general industry sector. Large orders (more than $15 million) almost tripled to $1,570 million in the fourth quarter and represented 21 percent of total orders received versus 10 percent in the same quarter in 2005. Base orders (less than $15 million) were up 19 percent (14 percent in local currencies). The strong fourth-quarter revenue growth reflects both higher product sales during the quarter and the execution of large systems orders won in previous quarters. Full-year 2006 revenues increased on a mix of higher volumes and prices. Earnings before interest and taxes The higher EBIT and EBIT margin in both the fourth quarter and full year were achieved through higher revenues and factory loadings, better execution of large projects and further efforts to reduce costs by sourcing production capacity, components and raw material from lower-cost regions. Corporate costs for the full year were $321 million, $80 million lower than in 2005. The company incurred $85 million less in charges associated with consolidation of the transformer business in 2006 compared to 2005, which also contributed to the improved profitability. The fourth-quarter EBIT margin was below the full-year average for several reasons, including the mix of margins in large project orders flowing through revenues. In addition, a higher proportion of costs was recorded in the fourth quarter related to activities under the transformer consolidation program and legacy project costs in ABB Lummus Global. Finance expense, taxes and discontinued operations Below the EBIT line, lower debt in 2006 resulted in a reduction in net finance expense(1) for the full year to $153 million from $246 million in 2005. The tax rate for the fourth quarter was 25 percent (Q4 2005: 28 percent) and 29 percent for the full year (full year 2005: 32 percent). The decrease was primarily the result of higher earnings from lower-tax jurisdictions. ABB's remaining Building Systems business was reclassified to discontinued operations in the fourth quarter, reflecting progress made on its divestment. An expected loss on the planned sale was the main contributor to the total $53-million loss in discontinued operations reported in the quarter. For the full year, discontinued operations reported a loss of $167 million, mainly the result of losses related to ABB's asbestos obligations and the disposal of businesses. Cash flow Cash flow from operations in the fourth quarter improved by more than $300 million compared to the same quarter in 2005. Included in cash flow in the 2006 quarter was approximately $100 million in customer advances on large orders received. The improvement in cash flow for the full year versus 2005 reflects in part the approximately $490-million negative impact from reducing the securitization of receivables in 2005. Free cash flow(2) for the full year increased by 77 percent compared to 2005. The cash conversion ratio(3) amounted to 115 percent in 2006, partly the result of some $460 million in project-related cash advances from customers. Balance sheet Net cash (total cash and marketable securities and short-term investments, less total debt) was $1,508 million at the end of 2006, compared to net debt of $513 million at the end of 2005. Strong cash flows combined with the reduction in total debt from the early conversion of ABB's previously outstanding $968-million convertible bond, were the main contributors to the higher net cash position. ABB contributed approximately $665 million to fund its various pension plans during 2006, including discretionary pension contributions of approximately $450 million to local pension funds that were not required to be funded under local laws. This, together with positive asset returns and increasing discount rates were the main factors that allowed ABB to reduce its unfunded pension liability to $291 million at the end of December 2006 from $839 million at the end of 2005. As the result of changes to U.S. accounting rules regarding defined benefit pension plans, the company took a non-cash charge to stockholders' equity in the fourth quarter of 2006 of approximately $415 million. The accounting changes have no impact on ABB's income statement. (Please refer to Appendix I - Accounting pronouncements, for further information.) Gearing(4) decreased to 34 percent at the end of December 2006, versus 52 percent a year earlier, primarily the result of the early bond conversion mentioned above and the increase in net income in 2006. As a result of ABB's stronger balance sheet and improved operational performance, the company's credit ratings were increased several levels during 2006. By the end of the year, the ratings were BBB+ with Standard & Poor's (up from BB+ at the beginning of 2006) and Baa1 with Moody's (up from Ba2 at the beginning of 2006). ____________________ 2 Free cash flow = cash from operating activities adjusted for changes in financing receivables and net investments in property, plant and equipment. 