UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of July 2007

Commission File Number 001-16429

ABB Ltd

(Translation of registrant’s name into English)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):         o

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indication by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):      o

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):  82-            .

This Form 6-K consists of the following:

1.               Press release issued by ABB Ltd dated July 26, 2007.

2.               Announcements regarding transactions in ABB Ltd’s securities made by the directors or members of the Executive Committee.

The information provided by Item 1 above is deemed filed for all purposes under the Securities Exchange Act of 1934, including by reference in the Registration Statement on Form S-8 (Registration No. 333-129271).

2

Press Release

Q2 net income doubles to $729 million

·       Continued strong global demand for power and automation technologies

·       Orders up 26%, revenues up 27%, higher in all regions

·       Growth and strong business execution produce 14.4% EBIT margin on EBIT of $1 billion

Zurich, Switzerland, July 26, 2007 — ABB today reported a strong increase in orders, revenues, earnings before interest and taxes (EBIT) and net income for the second quarter of 2007 as the result of continuing robust demand in all regions and businesses and further improvements in business execution.

EBIT in the quarter rose to $1 billion on a 27-percent increase in revenues (21 percent in local currencies), leading to an EBIT margin of 14.4 percent compared to 11.4 percent in the same quarter of 2006. Net income doubled to $729 million while cash flow from operating activities increased to $396 million.

“Our second quarter was marked by continued strong growth with outstanding operating margins,” said Fred Kindle, ABB President and CEO. “As a market and technology leader, ABB continues to benefit from increased global investments in energy efficiency as well as power and industrial infrastructure. Our profitability benefited from the combination of market strength and our ongoing focus on business execution.”

2007 Q2 key figures  key figures				Q2 07		Q2 06(1)		Change
$ millions unless otherwise indicated								US$		Local
Orders				8,666		6,868		26	%	20	%
Order backlog (end June)				20,435		14,703		39	%	33	%
Revenues				7,143		5,641		27	%	21	%
EBIT				1,030		645		60	%
as % of revenues				14.4		11.4
Net income				729		367		99	%
as % of revenues				10.2		6.5
Basic net income per share ($)				0.32		0.17
Cash flow from operating activities				396		338

(1)             Adjusted to reflect the reclassification of activities to discontinued operations

Summary of results

Orders received continued to grow strongly in the second quarter as the result of very high demand across all of ABB’s markets, particularly in the power sector.

Regional grid interconnections in Europe to make more efficient use of existing power generation capacity, along with power infrastructure expansion in the Middle East, continued to be the key growth drivers for the power divisions in the second quarter. As a result, the volume of large orders (more than $15 million) almost doubled to about $1.4 billion compared to the same quarter in 2006.

In the automation divisions, steady growth in industrial demand continued, especially in the metals and minerals sector, where high commodity prices are driving customer investments in both new capacity and to make existing assets more productive. High oil prices continue to fuel investments in more energy-efficient industrial processes across most sectors. Order growth rates in the automation divisions have slowed modestly, as expected, but remain at attractive levels.

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Revenues in the second quarter grew by more than 20 percent over the year-earlier period on a combination of higher product sales in the second quarter as well as increasing revenues from large orders booked in earlier quarters. As a result of the continued high level of order intake in the second quarter, the order backlog continued to expand and amounted to more than $20 billion at the end of June 2007.

Higher EBIT and EBIT margins were reported across all divisions on a combination of higher revenues, strong project execution, increased production and engineering in low cost countries and other operational improvements.

The increase in net income resulted mainly from higher EBIT and a lower tax rate. Also contributing to the higher net income was an improvement in net finance expense resulting from lower debt levels as well as the non-recurrence of $60 million in costs related to the induced conversion of ABB’s $968-million convertible bonds and the exchange offer for certain other bonds, completed in the second quarter of 2006.

Cash flow from operating activities improved compared to the second quarter of 2006 despite increased investments in working capital to support growth. Cash flow from financing activities included dividend payments to shareholders during the second quarter of approximately $450 million.

