ABB Annual Report 2012 PDF - ABB Group Annual Report 2012

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Note 23Operating segment andgeographic data, continuedOperational EBITDA represents earnings before interest and taxes (EBIT) excluding depreciation and amortization,restructuring and restructuring-related expenses, adjusted for the following: (i) unrealized gains and losses on derivatives(foreign exchange, commodities, embedded derivatives), (ii) realized gains and losses on derivatives where theunderlying hedged transaction has not yet been realized, (iii) unrealized foreign exchange movements on receivables/payables (and related assets/liabilities), (iv) acquisition-related expenses and (v) certain non-recurring items.Operational revenues are total revenues adjusted for the following: (i) unrealized gains and losses on derivatives,(ii) realized gains and losses on derivatives where the underlying hedged transaction has not yet been realized, and(iii) unrealized foreign exchange movements on receivables (and related assets).The CODM primarily reviews the results of each segment on a basis that is before the elimination of profits made oninventory sales between segments. Segment results below are presented before these eliminations, with a total deductionfor intersegment profits to arrive at the Company’s consolidated Operational EBITDA.The following tables present segment revenues, depreciation and amortization, Operational EBITDA, OperationalEBITDA margin, as well as reconciliations of Operational EBITDA to EBIT and Operational revenues to Total revenues,capital expenditure and total assets. Intersegment sales and transfers for 2012, 2011 and 2010, are accounted for asif the sales and transfers were to third parties, at current market prices.2012 ($ in millions)Third-partyrevenuesIntersegmentrevenuesTotalrevenuesDepreciationandamortizationOperationalrevenuesOperationalEBITDA (1)OperationalEBITDAmargin (%)Power Products 8,987 1,730 10,717 209 10,702 1,585 14.8%Power Systems 7,575 277 7,852 174 7,812 290 3.7%Discrete Automation and Motion 8,480 925 9,405 263 9,405 1,735 18.4%Low Voltage Products 6,276 362 6,638 250 6,626 1,219 18.4%Process Automation 7,946 210 8,156 82 8,134 1,003 12.3%Corporate and Other 72 1,505 1,577 204 1,576 (279) –Intersegment elimination – (5,009) (5,009) – (5,009) 2 –Consolidated 39,336 – 39,336 1,182 39,246 5,555 14.2%2011 ($ in millions)Third-partyrevenuesIntersegmentrevenuesTotalrevenuesDepreciationandamortizationOperationalrevenuesOperationalEBITDA (1)OperationalEBITDAmargin (%)Power Products 9,028 1,841 10,869 200 10,901 1,782 16.3%Power Systems 7,833 268 8,101 144 8,128 743 9.1%Discrete Automation and Motion 8,047 759 8,806 251 8,817 1,664 18.9%Low Voltage Products 4,953 351 5,304 116 5,315 1,059 19.9%Process Automation 8,078 222 8,300 83 8,318 1,028 12.4%Corporate and Other 51 1,508 1,559 201 1,558 (282) –Intersegment elimination – (4,949) (4,949) – (4,949) 20 –Consolidated 37,990 – 37,990 995 38,088 6,014 15.8%2010 ($ in millions)Third-partyrevenuesIntersegmentrevenuesTotalrevenuesDepreciationandamortizationOperationalrevenuesOperationalEBITDA (1)OperationalEBITDAmargin (%)Power Products 8,486 1,713 10,199 177 10,202 1,861 18.2%Power Systems 6,590 196 6,786 84 6,783 304 4.5%Discrete Automation and Motion 4,978 639 5,617 78 5,613 1,026 18.3%Low Voltage Products 4,263 291 4,554 105 4,554 926 20.3%Process Automation 7,209 223 7,432 76 7,427 925 12.5%Corporate and Other 63 1,468 1,531 182 1,532 (230) –Intersegment elimination – (4,530) (4,530) – (4,530) 12 –Consolidated 31,589 – 31,589 702 31,581 4,824 15.3%(1)Operational EBITDA by segment is presented before the elimination of intersegment profits made on inventory sales.130 Financial review | ABB Annual Report 2012
Note 23Operating segment andgeographic data, continuedCorporate and2012 ($ in millions, exceptOperational EBITDA margin in %)PowerProductsPowerSystemsDiscreteAutomationand MotionLow VoltageProductsProcessAutomationOther andIntersegmentelimination ConsolidatedOperational revenues 10,702 7,812 9,405 6,626 8,134 (3,433) 39,246Unrealized gains and losseson derivatives 30 68 (3) 17 18 1 131Realized gains and losses onderivatives where the underlyinghedged transaction has not yetbeen realized (2) (23) – – 4 – (21)Unrealized foreign exchangemovements on receivables(and related assets) (13) (5) 3 (5) – – (20)Total revenues 10,717 7,852 9,405 6,638 8,156 (3,432) 39,336Operational EBITDA 1,585 290 1,735 1,219 1,003 (277) 5,555Depreciation and amortization (209) (174) (263) (250) (82) (204) (1,182)Acquisition-related expensesand certain non-operational items (1) (70) (8) (106) (2) (12) (199)Unrealized gains and losseson derivatives (foreign exchange,commodities, embeddedderivatives) 43 44 2 21 27 (2) 135Realized gains and losses onderivatives where the underlyinghedged transaction has not yetbeen realized (6) (21) 1 – (2) – (28)Unrealized foreign exchangemovements on receivables/payables (and related assets/liabilities) (19) (10) (2) (5) (4) (3) (43)Restructuring and restructuringrelatedexpenses (65) (52) 4 (23) (28) (16) (180)EBIT 1,328 7 1,469 856 912 (514) 4,058Operational EBITDA margin (%) 14.8% 3.7% 18.4% 18.4% 12.3% – 14.2%ABB Annual Report 2012 | Financial review 131
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Building on our technology leadersh
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This is ABBABB is one of the world