3 Cash conversion ratio = free cash flow as a percentage of net income. 4 Gearing = total debt divided by total debt plus stockholders' equity (including minority interest). Dividend and authorized capital For 2006, ABB's Board of Directors will propose a dividend of CHF 0.24 per share, double the level of 2005. The proposal is subject to approval by shareholders at the company's annual general meeting on May 3, 2007 in Zurich, Switzerland. Should the proposal be approved, the ex-dividend date would be May 8, 2007. ABB's Board of Directors will also recommend that shareholders approve the replacement of the company's previously expired authorized capital. The move would allow ABB to issue up to 200 million shares and is intended to optimize the company's financial flexibility. Divestitures In line with its strategy to focus on power and automation technologies, ABB continued to divest non-core activities in 2006, including power lines businesses and a cables business in Ireland. The remaining Building Systems business was reclassified into discontinued operations in the fourth quarter of 2006 reflecting progress in its divestment. In January, 2007, ABB said it had restarted the process to divest its ABB Lummus Global oil and gas business. In February 2007, the company announced that it had agreed to sell its equity investments in two private power plants, part of its Equity Ventures holdings, for $490 million, and expects the transaction to be closed in the second quarter of 2007. Senior management appointments As previously announced, two new members were appointed to ABB's Executive Committee, effective January 1, 2007. Peter Leupp, previously ABB's country manager in China, was named head of the Power Systems division, while Diane de Saint Victor, formerly general counsel at EADS (European Aeronautic Defence and Space Company), was appointed head of the Legal and Compliance function. In addition, ABB announced in December 2006 that Jurgen Dormann, Chairman of the ABB Board of Directors, has decided not to seek re-election to the ABB Board for a further term. As a consequence, he will retire from the ABB Board after completing his current term as Chairman of the board, at the company's AGM on May 3, 2007. Asbestos In 2006, the Plans of Reorganization of ABB's U.S. subsidiaries Combustion Engineering (CE) and ABB Lummus Global (Lummus) became effective following final court approvals. As a result, any future asbestos personal injury claims against those and other ABB entities related to the operations of CE and Lummus will be channeled to the specially-created Personal Injury Trusts set up under the relevant Plans of Reorganization. Market outlook for 2007 The business environment for ABB in 2007 is not expected to vary significantly from the positive market situation seen in 2006. Demand for power transmission and distribution infrastructure is expected to continue on a high level in Asia, the Middle East and the Americas. Equipment replacement and improved network efficiency and reliability are forecast to be the drivers of higher demand in Europe and North America. Automation-related industrial investments are expected to continue in most sectors. Overall, automation-related demand growth is expected to be strongest in Asia and the Americas in 2007, with more modest growth in Europe. In view of the extraordinarily high order growth rates experienced in 2006, order growth is expected to moderate in 2007. Employment ABB employed approximately 108,000 people at the end of December 2006, an increase of 4,000 compared to the end of 2005. Most of the increase was in the fast-growing Asia region. Employment was also higher in eastern and western Europe. Divisional performance Q4 and full year 2006 Power Products Q4 06 Q4 05(1) Change 2006 2005(1) Change -------------- ------- ------ --------- ------- ------ --------- $ millions US$ Local US$ Local unless ------- ------ ------ ------ ------- ------ ------ ------ otherwise indicated -------------- Orders 2,038 1,607 27% 22% 8,743 6,879 27% 26% -------------- ------- ------ ------ ------ ------- ------ ------ ------ Order backlog (end 4,947 3,499 41% 34% Dec.) -------------- ------- ------ ------ ------ ------- ------ ------ ------ Revenues 2,285 1,861 23% 18% 7,422 6,307 18% 16% -------------- ------- ------ ------ ------ ------- ------ ------ ------ EBIT 290 189 53% 961 616 56% -------------- ------- ------ ------ ------ ------- ------ ------ ------ as % of 12.7% 10.2% 12.9% 9.8% revenues -------------- ------- ------ ------ ------ ------- ------ ------ ------ Cash flow from operations 386 329 736 566 -------------- ------- ------ ------ ------ ------- ------ ------ ------ 1 Adjusted to reflect the reclassification of activities to Discontinued operations Order growth remained strong in the fourth quarter, as both base and large orders increased substantially. Orders were higher in all business units, led by Transformers, and in all regions. Revenues also increased in all business units in the quarter, reflecting higher volumes from the strong order backlog and some price increases to compensate for higher raw material costs. Fourth-quarter EBIT and EBIT margin rose significantly for the division, mainly as the result of higher volumes and factory loadings together with lower costs from the transformer consolidation program announced last year. Expenses related to the program were $14 million in the fourth quarter of 2006 (fourth quarter 2005: $43 million). Program costs for the full year 2006 amounted to $38 million (2005: $123 million). For the full year 2006, higher demand for power infrastructure improvements led to increased orders and revenues in all business units and regions. EBIT increased 56 percent and the EBIT margin rose 3.1 percentage points as the result of higher volumes, better capacity utilization, and lower transformer consolidation costs. Power Systems Q4 06 Q4 05 Change 2006 2005 Change -------------- ------- ------ --------- ------- ------ ---------- $ millions US$ Local US$ Local unless otherwise indicated -------------- ------- ------ ------ ------ ------- ------ ------ ------ Orders 1,989 1,118 78% 71% 5,733 4,468 28% 28% -------------- ------- ------ ------ ------ ------- ------ ------ ------ Order backlog (end 5,638 4,085 38% 29% Dec.) -------------- ------- ------ ------ ------ ------- ------ ------ ------ Revenues 1,429 1,169 22% 16% 4,544 4,085 11% 10% -------------- ------- ------ ------ ------ ------- ------ ------ ------ EBIT 93 84 11% 279 187 49% -------------- ------- ------ ------ ------ ------- ------ ------ ------ as % of 6.5% 7.2% 6.1% 4.6% revenues -------------- ------- ------ ------ ------ ------- ------ ------ ------ Cash flow from operations 185 105 293 122 -------------- ------- ------ ------ ------ ------- ------ ------ ------ Orders were sharply higher in the fourth quarter of 2006, which was primarily the result of large project wins, including a $450-million order in Qatar and a $180-million order in Canada. Orders were up in all regions by more than 20 percent in both U.S. dollars and local currencies. Revenues grew in the fourth quarter on increased project execution from the strong order backlog. EBIT increased more than 10 percent compared to the same period in 2005, primarily the result of higher volumes. The EBIT margin decreased versus the fourth quarter of 2005, mainly reflecting a higher proportion of lower-margin projects executed during the quarter compared to the year-earlier period. For the full year 2006, orders and revenues grew as the demand for power transmission and distribution systems remained strong in all regions. Higher volumes and the resulting increase in capacity utilization, along with improved project selection and execution, were the main drivers of the higher EBIT and EBIT margin compared to 2005. Automation Products Q4 06 Q4 05 Change 2006 2005 Change -------------- ------- ------ --------- ------- ------ --------- $ millions US$ Local US$ Local unless otherwise indicated -------------- ------- ------ ------ ------ ------- ------ ------ ------ Orders 1,948 1,456 34% 26% 7,706 6,210 24% 23% -------------- ------- ------ ------ ------ ------- ------ ------ ------ Order backlog (end 2,439 1,417 72% 60% Dec.) -------------- ------- ------ ------ ------ ------- ------ ------ ------ Revenues 1,923 1,553 24% 16% 6,837 5,897 16% 15% -------------- ------- ------ ------ ------ ------- ------ ------ ------ EBIT 300 222 35% 1,053 822 28% -------------- ------- ------ ------ ------ ------- ------ ------ ------ as % of 15.6% 14.3% 15.4% 