ABB’s financial position remained strong in the second quarter, with net cash of $2.4 billion at the end of the period, approximately the same as at the end of the previous quarter. Gearing at the end of June, 2007 was 25 percent compared to 26 percent at the end of the first quarter (please refer to Appendix II on page 11 for more information). Following the conversion during the first half of 2007 of approximately 80 percent of ABB’s CHF 1-billion convertible bonds maturing in 2010, the company has decided to exercise its right to call the remainder of the bonds, with a face value of approximately CHF 200 million, effective September 10, 2007.

ABB employed approximately 111,000 people at the end of the second quarter of 2007, an increase of about 2,000 compared to the end of the first quarter of this year.

Management appointments

ABB announced the appointment of Ravi Uppal, regional manager of South Asia and country manager for India, to the ABB Group Executive Committee as president of Global Markets, effective July 1, 2007. He replaces Dinesh Paliwal who left ABB at the end of June. In his new role, Uppal will be responsible for all ABB regions and countries as well as the Group Account Management function.

Compliance

On July 13, 2007, ABB disclosed to the U.S. Department of Justice and the U.S. Securities and Exchange Commission suspect payments made by employees of company subsidiaries in Asia, South America and Europe, in particular Italy. These suspect payments were discovered as a result of ABB’s internal audit and compliance program. The payments may be in violation of the Foreign Companies Practices Act or other applicable laws. If ABB is found to have violated any of these laws, the company could be liable for penalties and other costs and the violations could otherwise negatively impact its business. ABB is cooperating on these issues with the relevant authorities and is continuing its internal investigations and compliance reviews.

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Divisional performance Q2 2007

Power Products division

2007 Q2 key figures				Q2 07		Q2 06(1)		Change
$ millions unless otherwise indicated								US$		Local
Orders				2,780		2,411		15	%	11	%
Order backlog (end June)				6,654		4,931		35	%	29	%
Revenues				2,472		1,821		36	%	30	%
EBIT				418		245		71	%
as % of revenues				16.9	%	13.5	%
Cash flow from operating activities				286		160

(1)             Adjusted to reflect the reclassification of activities to discontinued operations

Orders grew in the second quarter in all businesses and regions. Investments by utility customers in North America and Europe to strengthen and refurbish grid infrastructure fuelled strong growth, especially in the transformers business. In Asia and the Middle East, orders rose as customers continued to invest in new infrastructure to support economic growth.

Revenues were up in all businesses compared to the same quarter in 2006 on higher volumes and prices, resulting in a sharp increase in EBIT. The strong EBIT margin mainly reflects high levels of factory loading, productivity improvements, and effective supply management measures to control material costs and availability.

Power Systems division

2007 Q2 key figures				Q2 07		Q2 06		Change
$ millions unless otherwise indicated								US$		Local
Orders				2,217		1,388		60	%	50	%
Order backlog (end June)				7,415		4,900		51	%	44	%
Revenues				1,300		1,031		26	%	20	%
EBIT				109		62		76	%
as % of revenues				8.4	%	6.0	%
Cash flow from operating activities				(4	)	31

 

The sharp increase in orders received in the second quarter was primarily the result of large orders in the quarter more than doubling compared to the same quarter in 2006. Large orders won in the quarter included a subsea interconnection between the United Kingdom and the Netherlands aimed at increasing the efficiency of the European power grid, as well as large substation orders in the Middle East to support economic development in Abu Dhabi. Base orders (less than $15 million) also increased strongly, up 27 percent (20 percent in local currencies), reflecting the continuing favorable market situation in all businesses and regions.

Revenues increased across all businesses versus the same quarter in 2006 on execution of the strong order backlog. EBIT and EBIT margin increased significantly due to higher revenues, improved capacity utilization and ongoing benefits from improved project selection and execution.

Cash flow from operating activities decreased compared to the same quarter in 2006, reflecting the working capital requirements of large projects being executed.

