9 Mths Results - Part 1

ABB Ltd
24 October 2001


PART 1


ABB Media Relations                            ABB Investor Relations 
Thomas Schmidt                                 Switzerland: Tel. [phone]
Tel: [phone]                            Sweden: Tel. [phone]
Fax: [phone]                            USA: Tel. [phone]
[e-mail]                     [e-mail]


ABB reports improved operating performance 
Accelerates cost reduction program 


* Revenues increased 9 percent in local currencies 
* Excluding one-time capital gains, EBIT up 15 percent in local currencies      
* Operational cash flow up 36 percent
   

Zurich, Switzerland, October 24, 2001 - ABB said today revenues rose 9 percent 
and earnings before interest and taxes (EBIT) - excluding one-time capital gains
- increased 15 percent in local currencies for the first nine months of 2001, 
reflecting continued strong operational performance. Seeing a decline in orders,
ABB also said it will accelerate its cost-cutting program. 

'I'm satisfied with our operating results this quarter,' said Jorgen Centerman, 
president and CEO. 'Given the weaker market conditions, it is a sign of our 
strength and stability to have improved our underlying operating performance, 
even after providing US$ 50 million for our reinsurance exposure following the 
terrorist attacks in the U.S.' 

Centerman said ABB will accelerate its plans to cut 12,000 jobs. 'We need to 
become leaner as fast as possible given the economic climate,' Centerman said. 
'By taking more of the planned restructuring costs earlier we will reduce 
earnings now, but we build competitiveness and gain productivity improvements 
that pay back over time.' 

                                                                         Change
US$ in millions,                      Jan-Sept  Jan-Sept               in local
except per share data                     2001      2000    Change   currencies

Orders                                17,863    19,493         -8%          -3% 
Revenues                              16,877    16,217         +4%          +9% 
Earnings before interest and 
 taxes (EBIT), excluding one-time 
 capital gains                           763       698         +9%         +15% 
EBIT                                     766     1,038        -26%         -21% 
Income from continuing operations        352       676        -48%  
Income from discontinued operations 
 and accounting changes                  (63)      548   
Net income                               289     1,224        -76%  
Earnings per share (US$)
Income from continuing operations 
                            Basic       0.31      0.57
                          Diluted       0.31      0.57 
Net income                  Basic       0.25      1.04
                          Diluted       0.25      1.03

EBITDA                                 1,349     1,613        -16%         -11%
 

About one third of the job reductions is expected to come through natural 
attrition. The program is estimated to cost US$ 500 million in total. More costs
will now be taken in 2001. Once the plan is fully implemented, costs will be 
reduced by about US$ 500 million per year.

ABB also reported higher net cash from operating activities, up 36 percent when 
compared with the first nine months of 2000. 'While our liquidity is sufficient,
we have launched a special program to improve operating cash flow by the end of 
the year,' Centerman said. 'This is a clear step toward reducing our debt levels
in this economic environment.'

Financial highlights for the first nine months of 2001

Income statement and cash flow

Orders decreased 8 percent to US$ 17,863 million or 3 percent expressed in local
currencies. Base orders, defined as orders below US$ 15 million, now represent 
86 percent of total orders. Despite the ongoing transformation and more 
difficult economic conditions, base orders remained flat in nominal terms but 
increased 5 percent in local currencies when compared with the first nine months
of last year. Large orders (above US$ 15 million) declined 39 percent in nominal
terms or 33 percent in local currencies over the same period, mainly due to 
fewer large orders booked in the Oil, Gas and Petrochemicals division.

Revenues increased to US$ 16,877 million, up 4 percent in nominal terms and 9 
percent in local currencies. 

The order backlog increased since year end 2000 by 3 percent in nominal terms 
and 8 percent in local currencies to US$ 15,302 million. Reflecting the drop in 
third quarter orders, the order backlog declined slightly since June 30. 

Excluding one-time capital gains, EBIT increased 9 percent to US$ 763 million 
compared to the first nine months of 2000, and 15 percent when expressed in 
local currencies. This includes license income together with income from equity 
accounted companies of US$ 136 million and restructuring charges of US$ 33 
million. Capital gains were US$ 340 million in the first nine months of last 
year versus US$ 3 million this year. Including these one-time capital gains, 
EBIT decreased 26 percent to US$ 766 million. 

The change in net income from 2000 is mainly due to last year's one-time gain of
US$ 548 million from the sale of the former power generation business while this
year there was a one-time charge of US$ 63 million which was required upon 
adoption of the new accounting standard FAS 133 under US GAAP from the beginning
of 2001. After lower one-time capital gains in EBIT, interest expense associated
with higher debt levels and an increased effective tax charge, net income for 
the first nine months decreased by 76 percent to US$ 289 million. 