13.9% revenues -------------- ------- ------ ------ ------ ------- ------ ------ ------ Cash from 274 207 916 484 operations -------------- ------- ------ ------ ------ ------- ------ ------ ------ Orders from industrial customers to further increase operational efficiency continued to grow in all businesses and regions during the fourth quarter. Large orders from the rail transportation sector for traction motors and from wind energy customers for generators and low-voltage systems contributed to the strong increase. Revenues increased in the quarter mainly due to higher volumes. Higher prices to offset raw materials cost increases also contributed to the revenue growth. Increased revenues, high factory loadings and further migration to lower-cost countries were the prime drivers of an increase in EBIT and EBIT margin versus the same quarter in 2005. Full-year order and revenue growth reflect the strong market demand seen across most end user segments and in all regions. EBIT and EBIT margin increased as the result of higher volumes and factory loadings, and continuing cost migration efforts. Process Automation Q4 06 Q4 05 Change 2006 2005 Change -------------- ------- ------ --------- ------- ------ ---------- $ millions US$ Local US$ Local unless otherwise indicated -------------- ------- ------ ------ ------ ------- ------ ------ ------ Orders 1,381 1,322 4% 0% 6,550 5,400 21% 21% -------------- ------- ------ ------ ------ ------- ------ ------ ------ Order backlog (end. 3,991 2,647 51% 40% Dec.) -------------- ------- ------ ------ ------ ------- ------ ------ ------ Revenues 1,591 1,340 19% 13% 5,448 4,996 9% 8% -------------- ------- ------ ------ ------ ------- ------ ------ ------ EBIT 164 113 45% 541 398 36% -------------- ------- ------ ------ ------ ------- ------ ------ ------ as % of 10.3% 8.4% 9.9% 8.0% revenues -------------- ------- ------ ------ ------ ------- ------ ------ ------ Cash from 171 100 525 237 operations -------------- ------- ------ ------ ------ ------- ------ ------ ------ Base orders increased 21 percent in the fourth quarter (15 percent in local currencies), but large orders received in the fourth quarter of 2005 in South Korea and Singapore could not be repeated, which offset the base order increase. Base order growth was driven by demand for process automation systems across most of ABB's industrial end markets, such as oil and gas, pulp and paper, and minerals. Higher revenues in the fourth quarter reflect primarily the ongoing execution of large project orders awarded in earlier quarters, as well as increased product sales during the fourth quarter of 2006. EBIT and EBIT margin increased substantially over the fourth quarter of 2005, mainly due to higher volumes and improved project management. Orders for the full-year 2006 achieved a record level, reflecting continued strong demand in most sectors. Revenues increased mainly due to the growing systems business, especially in the minerals and marine sectors, and the products business. Full-year EBIT increased as the result of higher volumes, better pricing, improved project management, and ongoing cost migration initiatives. Robotics Q4 06 Q4 05 Change 2006 2005 Change -------------- ------- ------ ---------- ------ ------ ---------- $ millions US$ Local US$ Local unless otherwise indicated -------------- ------- ------ ------ ------ ------ ------ ------ ------ Orders 351 277 27% 20% 1,240 1,496 (17%) (18%) -------------- ------- ------ ------ ------ ------ ------ ------ ------ Order backlog (end 441 506 (13%) (19%) Dec.) -------------- ------- ------ ------ ------ ------ ------ ------ ------ Revenues 342 500 (32%) (35%) 1,288 1,699 (24%) (25%) -------------- ------- ------ ------ ------ ------ ------ ------ ------ EBIT (12) 12 n/a 1 91 (99%) -------------- ------- ------ ------ ------ ------ ------ ------ ------ as % of (3.5%) 2.4% 0.1% 5.4% revenues -------------- ------- ------ ------ ------ ------ ------ ------ ------ Cash from operations 47 42 30 (11) -------------- ------- ------ ------ ------ ------ ------ ------ ------ Orders received increased in the fourth quarter, primarily from the general industry sector, such as packaging, consumer electronics and food processing. Order growth was led by North America and Asia, mainly China. Revenues fell in the quarter, however, reflecting the declining order backlog that has resulted from the generally sluggish demand from U.S. and European automotive manufacturers and their major suppliers in recent quarters. The