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Chairman and CEO letterDear shareho
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We will also be looking at ways to
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HighlightsResilient performance thr
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As of March 1, 2013Executive Commit
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12 Corporate governance report | AB
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1. Principles1.1 General principles
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The following table sets forth, as
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3.2 Changes to the share capitalIn
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4.3 Shareholders’ dividend rights
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As at December 31, 2012, the member
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Brice Koch was appointed Executive
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10. Auditors10.1 AuditorsErnst & Yo
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28 Remuneration report | ABB Annual
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ABB’s success depends on its abil
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1.3 Board compensation in 2012Compe
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Annual base salaryThe base salary f
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Historical payout of performance co
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Base salaryShort-term variablecompe
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6.2 EC ownership of ABB sharesand o
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42 Financial review | ABB Annual Re
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Operating and financial reviewand p
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In May 2012, the Low Voltage Produc
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In a market environment in which ne
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We record provisions for our contin
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Goodwill and other intangible asset
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We also incur expenses other than c
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In 2011, orders in the Power Produc
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We determine the geographic distrib
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In 2012, “Capital gains, net” w
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Divisional analysisPower ProductsTh
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Continued pricing pressure in some
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OrdersIn 2012, orders were flat due
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The geographic distribution of orde
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In 2011, revenues increased, driven
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Throughout 2012 and 2011, the inves
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Current liabilitiesDecember 31, ($
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Total cash disbursements for the pu
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Consolidated Financial StatementsCo
Page 82 and 83: Consolidated Balance SheetsDecember
Page 84 and 85: Consolidated Statements of Changes
Page 86 and 87: Notes to theConsolidated Financial
Page 88 and 89: Note 2Significant accounting polici
Page 94 and 95: Note 3Acquisitions and increasesin
Page 96 and 97: Note 3Acquisitions and increasesin
Page 98 and 99: Note 5Financial instrumentsCurrency
Page 100 and 101: Note 5Financial instruments, contin
Page 102 and 103: Note 6Fair valuesRecurring fair val
Page 104 and 105: Note 7Receivables, net, continued
Page 106 and 107: Note 9Other non-current assets“Ot
Page 108 and 109: Note 11Goodwill and other intangibl
Page 110 and 111: Note 12Debt, continuedThe 4.625% EU
Page 112 and 113: Note 14Leases, continuedNote 15Comm
Page 114 and 115: Note 15Commitments and contingencie
Page 116 and 117: Note 16Taxes, continuedIn 2012, 201
Page 118 and 119: Note 16Taxes, continuedAt December
Page 120 and 121: Note 17Employee benefits, continued
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Page 124 and 125: Note 18Share-based paymentarrangeme
Page 126 and 127: Note 18Share-based paymentarrangeme
Page 128 and 129: Note 19Stockholders’ equityAt bot
Page 130 and 131: Note 21Other comprehensive incomeTh
Page 134 and 135: Note 23Operating segment andgeograp
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Page 138 and 139: Report of the Statutory Auditor on
Page 140 and 141: Financial Statements of ABB Ltd, Zu
Page 142 and 143: Note 6Stockholders’ equityShareca
Page 144 and 145: Note 10Board of Directors compensat
Page 146 and 147: Note 11Executive Committeecompensat
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Page 150 and 151: Note 12Share ownership of ABB byBoa
Page 152 and 153: Proposed appropriation of available
Page 154 and 155: Investor informationABB Ltd share p
Page 156 and 157: Stock exchange listingsABB Ltd is l
Page 158 and 159: 2012 price trend for ABB Ltd shares
Page 160: ABB LtdCorporate Communications P.O
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