ABB's net cash provided by operating activities was US$ 345 million for the 
first three quarters, up 36 percent from US$ 253 million for the same period 
last year. For the third quarter alone, net cash provided by operating 
activities was US$ 266 million, up from US$ 193 million last year. 

Balance Sheet and liquidity

Cash and marketable securities totaled US$ 5,385 million at September 30. Since 
the end of last year, net debt increased by US$ 4,514 million, mainly due to 
dividend payments, acquisitions (Eutech and Entrelec), significant investment in
profitable Financial Services assets, and the purchase of Treasury shares. 

Net debt (cash and marketable securities less short, medium and long-term debt) 
was US$ 6,271 million at September 30. In the third quarter, net debt increased 
by US$ 973 million. About 60 percent of the increase in net debt came from 
unrealized non-cash changes. The majority was translation of foreign currency 
debt into U.S. dollars, which is hedged. The rest of the net debt increase came 
from borrowings to finance capital expenditure, further investments in Financial
Services asset portfolios, and a mandatory final conversion of existing options 
into Treasury shares. 

The company aims to reduce net debt substantially by December 31, 2001. Part of 
the plan is a rigorous cash flow generation initiative in all operating units, 
aimed at ensuring and accelerating the traditionally high cash flow generation 
in the fourth quarter. Positive signs were already seen in the third quarter, 
during which net working capital was reduced by almost US$ 100 million. The 
reduction of net debt through internal cash flow generation and asset sales is a
key objective for the company. 

Stockholders' equity was US$ 2,912 million at September 30. Since the end of 
last year, equity declined as a result of dividends paid, the introduction of 
FAS 133, significant unrealized adverse currency movements versus the U.S. 
dollar, and the purchase of Treasury shares. The company has no plans for 
further share buybacks. 

Employees

As of September 30, 2001, ABB employed 162,532 people compared to 160,818 at 
year end 2000. Since June 30, excluding acquisitions and divestments, the number
of people decreased by over 2,000 as the cost reduction program began to take 
effect. 

Asbestos update 

Cash settlements in connection with asbestos litigation in the U.S. are expected
to run 9 percent above the payout in 2000 on an annualized basis prior to 
insurance reimbursements. On an annualized basis, the number of new claims has 
increased by approximately 34 percent in comparison with 2000. Claims filed for 
the full year 2000 totaled 39,000. It is not yet possible to determine whether 
the increase in claims is a consequence of an accelerated filing of future 
claims or if it represents a long-term trend. 

Outlook(1)

For 2001, revenues are expected to increase in comparison to 2000. 

Seeing a decline in orders, ABB is accelerating its cost reduction program which
will lead to higher restructuring charges being taken in 2001. ABB also expects 
base orders to be lower in the fourth quarter. As a result, EBIT is now expected
to be below last year, excluding capital gains for both years. Previously, EBIT 
excluding capital gains was expected to be well above last year's level. 

Income from continuing operations is expected to be below last year, due to the 
high level of one-time capital gains in 2000. Net cash provided by operating 
activities is expected to increase. 

The target to grow revenues on average by 6 percent annually through 2005 
(excluding major acquisitions and divestments) remains unchanged. EBIT margin is
expected to reach 9-10 percent by 2005. 

(1)Assumes no major currency effects.


Highlights of the third quarter 2001

* Dow Jones Sustainability Index (DJSI) ranked ABB number one in corporate      
  sustainability, topping its market sector for the first time and the electric 
  components and equipment industry group for the third year in a row
* ABB won a US$ 44 million contract with Commonwealth Edison to upgrade the     
  Chicago power grid
* The group released its restated historical figures for the new customer-      
  centric organization, further increasing transparency for stakeholders
* ABB won US$ 95 million in orders from Norway's Bergesen to build and operate  
  offshore oil production units
* ABB won a US$ 93 million contract to build a gas compressor in Algeria
* ABB purchased a minority stake in Swedish software maker Industrial &         
  Financial Systems AB (IFS) 
* Shortly after the quarter end, ABB announced a US$ 360 million order to build 
  a high-voltage direct current (HVDC) power transmission system linking        
  hydropower plants in central China to the Guangdong province

Industrial IT progress report
ABB made a strong first step in bringing its products and services in line with 
a common information architecture. As of September 30, approximately 800 
products were ready for level 0 certification (common information architecture).