division continued to take steps to improve project execution, reduce costs and refocus the product offering. Costs associated with these actions, combined with lower revenues and special charges related to a large project, resulted in a decline in EBIT and EBIT margin in the fourth quarter. Full-year 2006 orders and revenues were significantly lower than the year before as demand remained weak in ABB's key automotive end markets in North America and Europe. Service revenues and sales to general industry in the year were higher which partly mitigated the costs associated with the division's operational improvement program, resulting in a breakeven EBIT for the year. Non-core activities With the reclassification of Building Systems to discontinued operations in the fourth quarter of 2006, ABB's Non-core activities now comprise the ABB Lummus Global oil, gas and petrochemicals business, a portfolio of equity investments in power and other infrastructure projects, and ABB's real estate management activities. (Please refer to Appendix II for further information on the impact of reclassifications of activities to discontinued operations in 2006.) Non-core activities reported an EBIT loss of $5 million in the fourth quarter on revenues of $359 million, primarily the result of costs related to outstanding claims on an ABB Lummus Global project. Income from the Equity Ventures portfolio and gains from real estate activities comprised most of the full-year Non-core EBIT of $72 million. ABB Lummus Global reported a breakeven EBIT for the full year. Corporate Corporate costs decreased in the fourth quarter of 2006, mainly reflecting continued focus on the reduction of corporate costs in the countries and in the Headquarters. For the full year 2006, Corporate costs amounted to $321 million compared to $401 million in 2005. More information The 2006 Q4 results press release and presentation slides are available from February 15, 2007 on the ABB News Center at www.abb.com/news and on the Investor Relations homepage at www.abb.com/investor ABB will host a press conference today starting at 10:00 a.m. Central European Time (CET). U.K. callers should dial +44 20 7107 0611. From Sweden, +46 8 5069 2105, and from the rest of Europe, +41 91 610 56 00. Lines will be open 15 minutes before the start of the conference. Audio playback of the call will start one hour after the call ends and will be available for 72 hours: Playback numbers: +44 20 7108 6233 (U.K.), +41 91 612 4330 (rest of Europe) or +1 866 416 2558 (U.S./Canada). The code is 354, followed by the # key. A meeting for analysts and investors is scheduled to begin today at 2:00 p.m. CET (8:00 a.m. EST). Callers should dial +1 412 858 4600 (from the U.S./Canada) or +41 91 610 56 00 (Europe and the rest of the world). Callers are requested to phone in 10 minutes before the start of the call. The audio playback of the call will start one hour after the end of the call and be available for 96 hours. Playback numbers: +1 866 416 2558 (U.S./Canada) or +41 91 612 4330 (Europe and the rest of the world). The code is 558, followed by the # key. Investor calendar 2007 Q1 2007 results April 26, 2007 ABB Ltd Annual General Meeting May 3, 2007 Q2 2007 results July 26, 2007 Q3 2007 results October 25, 2007 ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 108,000 people. Zurich, February 15, 2007 Fred Kindle, CEO Important notice about forward-looking information This press release includes forward-looking information and statements including statements concerning the outlook for our businesses. These statements are based on current expectations, estimates and projections about the factors that may affect our future performance, including the economic conditions of the regions and industries that are major markets for ABB Ltd. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects," "believes," "estimates," "targets," "plans" or similar expressions. However, there are many risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking information and statements made in this press release and which could affect our ability to achieve any or all of our stated targets. The important factors that could cause such differences include, among others, the amount of revenues we are able to generate from order backlogs and orders received, raw materials prices, market acceptance of new products and services, changes in governmental regulations and costs associated with compliance activities, 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, including its Annual Reports on Form 20-F. 