ABBNY 6-K 2022 - Equibles

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 April 2022

Commission File Number 001-16429

ABB Ltd

(Translation of registrant’s name into English)

Affolternstrasse 44, CH-8050, Zurich, Switzerland

(Address of principal executive office)

Indicate by check mark whether the registrant

files or will file annual reports

under cover of Form 20-F or Form

40-F.

Form 20-F

☒

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):

⬜

Note:

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permits the submission in paper of

a Form 6-K if submitted solely to provide

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):

⬜

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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

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pursuant to Rule 12g3-2(b) under

the Securities Exchange Act of 1934.

Yes

⬜

☒

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:

Press release issued by ABB Ltd dated

April 21, 2022 titled “Q1 2022

results”.

Q1 2022 Financial Information.

The information provided by Item 2

above is hereby incorporated by reference

into the Registration Statements on

Form F-3 of

ABB Ltd and ABB Finance (USA) Inc. (File

Nos. 333-223907 and 333-223907-01)

and registration statements on Form

S-8

(File Nos. 333-190180, 333-181583,

333-179472, 333-171971 and

333-129271) each of which was previously

filed with the

Securities and Exchange Commission.

—

ABB has started the year with a promising performance in the face of multiple external

uncertainties. I expect this year to result in improving profitability,

solid cash flow and

execution of our planned portfolio activities

Björn Rosengren

, CEO

—

ZURICH, SWITZERLAND, APRIL

21, 2022

Q1 2022 results

Solid performance in

an uncertain environment

●

Orders $9.4 billion,

+21%; comparable

+28%

●

Revenues $7.0 billion

+1%; comparable +7%

●

Income from operations

$857 million; margin 12.3%

●

Operational EBITA

$997 million; margin

14.3%

●

Basic EPS $0.31;

25%

●

Cash flow from operating

activities -$573 million;

cash flow from operating

activities in continuing oper

ations -$564 million

Ad hoc Announcement pursuant to Art.

53 Listing Rules of SIX Swiss Exchange

—

Q1 2022

First three months

Press Release

KEY FIGURES

CHANGE

($ millions, unless otherwise indicated)

Q1 2022

Q1 2021

US$

Comparable

Orders

9,373

7,756

21%

28%

Revenues

6,965

6,901

Gross Profit

2,281

2,268

as % of revenues

32.7%

32.9%

-0.2 pts

Income from operations

857

797

Operational EBITA

997

959

as % of operational revenues

14.3%

13.8%

+0.5 pts

Income from continuing operations, net of tax

643

551

17%

Net income attributable to ABB

604

502

20%

Basic earnings per share ($)

0.31

0.25

25%

Cash flow from operating activities

(573)

543

n.a.

Cash flow from operating activities in continuing

operations

(564)

523

n.a.

For a reconciliation of non-GAAP measures, see “supplemental

reconciliations and definitions” in the attached Q1 2022

Financial Information.

EPS growth rates are computed using unrounded amounts.

Constant currency (not adjusted for portfolio

changes).

Amount represents total for both continuing and

discontinued operations.

ABB

INTERIM

REPORT

2022

In the first quarter

we witnessed the start of

the war in Ukraine

– a human tragedy

– and consequently one

of our key priorities

was to ensure the safety

and wellbeing of our people.

In an

effort to support

the people of Ukraine, we

have made a

significant donation

to the International Committee

of the Red

Cross. Prior to suspending

the intake of any new orders

Russia it represented

only 1-2% of ABB revenues.

Customer activity was

strong throughout the

quarter, resulting

in the very high order

growth of 21% year

-on-year

(28% comparable).

Most major customer segments

and regions

developed favorably and

three out of four business

areas

reported high double

-digit growth. Notably,

the high order intake

was driven by high

general customer activity

and not by large

orders, and includes

a de-booking of approximately

$190 million

in Process Automation.

We saw an increase

in revenues which improved

by 1%

(7% comparable),

supported by a positive

development in all

business areas except

for Robotics & Discrete

Automation, which

was hampered by component

shortages. The order

backlog

increased to $18.9 billion at

the end of the period, up by

28%

year-on-year (32%

comparable). The zero-Covid

strategy in

China had no material

impact on our ability to fulfill

customer

deliveries in the

first quarter.

That said, we are monitoring

the

situation and although

difficult to quantify,

we do not rule out

somewhat of an

adverse near-term impact

on operations due to

the local lock-downs.

In total,

we achieved an Operational

EBITA margin of

14.3%.

Due to the support

from higher volumes

and successful pricing

activities we managed

to offset the adverse

impacts from cost

inflation,

primarily related to

raw materials, certain components,

logistics and tight labor

markets. In addition, the

result was

supported by low costs

in Corporate & Other.

As a reminder,

last year’s Operational

EBITA margin

of 13.8%, was positively

impacted by 30 basis

points from the recently

divested

Mechanical Power

Transmission business.

Looking at the

underlying operations,

I am pleased that we

were able to

slightly improve the

Operational EBITA

margin in the current

environment of inflation

and strained value chain.

This reflects

that our hard work

towards increased accountability,

transparency and speed

is yielding results.

Cash flow from operating

activities, amounted to

-$573 million.

As expected, it declined

compared with last year,

but the drop was sharper

than anticipated due

primarily to a

higher-than-expected

build-up of net working capital

to support

deliveries from the

order backlog.

Cash delivery will clearly

in focus going forward

and I expect a solid full

-year cash flow.

We made overall

good progress towards our 2030

sustainability

goals in 2021, as publicized

in our Sustainability Report

in March.

As an example, we

reduced our own CO2e

emissions by 39%, from

the 2019 baseline.

Additionally,

our products, services and

solutions sold last year

will enable our customers

to reduce their

CO2e emissions by

11.5 megatons

after the first year,

which is a

good start towards

our target of more than

100 megatons by 2030.

We made progress

with the portfolio activities.

We plan for an

exit of the Turbocharging

business, although the

geo-political

uncertainties caused

us to delay the final decision

on a spin-off

or sale to the second

quarter. Prepar

ing for the separation, we

launched the new company

name and brand – Accelleron.

For

the E-mobility business

our plan for a separate

listing during

the second quarter

remains

intact,

assuming constructive

market conditions.

I look forward to

the impacts of the leadership

exchange in

Electrification and Motion.

I have great confidence

in both Tarak

and Morten and expect

them to continue to improve

operational

performance for both

growth and profitability.

The change was

effective as of April

Finally,

I am pleased we announced

a continuation of share

buybacks of up to $3

billion, including the fulfillment

of the

promise to return the

remaining $1.2 billion

of proceeds related

to the divestment of

Power Grids. This new buyback

program

was launched on

April 1.

Björn Rosengren

CEO

In the

second quarter of 2022

, ABB anticipates the underlying

market activity to remain

broadly similar compared

with the prior

quarter.

Revenues in the second

quarter tend to be sequentially

stronger in absolute

terms, supporting a slight

sequential

margin increase,

assuming no escalation

of lock-downs in

China.

In full-year 2022

, we expect a steady margin

improvement

towards the 2023 target

of at least 15%, supported

increased efficiency

as we fully incorporate the

decentralized

operating model and performance

culture in all our divisions.

Furthermore, we expect

support from an anticipated

positive

market momentum

and our strong order backlog.

CEO summary

Outlook

ABB

INTERIM

REPORT

2022

Business momentum

in the first quarter was very

strong,

supported by most

major customer segments.

This generated a

strong positive order

development in all business

areas, despite

a smaller contribution

from large orders compared

with the prior

year and the order

de-booking to the amount

of $190 million in

the European region.

There were no unusual order

cancellations. Service-related

orders increased by

10%

(15%

comparable). In total, order

intake improved by

21% (28% comparable)

to $9,373 million, the highest

quarterly

level in recent years.

The positive development

was very strong in the segments

machine building,

food & beverage and

in general industries

well as in the automotive

segment due to broadly

accelerating

investments in the

EV segment.

In transport and infrastructure,

there was a very strong

order

development across

the renewables and e-mobility

business.

The buildings segment

improved in both the residential

and

non-residential segments.

In the marine segment a

positive

development was noted

for cruising as well as general

marine &

port demand. The process

-related business improved

across

the customer segments,

except for a stable

development in

power generation.

From a geographical

perspective, orders

increased by more

than 20% in all three

regions,

on a comparable basis.

Orders in

Europe increased by

14% (24% comparable).

Americas

improved by 29% (40%

comparable), supported by

a stellar

33% (46% comparable)

growth in the United States.

In Asia,

Middle East and

Africa orders increased by

22% (24%

comparable), with China

outperforming the region as

whole as it improved by

28% (26% comparable).

Compared with the

fourth quarter,

the level of component

constraints remained

broadly similar and as expected,

except

for a somewhat worse

than anticipated development

Robotics & Discrete

Automation where customer

deliveries

were delayed due to semiconductor

shortages. The sharp

revenue decline in

Robotics & Discrete Automation

was

however more than

offset by strong comparable

improvements

in the other business

areas. ABB Group revenues

increased by

1% (7% comparable)

$6,965 million, supported

by both volume growth and

good

pricing execution, but

adversely impacted by changed

exchange rates.

Orders and revenues

Orders by region

($ in millions,

unless otherwise

indicated)

CHANGE

Q1 2022

Q1 2021

US$

Comparable

Europe

3,534

3,102

14%

24%

The Americas

2,897

2,247

29%

40%

Asia, Middle East

and Africa

2,942

2,407

22%

24%

ABB Group

9,373

7,756

21%

28%

Growth

Change year-on-year

Orders

Revenues

Comparable

28%

-4%

-3%

Portfolio changes

-3%

Total

21%

Revenues by region

($ in millions,

unless otherwise

indicated)

CHANGE

Q1 2022

Q1 2021

US$

Comparable

Europe

2,518

2,551

-1%

The Americas

2,169

2,043

15%

Asia, Middle East

and Africa

2,278

2,307

-1%

ABB Group

6,965

6,901

ABB

INTERIM

REPORT

2022

Gross profit

Gross margin decreased

to 32.7%, a slight decline

20 basis points year

-on-year,

primarily due to the divestment

Mechanical Power

Transmission, but

to some extent also to

decline in Robotics

& Discrete Automation.