SKYVA International, a majority owned subsidiary of ABB, signed a global 
agreement with International Business Machines (IBM). IBM will incorporate 
portions of SKYVA's application development products as part of its WebSphere 
eBusiness infrastructure software. 

In recent weeks, ABB released several important platforms to support the rollout
of Industrial IT to all its business divisions. The Aspect Integrator Platform 
(AIP) 1.0, Operate IT 1.2, and Control IT 2.2 all support the ongoing Industrial
IT business by extending functionality and offering additional connections to 
older systems. They also serve as a basis for broader development efforts. 

ABB also received advance notice that a patent has been granted for the Aspect 
Directory - one of the core concepts behind the Industrial IT software 
architecture - which provides the intelligence to connect and manage the 
information flows between all objects and aspects of Industrial IT products. 

Process Industries launched the Operate IT and Control IT product suites, which 
include software for information exchange across business enterprises. Similar 
research is being carried out to further support ABB's 10-year strategic 
agreement with The Dow Chemical Company. 

ABB's corporate research centers have shifted resources, both financial and 
physical, toward Industrial IT. In addition, they have further developed two new
Industrial IT centers in Asia. The centers, first announced earlier this year, 
will soon be open in India and Singapore. 

Transformation update
ABB's new organization is in place in almost all markets. The organizational 
structure underpinning the transformation as announced at the beginning of 
January 2001 is complete.

The transformation is based on the creation of four divisions serving utilities,
process industries, manufacturing and consumer industries, the oil, gas and 
petrochemicals sectors - and two divisions going to market through ABB's four 
industry divisions as well as external channel partners with power technology 
and automation technology products. ABB's Financial Services division remains 
unchanged. The realignment is supported by common group processes and 
infrastructure throughout ABB in key areas such as front-end, project execution,
supply chain management, eBusiness and information systems. 

One of the main elements of the customer-centric organization is the build-up of
a key account management structure for ABB's strategic and major accounts. As of
September 30, 168 key account managers had been appointed. First indications of 
the impact of the customer centric organization is promising, as orders from 
ABB's largest 100 customers have increased by 4 percent since year end. 

Division reviews

The ABB Group's reporting currency is the U.S. dollar, which strengthened 
against most of ABB's local currencies since last year. The strengthened dollar 
continued to unfavorably impact results during the third quarter. All figures 
reflect the first nine months' activity and, except for EBIT margins, comments 
refer to local currency figures. 

EBIT excluding capital gains is shown below only if the aggregate of such gains 
is material (in any case, if capital gains represent more than 10 percent of 
divisional EBIT).

Utilities
                                                                         Change 
US$ in millions, except where          Jan-Sept   Jan-Sept             in local
indicated                                  2001       2000   Change  currencies

Orders                                    4,816      4,710      +2%         +7% 
Revenues                                  3,974      3,898      +2%         +6% 
EBIT*                                       122        196     -38%        -37% 
EBIT Margin                                 3.1%       5.0%  

*Excluding capital gains, EBIT for the first nine months of 2000 was US$ 150    
 million and the EBIT margin was 3.8 percent.  

The ABB Utilities division serves electric, gas and water industries - whether 
state-owned or private, global or local, operating in liberalized or regulated 
markets - through a portfolio of capabilities, from products to services and 
systems. The Utilities division has approximately 16,000 employees.

Demand in Asia continues to be high for utilities, while the Americas, Europe, 
the Middle East and Africa is stable. Utility markets have not noticeably 
weakened in the aftermath of September 11. Orders increased 7 percent on growth 
in both large and base orders. All business areas reported moderate single-digit
order increases, except Utility Automation which was flat.

Revenues were up 6 percent. All business areas reported moderate or strong 
double-digit growth, except Utility Services which recorded higher revenues last
year for the ComEd project in Chicago.

Excluding one-time capital gains, EBIT fell 18 percent as a result of delayed 
project awards and execution timing in large power system projects. As a result,
EBIT margin decreased from 3.8 to 3.1 percent.


Process Industries

                                                                         Change
US$ in millions, except where          Jan-Sept   Jan-Sept             in local
indicated                                  2001       2000   Change  currencies

Orders                                    2,632      2,818      -7%         -2% 
Revenues                                  2,391      2,422      -1%         +3% 
EBIT                                         94         75     +25%        +31% 
EBIT Margin                                 3.9%       3.1%   


The ABB Process Industries division serves the chemical, pharmaceutical, 
petroleum, gas, marine, metals, minerals, mining, cement, pulp, paper and 
printing industries with a variety of power, automation and unique process 
industry technology products. The division has strong domain expertise and uses 
its automation, power, supply chain and service portfolio to create Industrial 
IT solutions focused on these customers. The division has approximately 16,000 
employees.