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. Appendix I Reclassifications Amounts reported for prior periods in the consolidated financial statements have been reclassified to conform to the current period's presentation, primarily as a result of the application of Statement of Financial Accounting Standards No. 144 Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144), in reflecting assets and liabilities held for sale and in discontinued operations. CE asbestos obligations During the second quarter of 2006, the Modified CE Plan of Reorganization for Combustion Engineering (CE), a subsidiary of ABB in the U.S., became effective. Certain actions taken in connection with making the Plan effective resulted in changes to our consolidated financial statements. These changes are summarized below. For additional information, regarding the background of the Modified CE Plan of Organization, our asbestos obligations and the Plan effective date, please refer to ABB's 2005 Annual Report on Form 20-F, as well as our third quarter press release dated October 26, 2006. The 30,298,913 ABB shares reserved to cover part of ABB's asbestos liabilities were contributed to the Combustion Engineering 524(g) Asbestos Personal Injury Trust (PI Trust) on April 20, 2006, and resulted in a reduction in Asbestos obligations, and an increase in the Capital stock and additional paid-in capital of $407 million. In addition, the mark-to-market accounting treatment of the ABB CE Settlement Shares contributed to the PI Trust, resulted in an expense of $114 million in the item Loss from discontinued operations, net of tax in ABB's consolidated income statement for the twelve month period ended December 31, 2006. Following the effective date of the Plan, ABB discounted the ABB promissory notes and other required asbestos contributions at our incremental borrowing rate. The total discount adjustment on the value of the ABB promissory notes and other required contributions resulted in non-cash income of approximately $45 million, which is reflected in the item Loss from discontinued operations, net of tax in the consolidated income statement for the twelve month period ended December 31, 2006. Debt securities transactions In the second quarter of 2006, a bond conversion of ABB's previously outstanding $968-million, 4.625-percent convertible bonds due in May 2007 was completed, resulting in the issuance of approximately 105 million new ABB shares and approximately 2 million treasury shares. Expenses of $55 million related to the induced conversion were recorded in the second quarter 2006 consolidated income statement in Interest and other finance expense, net. As a result of the transaction, ABB's total debt decreased by approximately $930 million and equity increased by a similar amount. For further details regarding this transaction, please refer to ABB's second quarter press release dated July 27, 2006. ABB also completed a bond exchange offering in the second quarter of 2006 to extend the maturity profile of its outstanding public debt. The offering related to its 9.5-percent Euro500-million bonds due 2008, and its 10-percent #200-million bonds due 2009. Following the completion of the offer, ABB issued new 4.625-percent Euro700-million bonds due 2013. As a result, the principal remaining amount outstanding for the 2008 bonds is approximately Euro77 million, and approximately #20 million for the 2009 bonds. For further details regarding this transaction, please refer to ABB's second quarter press release dated July 27, 2006. Employee benefits funding During the twelve months ended December 31, 2006, ABB made $690 million of contributions, including discretionary contributions of approximately $450 million, to its pension and other post-retirement benefit plans. The majority of the current year contributions have been made in the form of marketable securities. Accounting pronouncements In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans-an amendment of FASB Statements No. 87, 88, 106, and 132 (R)." SFAS No. 158 requires an employer to recognize in its statement of financial position an asset for a plan's overfunded status or a liability for a plan's underfunded status, measure a plan's assets and its obligations that determine its funded status as of the end of the employer's fiscal year, and recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur. Those changes are reported in Accumulated other comprehensive