Gross profit improved

slightly by 1% to $2,

281 million.

Income from operations

amounted to $857 million,

improving by

$60 million,

or 8%. The improvement

was mainly driven by

operational performance,

lower restructuring charges

and changes

in obligations related

to divested businesses,

which more than

offset increased

acquisition-

and divestment-related

costs.

Operational

EBITA

Operational EBITA

of $997 million

was 4% higher (8% constant

currency) year-on-year,

with the increased profit

in Process

Automation as the main

driver. Profitability

in both Motion and

Process Automation

improved, while it declined

in Electrification

and Robotics & Discrete

Automation.

The Operational

EBITA margin

increased by 50

basis points to

14.3%, supported by higher

profitability in operations and

improved

Operational EBITA

in Corporate and

Other, which was

up by $69

million to -$32 million

Last year’s Operational EBITA

margin for the

first quarter was 13.8%,

positively impacted by 30

basis points from

the divested Mechanical

Power Transmission

business.

Earnings were positively

impacted by higher volumes

and

successful pricing activities,

which combined more than

offset the

adverse effects

from cost inflation primarily

related to raw materials,

certain components,

logistics and tight labor

market. Selling,

general and administrative

(SG&A) expenses decreased

slightly by

2% (up 2% in constant

currency),

the combined impact

from

increased sales cost

to support the high demand

environment and

a decrease in General

& Administrative expenses.

Net finance expenses

declined to $9 million

from $44 million,

primarily reflecting

lower foreign exchange

losses and lower

interest charges on

borrowings as well as a

reduction in certain

income tax-related

risks.

Income tax

Income tax expense

was $241 million with an effective

tax rate of

27.3%, including $61

million in negative tax impacts

related to the

separation of E-mobility

and Turbocharging businesses.

Net income and earnings

per share

Net income attributable

to ABB was $604 million and

increased 20%

from last year,

mainly due to increased

earnings in continuing

operations and lower

net finance expenses.

Consequently,

basic

earnings per share was

$0.31,

and increased from $0.25,

year-on-

year.

Earnings

ABB

INTERIM

REPORT

2022

Net working capital

amounted to $3,461 million,

increasing

both year-on-year from

$2,904 million and sequentially

from

$2,303 million.

The sequential increase

was driven primarily

by inventories to support

future deliveries to

the strong

market demand, as

well as receivables.

Net working capital

as a percentage of

revenues

was 12.1%.

Capital expenditures

Purchases of property,

plant and equipment and

intangible

assets amounted to

$187 million, somewhat higher

than

expected driven

mainly by Electrification and

Motion.

Net debt

amounted to $2,772 million

at the end of the

quarter,

and increased from $1,233

million, year-on-year.

Sequentially,

the net cash position

of $98 million changed

to a

net debt position, as

increased debt more than

offset

increased Cash & equivalents

including paid dividend.

Cash flows

Cash flow from operating

activities in continuing operations

was -$564 million and

declined year-on-year from

$523 million. The

quarterly year-on-year decline

was driven

by a higher build-up

of trade net working capital,

mainly

related to inventories

to support future deliveries

on the high

order intake as well

as receivables, but also by

higher pay-

out of incentives due

to the strong financial

performance in

It also reflects

approximately $170 million

of cash

paid for income taxes relating

to the E-mobility and

Turbocharging separations

ABB expects a solid cash

flow

delivery in 2022.

Share buyback program

ABB launched a new

share buyback program

of up to $3 billion

on April 1. As part of

this program, ABB intends

to return to its

shareholders the remaining

$1.2 billion of the $7.8

billion of

cash proceeds from the

Power Grids divestment. Shares

are

being repurchased

on the second trading line.

conclude the

previous buyback program,

31,438,500 shares were

repurchased in the

first quarter for the amount

of approximately

$1 billion. The total

number of ABB Ltd’s issued

shares is

2,053,148,264, including

those approved for

cancellation at

ABB's 2022 AGM.

($ millions,

unless otherwise indicated)

Mar. 31

2022

Mar. 31

2021

Dec. 31

2021

Short term debt and current

maturities of long-term debt

3,114

1,336

1,384

Long-term debt

6,171

5,619

4,177

Total debt

9,285

6,955

5,561

Cash & equivalents

5,216

3,466

4,159

Restricted cash - current

Marketable securities and

short-term investments

967

1,884

1,170

Restricted cash - non-current

300

Cash and marketable securities

6,513

5,722

5,659

Net debt (cash)*

2,772

1,233

(98)

Net debt (cash)* to EBITDA ratio

0.42

0.4

(0.01)

Net debt (cash)* to Equity ratio

0.20

0.09

(0.01)

At Mar. 31, 2022, Mar. 31, 2021 and Dec. 31, 2021, net debt(cash) excludes net

pension

(assets)/liabilities of $(13) million, $684 million and $45

million, respectively.

Balance sheet & Cash flow

ABB

INTERIM

REPORT

2022

Orders and revenues

Demand was very

strong across all customer

segments in the

first quarter,

resulting in an order growth of

25% (29% comparable)

to $4,397 million, the highest

level in

recent history.

Book-to-bill was 1.3 and the

order backlog

extended to a record

level of $6.5 billion.

●

All divisions reported

double-digit order growth,

including

the newly established

Service division. Momentum

was

clearly strongest

in E-mobility,

which more than doubled

its

orders.

●

All customer segments

contributed strongly to the

high

order intake.

●

Orders

increased at a steep

double-digit growth rate of

24%

(35% comparable)

in Europe, and by

42% (42% comparable)

in the Americas, including

a 50%

improvement in the

United States. Asia, Middle

East and

Africa increased by

6% (7% comparable) supported

by an

11% (9%

comparable) increase

in China.

●

Revenues improved by

6% (10% comparable) to

$3,327 million, with

strong contribution from pricing

actions,

although hampered

by low volumes in the largest

division,

Distribution Solutions

where customer deliveries

were

adversely impacted

by a tight supply chain.

Double-digit

growth rates were reported

in both the Americas and

Europe, while Asia,

Middle East and Africa improved

at a

mid-single digit rate.

During the quarter,

a new service division was

formed

through internal reorganization

Transparency

will improve

by moving the service

business mainly out of

Distribution

Solutions, with the

aim to increase focus on

its operational

performance.

Profit

The Operational

EBITA was $510

million, remaining stable,

while it improved by 5%

in constant currency

which on

higher revenues

resulted in a margin decline

of 80 basis

points to 15.4%.

●

The strained supply

chain impacted the largest

division,

Distribution Solutions,

due to its large systems

sales. This

and the impacts

from cost inflation - mainly

driven by higher

raw material costs

as the previous year period

benefited

from raw material hedges

at lower price point -

more than

offset the benefits

from higher volumes,

pricing and

operational efficiencies,

year-on-year.

—

Electrification

CHANGE

($ millions, unless otherwise indicated)

Q1 2022

Q1 2021

US$

Comparable

Orders

4,397

3,531

25%

29%

Order backlog

6,504

4,699

38%

42%

Revenues

3,327

3,140

10%

Operational EBITA

510

511

as % of operational revenues

15.4%

16.2%

-0.8 pts

Cash flow from operating activities

319

-88%

No. of employees (FTE equiv.)

50,860

50,990

Growth

Change year-on-year

Orders

Revenues

Comparable

29%

10%

-4%

Portfolio changes

Total

25%

ABB

INTERIM

REPORT

2022

Orders and revenues

Order intake increased

by 15%

(32% comparable) to

$2,202 million, the highest

level for several years,

despite

the full impact from

the divestment of Mechanical

Power

Transmission

(Dodge) as well as a

smaller contribution from

large orders,

year-on-year.

●

Customer activity was

high in all segments and

all

divisions contributed strongly

to order growth, except

for

Traction which

faced a high comparable

from last year.

●

Demand was strong in

all major regions. Orders

increased by 18% (31%

comparable) in Europe

and by

27% (29% comparable)

in Asia, Middle East and

Africa.

The Americas reported

largely stable orders (up

34% comparable) mainly

due to the divestment

of Dodge.

●

The divestment of Dodge

weighed on reported revenue

growth which decreased

by 6% (up 9% comparable).

Supply chain constraints

eased somewhat sequentially,

not least due to the

implemented redesigns

and validating

of alternative suppliers.

Most of the divisions contributed

to the comparable revenue

growth.

Profit

Despite the divestment

of the high margin Dodge

business,

the Operational EBITA

margin increased by

30 basis points

to 17.4%. Operational

EBITA amounted

to $274 million

●

The impacts from higher

volumes and strong pricing

execution more than offset

the adverse impacts from

cost

inflation, mainly related

to raw materials and freight.

●

The divestment of the

Dodge business had an

adverse

impact of 90 basis

points on the Operational

EBITA

margin, year-on-year.

Growth

Change year-on-year

Orders

Revenues

Comparable

32%

-5%

-4%

Portfolio changes

-12%

-10%

Total

15%

-6%

—

Motion

CHANGE

($ millions, unless otherwise indicated)

Q1 2022

Q1 2021

US$

Comparable

Orders

2,202

1,917

15%

32%

Order backlog

4,317

3,419

26%

32%

Revenues

1,572

1,667

-6%

Operational EBITA

274

289

-5%

as % of operational revenues

17.4%

17.1%

+0.3 pts

Cash flow from operating activities

(2)

324

n.a.

No. of employees (FTE equiv.)

20,330

20,980

ABB

INTERIM

REPORT

2022

Orders and revenues

On generally strong markets,

the order intake increased

2% (6% comparable)

and amounted to $1,692

million,

despite the order de

-booking valued at approximately

$190

million booked in

Europe.