The economic downturn in the Americas and more recently in Europe is 
significantly impacting metal, pulp and paper, and mining industries. There has 
been less impact on chemical, pharmaceutical and marine industries.

Overall, orders were down 2 percent. Double-digit decreases in metal and paper 
sectors were partially offset by increased orders from the chemical and 
pharmaceutical industries. Marine orders were down in comparison with a high 
order intake last year, but are still at good levels.

Revenues increased 3 percent on execution of the order backlog from last year.

EBIT grew 31 percent as a result of increased contract profitability and early 
cost savings actions. EBIT margin increased from 3.1 to 3.9 percent.


Manufacturing and Consumer Industries

                                                                         Change
US$ in millions, except where          Jan-Sept   Jan-Sept             in local
indicated                                  2001       2000   Change  currencies

Orders                                    3,435      4,283     -20%        -15% 
Revenues                                  3,464      3,665      -5%       +/-0% 
EBIT*                                        88        137     -36%        -34% 
EBIT Margin                                 2.5%       3.7%  

*Excluding capital gains, EBIT for the first nine months of 2000 was US$ 116    
 million and the EBIT margin was 3.2 percent.  


The Manufacturing and Consumer Industries division sells products, solutions and
services to improve customer productivity and competitiveness in areas like 
automotive industries, telecom, product manufacturing, electronics, airports, 
parcel and cargo distribution, public and commercial buildings. It also provides
air handling solutions for industrial and environmental processes. The division 
employs approximately 31,000 people.

The manufacturing and consumer industries have been most negatively affected by 
the economic slowdown in the Americas. Demand has been volatile and investment 
spending has been deferred, particularly in the automotive industry. European 
construction markets have weakened and in telecom, the rollout of UMTS networks 
remains on hold.

Poor demand resulted in a 15 percent drop in orders. Revenues were flat, with 
growth in Building Systems offsetting the decline in Automotive. 

Excluding capital gains, EBIT fell 22 percent as a result of low volume in the 
Airport and Automotive businesses, as well as in some parts of Building Systems.
EBIT margin decreased from 3.2 to 2.5 percent.


Oil, Gas and Petrochemicals 

                                                                         Change
US$ in millions, except where          Jan-Sept   Jan-Sept             in local
indicated                                  2001       2000   Change  currencies

Orders                                    2,602      3,197     -19%        -17% 
Revenues                                  2,450      1,829     +34%        +38% 
EBIT                                        119        101     +18%        +21% 
EBIT Margin                                 4.9%       5.5%   


The Oil, Gas and Petrochemicals division focuses on systems, technologies, 
products and services for oil and gas exploration and development, gas 
processing, refineries and petrochemical plants for the hydrocarbon industry 
worldwide. The division employs approximately 13,000 people.

Oil prices have continued to slip downwards and are now at the lower end of the 
OPEC band. The Upstream business still shows a high activity level even after 
the terrorist attack in the U.S. Lower gas prices in U.S. markets have reduced 
interest in gas exploration and production projects in the Gulf of Mexico. In 
Downstream, demand has fallen off in 2001, especially in the petrochemicals 
industry. Upgrading of refineries and gas processing plants is continuing and 
demand for clean fuels is expected to grow, but some awards are being deferred 
into 2002.

Orders dropped 17 percent, compared with a particularly high intake in 2000. 
High tendering activity in Upstream is currently fuelling its order growth, with
several large projects booked that have partly offset the decline in Downstream.

Revenues increased 38 percent, generated by the large order backlog at the 
beginning of the year. Umoe, the oil and gas service company acquired last year,
also made a positive contribution. 

EBIT grew 21 percent on higher volumes. EBIT margin was lower at 4.9 percent due
to some delays and cost overruns.


Power Technology Products 

                                                                         Change
US$ in millions, except where          Jan-Sept   Jan-Sept             in local
indicated                                  2001       2000   Change  currencies

Orders                                    3,272      3,059      +7%        +13% 
Revenues                                  2,877      2,626     +10%        +15% 
EBIT                                        190        170     +12%        +17% 
EBIT Margin                                 6.6%       6.5%   


The Power Technology Products division produces transformers, switchgear, 
breakers, capacitors, cables as well as other products and technologies for 
high- and medium-voltage applications. The products are used in industrial, 
commercial and utility applications and sold through ABB end-user divisions as 
well as through external channel partners - original equipment manufacturers 
(OEMs), system integrators, and distributors. The division has approximately 
28,000 employees.