5

Automation Products division

2007 Q2 key figures		Q2 07		Q2 06		Change
$ millions unless otherwise indicated						US$		Local
Orders		2,221		1,957		13	%	8	%
Order backlog (end June)		3,136		2,218		41	%	35	%
Revenues		2,147		1,684		27	%	21	%
EBIT		374		262		43	%
as % of revenues		17.4	%	15.6	%
Cash flow from operating activities		318		222

 

Markets continued to develop favorably in the second quarter of 2007. Order growth for standard products remained strong while engineered products and system order growth was flat compared to the very high levels seen in the same period a year ago. Geographically, the strongest growth was in China, South America, Eastern Europe and the Middle East.

Revenues increased compared to the same quarter in 2006 due to higher volumes and price increases covering higher raw materials costs. Revenue growth and high levels of capacity utilization were the primary drivers of a 43-percent increase in EBIT and a higher EBIT margin versus the second quarter of 2006.

Process Automation division

2007 Q2 key figures		Q2 07		Q2 06		Change
$ millions unless otherwise indicated						US$		Local
Orders		1,937		1,682		15	%	10	%
Order backlog (end June)		4,799		3,611		33	%	27	%
Revenues		1,586		1,300		22	%	16	%
EBIT		167		120		39	%
as % of revenues		10.5	%	9.2	%
Cash flow from operating activities		107		178

 

Demand for automation solutions, reflected in both base and large orders, continued strong in all sectors. High commodity prices drove investments to expand capacity in the metals and minerals business. Other industrial customers continued to invest in greater energy efficiency in the face of high oil prices. Orders were higher in all regions except Europe, where a number of large marine orders won in the second quarter of 2006 were not repeated this year.

Revenues in the quarter grew significantly, reflecting the execution of the high level of orders taken in recent quarters. Revenues were higher in all parts of the business. EBIT and EBIT margin were up on higher revenues combined with continuing operational improvements and tighter execution of large projects.

Cash flow from operations decreased from a year ago, reflecting the working capital required to execute the large number of systems orders taken during 2006.

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Robotics division

2007 Q2 key figures		Q2 07		Q2 06		Change
$ millions unless otherwise indicated						US$		Local
Orders		392		268		46	%	40	%
Order backlog (end June)		582		460		27	%	22	%
Revenues		339		332		2	%	(2	)%
EBIT		19		7		n/a
as % of revenues		5.6	%	2.1	%
Cash flow from operating activities		9		43

 

Orders increased significantly in the second quarter compared to the low levels of the year-earlier period. Orders were higher from both general industry, such as packaging, consumer electronics and food, and the automotive industry. Orders were higher in all regions, led by Europe.

Revenues in local currencies were lower than in the same quarter of 2006 as the result of the low order levels in most of 2006. EBIT and EBIT margin improved reflecting the successful efforts to improve cost efficiency and project execution, as well as the non-recurrence of costs taken in the same quarter last year associated with a large project.

Cash flow from operating activities declined in the quarter as inventories were built up to meet the needs of higher orders received in the previous two quarters.

Non-core activities and Corporate

Non-core activities in the second quarter generated EBIT of $8 million. A final gain of approximately $40 million on the completion of the previously-announced sale of two Equity Ventures investments in April, 2007, was offset by the write-down of another investment, in line with the company’s strategy to divest its non-core activities.

Outlook for the remainder of 2007

The business environment for ABB during the rest of 2007 is expected to remain in line with the positive market situation seen in 2006 and the first half of this year.

Demand for power transmission and distribution infrastructure is expected to continue on a high level in all regions. 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 at a high level in most sectors, although below the levels seen in 2006. Overall, automation-related demand growth is expected to be strongest in Asia and the Americas in 2007, with more modest growth in Europe.

In addition, ABB is well-positioned to benefit from increasing investments by customers to mitigate climate change with energy-efficient products and systems.