●

Demand was strong across

most customer segments,

with a particularly strong

development in the

marine and

mining & metals segment

Only the power generation

segment remained stable

Service orders increased by

7% (12% comparable

●

The order de-booking triggered

a decline of 25% (20%

comparable) in total

order growth in Europe.

However,

steep order growth

was reported in both the

Americas,

22% (23% comparable)

and in Asia, Middle East and

Africa, 28% (31% comparable).

●

Revenues increased

by 7% (11%

comparable), supported

by a positive development

in most divisions and

with

higher-than-expected

deliveries towards the

end of the

quarter as the adverse

impact of semi-conductor

shortages

were somewhat lower than

anticipated.

Profit

All divisions reported

double-digit Operational EBITA

margin

with both earnings

and profitability improvements

noted in

most divisions,

year-on-year. In

total, the business area’s

Operational EBITA

increased by 26

%, to $196 million, and

the Operational EBITA

margin improved

to 13.0% from

11.0%.

●

The earnings and margin

increases

were driven by higher

volumes and efficiency

measures,

which more than offset

cost inflation mainly

in freight and a slight negative

divisional mix.

●

Impacts on profitability

from component shortages

were

limited in the period, although

may increase as the year

progresses.

Growth

Change year-on-year

Orders

Revenues

Comparable

11%

-4%

Portfolio changes

Total

—

Process Automation

CHANGE

($ millions, unless otherwise indicated)

Q1 2022

Q1 2021

US$

Comparable

Orders

1,692

1,656

Order backlog

6,190

5,900

Revenues

1,506

1,407

11%

Operational EBITA

196

155

26%

as % of operational revenues

13.0%

11.0%

+2 pts

Cash flow from operating activities

233

-74%

No. of employees (FTE equiv.)

21,920

22,000

ABB

INTERIM

REPORT

2022

Orders and revenues

Order intake reached

the highest quarterly level

for several

years and amounted

to $1,308 million, up by 56%

(60%

comparable), year-on-year.

Revenues on the other hand

declined by 14% (12%

comparable) to $730

million, materially

hampered by component

shortages. Consequently,

order

backlog increased to

the high level of $2.5

billion, and although

the supply chain

is expected to remain strained,

the first quarter

should have marked

the low point for Robotics

& Discrete

Automation.

●

The steep order

growth was driven by very

strong momentum

in both Robotics and

Machine Automation with

contribution

from a strong base

business as well as from large

orders in

Robotics.

All customer segments

increased at a double-digit

growth rate,

with particularly strong momentum

in automotive

– driven by EV investments

in China, general industry

and

machine builders.

●

All major regions benefited

from a very strong order

momentum. Europe

increased by 40% (49% comparable)

and the Americas close

to doubled at 89%

(89%

comparable). Asia,

Middle East and Africa improved

by 67%

(66% comparable)

with China growth reported

at 96% (93%

comparable).

●

Revenues in both divisions

were adversely impacted by

delayed customer deliveries

due to component shortages,

primarily related

to semi-conductors. The supply

situation

deteriorated somewhat

sequentially.

Despite the protracted

delivery times, there

were no cancellations.

The COVID-

related lock-downs

in China had no significant

impact in the

first quarter,

but some effects on

the business area’s

operations are anticipated

in the second quarter

on the

Shanghai manufacturing

site.

Profit

Both profit and profitability

declined year-on-year due

to the

low volumes and cost

inflation linked to the

tight supply

chain. Operational

EBITA declined

by 53% with a margin

deterioration of 570

basis points.

●

In total, the decline

in volumes

triggered underabsorption

of fixed costs,

which combined with

cost inflation related

to freight and input

costs more than offset

the contribution

from cost measures and

positive price execution,

year-

on-year.

—

Robotics & Discrete Automation

Growth

Change year-on-year

Orders

Revenues

Comparable

60%

-12%

-6%

-3%

Portfolio changes

Total

56%

-14%

CHANGE

($ millions, unless otherwise indicated)

Q1 2022

Q1 2021

US$

Comparable

Orders

1,308

841

56%

60%

Order backlog

2,495

1,362

83%

86%

Revenues

730

853

-14%

-12%

Operational EBITA

105

-53%

as % of operational revenues

6.7%

12.4%

-5.7 pts

Cash flow from operating activities

(29)

111

n.a.

No. of employees (FTE equiv.)

10,690

10,290

ABB

INTERIM

REPORT

2022

Quarterly highlights

●

ABB adopted the

United Nations (UN) Women’s

Empowerment Principles

to promote gender equality

and

women’s empowerment

in the workplace, marketplace

and

community.

As part of further promoting

an inclusive

culture,

more than 7,500 senior

managers at ABB have

taken part in unconscious

bias training.

●

ABB released its

Sustainability Report 2021, outlining

the

achievements of

the company under the

four pillars of its

ambitious 2030 sustainability

strategy.

Notably,

ABB made

strong progress on

its way towards reaching carbon

neutrality in its own

operations by 2030 as it

reduced its

CO2 emissions by

39 percent in 2021 vs. 2019.

●

ABB has entered into

an agreement with

leading global

transport solutions

provider, Scania,

to provide a

comprehensive range

of robotic solutions for

Scania’s new

highly automated battery

assembly plant in Sweden.

The

new facility will be a key

milestone on Scania’s

journey

towards the electrification

of heavy vehicles.

●

ABB and Ballard

Power Systems (Ballard)

have joined

forces in an industry

-first partnership to develop

high-

power fuel cell concept

capable of generating

3 megawatts (4,000

HP) of electrical power.

The aim is to

make zero-emission

hydrogen fuel cell technology

commercially available

for larger ships.

Story of the quarter

ABB published the

findings of a new global

study of

international business

and technology leaders

on industrial

transformation, looking

at the intersection of digitalization

and sustainability.

The study,

“Billions of better decisions:

industrial transformation’s

new imperative,” examines

the

current take-up of the

Industrial Internet of Things

(IoT) and

its potential for improving

energy efficiency,

lowering

greenhouse gas

emissions and driving change.

With more

than 70 percent of ABB’s

R&D resources dedicated

digital and software

innovations, and a robust

ecosystem of

digital partners, including

Microsoft, IBM and

Ericsson, the

company has established

a leading presence in

Industrial

IoT.

Q1 outcome

●

27% reduction of CO

₂

emissions in own operations year

-on-

year

●

21% year-on-year increase in

LTIFR due

to a slight increase

in absolute lost time incidents

as COVID-related restrictions

loosened and less contractor

hours booked for March

●

3%-points increase in number

of women in senior

management supported by targeted

initiatives across all

business areas

—

Sustainability

Q1 2022

Q1 2021

CHANGE

12M ROLLING

CO2e own operations emissions,

kt scope 1 and 2

131

-27%

401

Lost Time Injury Frequency Rate (LTIFR),

frequency / 200,000 working hours

0.17

0.14

21%

0.15

Share of females in senior management

positions, %

16.9

14.3

+2.6 pts

15.5

₂

equivalent emissions from site, energy use and

fleet, previous quarter

ABB

INTERIM

REPORT

2022

During Q1 2022

●

On January 27, ABB announced

that it had increased its

shareholdings to approximately

60% in start-up company

InCharge Energy to

strengthen its E-mobility division

the North American

market and expand its software

and

digital services offering.

InCharge Energy tailors

end-to-

end EV charging infrastructure

solutions, including the

procurement, installation,

operation, and maintenance

charging systems,

and provides cloud-based

software

services for the optimization

of energy management.

●

On February 2, ABB announced

that Andrea Antonelli

was appointed General

Counsel and Member of

the

Executive Committee,

as of March 1, 2022.

Furthermore,

Andrea became

ABB’s Company Secretary

on March 24,

2022, following the

Annual General Meeting.

●

On February 25,

ABB announced changes

to Business

Area leadership in Executive

Committee. As of April 1,

2022, Morten Wierod,

who was President of

Motion,

became President of

Electrification, while Tarak

Mehta,

who was President

of Electrification, has become

President of Motion.

●

On March 24, ABB announced

its plans to launch a new

share buyback program

of up to $3 billion. The

program

was launched on

April 1.

●

On March 24, ABB announced

that shareholders

approved all proposals

at the 2022 Annual General

Meeting.

●

On March 28, ABB announced

that Karin Lepasoon had

been appointed Chief

Communications & Sustainability

Officer and Member

of the Executive

Committee.

Lepasoon will assume

her position latest on

October 1,

2022.

After Q1 2022

Significant events

ABB

INTERIM

REPORT

2022

Excludes one project estimated to a total of ~$100

million, that is ongoing in the non-core business. Exact

exit timing is difficult to assess due to legal proceedings

etc.

Excludes restructuring-related expenses of ~$200

million from the full exit of a product group within our

non-core businesses expected in Q2 2022.

Costs relating to the announced exits and the

potential E-mobility listing.

Excluding share of net income from JV.

Excluding impact of acquisitions or divestments or

any significant non-operational items.

($ in millions, unless otherwise stated)

FY 2022

Q2 2022

Net finance expenses

~(100)

~(30)

unchanged

Non-operational pension

(cost) / credit

~140

~35

unchanged

Effective tax rate

~25%

~27%

unchanged

Capital Expenditures

~(750)

~(200)

unchanged

($ in millions, unless otherwise stated)

FY 2022

Q2 2022

Corporate and Other Operational costs

~(300)

~(90)

from ~(330)

Non-operating items

Acquisition-related amortization

~(230)

~(60)

unchanged

Restructuring and restructuring related

~(130)

~(40)

from ~(150)

Separation costs

~(180)

~(70)

unchanged

ABB Way transformation

~(150)

~(40)

unchanged

Certain other income and expenses

related to PG divestment

~(25)

~(5)

from ~(20)

Additional 2022 guidance

Note: comparable growth calculation includes acquisitions

and divestments with revenues of greater than

$50 million.