Strong demand continued in the Americas - particularly for transmission products
- and parts of Asia. European markets are mixed, while the Middle East and 
Africa are showing signs of improvement.

Orders increased 13 percent, led by Power Transformers and High Voltage 
Products, which reported double-digit growth while Distribution Transformers and
Medium Voltage Products recorded single-digit increases.

Revenues were up 15 percent, led by double-digit growth in High Voltage 
Products, while all other business areas showed single-digit growth. 

Fuelled by higher revenues and productivity improvements, EBIT grew 17 percent. 
EBIT margin improved from 6.5 to 6.6 percent. 


Automation Technology Products 

                                                                         Change
US$ in millions, except where          Jan-Sept   Jan-Sept             in local
indicated                                  2001       2000   Change  currencies

Orders                                    3,959      4,184      -5%       +/-0% 
Revenues                                  3,925      3,796      +3%         +9% 
EBIT                                        330        337      -2%         +3% 
EBIT Margin                                 8.4%       8.9%   


The Automation Technology Products division provides products, systems, software
and services for the automation and optimization of discrete, process and batch 
manufacturing operations plus related business aspects. Key technologies include
measurement control, instrumentation, process analysis, drives and motors, power
electronics, robots, and low-voltage products; all geared toward one common 
Industrial IT architecture for real-time automation and information solutions 
across the business enterprise. These technologies are sold both through third-
party channels (OEM's, system integrators, distributors) and through the ABB 
end-user divisions. It has approximately 41,000 employees.

Slowdown in European and Asian markets (with the exception of China) followed 
the earlier economic downturn in the U.S., and the terrorist attack is clouding 
the outlook. The construction market has significantly weakened in Germany, 
reducing demand for Low Voltage Products, Drives and Electrical Machines.

Orders were stable despite generally difficult trading conditions, as moderate 
growth in parts of Drives and Low Voltage Products offset flat or lower intake 
in other business areas. 

Revenues grew 9 percent as growth was particularly strong in Drives and Power 
Electronics, Electrical Machines, and Low Voltage Products which all recorded 
double-digit increases. Moderate growth was reported in Controls. 
Instrumentation & Metering as well as Robotics recorded lower revenues, 
particularly Robotics as a result of the continued downturn in the automotive 
industry.

EBIT increased 3 percent on stronger earnings in all business areas except 
Instrumentation & Metering and Robotics. EBIT margin was down from 8.9 to 8.4 
percent. 


Financial Services 

                                                                         Change
US$ in millions, except where          Jan-Sept   Jan-Sept             in local
indicated                                  2001       2000   Change  currencies

Revenues                                  1,428      1,318      +8%        +14% 
EBIT                                        233        250      -7%         +3% 


The ABB Financial Services division supports its customers with innovative 
financial solutions in structured finance, leasing, project development and 
equity participations, financial consulting, insurance and treasury services. 
The division employs approximately 1,200 people.

Revenues rose 14 percent on strong trading operations in Treasury Centers and 
the recent expansion of the leasing portfolio by Structured Finance. Under US 
GAAP, most of Equity Ventures income from equity-accounted investments does not 
appear in revenues but is instead recognized in EBIT.

EBIT increased 3 percent, even after providing US$ 50 million for estimated 
reinsurance claims following the terrorist attack in the U.S. All business areas
reported double-digit earnings growth except Insurance.

Total assets rose 39 percent to US$ 17,713 million since year end 2000. The main
reason was increased lending to ABB companies and expansion in financing 
receivables. Receivables, net and financing receivables mainly include loans and
leases to non-ABB customers in the Structured Finance business, and almost all 
are secured by real property and equipment. The loan and lease portfolio is 
balanced, with governments, municipalities and banks accounting for about half 
of all credit exposures. Historical loan loss experience has been less than 0.1 
percent per year.

Reporting dates

The company will host a conference call to discuss its nine month results today 
at 15.00 Central European Time (CET). Teleconference callers should dial +41 91 
610 4111 in Europe and [phone] for all other callers. Presentation 
material for the conference call is available on ABB's Web site: 
www.abb.com/investorrelations. 

Quarterly reporting dates in 2002 are scheduled for February 13, April 24, July 
24 and October 24. The Annual General meeting of ABB Ltd will be held on 
Tuesday, March 12, 2002.

ABB (www.abb.com) is a global leader in power and automation technologies that 
enable utility and industry customers to improve performance while lowering 
their environmental impact. ABB has 160,000 employees in more than 100 
countries.