Order growth is expected to continue on a high level but to moderate somewhat over the remainder of 2007, compared to the extraordinarily high order growth rates experienced in 2006 and the first half of 2007.

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More information

The 2007 Q2 results press release and presentation slides are available from July 26, 2007 on the ABB News Center at www.abb.com/news and on the Investor Relations homepage at www.abb.com/investorrelations.

ABB will host a media call 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; from the U.S. and Canada +1 (1) 866 291 4166; 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 (1) 866 416 2558 (U.S./Canada). The code is 314, followed by the # key.

A conference call for analysts and investors is scheduled to begin today at 3:00 p.m. CET (9:00 a.m. EDT). Callers should dial +1 (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 two weeks. Playback numbers: +1 866 416 2558 (U.S./Canada) or +41 91 612 4330 (Europe and the rest of the world). The code is 208, followed by the # key.

Investor calendar 2007
ABB Strategy Day		September 5, 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 111,000 people.

Zurich, July 26, 2007
Fred Kindle, CEO

Important notice about forward-looking information

This press release includes forward-looking information and statements including the section entitled “Outlook for the remainder of 2007,” Appendix I, as well as other statements concerning the outlook for our business. These statements are based on current expectations, estimates and projections about the factors that may affect our future performance, including global economic conditions, 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 backlog 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 Ltd’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.

For more information please contact:

Media Relations:		Investor Relations:		ABB Ltd
Thomas Schmidt, Wolfram Eberhardt		Switzerland: Tel. +41 43 317 7111		Affolternstrasse 44
(Zurich, Switzerland)		Sweden: Tel. +46 21 325 719		CH-8050 Zurich, Switzerland
Tel: +41 43 317 6568		USA: Tel. +1 203 750 7743
Fax: +41 43 317 7958		investor.relations@ch.abb.com
media.relations@ch.abb.com

 

8

ABB

 

ABB second quarter (Q2) and first half (H1) 2007 key figures

 

				Q2 07		Q2 06(1)		Change				H1 07		H1 06(1)		Change
								US$		Local						US$		Local
Orders		Group		8,666		6,868		26	%	20	%	17,305		13,727		26	%	20	%
		Power Products		2,780		2,411		15	%	11	%	6,037		4,721		28	%	23	%
		Power Systems		2,217		1,388		60	%	50	%	4,014		2,694		49	%	40	%
		Automation Products		2,221		1,957		13	%	8	%	4,632		3,901		19	%	12	%
		Process Automation		1,937		1,682		15	%	10	%	3,678		3,341		10	%	5	%
		Robotics		392		268		46	%	40	%	770		594		30	%	23	%
		Non-core activities		95		91		4	%	-2	%	196		184		7	%	0	%
		Corporate (consolidation)		-976		-929		-5	%	1	%	-2,022		-1,708		-18	%	-11	%
Revenues		Group		7,143		5,641		27	%	21	%	13,358		10,780		24	%	18	%
		Power Products		2,472		1,821		36	%	30	%	4,532		3,284		38	%	32	%
		Power Systems		1,300		1,031		26	%	20	%	2,454		2,043		20	%	14	%
		Automation Products		2,147		1,684		27	%	21	%	4,045		3,214		26	%	19	%
		Process Automation		1,586		1,300		22	%	16	%	2,969		2,535		17	%	11	%
		Robotics		339		332		2	%	-2	%	644		665		-3	%	-8	%
		Non-core activities		100		97		3	%	-3	%	198		192		3	%	-4	%
		Corporate (consolidation)		-801		-624		-28	%	-25	%	-1,484		-1,153		-29	%	-22	%
EBIT		Group		1,030		645		60	%			1,852		1,137		63	%
		Power Products		418		245		71	%			735		418		76	%
		Power Systems		109		62		76	%			189		110		72	%
		Automation Products		374		262		43	%			683		483		41	%
		Process Automation		167		120		39	%			306		238		29	%
		Robotics		19		7		171	%			34		8		325	%
		Non-core activities		8		21		-62	%			43		33		30	%
		Corporate		-65		-72		10	%			-138		-153		10	%
EBIT margin (%)		Group		14.4	%	11.4	%					13.9	%	10.5	%
		Power Products		16.9	%	13.5	%					16.2	%	12.7	%
		Power Systems		8.4	%	6.0	%					7.7	%	5.4	%
		Automation Products		17.4	%	15.6	%					16.9	%	15.0	%
		Process Automation		10.5	%	9.2	%					10.3	%	9.4	%
		Robotics		5.6	%	2.1	%					5.3	%	1.2	%