Represents the estimated annual revenues for the

period prior to the announcement of the respective acquisition/divestment.

Divestments

Company/unit

Closing date

Revenues, $ million

No. of employees

2021

Motion

Mechanical Power Transmission

1-Nov

645

1,500

Acquisitions

Company/unit

Closing date

Revenues, $ million

No. of employees

2022

Electrification

InCharge Energy, Inc (majority stake)

26-Jan

2021

Electrification

Enervalis (majority stake)

26-Apr

Robotics & Discrete Automation

ASTI Mobile Robotics Group

2-Aug

300

Additional figures

ABB Group

Q1 2021

Q2 2021

Q3 2021

Q4 2021

FY 2021

Q1 2022

EBITDA, $ in million

1,024

1,324

1,072

3,191

6,611

1,067

Return on Capital Employed, %

n.a.

14.90

n.a.

Net debt/Equity

0.09

0.16

0.13

(0.01)

0.20

Net debt/ EBITDA 12M rolling

0.4

0.7

0.5

(0.01)

0.42

Net working capital, % of 12M rolling revenues

10.8%

11.6%

10.2%

8.1%

12.1%

Earnings per share, basic, $

0.25

0.37

0.33

1.34

2.27

0.31

Earnings per share, diluted, $

0.25

0.37

0.32

1.33

2.25

0.31

Dividend per share, CHF

n.a.

0.82

n.a.

Share price at the end of period, CHF

28.56

31.39

34.90

30.17

Share price at the end of period, $

30.47

33.99

33.36

38.17

32.34

Number of employees (FTE equivalents)

105,330

106,370

106,080

104,420

104,720

No. of shares outstanding at end of period (in millions)

2,024

2,006

1,993

1,958

1,929

Acquisitions and divestments, last twelve months

ABB

INTERIM

REPORT

2022

For additional information please contact:

Media Relations

Phone: +41 43 317

71 11

Email:

[email protected]

Investor Relations

Phone: +41 43 317

71 11

Email:

[email protected]

ABB Ltd

Affolternstrasse

8050 Zurich

Switzerland

Financial calendar

2022

Mid-May

Proposed timing to

receive dividend for shares

on US-NYSE

May 17

ABB Motion CMD in Helsinki

May 18

ABB Process Automation

CMD in Helsinki

July 21

Q2 2022 results

October 20

Q3 2022 results

This press release

includes forward-looking information

and

statements as well

as other statements concerning

the

outlook for our business,

including those in the sections

this release titled “CEO summary,”

“Outlook,” “Balance

sheet & cash flow”,

“Robotics and Discrete

Automation,”

and “Sustainability”.

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.

These expectations, estimates

and projections are generally

identifiable by statements

containing words such as

“intends,” “anticipates,”

“expects,” “estimates,” “plans,”

“targets” 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.

Some important

factors that could cause such

differences

include, among others,

business risks associated

with the

volatile global economic

environment and political

conditions, costs associated

with compliance activities,

market acceptance

of new products and services,

changes

in governmental

regulations and 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

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.

The Q1 2022

results press release

and presentation slides

are available on the

ABB News Center at

www.abb.com/news

and on the Investor

Relations

homepage at www.abb.com/investorrelations.

A conference call and

webcast for analysts

and investors is

scheduled to begin

today at 10:00 a.m. CET.

pre-register for the conference

call or to join the

webcast, please

refer to the ABB website:

www.abb.com/investorrelations.

The recorded session

will be available after

the event on

ABB’s website.

Q1 results presentation on April 21, 2022

Important notice about forward-looking information

ABB

(ABBN: SIX Swiss

Ex) is a leading global

technology company

that energizes the transformation

of society and industry to

achieve a more productive,

sustainable future. By connecting

software to its electrification,

robotics, automation and

motion

portfolio, ABB pushes

the boundaries of technology

to drive performance

to new levels. With a history

of excellence stretching

back

more than 130 years,

ABB’s success is

driven by about 105,000 talented

employees in over 100 countries.

Q1 2022

FINANCIAL

INFORMATION

April 21, 2022

Q1 2022

Financial information

Q1 2022

FINANCIAL

INFORMATION

—

Financial

Information

Contents

─ 05

Key Figures

06 ─

Consolidated

Financial

Information

(unaudited)

31 ─

Supplemental

Reconciliations

and Definitions

Q1 2022

FINANCIAL

INFORMATION

—

Key Figures

CHANGE

($ in millions, unless otherwise indicated)

Q1 2022

Q1 2021

US$

Comparable

(1)

Orders

9,373

7,756

21%

28%

Order backlog (end March)

18,901

14,750

28%

32%

Revenues

6,965

6,901

Gross Profit

2,281

2,268

as % of revenues

32.7%

32.9%

-0.2 pts

Income from operations

857

797

Operational EBITA

(1)

997

959

(2)

as % of operational revenues

(1)

14.3%

13.8%

+0.5 pts

Income from continuing operations, net of tax

643

551

17%

Net income attributable to ABB

604

502

20%

Basic earnings per share ($)

0.31

0.25

25%

(3)

Cash flow from operating activities

(4)

(573)

543

n.a.

Cash flow from operating activities in continuing operations

(564)

523

n.a.

(1)

For a reconciliation of non-GAAP measures see “

Supplemental Reconciliations and Definitions

” on page 31.

(2)

Constant currency (not adjusted for portfolio changes).

(3)

EPS growth rates are computed using unrounded amounts.

(4)

Cash flow from operating activities includes both continuing and discontinued operations.

Q1 2022

FINANCIAL

INFORMATION

CHANGE

($ in millions, unless otherwise indicated)

Q1 2022

Q1 2021

US$

Local

Comparable

Orders

ABB Group

9,373

7,756

21%

25%

28%

Electrification

4,397

3,531

25%

29%

Motion

2,202

1,917

15%

20%

32%

Process Automation

1,692

1,656

Robotics & Discrete Automation

1,308

841

56%

62%

60%

Corporate and Other

(incl. intersegment eliminations)

(226)

(189)

Order backlog (end March)

ABB Group

18,901

14,750

28%

32%

Electrification

6,504

4,699

38%

42%

Motion

4,317

3,419

26%

30%

32%

Process Automation

6,190

5,900

Robotics & Discrete Automation

2,495

1,362

83%

87%

86%

Corporate and Other

(incl. intersegment eliminations)

(605)

(630)

Revenues

ABB Group

6,965

6,901

Electrification

3,327

3,140

10%

Motion

1,572

1,667

-6%

-2%

Process Automation

1,506

1,407

11%

Robotics & Discrete Automation

730

853

-14%

-11%

-12%

Corporate and Other

(incl. intersegment eliminations)

(170)

(166)

Income from operations

ABB Group

857

797

Electrification

506

440

Motion

254

265

Process Automation

151

147

Robotics & Discrete Automation

Corporate and Other

(incl. intersegment eliminations)

(76)

(137)

Income from operations %

ABB Group

12.3%

11.5%

Electrification

15.2%

14.0%

Motion

16.2%

15.9%

Process Automation

10.0%

10.4%

Robotics & Discrete Automation

3.0%

9.6%

Operational EBITA

ABB Group

997

959

Electrification

510

511

Motion

274

289

-5%

-3%

Process Automation

196

155

26%

31%

Robotics & Discrete Automation

105

-53%

-50%

Corporate and Other

(incl. intersegment eliminations)

(32)

(101)

Operational EBITA %

ABB Group

14.3%

13.8%

Electrification

15.4%

16.2%

Motion

17.4%

17.1%

Process Automation

13.0%

11.0%

Robotics & Discrete Automation

6.7%

12.4%

Cash flow from operating activities

ABB Group

(573)

543

Electrification

319

Motion

(2)

324

Process Automation

233

Robotics & Discrete Automation

(29)

111

Corporate and Other

(incl. intersegment eliminations)

(632)

(464)

Discontinued operations

(9)

Q1 2022

FINANCIAL

INFORMATION

Operational EBITA

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions, unless otherwise indicated)

Q1 22

Q1 21

Q1 22

Q1 21

Q1 22

Q1 21

Q1 22

Q1 21

Q1 22

Q1 21

Revenues

6,965

6,901

3,327

3,140

1,572

1,667

1,506

1,407

730

853

Foreign exchange/commodity timing

differences in total revenues

(3)

(10)

(1)

(3)

Operational revenues

6,962

6,934

3,317

3,150

1,575

1,686

1,505

1,412

735

850

Income from operations

857

797

506

440

254

265

151

147

Acquisition-related amortization

Restructuring, related and

implementation costs

Changes in obligations related to

divested businesses

(14)

–

Changes in pre-acquisition estimates

–

Gains and losses from sale of businesses

–

Acquisition- and divestment-related

expenses and integration costs

–

Other income/expense relating to the

Power Grids joint venture

–

Certain other non-operational items

(2)

(30)

(6)

–

Foreign exchange/commodity timing

differences in income from operations

(15)

(19)

(1)

(2)

Operational EBITA

997

959

510

511

274

289

196

155

105

Operational EBITA margin (%)

14.3%

13.8%

15.4%

16.2%

17.4%

17.1%

13.0%

11.0%

6.7%

12.4%

Depreciation and Amortization

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions)

Q1 22

Q1 21

Q1 22

Q1 21

Q1 22

Q1 21

Q1 22

Q1 21

Q1 22

Q1 21

Depreciation

136

144

Amortization

including total acquisition-related amortization of:

Orders received and revenues by region

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

Com-

Q1 22

Q1 21

US$

Local

parable

Q1 22

Q1 21

US$

Local

parable

Europe

3,534

3,102

14%

24%

2,518

2,551

-1%

The Americas

2,897

2,247

29%

40%

2,169

2,043

15%

of which United States

2,225

1,679

33%

46%

1,582

1,532

14%

Asia, Middle East and Africa

2,942

2,407

22%

24%

2,278

2,307

-1%

of which China

1,537

1,199

28%

26%

1,100

1,176

-6%

-8%

ABB Group

9,373

7,756

21%

25%

28%

6,965

6,901

Q1 2022

FINANCIAL

INFORMATION

—

Consolidated Financial Information

ABB Ltd Interim Consolidated Income Statements (unaudited)