This press release includes forward-looking information and statements that are 
subject to risks and uncertainties that could cause actual results to differ. 
These statements are based on current expectations, estimates and projections 
about global economic conditions, the economic conditions of the regions and 
industries that are major markets for ABB Ltd and ABB Ltd's lines of business. 
These expectations, estimates and projections are generally identifiable by 
statements containing words such as 'expects', 'believes', 'estimates' or 
similar expressions. Important factors that could cause actual results to differ
materially from those expectations include, among others, economic and market 
conditions in the geographic areas and industries that are major markets for 
ABB's businesses, market acceptance of new products and services, changes in 
governmental regulations, interest rates, fluctuations in currency exchange 
rates and such other factors as may be discussed from time to time in ABB's 
filings with the U.S. Securities and Exchange Commission. Although ABB Ltd 
believes that its expectations reflected in any such forward looking statement 
are based upon reasonable assumptions, it can give no assurance that those 
expectations will be achieved. 



Consolidated Income Statements

                                      January-September         July-September
                                      2001        2000         2001        2000
                                                     (Unaudited)
                                      (in millions, except per share data)

Revenues                         $ 16, 877   $ 16, 217    $   5,778    $  5,149
Cost of sales                      (12,896)    (12,188)      (4,566)     (3,962)
Gross profit                         3,981       4,029        1,212       1,187 
Selling, general and 
 administrative expenses            (3,146)     (3,150)      (1,038)     (1,027)
Amortization expense                  (175)       (154)         (59)        (52)
Other income (expense), net            106         313           25         139 
Earnings before interest 
 and taxes                             766       1,038          140         247 
Interest and dividend income           445         427          161         129 
Interest and other finance expense    (637)       (459)        (224)       (168)
Income from continuing 
 operations before taxes and 
 minority interest                     574       1,006           77         208 
Provision for taxes                   (185)       (297)         (39)        (59)
Minority interest                      (37)        (33)         (15)        (17)
Income from continuing operations      352         676           23         132 
Income from discontinued 
 operations, net of tax                 --         548           --          -- 
Change in accounting principles 
 (introduction of FAS 133)             (63)         --           --          -- 
Net income                       $     289   $   1,224    $      23    $    132

Weighted average shares 
 outstanding                         1,139       1,178        1,116       1,184
Dilutive potential shares                3           6           --           4 
Diluted weighted average 
 shares outstanding                  1,142       1,184        1,116       1,188 

Basic earnings per share:                                                       
  Income from continuing 
   operations                    $    0.31   $    0.57    $    0.02    $   0.11
  Income from discontinued 
   operations                           --        0.47           --          -- 
  Change in accounting 
   principles                        (0.06)         --           --          -- 
  Net income                     $    0.25   $    1.04    $    0.02    $   0.11

Diluted earnings per share:                                                     
  Income from continuing 
   operations                    $    0.31   $    0.57    $    0.02    $   0.11
  Income from discontinued 
   operations                           --        0.46           --          -- 
  Change in accounting 
   principles                        (0.06)         --           --          -- 
  Net income                     $    0.25   $    1.03    $    0.02    $   0.11



Consolidated Balance Sheets 
                                                           
                                                                 At          At 
                                                          September    December
                                                                30,         31,
                                                               2001        2000 
                                                         (Unaudited)   (Audited)
                                                            (US$ in millions)  

Cash and equivalents                                       $  2,232    $  1,397 
Marketable securities                                         3,153       4,209 
Receivables, net                                              8,621       8,328 
Inventories, net                                              3,644       3,192 
Prepaid expenses and other                                    2,668       1,585 
Total current assets                                         20,318      18,711 
Financing receivables, non-current                            4,599       3,875 
Property, plant and equipment, net                            3,108       3,243 
Goodwill and other intangible assets, net                     3,491       3,155 
Investments and other                                         2,193       1,978 
Total assets                                               $ 33,709    $ 30,962 
 
Accounts payable, trade                                    $  3,775    $  3,375 
Accounts payable, other                                       2,317       2,363 
Short-term borrowings and current maturities 
 of long-term borrowings                                      6,789       3,587 
Accrued liabilities and other                                 7,086       6,127 
Total current liabilities                                    19,967      15,452 
Long-term borrowings                                          4,867       3,776 
Pension and other related benefits                            1,742       1,790 
Deferred taxes                                                1,357       1,528 
Other liabilities                                             2,565       2,924 
Total liabilities                                            30,498      25,470 
Minority interest                                               299         321 
Total stockholders' equity                                    2,912       5,171 
Total liabilities and stockholders' equity                 $ 33,709    $ 30,962 