(1)             Adjusted to reflect the reclassification of activities to discontinued operations

ABB Q2 2007 orders received and revenues by region

 

$ millions				Orders received				Change				Revenues				Change
				Q2 07		Q2 06(1)		US$		Local		Q2 07		Q2 06(1)		US$		Local
Europe				4,079		3,496		17	%	13	%	3,223		2,695		20	%	15	%
Americas				1,366		1,052		30	%	23	%	1,258		1,071		17	%	12	%
Asia				2,261		1,679		35	%	25	%	1,867		1,370		36	%	27	%
Middle East and Africa				960		641		50	%	47	%	795		505		57	%	52	%
Group total				8,666		6,868		26	%	20	%	7,143		5,641		27	%	21	%

(1)             Adjusted to reflect the reclassification of activities to discontinued operations

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Appendix I

Debt and equity securities transactions

During the first six months of 2007, bondholders of an aggregate principle amount of CHF 799 million of the Company’s CHF 1 billion convertible bonds, due 2010, exercised their right to call the bonds. This resulted in a reduction in long-term debt of approximately $658 million and an increase in equity of $660 million.

 

During the second quarter of 2007, a bank holding call options related to ABB’s management incentive programs issued at fair value during 2001, 2003 and 2004, and with strike prices ranging from CHF 7.00 to CHF 13.49, exercised a portion of these options resulting in the issuance of approximately 17 million shares and a net increase in the Company’s capital stock and additional paid-in capital of $153 million.

 

Also during the second quarter of 2007, the Company purchased on the open market 10 million of its own shares for use in connection with its employee incentive plans. These transactions resulted in an increase in treasury stock by $199 million.

 

Employee benefits funding

During the first six months of 2007 ABB made contributions of $91 million to its pension plans and $10 million to its other postretirement plans.

 

 The planned “standard” contributions for full year 2007, based on current plan structures, are about $186 million to defined benefit pension plans and approximately $21 million to other postretirement benefit plans.

 

The company expects that additional discretionary contributions will be made in the remaining part of the year.

 

Accounting pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS 157 does not require any new fair value measurements and eliminates inconsistencies in guidance found in various prior accounting pronouncements. SFAS 157 provides a single definition for fair value that is to be applied consistently for all accounting applications, and also generally describes and prioritizes according to reliability the methods and inputs used in valuations. SFAS 157 will be effective for the Company on January 1, 2008. The Company is currently evaluating and assessing the impact of adopting SFAS 157 on its Consolidated Financial Statements.

 

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement. SFAS 159 will be adopted by the Company earliest on January 1, 2008. The Company is currently evaluating and assessing the impact of adopting SFAS 159 on its Consolidated Financial Statements.

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Appendix II

(1)             Adjusted to reflect the reclassification of activities to discontinued operations

 

EBIT margin and net margin are calculated by dividing EBIT and net income, respectively, by total revenues. Management believes EBIT margin and net margin are useful measures of profitability and uses them as performance targets.

 

		At June 30, 2007		At Mar. 31, 2007
Net cash:
Cash and equivalents		4,428		4,366
Marketable securities and short-term investments		613		685
Cash and marketable securities		5,041		5,051
Short-term debt and current maturities of long-term debt		387		341
Long-term debt		2,279		2,371
Total debt		2,666		2,712
Net cash		2,375		2,339
Gearing:
Total debt		2,666		2,712
Total stockholders’ equity		7,637		7,231
Minority interest		431		484
Gearing		25	%	26	%

 

Net cash is a financial measure that is calculated as the total of cash and equivalents, marketable securities and short-term investments minus total debt.