Three months ended

($ in millions, except per share data in $)

Mar. 31, 2022

Mar. 31, 2021

Sales of products

5,749

5,707

Sales of services and other

1,216

1,194

Total revenues

6,965

6,901

Cost of sales of products

(3,968)

(3,924)

Cost of services and other

(716)

(709)

Total cost of sales

(4,684)

(4,633)

Gross profit

2,281

2,268

Selling, general and administrative expenses

(1,239)

(1,263)

Non-order related research and development expenses

(277)

(293)

Other income (expense), net

Income from operations

857

797

Interest and dividend income

Interest and other finance expense

(22)

(55)

Non-operational pension (cost) credit

Income from continuing operations before taxes

884

803

Income tax expense

(241)

(252)

Income from continuing operations, net of

tax

643

551

Loss from discontinued operations, net of tax

(11)

(28)

Net income

632

523

Net income attributable to noncontrolling interests

(28)

(21)

Net income attributable to ABB

604

502

Amounts attributable to ABB shareholders:

Income from continuing operations, net of tax

615

530

Loss from discontinued operations, net of tax

(11)

(28)

Net income

604

502

Basic earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

0.32

0.26

Loss from discontinued operations, net of tax

(0.01)

Net income

0.31

0.25

Diluted earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

0.31

0.26

Loss from discontinued operations, net of tax

(0.01)

Net income

0.31

0.25

Weighted-average number of shares outstanding

(in millions) used to compute:

Basic earnings per share attributable to ABB shareholders

1,936

2,015

Diluted earnings per share attributable to ABB shareholders

1,953

2,034

Due to rounding, numbers presented may not add to the totals provided.

See Notes to the Interim Consolidated Financial Information

Q1 2022

FINANCIAL

INFORMATION

—

ABB Ltd Interim Condensed Consolidated Statements of Comprehensive

Income (unaudited)

Three months ended

($ in millions)

Mar. 31, 2022

Mar. 31, 2021

Total comprehensive income, net of

tax

577

325

Total comprehensive income

attributable to noncontrolling interests, net of tax

(23)

(24)

Total comprehensive income attributable

to ABB shareholders, net of tax

554

301

Due to rounding, numbers presented may not add to the totals provided.

See Notes to the Interim Consolidated Financial Information

Q1 2022

FINANCIAL

INFORMATION

—

ABB Ltd Consolidated Balance Sheets (unaudited)

($ in millions)

Mar. 31, 2022

Dec. 31, 2021

Cash and equivalents

5,216

4,159

Restricted cash

Marketable securities and short-term investments

967

1,170

Receivables, net

6,851

6,551

Contract assets

1,072

990

Inventories, net

5,372

4,880

Prepaid expenses

289

206

Other current assets

537

573

Current assets held for sale and in discontinued operations

140

136

Total current assets

20,474

18,695

Restricted cash, non-current

300

Property, plant and equipment, net

4,044

4,045

Operating lease right-of-use assets

867

895

Investments in equity-accounted companies

1,626

1,670

Prepaid pension and other employee benefits

915

892

Intangible assets, net

1,572

1,561

Goodwill

10,637

10,482

Deferred taxes

1,319

1,177

Other non-current assets

517

543

Total assets

42,271

40,260

Accounts payable, trade

4,830

4,921

Contract liabilities

2,080

1,894

Short-term debt and current maturities of long-term debt

3,114

1,384

Current operating leases

218

230

Provisions for warranties

999

1,005

Dividends payable to shareholders

824

–

Other provisions

1,311

1,386

Other current liabilities

4,114

4,367

Current liabilities held for sale and in discontinued operations

365

381

Total current liabilities

17,855

15,568

Long-term debt

6,171

4,177

Non-current operating leases

671

689

Pension and other employee benefits

990

1,025

Deferred taxes

745

685

Other non-current liabilities

2,091

2,116

Non-current liabilities held for sale and in discontinued operations

Total liabilities

28,553

24,303

Commitments and contingencies

Redeemable noncontrolling interest

–

Stockholders’ equity:

Common stock, CHF 0.12 par value

(2,053 million shares issued at March 31, 2022, and December

31, 2021)

178

Additional paid-in capital

–

Retained earnings

21,278

22,477

Accumulated other comprehensive loss

(4,138)

(4,088)

Treasury stock, at cost

(124 million and 95 million shares at March 31, 2022, and December

31, 2021, respectively)

(4,071)

(3,010)

Total ABB stockholders’ equity

13,247

15,579

Noncontrolling interests

391

378

Total stockholders’ equity

13,638

15,957

Total liabilities and stockholders’

equity

42,271

40,260

Due to rounding, numbers presented may not add to the totals provided.

See Notes to the Consolidated Financial Information

Q1 2022

FINANCIAL

INFORMATION

—

ABB Ltd Consolidated Statements of Cash Flows (unaudited)

Three months ended

($ in millions)

Mar. 31, 2022

Mar. 31, 2021

Operating activities:

Net income

632

523

Loss from discontinued operations, net of tax

Adjustments to reconcile net income to net cash provided

by (used in) operating activities:

Depreciation and amortization

210

227

Changes in fair values of investments

(24)

(10)

Pension and other employee benefits

(46)

(50)

Deferred taxes

(116)

Loss from equity-accounted companies

Net loss (gain) from derivatives and foreign exchange

(28)

Net gain from sale of property,

plant and equipment

(32)

(11)

Other

Changes in operating assets and liabilities:

Trade receivables, net

(317)

(2)

Contract assets and liabilities

107

(90)

Inventories, net

(542)

(168)

Accounts payable, trade

Accrued liabilities

(390)

(76)

Provisions, net

(53)

Income taxes payable and receivable

(50)

Other assets and liabilities, net

(81)

Net cash provided by (used in) operating activities – continuing

operations

(564)

523

Net cash provided by (used in) operating activities – discontinued

operations

(9)

Net cash provided by (used in) operating activities

(573)

543

Investing activities:

Purchases of investments

(128)

(309)

Purchases of property, plant and

equipment and intangible assets

(187)

(142)

Acquisition of businesses (net of cash acquired) and increases

in cost-

and equity-accounted companies

(145)

(4)

Proceeds from sales of investments

305

391

Proceeds from maturity of investments

–

Proceeds from sales of property,

plant and equipment

Proceeds from sales of businesses (net of transaction costs

and cash disposed) and cost-

and

equity-accounted companies

–

(2)

Net cash from settlement of foreign currency derivatives

(61)

Other investing activities

(8)

Net cash used in investing activities – continuing operations

(44)

(35)

Net cash used in investing activities – discontinued

operations

(21)

(44)

Net cash used in investing activities

(65)

(79)

Financing activities:

Net changes in debt with original maturities of 90 days or less

1,305

Increase in debt

2,542

991

Repayment of debt

(41)

(47)

Delivery of shares

370

760

Purchase of treasury stock

(1,561)

(1,386)

Dividends paid

(889)

(844)

Dividends paid to noncontrolling shareholders

(1)

Other financing activities

(34)

(36)

Net cash provided by (used in) financing activities – continuing

operations

1,691

(476)

Net cash provided by financing activities – discontinued

operations

–

Net cash provided by (used in) financing activities

1,691

(476)

Effects of exchange rate changes on cash and equivalents

and restricted cash

(51)

Net change in cash and equivalents and restricted cash

1,057

(63)

Cash and equivalents and restricted cash, beginning of period

4,489

3,901

Cash and equivalents and restricted cash, end of period

5,546

3,838

Supplementary disclosure of cash flow information:

Interest paid

Income taxes paid

340

256

Due to rounding, numbers presented may not add to the totals provided.

See Notes to the Consolidated Financial Information

Q1 2022

FINANCIAL

INFORMATION

—

ABB Ltd Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

($ in millions)

Common

stock

Additional

paid-in

capital

Retained

earnings

Accumulated

other

comprehensive

loss

Treasury

stock

Total ABB

stockholders’

equity

Non-

controlling

interests

Total

stockholders’

equity

Balance at January 1, 2021

188

22,946

(4,002)

(3,530)

15,685

314

15,999

Comprehensive income:

Net income

502

523

Foreign currency translation

adjustments, net of tax of $3

(273)

(270)

Effect of change in fair value of

available-for-sale securities,

net of tax of $(3)

(12)

Unrecognized income (expense)

related to pensions and other

postretirement plans,

net of tax of $(2)

Change in derivative instruments

and hedges, net of tax of $(1)

Total comprehensive income

301

325

Changes in noncontrolling interests

(37)

(3)

Dividends to

noncontrolling shareholders

–

(4)

Dividends to shareholders

(1,730)

Share-based payment arrangements

Purchase of treasury stock

(1,300)

Delivery of shares

(58)

(136)

954

760

Balance at March 31, 2021

188

–

21,582

(4,203)

(3,876)

13,691

368

14,059

Balance at January 1, 2022

178

22,477

(4,088)

(3,010)

15,579

378

15,957

Comprehensive income:

Net income

604

632

Foreign currency translation

adjustments, net of tax of $0

(70)

(5)

(75)

Effect of change in fair value of

available-for-sale securities,

net of tax of $(3)

(12)

Unrecognized income (expense)

related to pensions and other

postretirement plans,

net of tax of $10

Change in derivative instruments

and hedges, net of tax of $2

Total comprehensive income

554

577

Changes in noncontrolling interests

(10)

(7)

(17)

Dividends to

noncontrolling shareholders

–

(3)

Dividends to shareholders

(1,700)

Share-based payment arrangements

Purchase of treasury stock

(1,561)

Delivery of shares

(26)

(104)

500

370

Other

Balance at March 31, 2022

178

–

21,278

(4,138)

(4,071)

13,247

391

13,638

Due to rounding, numbers presented may not add to the totals provided.