Consolidated Statements of Cash Flows 

                                                             January - September
                                                               2001        2000 
                                                                 (Unaudited)    
                                                             (US$ in millions)  
                      
Operating Activities                                                        
Income from continuing operations                          $    352    $    676 
Adjustments to reconcile income from continuing 
 operations to net cash provided by operating activities:                       
  Depreciation and amortization                                 583         575 
  Changes in restructuring provisions                           (39)        (21)
  Pension and post-retirement benefits                           14         (32)
  Deferred taxes                                                 13         129 
  Net gain from sale of property, plant and equipment           (13)       (227)
  Other                                                           2         (41)
  Changes in operating assets and liabilities                                   
     Marketable securities - trading                             79        (239)
     Trade receivables                                         (134)        128 
     Inventories                                               (549)       (361)
     Trade payables                                             444        (190)
     Other assets and liabilities, net                         (407)       (144)
              
Net cash provided by operating activities                  $    345    $    253 
    
Investing Activities                                                        
Changes in financing receivables                             (1,105)       (557)
Purchases of marketable securities (other than trading)      (2,248)     (1,519)
Purchases of property, plant and equipment                     (560)       (435)
Acquisitions of businesses (net of cash acquired)              (575)       (404)
Proceeds from sales of marketable securities (other                             
 than trading)                                                2,768       1,587 
Proceeds from sales of property, plant and equipment             80         138 
Proceeds from sales of businesses (net of cash disposed)         31         139 
                                           
Net cash used in investing activities                      $ (1,609)   $ (1,051)
 
Financing Activities                                                        
Changes in borrowings                                         4,300       1,133 
Treasury and capital stock transactions                      (1,433)        245 
Dividends paid                                                 (502)       (531)
Other                                                           (61)        (60)
               
Net cash provided by financing activities                  $  2,304    $    787 
    
Net cash provided by discontinued operations                   (158)      1,229 
Effects of exchange rate changes on cash and equivalents        (47)       (128)
              
Net change in cash and equivalents                              835       1,090 
Cash and equivalents-beginning of year                        1,397       1,615 
             
Cash and equivalents-end of period                         $  2,232    $  2,705 
  
Interest paid                                              $    579    $    485 
Taxes paid                                                 $    263    $    235 
    
 
 
          ABB Ltd notes to consolidated financial statements (Unaudited)  
                  (US$ in millions, except per share amounts) 
 
Note 1 Developments in the nine months ended September 30, 2001: 
 
*  Share split 
   At our annual general meeting held on March 20, 2001, our shareholders
   approved a four-for-one share split to reduce the nominal value of our shares
   from CHF 10 each to CHF 2.50 each. The share split became effective as of May
   7, 2001. 
 
*  Treasury and capital stock 
   At our annual general meeting held on March 20, 2001 our shareholders
   approved a share repurchase of 24 million shares, which corresponds to
   approximately 2% of our nominal share capital. During the first half of 2001
   all of the 24 million shares were purchased using a second trading line. We
   intend to propose to our shareholders at next year's annual general meeting a
   reduction of our nominal share capital for the purpose of canceling such
   shares.  

In addition, at September 30, 2001, we owned approximately 63 million treasury 
shares for purposes such as hedging management incentive plans (MIP).  

   In June 2001, the Company settled its outstanding written put options by
   repurchasing 18.5 million of its own shares. The Company further issued call
   options that give a counterparty the right to acquire up to 18.5 million
   shares of the Company at an average rate of CHF 41 per share. The call
   options expire in periods ranging from 2004 to 2006 and were recorded as
   equity instruments in accordance with EITF 00-19, Accounting for Derivative
   Financial Instruments Indexed to, and Potentially Settled in, a Company's Own
   Stock. These transactions are linked to the management of the Company's MIP. 

   The market value of the ABB shares as of September 30, 2001 was CHF 11.60
   (approximately US$ 7.18) per share. 
 
*  Listing New York 
   On April 6, 2001 we listed our American Depositary Shares (ADSs) on the New
   York Stock Exchange. Simultaneously, we successfully completed an exchange
   offer giving holders of restricted ADSs the opportunity to exchange to our
   new ADSs that are eligible for trading on the New York Stock Exchange. One
   new ADS represents one registered share. Our new ADSs are traded under the
   symbol 'ABB'.  
 
Note 2 Significant Accounting Policies 
 
The consolidated financial statements are prepared on the basis of United States
(U.S.) generally accepted accounting principles and are presented in U.S. 
dollars ($) unless otherwise stated. Par value of capital stock is denominated 
in Swiss francs (CHF). The financial information as of September 30, 2001 should
be read in conjunction with the December 31, 2000 financial statements contained
in the Annual Report and our registration statement on Form 20-F for the U.S. 
listing. 
 