 

Gearing is a financial measure that is calculated as total debt divided by the sum of total debt plus total stockholders’ equity, including minority interest. Total debt used to calculate net cash and gearing equals long-term debt plus short-term debt and current maturities of long-term debt. Management believes net cash and gearing are helpful in analyzing leverage and it considers both measures in evaluating possible financing transactions.

 

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 results in local currencies as compared to U.S. dollars are caused exclusively by changes in currency exchange rates.

11

 

ABB Ltd Consolidated Income Statements

		Six Months Ended				Three Months Ended
$ millions, except per share data (unaudited)		June 30, 2007		June 30, 2006(1)		June 30, 2007		June 30, 2006(1)
Sales of products		11,373		8,993		6,089		4,720
Sales of services		1,985		1,787		1,054		921
Total revenues		13,358		10,780		7,143		5,641
Cost of products		(7,900	)	(6,469	)	(4,220	)	(3,365	)
Cost of services		(1,321	)	(1,214	)	(706	)	(620	)
Total cost of sales		(9,221	)	(7,683	)	(4,926	)	(3,985	)
Gross profit		4,137		3,097		2,217		1,656
Selling, general & administrative expenses		(2,333	)	(2,035	)	(1,193	)	(1,069	)
Other income (expense) net		48		75		6		58
Earnings before interest and taxes		1,852		1,137		1,030		645
Interest and dividend income		91		82		41		48
Interest and other finance expense		(115	)	(187	)	(40	)	(112	)
Income from continuing operations before taxes and minority interest		1,828		1,032		1,031		581
Provision for taxes		(484	)	(322	)	(260	)	(169	)
Minority interest		(100	)	(78	)	(60	)	(47	)
Income from continuing operations		1,244		632		711		365
Income (loss) from discontinued operations, net of tax		22		(61	)	18		2
Net income		1,266		571		729		367
Basic earnings (loss) per share
Income from continuing operations		0.56		0.30		0.31		0.17
Income (loss) from discontinued operations, net of tax		0.01		(0.03	)	0.01		—
Net income		0.57		0.27		0.32		0.17
Average basic shares (in millions)		2,230		2,080		2,269		2,124
Diluted earnings (loss) per share
Income from continuing operations		0.54		0.29		0.31		0.17
Income (loss) from discontinued operations, net of tax		0.01		(0.02	)	0.01		—
Net income		0.55		0.27		0.32		0.17
Average diluted shares (in millions)		2,306		2,199		2,310		2,243

 

(1)             Adjusted to reflect the reclassification of activities to discontinued operations

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ABB Ltd Consolidated Balance Sheets

$ millions, except share data (unaudited)		June 30, 2007		Dec. 31, 2006(1)
Cash and equivalents		4,428		4,211
Marketable securities & short-term investments		613		528
Receivables, net		7,639		6,592
Inventories, net		4,581		3,850
Prepaid expenses		237		248
Deferred taxes		684		572
Other current assets		254		237
Assets held for sale and in discontinued operations		1,286		1,305
Total current assets		19,722		17,543
Financing receivables		535		539
Property, plant and equipment, net		2,909		2,803
Goodwill		2,401		2,369
Other intangible assets, net		256		286
Prepaid pension and other employee benefits		384		373
Investments in equity method companies		66		545
Deferred taxes		481		509
Other non-current assets		154		175
Total assets		26,908		25,142
Accounts payable, trade		4,180		3,692
Accounts payable, other		1,157		1,173
Short-term debt and current maturities of long-term debt		387		122
Advances from customers		1,830		1,493
Deferred taxes		259		226
Asbestos obligations		297		150
Provision and other		2,813		2,880
Accrued expenses		1,442		1,517
Liabilities held for sale and in discontinued operations		1,107		1,232
Total current liabilities		13,472		12,485
Long-term debt		2,279		3,160
Pension and other employee benefits		818		809
Deferred taxes		535		763
Asbestos obligations		46		282
Other liabilities		1,690		1,154
Total liabilities		18,840		18,653
Minority interest		431		451
Stockholders’ equity:
Capital stock and additional paid-in capital		5,343		4,514
Retained earnings		4,464		3,647
Accumulated other compreshensive loss		(1,868	)	(2,019	)
Less: Treasury stock, at cost (18,750,738 and 8,782,721 shares at June 30, 2007 and December 31, 2006)		(302	)	(104	)
Total stockholders’ equity		7,637		6,038
Total liabilities and stockholders’ equity		26,908		25,142