See Notes to the Consolidated Financial Information

Q1 2022

FINANCIAL

INFORMATION

—

Notes to the Consolidated Financial Information (unaudited)

─

Note 1

The Company and basis of presentation

ABB Ltd and its subsidiaries (collectively,

the Company) together form a leading global technology

company, connecting software

to its electrification, robotics,

automation and motion portfolio to drive performance to new

levels.

The Company’s Consolidated Financial Information is prepared

in accordance with United States of America generally accepted

accounting principles (U.S.

GAAP) for interim financial reporting. As such, the Consolidated

Financial Information does not include all the

information and notes required under U.S. GAAP

for

annual consolidated financial statements. Therefore, such financial

information should be read in conjunction with the audited

consolidated financial statements in

the Company’s Annual Report for the year ended December

31, 2021.

The preparation of financial information in conformity with U.S. GAAP

requires management to make assumptions

and estimates that directly affect the amounts

reported in the Consolidated Financial Information. These accounting

assumptions and estimates include:

●

growth rates, discount rates and other assumptions used to determine

impairment of long-lived assets and in testing goodwill

for impairment,

●

estimates to determine valuation allowances for deferred tax assets

and amounts recorded for unrecognized tax benefits,

●

assumptions used in determining inventory obsolescence and net

realizable value,

●

estimates and assumptions used in determining the initial fair value

of retained noncontrolling interest and certain obligations

in connection with

divestments,

●

estimates and assumptions used in determining the fair values

of assets and liabilities assumed in business

combinations,

●

estimates of loss contingencies associated with litigation or

threatened litigation and other claims and inquiries, environmental

damages, product

warranties, self-insurance reserves, regulatory and other proceedings,

●

estimates used to record expected costs for employee severance

in connection with restructuring programs,

●

estimates related to credit losses expected to occur over

the remaining life of financial assets such as trade and other

receivables, loans and other

instruments,

●

assumptions used in the calculation of pension and postretirement

benefits and the fair value of pension plan assets, and

●

assumptions and projections, principally related to future material,

labor and project-related overhead costs, used in determining the

percentage-of-

completion on projects, as well as the amount of variable consideration

the Company expects to be entitled to.

The actual results and outcomes may differ from the Company’s

estimates and assumptions.

A portion of the Company’s activities (primarily long-term

construction activities) has an operating cycle that

exceeds one year. For classification

of current assets

and liabilities related to such activities, the Company elected to

use the duration of the individual contracts as

its operating cycle. Accordingly,

there are accounts

receivable, contract assets, inventories and provisions related to

these contracts which will not be realized within one

year that have been classified as current.

Basis of presentation

In the opinion of management, the unaudited Consolidated Financial

Information contains all necessary

adjustments to present fairly the financial position, results

of operations and cash flows for the reported periods. Management considers

all such adjustments to be of a normal recurring nature. The

Consolidated Financial

Information is presented in United States dollars ($)

unless otherwise stated. Due to rounding, numbers presented

in the Consolidated Financial Information may

not add to the totals provided.

Q1 2022

FINANCIAL

INFORMATION

─

Note 2

Recent accounting pronouncements

Applicable for current periods

Business Combinations — Accounting for contract

assets and contract liabilities from contracts with customers

In January 2022, the Company early adopted a new accounting

standard update, which provides guidance on the accounting for

revenue contracts acquired in a

business combination. The update requires contract assets

and liabilities acquired in a business combination to be recognized

and measured at the date of

acquisition in accordance with the principles for recognizing revenues

from contracts with customers.

The Company has applied this accounting standard update

prospectively starting with acquisitions closing after January 1, 2022.

Disclosures about government assistance

In January 2022, the Company adopted a new accounting standard

update,

which requires entities to disclose certain types of government

assistance. Under the

update, the Company is required to annually disclose (i) the

type of the assistance received, including any significant

terms and conditions, (ii) its related

accounting policy, and (iii) the effect

such transactions have on its financial statements. The Company

has applied this accounting standard update prospe

ctively.

This update does not have a significant impact on the Company’s

consolidated financial statements.

Applicable for future periods

Facilitation of the effects of reference rate reform on financial

reporting

In March 2020, an accounting standard update was issued

which provides temporary optional expedients and exceptions

to the current guidance on contract

modifications and hedge accounting to ease the financial reporting

burdens

related to the expected market transition from the London

Interbank Offered Rate

(LIBOR) and other interbank offered rates to alternative reference

rates. This update, along with clarifications outlined

in a subsequent update issued in January

2021, can be adopted and applied no later than December 31,

2022, with early adoption permitted. The Company does

not expect this update to have a significant

impact on its consolidated financial statements.

─

Note 3

Discontinued operations and assets held for sale

Divestment of the Power Grids business

On July 1, 2020, the Company completed the sale of 80.1 percent

of its Power Grids business to Hitachi Ltd (Hitachi).

The transaction was executed through the

sale of 80.1 percent of the shares of Hitachi Energy Ltd, formerly

Hitachi ABB Power Grids Ltd (“Hitachi Energy”).

Cash consideration received at the closing date

was $9,241 million net of cash disposed.

Further, for accounting purposes,

the 19.9 percent ownership interest retained by the Company

is deemed to have been

both divested and reacquired at its fair value on July 1, 2020 (see

Note 4).

At the date of the divestment, the Company recorded liabilities in discontinued

operations for estimated future costs and other cash payments

of $487 million for

various contractual items relating to the sale of the business

including required future cost reimbursements payable

to Hitachi Energy, costs to be

incurred by the

Company for the direct benefit of Hitachi Energy,

and an amount due to Hitachi Ltd in connection

with the expected purchase price finalization of the closing

debt

and working capital balances. From the date of the disposal

through March 31, 2022, $385 million of these liabilities had

been paid and are reported as reductions

in the cash consideration received, of which $21 million

and $44 million was paid during the three months

ended March 31, 2022 and 2021,

respectively. At

March 31, 2022,

the remaining amount recorded was $111

million.

Certain entities of the Power Grids business for which the legal

process or other regulatory delays resulted in the Company

not yet having transferred legal titles to

Hitachi were accounted for as being sold since control of the business

as well as all risks and rewards of the business

have been fully transferred to Hitachi

Energy. The proceeds for these entities

are included in the cash proceeds described above

and certain funds were placed in escrow pending completion

of the

transfer process. At both March 31, 2022, and December 31,

2021,

current restricted cash includes $12 million in respect

of these funds.

Upon closing of the sale, the Company entered into various

transition services agreements (TSAs). Pursuant to these

TSAs, the Company and Hitachi Energy

provide to each other, on an interim, transitional

basis, various services. The services

provided by the Company primarily include finance, information technology,

human resources and certain other administrative services.

Under the current terms, the TSAs will continue for up

to 3 years, and can only be extended on an

exceptional basis for business-critical services for an additional period which

is reasonably necessary to avoid a material adverse

impact on the business. In the

three months ended March 31, 2022 and 2021,

the Company has recognized within its continuing

operations, general and administrative expenses

incurred to

perform the TSA, offset by $38 million and $47 million, respectively,

in TSA-related income for such services that is reported

in Other income (expense).

Discontinued operations

As a result of the sale of the Power Grids business, substantially

all assets and liabilities related to Power Grids have

been sold. As this divestment represented

strategic shift that would have a major effect on the Company’s

operations and financial results, the

results of this business were presented as discontinued

operations and the assets and liabilities were presented as held

for sale and in discontinued operations. After the

date of sale, certain business contracts in the

Power Grids business continue to be executed by subsidiaries

of the Company for the benefit/risk of Hitachi Energy

Assets and liabilities relating to, as well as

the

net financial results of, these contracts will continue to be

included in discontinued operations until they have been completed

or otherwise transferred to Hitachi

Energy.

Q1 2022

FINANCIAL

INFORMATION

Amounts recorded in discontinued operations were as follows:

Three months ended

($ in millions)

Mar. 31, 2022

Mar. 31, 2021

Total revenues

–

Total cost of sales

–

Gross profit

–

Expenses

(6)

(4)

Change to net gain recognized on sale of the Power Grids business

(5)

(24)

Loss from operations

(11)

(28)

Net interest income (expense) and other finance expense

–

Non-operational pension (cost) credit

–

Loss from discontinued operations before taxes

(11)

(28)

Income tax

–

Loss from discontinued operations, net of

tax

(11)

(28)

Of the total Loss from discontinued operations before taxes

in the table above, $11 million

and $28 million in the three months ended March 31,

2022 and 2021,

respectively, are attributable to the Company.

In addition,

the Company also has retained obligations (primarily for

environmental and taxes) related to other businesses

disposed or otherwise exited that

qualified as discontinued operations. Changes to these retained obligations

are also included in Loss from discontinued operations,

net of tax, above.

The major components of assets and liabilities held for sale and

in discontinued operations in the Company’s Consolidated

Balance Sheets are summarized as

follows:

($ in millions)

Mar. 31, 2022

(1)

Dec. 31, 2021

(1)

Receivables, net

130

131

Other current assets

Current assets held for sale and in discontinued

operations

140

136

Accounts payable, trade

Other liabilities

307

310

Current liabilities held for sale and in discontinued

operations

365

381

Other non-current liabilities

Non-current liabilities held for sale and in discontinued

operations

(1)

At March 31, 2022, and December 31, 2021,

the balances reported as held for sale and in discontinued operations pertain to Power Grids activities and other obligations which will

remain with the Company until such time as the obligation is settled or the activities are fully wound down.

─

Note 4

Acquisitions and equity-accounted companies

Acquisition of controlling interests

Acquisitions of controlling interests were as follows:

Three months ended March 31,

($ in millions, except number of acquired businesses)

2022

2021

Purchase price for acquisitions (net of cash acquired)

(1)

138

Aggregate excess of purchase price

over fair value of net assets acquired

(2)

191

Number of acquired businesses

(1)

Excluding changes in cost- and equity-accounted companies.

