ABB Ltd Consolidated Income Statements Year Ended $ millions, except per share data (unaudited) Sales of products Sales of services Total revenues Cost of products Cost of services Total cost of sales Gross profit Selling, general and administrative expenses Other income (expense), net Earnings before interest and taxes Interest and dividend income Interest and other finance expense Income from continuing operations before taxes and minority interest Provision for taxes Minority interest Income from continuing operations Income (loss) from discontinued operations, net of tax Net income Basic earnings (loss) per share Income from continuing operations Income (loss) from discontinued operations, net of tax Net income Weighted average basic shares (in millions) Diluted earnings (loss) per share Income from continuing operations Income (loss) from discontinued operations, net of tax Net income Weighted average dilutive shares (in millions) Three Months Ended Dec. 31, 2008 29,705 5,207 34,912 (20,506) (3,466) (23,972) 10,940 (5,822) (566) 4,552 315 (349) Dec. 31, 2007 24,816 4,367 29,183 (17,292) (2,923) (20,215) 8,968 (4,975) 30 4,023 273 (286) Dec. 31, 2008 7,779 1,361 9,140 (5,597) (946) (6,543) 2,597 (1,502) (636) 459 65 (210) Dec. 31, 2007 7,384 1,329 8,713 (5,192) (898) (6,090) 2,623 (1,446) (32) 1,145 90 (62) 4,518 (1,119) (260) 3,139 4,010 (595) (244) 3,171 314 (5) (76) 233 1,173 113 (87) 1,199 (21) 3,118 586 3,757 (20) 213 554 1,753 1.37 1.40 0.10 0.52 (0.01) 1.36 2,287 0.26 1.66 2,258 (0.01) 0.09 2,283 0.24 0.76 2,294 1.37 1.38 0.10 0.52 (0.01) 1.36 2,296 0.25 1.63 2,308 (0.01) 0.09 2,285 0.24 0.76 2,311 ABB Ltd Consolidated Balance Sheets $ millions, except share data (unaudited) Dec. 31, 2008 Dec. 31, 2007 Cash and equivalents Marketable securities and short-term investments Receivables, net Inventories, net Prepaid expenses Deferred taxes Other current assets Assets held for sale and in discontinued operations Total current assets 6,399 1,407 9,245 5,306 237 1,020 733 24,347 4,650 3,460 8,582 4,863 307 783 368 132 23,145 Financing receivables, net Property, plant and equipment, net Goodwill Other intangible assets, net Prepaid pension and other employee benefits Investments in equity method companies Deferred taxes Other non-current assets Total assets 445 3,562 2,817 411 73 68 1,190 268 33,181 487 3,246 2,421 270 380 63 862 127 31,001 Accounts payable, trade Billings in excess of sales Accounts payable, other Short-term debt and current maturities of long-term debt Advances from customers Deferred taxes Provisions for warranties Provisions and other Accrued expenses Liabilities held for sale and in discontinued operations Total current liabilities 4,451 1,224 1,292 354 2,014 528 1,105 3,467 1,569 16,004 4,167 829 1,289 536 2,045 371 1,121 2,322 1,737 62 14,479 Long-term debt Pension and other employee benefits Deferred taxes Other liabilities Total liabilities 2,009 1,071 425 1,902 21,411 2,138 631 407 1,797 19,452 612 592 Minority interest Stockholders' equity: Capital stock and additional paid-in capital Retained earnings Accumulated other comprehensive loss Less: Treasury stock, at cost (40,108,014 and 18,725,475 shares at December 31, 2008 and December 31, 2007) Total stockholders' equity Total liabilities and stockholders' equity 4,695 10,073 (2,710) 5,634 6,955 (1,330) (900) 11,158 33,181 (302) 10,957 31,001 ABB Ltd Consolidated Statements of Cash Flows Year Ended $ millions (unaudited) Operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Pension and postretirement benefits Deferred taxes Net gain from sale of property, plant and equipment Income from equity accounted companies Minority interest Loss (gain) on sale of discontinued operations Other Changes in operating assets and liabilities: Trade receivables Inventories Trade payables Billings in excess of sales Provisions, net Advances from customers Other assets and liabilities, net Net cash provided by operating activities Investing activities Changes in financing receivables Purchases of marketable securities (other than trading) and short-term investments Purchases of property, plant and equipment and intangible assets Acquisition of businesses (net of cash acquired) Proceeds from sales of marketable securities (other than trading) and short-term investments Proceeds from sales of property, plant and equipment Proceeds from sales of businesses and equity accounted companies (net of cash disposed) Net cash provided by (used in) investing activities Dec. 31, 2008 3,118 Three Months Ended Dec. 31, 2007 3,757 Dec. 31, 2008 213 Dec. 31, 2007 1,753 661 43 (199) (49) (15) 261 232 602 (61) (351) (46) (55) 246 (541) 132 178 (3) (421) (15) (3) 77 168 167 (43) (408) (22) (5) 88 (541) 24 (1,266) (800) 522 539 677 130 104 3,958 (1,323) (551) 530 374 (362) 411 292 3,054 (73) 217 121 105 814 (219) 236 1,395 (286) 258 108 243 (166) 63 236 1,469 7 56 8 (1) (3,626) (10,115) (796) (2,843) (1,171) (653) (756) (54) (435) (101) (288) (10) 5,417 94 1,141 49 678 31 1,142 (2,291) (134) 790 (1,643) (19) 210 (247) 241 (199) (449) (117) (45) (625) (42) 135 (145) (15) (3) (60) (130) (15) 64 (80) 88 1 (17) 41 (230) 275 (79) 76 26 39 - 54 Net change in cash and equivalents - continuing operations 1,749 452 1,052 (3) Cash and equivalents beginning of period Cash and equivalents end of period 4,650 6,399 4,198 4,650 5,347 6,399 4,653 4,650 244 1,065 246 780 70 272 70 152 - 843 - - Financing activities Net changes in debt with maturities of 90 days or less Increase in debt Repayment of debt Issuance of shares Purchase of treasury shares Dividends paid Dividends paid to minority shareholders Other Net cash provided by (used in) financing activities Effects of exchange rate changes on cash and equivalents Adjustment for the net change in cash and equivalents in assets held for sale and in discontinued operations 46 114 7,361 75 (10) 458 (786) 49 (621) (1,060) (152) 3 (2,119) Supplementary disclosure of cash flow information Interest paid Taxes paid Carrying value of debt and accrued interest converted into capital stock rs' equ ity toc kho lde toc k To tal s Tre asu ry s To tal com accu pre mula hen te siv d oth e lo e ss r Un rea cas lized h flo ga w h in (lo ss edg e d ) of eriv ativ es Un rea ava lized ilab g le-fo ain (lo r-sa ss) le s on ecu ritie s Pe nsio pos n an tret do adju irem ther stm ent ents plan For eig adju n cu stm rrenc ent y tr ans la Re tain ear ed nin gs Ca pit paid al sto ck -in cap and add ital itio nal $ millions (unaudited) Balance at January 1, 2007 tion Accumulated other comprehensive loss 4,514 3,647 (1,462) (2) (629) 74 (2,019) (104) 6,038 -- 3,757 -- -- -- -- -- -- 3,757 -- -- 505 -- -- -- 505 -- 505 -- -- 51 -- -- -- 51 -- 51 -- -- -- 9 -- -- 9 -- 9 -- -- -- -- 59 -- 59 -- 59 -- -- -- -- 84 -- 84 -- 84 -- -- -- -- -- (19) (19) -- (19) Treasury share transactions (1) -- -- -- -- -- -- (198) (199) Dividends paid -- (449) -- -- -- -- -- -- (449) Conversion of convertible bonds 830 -- -- -- -- -- -- -- 830 Issuance of shares 241 -- -- -- -- -- -- -- 241 45 -- -- -- -- -- -- -- 45 5 -- -- -- -- -- -- -- 5 5,634 6,955 (906) 7 (486) 55 (1,330) (302) 10,957 Comprehensive income: Net income Foreign currency translation adjustments Foreign currency translation adjustments related to divestments of businesses Effect of change in fair value of available-for-sale securities, net of tax Unrecognized income related to pensions and other postretirement plans, net of tax Adjustments related to pensions and other postretirement plans allocated to divestments of businesses, net of tax Change in derivatives qualifying as cash flow hedges, net of tax Total comprehensive income 4,446 Share-based payment arrangements Call options Balance at December 31, 2007 Comprehensive income: Net income Foreign currency translation adjustments Foreign currency translation adjustments related to divestments of businesses Effect of change in fair value of available-for-sale securities, net of tax Unrecognized income (loss) related to pensions and other postretirement plans, net of tax Change in derivatives qualifying as cash flow hedges, net of tax (906) 7 (486) 55 (1,330) To tal equ stock ho ity lde rs' toc k Tre asu ry s To tal com accu pre mula hen te siv d oth e lo e ss r Un rea cas lized h g der flow h ain (lo iva tive edge ss) of s Pe ns pos ion an tr d adju etirem other stm ent ents plan Un rea ava lized ila g sec ble-fo ain (lo urit s r ies -sale s) on ent For eig tran n cu rr sla tion ency adju stm Re tain ear ed nin gs $ millions (unaudited) Balance at January 1, 2008 Ca pit add al sto c itio nal k and paid -in c apit al Accumulated other comprehensive loss 5,634 6,955 (302) 10,957 -- 3,118 -- -- -- -- -- -- (754) -- -- -- -- -- 3,118 (754) -- (754) -- -- 6 -- -- -- 6 -- 6 -- -- -- 76 -- -- 76 -- 76 -- -- -- -- (492) -- (492) -- (492) -- -- -- -- -- (216) (216) -- Total comprehensive income Dividends paid in the form of nominal value reduction (216) 1,738 (1,060) -- -- -- -- -- -- -- (21) -- -- -- -- -- -- 21 -- -- -- -- -- -- -- -- (619) (619) Issuance of shares 49 -- -- -- -- -- -- -- 49 Share-based payment arrangements 63 -- -- -- -- -- -- -- 63 Call options 30 -- -- -- -- -- -- -- 30 4,695 10,073 (1,654) 83 (978) (161) (2,710) (900) 11,158 Treasury share transactions Shares repurchased under buyback program Balance at December 31, 2008 (1,060)