(1)             Adjusted to reflect the reclassification of activities to discontinued operations

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ABB Ltd Consolidated Statements of Cash Flows

		Six Months Ended						Three Months Ended
$ millions (unaudited)		June 30, 2007			June 30, 2006			June 30, 2007			June 30, 2006
Operating activities
Net income		$	1,266		$	571		$	729		$	367
Adiustments to reconcile net income  to net cash provided by operating activities:
Depreciation and amortization		286			274			139			139
Provisions		(149		)	82			(144		)	(56		)
Pension and postretirement benefits		(12		)	(8		)	(5		)	(10		)
Deferred taxes		66			73			25			25
Net gain from sale of property, plant and equipment		(19		)	(46		)	(6		)	(37		)
Income from equity accounted companies		(39		)	(44		)	(10		)	(20		)
Minority interest		100			79			60			48
Other		97			131			48			135
Changes in operating assets and liabilities:
Trade receivables		(400		)	(252		)	(506		)	(177		)
Inventories		(587		)	(476		)	(118		)	(108		)
Trade payables		376			215			233			80
Advances from customers		285			193			173			108
Other assets and liabilities, net		(571		)	(416		)	(222		)	(156		)
Net cash provided by operating activities		699			376			396			338
Investing Activities
Changes in financing receivables		15			27			12			20
Purchases of marketable securities and short-term investments (other than trading)		(4,260		)	(1,919		)	(2,223		)	(676		)
Purchases of property, plant and equipment and intangible assets		(284		)	(212		)	(160		)	(123		)
Acquisition of businesses (net of cash acquired)		(43		)	—			(17		)	—
Proceeds from sales of marketable securities and short-term investments (other than trading)		4,304			1,826			2,406			798
Proceeds from sales of property, plant and equipment		29			60			10			46
Proceeds from sales of businesses and equity accounted companies (net of cash disposed)		337			22			225			9
Net cash provided by (used in) investing activities		98			(196		)	253			74
Financing Activities
Net changes in debt with maturities of 90 days or less		1			40			(24		)	17
Increase in debt		93			66			44			49
Repayment of debt		(84		)	(80		)	(58		)	(42		)
Issuance of shares		153			—			153			—
Purchase of treasury shares		(199		)	—			(199		)	—
Dividends paid		(449		)	(203		)	(449		)	(203		)
Payments made upon bond conversion		—			(72		)	—			(72		)
Payments made upon bond exhange		—			(114		)	—			(114		)
Other		(138		)	(48		)	(104		)	(71		)
Net cash used in financing activities		(623		)	(411		)	(637		)	(436		)
Effects of exchange rate changes on cash and equivalents		55			133			53			87
Adjustment for the net change in cash and equivalents in assets held for sale and in discontinued operations		(12		)	17			(3		)	12
Net change in cash and equivalents—continuing operations		217			(81		)	62			75
Cash and equivalents begining of period		4,211			3,152			4,366			2,996
Cash and equivalents end of period		4,428			3,071			4,428			3,071
Supplementary disclosure of cash flow information
Interest paid		104			136			45			68
Taxes paid		401			272			243			143
Carrying value of debt and accrued interest converted into capital stock		670			953			10			953

 

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