 
Introduction of FAS 133 
 
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities, which is required to be adopted in years beginning
after June 15, 2000. The Company has adopted the new Statement with effect
from January 1, 2001. The Statement requires us to recognize all derivatives
on the balance sheet at fair value. Derivatives that are not hedges must be
adjusted to fair value through income. If the derivative is a hedge, depending 
on the nature of the hedge, changes in the fair value of derivatives will either
be offset against the change in fair value of the hedged assets, liabilities, or
firm commitments through earnings or recognized in other comprehensive income 
until the hedged item is recognized in earnings. Based on the Company's 
derivative positions at December 31, 2000, the Company has upon adoption at 
January 1, 2001 recorded a loss from the cumulative effect of an accounting 
change of $63 million in the consolidated income statement and a reduction of 
$41 million in other comprehensive income. 

Note 3 Statement of Consolidated Common Stockholders' Equity  
(US$ in millions) 
 
Balance at January 1, 2001                                            $   5,171 
Comprehensive income:                                                       
Net income                                                      289             
Foreign currency translation adjustments                       (374)            
Unrealized loss on available-for-sale securities               (129)            
Change in accounting principles (FAS 133) at January 1, 2001    (41)            
FAS 133 effect through September 30, 2001                       (84)            
Total comprehensive income(loss)                               (339)
Dividends paid                                                             (502)
Treasury stock transactions                                              (1,433)
Other                                                                        15 
Balance at September 30, 2001                                         $   2,912 
 
Note 4 Segment and Geographic Data 
We have realigned our worldwide business operations to increase our
responsiveness to our customers' needs. The new customer-focused structure is
intended to capitalize on our extensive knowledge of our customers' industries 
and their business processes. It is based on the premise that our primary growth
opportunity lies in our existing customer base. Our new business structure will 
enhance our ability to expand our existing customer relationships into 
additional sales of products, systems and services. Our focus on customer groups
should also facilitate the building of new customer relationships. 
 
For all periods presented, the division data reflects the new customer-centric 
structure:  

Utilities: Serves electric, gas and water industries - whether state-owned or
private, global or local, operating in liberalized or regulated markets -
through a portfolio of capabilities, from essential products to comprehensive
services and systems. 

Process Industries: Serves the chemical, pharmaceutical, petroleum, gas,
marine, metals, minerals, mining, cement, pulp, paper and printing industries
with a variety of power and automation technology products. The division has
a strong domain expertise and uses its automation, power, supply chain and
service portfolio to create industrial IT solutions focused on these
customers. 

Manufacturing and Consumer Industries: Sells products, solutions and services
to improve customer productivity and competitiveness in areas like automotive
industries, telecom, product manufacturing, electronics, airports, parcel and
cargo distribution, public and commercial buildings. It also provides air
handling solutions for industrial and environmental processes.  

Oil, Gas and Petrochemicals: Focuses on systems, products and services for
oil and gas drilling both offshore and onshore, and the development and
supply of offshore production installations, refineries and petrochemical
plants worldwide. 

Power Technology Products: Covers the entire spectrum of technology for power
transmission and power distribution. It includes transformers, switchgear,
breakers, capacitors, cables as well as other products and technologies for
high- and medium-voltage applications. All products are currently developed
to fit into a common industrial IT architecture. The increased use of IT,
including online product configurators, enables ABB Power Technology Products
to deliver within best-in-class cycle times. The division focuses on
customers such as industrial, commercial, utilities and external channel
partners, e.g. distributors, system integrators, contractors and original
equipment manufacturers (OEMs). 

Automation Technology Products: Provides products, systems, software and
services for the automation and optimization of discrete, process and batch
manufacturing operations plus related business aspects. Key technologies
include measurement control, instrumentation, process analysis, drives and
motors, power electronics, robots, and low-voltage products, all geared
toward one common industrial IT architecture for real-time automation and
information solutions across the business enterprise. These technologies are
sold both through third-party channels (OEMs, system integrators,
distributors) and through the ABB end-user divisions. 

Financial Services: Supports its internal and external customers with
innovative financial solutions in structured finance, leasing, project
development and ownership, financial consulting, insurance and treasury
activities. 

The Company evaluates performance based on earnings before interest and taxes
(EBIT), which excludes interest income and expense, taxes, minority
interests, the results from discontinued operations and other items. 
 
 
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