(2)

Recorded as goodwill.

In the table above, the “Purchase price for acquisitions”

and “Aggregate excess of purchase price over fair value of

net assets acquired” amounts for the three

months ended March 31, 2022, relate primarily to the acquisition

of InCharge Energy,

Inc. (In-Charge).

Acquisitions of controlling interests have been accounted for under the

acquisition method and have been included in the Company’s

Consolidated Financial

Statements since the date of acquisition.

While the Company uses its best estimates and assumptions

as part of the purchase price allocation process

to value assets acquired and liabilities assumed

the acquisition date, the purchase price allocation for acquisitions

is preliminary for up to 12 months after the acquisition

date and is subject to refinement as more

detailed analyses are completed and additional information

about the fair values of the assets and liabilities becomes available.

Q1 2022

FINANCIAL

INFORMATION

On January 26, 2022, the Company increased its ownership in

In-Charge to a 60 percent controlling interest through a stock

purchase agreement. The resulting

cash outflows for the Company amounted to $135 million (net

of cash acquired of $4 million). The acquisition expands

the market presence of the E-mobility

Division, particularly in the North American market. In connection with

the acquisition, the Company’s pre-existing

13.2 percent ownership of In-Charge was

revalued to fair value and a gain of $32 million was recorded

in Other income (expense) in the three months ended March

31, 2022. The Company entered into an

agreement with the remaining noncontrolling shareholders allowing ei

ther party to put or call the remaining 40 percent

of the shares until 2027. The amount for

which either party can exercise their option is dependent on

a formula based on revenues and thus, the amount

is subject to change. As a result of this agreement,

the noncontrolling interest is classified as Redeemable noncontrolling

interest (i.e. mezzanine equity) in the Consolidated Balance

Sheets and was initially

recognized at fair value.

There were no significant business acquisitions for the three months

ended March 31, 2021.

Investments in equity-accounted companies

In connection with the divestment of its Power Grids business

to Hitachi (see Note 3), the Company retained a 19.

percent interest in the business and obtained

an option, exercisable with three-months’ notice commencing

April 2023, granting it the right to require Hitachi to purchase

this investment at fair value, subject to

a minimum floor price equivalent to a 10 percent discount compared

to the price paid for the initial 80.1 percent. The

Company has concluded that based on its

continuing involvement with the Power Grids business, including

membership in its governing board of directors,

it has significant influence over Hitachi Energy.

a result, the investment (including the value of the option)

is accounted for using the equity method.

At the date of the divestment of the Power Grids business,

the fair value of Hitachi Energy exceeded the book

value of the underlying net assets.

At March 31,

2022, and December 31, 2021,

the reported value of the investment in Hitachi

Energy includes $1,442 million and $1,474 million, respectively,

for the Company’s

19.9 percent share of this basis difference. The Company

amortizes its share of these differences

over the estimated remaining useful lives of the underlying

assets that gave rise to this difference, recording the amortization,

net of related deferred tax benefit, as a reduction of

income from equity-accounted companies.

As of March 31, 2022, the Company determined that no

impairment of its equity-accounted investments existed.

The carrying value of the Company’s investments in equity-accounted

companies and respective percentage of ownership

is as follows:

Ownership as of

Carrying value at

($ in millions, except ownership share in %)

March 31, 2022

December 31, 2021

Hitachi Energy Ltd

19.9%

1,555

1,609

Others

Total

1,626

1,670

In the three months ended March 31, 2022 and 2021,

the Company recorded its share of the earnings of

investees accounted for under the equity method of

accounting in Other income (expense), net, as follows:

Three months ended March 31,

($ in millions)

2022

2021

Loss from equity-accounted companies, net of taxes

(11)

(3)

Basis difference amortization (net of deferred income tax benefit)

(37)

(32)

Loss from equity-accounted companies

(48)

(35)

Q1 2022

FINANCIAL

INFORMATION

─

Note 5

Cash and equivalents, marketable securities and short-term investments

Cash and equivalents, marketable securities and short-term

investments consisted of the following:

March 31, 2022

Cash and

Marketable

Gross

equivalents

securities

unrealized

and restricted

and short-term

($ in millions)

Cost basis

gains

losses

Fair value

cash

investments

Changes in fair value

recorded in net income

Cash

2,648

Time deposits

3,100

2,898

202

Equity securities

468

481

6,216

–

6,229

5,546

683

Changes in fair value recorded

in other comprehensive income

Debt securities available-for-sale:

U.S. government obligations

203

(7)

200

Other government obligations

Corporate

(3)

290

(10)

284

–

284

Total

6,506

(10)

6,513

5,546

967

Of which:

Restricted cash, current

Restricted cash, non-current

300

December 31, 2021

Cash and

Marketable

Gross

equivalents

securities

unrealized

and restricted

and short-term

($ in millions)

Cost basis

gains

losses

Fair value

cash

investments

Changes in fair value

recorded in net income

Cash

2,752

Time deposits

2,037

1,737

300

Equity securities

569

587

5,358

–

5,376

4,489

887

Changes in fair value recorded

in other comprehensive income

Debt securities available-for-sale:

U.S. government obligations

203

(1)

209

Corporate

(1)

277

(2)

283

–

283

Total

5,635

(2)

5,659

4,489

1,170

Of which:

Restricted cash, current

Restricted cash, non-current

300

Q1 2022

FINANCIAL

INFORMATION

─

Note 6

Derivative financial instruments

The Company is exposed to certain currency,

commodity, interest rate and equity

risks arising from its global operating, financing and

investing activities. The

Company uses derivative instruments to reduce and manage the

economic impact of these exposures.

Currency risk

Due to the global nature of the Company’s operations, many

of its subsidiaries are exposed to currency risk

in their operating activities from entering into

transactions in currencies other than their functional currency.

To manage such

currency risks, the Company’s policies require its

subsidiaries to hedge their

foreign currency exposures from binding sales and purchase

contracts denominated in foreign currencies. For forecasted foreign currency

denominated sales of

standard products and the related foreign currency denominated purchases,

the Company’s policy is to hedge up to a maximum of

100 percent of the forecasted

foreign currency denominated exposures, depending on the

length of the forecasted exposures. Forecasted

exposures greater than 12 months are not hedged.

Forward foreign exchange contracts are the main instrument used to

protect the Company against the volatility of future cash

flows (caused by changes in

exchange rates) of contracted and forecasted sales and purchases

denominated in foreign currencies. In addition, within

its treasury operations, the Company

primarily uses foreign exchange swaps and forward foreign exchange

contracts to manage the currency and timing mismatches

arising in its liquidity management

activities.

Commodity risk

Various commodity products

are used in the Company’s manufacturing activities.

Consequently it is exposed to volatility in future cash flows arising from

changes

in commodity prices. To

manage the price risk of commodities, the Company’s

policies require that its subsidiaries hedge the commodity

price risk exposures from

binding contracts, as well as at least 50 percent (up to a maximum

of 100 percent) of the forecasted commodity exposure over

the next 12 months or longer (up to

a maximum of 18 months). Primarily swap contracts are used to

manage the associated price risks of commodities.

Interest rate risk

The Company has issued bonds at fixed rates. Interest rate swaps

and cross-currency interest rate swaps are used to manage

the interest rate and foreign

currency risk associated with certain debt and generally such

swaps are designated as fair value hedges. In addition, from time

to time, the Company uses

instruments such as interest rate swaps, interest rate futures, bond

futures or forward rate agreements to manage interest

rate risk arising from the Company’s

balance sheet structure but does not designate such instruments

as hedges.

Equity risk

The Company is exposed to fluctuations in the fair value of

its warrant appreciation rights (WARs)

issued under its management

incentive plan. A WAR gives its

holder the right to receive cash equal to the market price of

an equivalent listed warrant on the date of exercise. To

eliminate such risk, the Company has

purchased cash-settled call options, indexed to the shares of the

Company, which entitle the Company

to receive amounts equivalent to its obligations

under the

outstanding WARs.

Volume of derivative activity

In general, while the Company’s primary objective in

its use of derivatives is to minimize exposures arising from

its business, certain derivatives are designated

and qualify for hedge accounting treatment while others either are

not designated or do not qualify for hedge accounting.

Foreign exchange and interest rate derivatives

The gross notional amounts of outstanding foreign exchange and

interest rate derivatives (whether designated as hedges

or not) were as follows:

Type of derivative

Total notional amounts

($ in millions)

March 31, 2022

December 31, 2021

March 31, 2021

Foreign exchange contracts

13,255

11,276

11,229

Embedded foreign exchange derivatives

863

815

1,313

Cross-currency interest rate swaps

888

906

973

Interest rate contracts

4,421

3,541

3,122

Derivative commodity contracts

The Company uses derivatives to hedge its direct or indirect exposure

to the movement in the prices of commodities which are

primarily copper, silver and

aluminum. The following table shows the notional amounts

of outstanding derivatives (whether designated as hedges

or not), on a net basis, to reflect the

Company’s requirements for these commodities:

Type of derivative

Unit

Total notional amounts

March 31, 2022

December 31, 2021

March 31, 2021

Copper swaps

metric tonnes

39,223

36,017

42,448

Silver swaps

ounces

2,634,550

2,842,533

2,217,821

Aluminum swaps

metric tonnes

6,950

7,125

7,450

Equity derivatives

At March 31, 2022, December 31, 2021, and March 31, 2021,

the Company held 9 million, 9 million and 18 million

cash-settled call options indexed to ABB Ltd

shares (conversion ratio 5:1) with a total fair value of $20

million, $29 million and $30 million, respectively.