income/loss and as a separate component of stockholders' equity. ABB adopted SFAS No. 158 in the fourth quarter of 2006. The adoption of SFAS 158 resulted in a non-cash charge to equity, net of tax, of approximately $415 million. The adoption of SFAS 158 did not affect the consolidated income statements. In June 2006, the FASB issued FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes (an interpretation of FASB Statement No. 109)" which is effective for fiscal years beginning after December 15, 2006. This interpretation was issued to clarify the accounting for uncertainty in income taxes recognized in the financial statements by prescribing a "more likely than not" threshold measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. If there are changes in net assets as a result of application of FIN 48, these will be accounted for as an adjustment to retained earnings. (The new guidance will be effective for ABB on January 1, 2007.) ABB expects the transition effects to consist of reclassification of certain income-tax related liabilities in its consolidated financial statements and an immaterial adjustment to the balance of Retained earnings. Prior periods will not be restated as a result of this change. Local currencies The results of operations and financial position of many of ABB's non-U.S. subsidiaries are recorded in the currencies of the countries in which those subsidiaries reside. The company refers to these as "local currencies." However, ABB reports its operational and financial results in U.S. dollars. Differences in our results in local currencies as compared to U.S. dollars are caused exclusively by changes in currency exchange rates. Segment reporting As disclosed in our 2005 Annual Report on Form 20-F, beginning in the first quarter of 2006, ABB modified its reporting from two primary reportable segments to five primary reportable segments due to organizational changes to strengthen the Company's focus on customer relationships and growth. Therefore the segment disclosures for 2005 have been reclassified to conform to the current presentation. Appendix II 2006 quarterly revenues and EBIT by division, adjusted for reclassifications to discontinued operations Adjustments made in Power Products, Non-core activities and ABB Group Revenues EBIT US$ millions Q1 2006 Q2 2006 Q3 2006 Q1 2006 Q2 2006 Q3 2006 -------------- ------- ------- ------- ------- ------- ------- Power Products1 1,463 1,821 1,853 173 245 253 Power Systems 1,012 1,031 1,072 48 62 76 Automation Products 1,530 1,684 1,700 221 262 270 Process Automation 1,235 1,300 1,322 118 120 139 Robotics 333 332 281 1 7 5 Non-core activities2 304 368 338 35 19 23 Corporate (530) (625) (600) (81) (72) (82) -------------- ------- ------- ------- ------- ------- ------- Total ABB 5,347 5,911 5,966 515 643 684 2006 quarterly net income adjusted for reclassifications to discontinued operations Discontinued operations (95) 8 (27) -------------- ------- ------- ------- ------- ------- ------- Net income 204 367 397 -------------- ------- ------- ------- ------- ------- ------- 1 A low-voltage cable business in Ireland was reclassified to Discontinued operations in Q3 2006; 2 ABB's remaining Building Systems business was reclassified to Discontinued operations in Q4 2006. Appendix III ABB fourth-quarter (Q4) and full-year 2006 key figures $ millions unless otherwise indicated Q4 06 Q4 05(1) Change 2006 2005(1) Change ------------------ ------ ------ --------- ------ ------ --------- US$ Local US$ Local -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Orders Group 7,479 5,502 36% 30% 28,401 23,194 22% 22% -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Power Products 2,038 1,607 27% 22% 8,743 6,879 27% 26% -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Power Systems 1,989 1,118 78% 71% 5,733 4,468 28% 28% -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Automation 1,948 1,456 34% 26% 7,706 6,210 24% 23% -------- Products ------ ------ ------ ------ ------ ------ ----- ----- ------------ Process 1,381 1,322 4% 0% 6,550 5,400 21% 21% -------- Automation ------------ ------ ------ ------ ------ ------ ------ ----- ----- Robotics 351 277 27% 20% 1,240 1,496 -17% -18% -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Non-core 410 244 68% 60% 1,551 1,059 46% 44% -------- activities ------------ ------ ------ ------ ------ ------ ------ ----- ----- Corporate -638 -522 -3,122 -2,318 -------- (consolidation) ------------ ------ ------ ------ ------ ------ ------ ----- ----- Revenues Group 7,188 5,917 21% 16% 24,412 22,012 11% 10% -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Power Products 2,285 1,861 23% 18% 7,422 6,307 18% 16% -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Power Systems 1,429 1,169 22% 16% 4,544 4,085 11% 10% -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Automation 1,923 1,553 24% 16% 6,837 5,897 16% 15% -------- Products ------------ ------ ------ ------ ------ ------ ------ ----- ----- Process 1,591 1,340 19% 13% 5,448 4,996 9% 8% -------- Automation ------------ ------ ------ ------ ------ ------ ------ ----- ----- Robotics 342 500 -32% -35% 1,288 1,699 -24% -25% -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Non-core 359 112 221% 174% 1,369 1,348 2% 1% -------- activities ------------ ------ ------ ------ ------ ------ ------ ----- ----- Corporate -741 -618 -2,496 -2,320 -------- (consolidation) ------------ ------ ------ ------ ------ ------ ------ ----- ----- EBIT Group 744 522 43% 2,586 1,778 45% -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Power Products 290 189 53% 961 616 56% -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Power Systems 93 84 11% 279 187 49% -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Automation 300 222 35% 1,053 822 28% -------- Products ------------ ------ ------ ------ ------ ------ ------ ----- ----- Process 164 113 45% 541 398 36% -------- Automation ------------ ------ ------ ------ ------ ------ ------ ----- ----- Robotics -12 12 n.a. 1 91 -99% -------- ------------ ------ ------ ------ ------ ------ ------ ----- ----- Non-core -5 15 n.a. 72 65 11% -------- activities ------------ ------ ------ ------ ------ ------ ------ ----- ----- Corporate -86 -113 24% -321 -401 20% -------- ------------ ------ ------ ------ ------ ------ ----- EBIT Group 10.4% 8.8% 10.6% 8.1% margin ------------ ------ ------ ------ ------ (%) -------- Power Products 12.7% 10.2% 12.9% 9.8% -------- ------------ ------ ------ ------ ------ Power Systems 6.5% 7.2% 6.1% 4.6% -------- ------------ ------ ------ ------ ------ Automation 15.6% 14.3% 15.4% 13.9% -------- Products ------------ ------ ------ ------ ------ Process 10.3% 8.4% 9.9% 8.0% -------- Automation ------------ ------ ------ ------ ------ Robotics -3.5% 2.4% 0.1% 5.4% -------- ------------ ------ ------ ------ ------ Non-core n.a. 13.4% 5.3% 4.8% -------- activities ------------ ------ ------ ------ ------ ------ ------ ----- ----- -------------------- 1 Adjusted to reflect the reclassification of activities to Discontinued operations Q4 and full-year 2006 orders received and revenues by region Q4 2006 $ millions Orders received Change Revenues Change ------------ ----------- ---------- ----------- ---------- Q4 06 Q4 05(1) US$ Local Q4 06 Q4 05(1) US$ Local ------------ ------ ------ ------ ------ ------- ------ ------ ------ Europe 2,949 2,491 18% 12% 3,364 2,634 28% 20% ------------ ------ ------ ------ ------ ------- ------ ------ ------ Americas 1,566 1,004 56% 53% 1,249 1,284 -3% -6% ------------ ------ ------ ------ ------ ------- ------ ------ ------ Asia 1,772 1,380 28% 23% 1,820 1,543 18% 14% ------------ ------ ------ ------ ------ ------- ------ ------ ------ Middle East and Africa 1,192 627 90% 80% 755 456 66% 56% ------------ ------ ------ ------ ------ ------- ------ ------ ------ Group total 7,479 5,502 36% 30% 7,188 5,917 21% 16% ------------ ------ ------ ------ ------ ------- ------ ------ ------ Full year 2006 2006 20051 US$ Local 2006 20051 US$ Local ------------ ------ ------ ------ ------ ------- ------ ------ ------ Europe 12,547 10,545 19% 18% 11,435 10,709 7% 6% ------------ ------ ------ ------ ------ ------- ------ ------ ------ Americas 5,183 4,443 17% 15% 4,526 4,231 7% 5% ------------ ------ ------ ------ ------ ------- ------ ------ ------ Asia 6,998 5,773 21% 21% 6,103 5,127 19% 18% ------------ ------ ------ ------ ------ ------- ------ ------ ------ Middle East and 3,673 2,433 51% 52% 2,348 1,945 21% 21% Africa ------------ ------ ------ ------ ------ ------- ------ ------ ------ Group total 28,401 23,194 22% 22% 24,412 22,012 11% 10% ------------ ------ ------ ------ ------ ------- ------ ------ ------ 1 Adjusted to reflect the reclassification of activities to Discontinued operations To view the full text of this press release, paste the following link into your web browser: This information is provided by RNS The company news service from the London Stock Exchange END FR TAMATMMTBMPR |
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