Cash flow hedges

As noted above, the Company mainly uses forward foreign exchange

contracts to manage the foreign exchange risk

of its operations, commodity swaps to

manage its commodity risks and cash-settled call options to

hedge its WAR liabilities. The Company applies cash

flow hedge accounting in only limited cases. In

these cases, the effective portion of the changes in their

fair value is recorded in “Accumulated other comprehensive

loss” and subsequently reclassified into

earnings in the same line item and in the same period as

the underlying hedged transaction affects

earnings. For the three months ended March 31, 2022

and

2021, there were no significant amounts recorded for cash

flow hedge accounting activities.

Fair value hedges

To reduce its interest

rate exposure arising primarily from its debt issuance activities,

the Company uses interest rate swaps

and cross-currency interest rate

swaps. Where such instruments are designated as fair value hedges,

the changes in the fair value of these instruments,

as well as the changes in the fair value of

the risk component of the underlying debt being hedged, are recorded

as offsetting gains and losses in “Interest

and other finance expense”.

Q1 2022

FINANCIAL

INFORMATION

The effect of derivative instruments, designated and qualifying

as fair value hedges, on the Consolidated Income

Statements was as follows:

Three months ended March 31,

($ in millions)

2022

2021

Gains (losses) recognized in Interest and other finance expense:

Interest rate contracts

Designated as fair value hedges

(29)

(14)

Hedged item

Cross-currency interest rate swaps

Designated as fair value hedges

(45)

(23)

Hedged item

Derivatives not designated in hedge relationships

Derivative instruments that are not designated as hedges or do not

qualify as either cash flow or fair value hedges

are economic hedges used for risk management

purposes. Gains and losses from changes in the fair values

of such derivatives are recognized in the same line in the

income statement as the economically

hedged transaction.

Furthermore, under certain circumstances, the Company

is required to split and account separately for foreign currency

derivatives that are embedded within

certain binding sales or purchase contracts denominated

in a currency other than the functional currency of the subsidiary

and the counterparty.

The gains (losses) recognized in the Consolidated Income Statements

on derivatives not designated in hedging relationships

were as follows:

Type of derivative not

Gains (losses) recognized in income

designated as a hedge

Three months ended March 31,

($ in millions)

Location

2022

2021

Foreign exchange contracts

Total revenues

(60)

Total cost of sales

(6)

(4)

SG&A expenses

(1)

Non-order related research and development

(1)

Interest and other finance expense

(106)

Embedded foreign exchange contracts

Total revenues

(2)

(14)

Total cost of sales

(1)

Commodity contracts

Total cost of sales

Other

Interest and other finance expense

–

Total

(143)

(1)

SG&A expenses represent

“Selling, general and

administrative expenses”.

The fair values of derivatives included in the Consolidated Balance

Sheets were as follows:

March 31, 2022

Derivative assets

Derivative liabilities

Current in

Non-current in

Current in

Non-current in

“Other current

“Other non-current

“Other current

“Other non-current

($ in millions)

assets”

liabilities”

Derivatives designated as hedging instruments:

Foreign exchange contracts

–

Interest rate contracts

Cross-currency interest rate swaps

–

164

Cash-settled call options

–

Total

173

Derivatives not designated as hedging instruments:

Foreign exchange contracts

134

Commodity contracts

–

Interest rate contracts

–

Embedded foreign exchange derivatives

Total

140

153

Total fair value

169

163

192

Q1 2022

FINANCIAL

INFORMATION

December 31, 2021

Derivative assets

Derivative liabilities

Current in

Non-current in

Current in

Non-current in

“Other current

“Other non-current

“Other current

“Other non-current

($ in millions)

assets”

liabilities”

Derivatives designated as hedging instruments:

Foreign exchange contracts

–

Interest rate contracts

–

Cross currency swaps

–

109

Cash-settled call options

–

Total

114

Derivatives not designated as hedging instruments:

Foreign exchange contracts

108

107

Commodity contracts

–

Interest rate contracts

–

Embedded foreign exchange derivatives

Total

138

130

Total fair value

176

133

131

Close-out netting agreements provide for the termination, valuation

and net settlement of some or all outstanding transactions

between two counterparties on the

occurrence of one or more pre-defined trigger events.

Although the Company is party to close-out netting agreements

with most derivative counterparties, the fair values in the

tables above and in the Consolidated

Balance Sheets at March 31, 2022, and December 31, 2021,

have been presented on a gross basis.

The Company’s netting agreements and other similar arrangements

allow net settlements under certain conditions.

At March 31, 2022, and December 31, 2021,

information related to these offsetting arrangements was as

follows:

($ in millions)

March 31, 2022

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement or

of recognized

eligible for set-off

collateral

Net asset

similar arrangement

assets

in case of default

received

exposure

Derivatives

175

(90)

–

Total

175

(90)

–

($ in millions)

March 31, 2022

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement or

of recognized

eligible for set-off

collateral

Net liability

similar arrangement

liabilities

in case of default

pledged

exposure

Derivatives

326

(90)

–

236

Total

326

(90)

–

236

($ in millions)

December 31, 2021

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement or

of recognized

eligible for set-off

collateral

Net asset

similar arrangement

assets

in case of default

received

exposure

Derivatives

200

(104)

–

Total

200

(104)

–

($ in millions)

December 31, 2021

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement or

of recognized

eligible for set-off

collateral

Net liability

similar arrangement

liabilities

in case of default

pledged

exposure

Derivatives

238

(104)

–

134

Total

238

(104)

–

134

Q1 2022

FINANCIAL

INFORMATION

─

Note 7

Fair values

The Company uses fair value measurement principles to record certain

financial assets and liabilities on a recurring basis

and, when necessary,

to record certain

non-financial assets at fair value on a non-recurring basis,

as well as to determine fair value disclosures for certain financial

instruments carried at amortized cost

in the financial statements. Financial assets and liabilities recorded

at fair value on a recurring basis include foreign currency,

commodity and interest rate

derivatives, as well as cash-settled call options and available-for-sale

securities. Non-financial assets recorded at fair value

on a non-recurring basis include

long-lived assets that are reduced to their estimated fair value due

to impairments.

Fair value is the price that would be received when selling an

asset or paid to transfer a liability in an orderly transaction

between market participants at the

measurement date. In determining fair value, the Company

uses various valuation techniques including the market

approach (using observable market data for

identical or similar assets and liabilities), the income approach (discounted

cash flow models) and the cost approach (using costs

a market participant would incur

to develop a comparable asset). Inputs used to determine the fair

value of assets and liabilities are defined by a three-level

hierarchy, depending on the nature

those inputs. The Company has categorized its financial assets

and liabilities and non-financial assets measured at

fair value within this hierarchy based on

whether the inputs to the valuation technique are observable or unobservable.

An observable input is based on market data obtained from

independent sources,

while an unobservable input reflects the Company’s

assumptions about market data.

The levels of the fair value hierarchy are as follows:

Level 1:

Valuation inputs consist

of quoted prices in an active market for identical

assets or liabilities (observable quoted prices). Assets

and liabilities valued

using Level 1 inputs include exchange

‑

traded equity securities, listed derivatives

which are actively traded such as commodity futures, interest

rate

futures and certain actively traded debt securities.

Level 2:

Valuation inputs consist

of observable inputs (other than Level 1 inputs)

such as actively quoted prices for similar assets, quoted prices

in inactive

markets and inputs other than quoted prices such

as interest rate yield curves, credit spreads, or inputs derived from

other observable data by

interpolation, correlation, regression or other means. The adjustments

applied to quoted prices or the inputs used in valuation

models may be both

observable and unobservable. In these cases, the fair value measurement

is classified as Level 2 unless the unobservable portion

of the adjustment or

the unobservable input to the valuation model is significant,

in which case the fair value measurement would be

classified as Level 3. Assets and

liabilities valued or disclosed using Level 2 inputs include investments

in certain funds, certain debt securities that are not actively

traded, interest rate

swaps, cross-currency interest rate swaps, commodity

swaps, cash-settled call options, forward foreign exchange

contracts, foreign exchange swaps and

forward rate agreements, time deposits, as well as financing receivables

and debt.

Level 3:

Valuation inputs are based on

the Company’s assumptions of relevant market

data (unobservable input).

Whenever quoted prices involve bid-ask spreads, the Company

ordinarily determines fair values based on mid-market

quotes. However, for the purpose of

determining the fair value of cash-settled call options serving

as hedges of the Company’s management incentive

plan, bid prices are used.

When determining fair values based on quoted prices

in an active market, the Company considers if the

level of transaction activity for the financial instrument

has

significantly decreased or would not be considered orderly.

In such cases, the resulting changes in valuation

techniques would be disclosed. If the market is

considered disorderly or if quoted prices are not available, the Company

is required to use another valuation technique, such

as an income approach.

Recurring fair value measures

The fair values of financial assets and liabilities measured at

fair value on a recurring basis were as follows:

March 31, 2022

($ in millions)

Level 1

Level 2

Level 3

Total fair value

Assets

Securities in “Marketable securities and short-term investments”:

Equity securities

–

481

–

481

Debt securities—U.S. government obligations

200

–

200

Debt securities—Other government obligations

–

Debt securities—Corporate

–

Derivative assets—current in “Other current assets”

–

169

–

169

Derivative assets—non-current in “Other non-current assets”

–

Total

200

761

–

961

Liabilities

Derivative liabilities—current in “Other current liabilities”

–

163

–

163

Derivative liabilities—non-current in “Other non-current liabilities”

–

192

–

192

Total

–

355

–

355

Q1 2022

FINANCIAL

INFORMATION

December 31, 2021

($ in millions)

Level 1

Level 2

Level 3

Total fair value

Assets

Securities in “Marketable securities and short-term investments”:

Equity securities

587

Debt securities—U.S. government obligations

209

Debt securities—Corporate

Derivative assets—current in “Other current assets”

176

Derivative assets—non-current in “Other non-current assets”

Total

209

878

–

1,087

Liabilities

Derivative liabilities—current in “Other current liabilities”

133

Derivative liabilities—non-current in “Other non-current liabilities”

131

Total

–

264

–

264

The Company uses the following methods and assumptions in

estimating fair values of financial assets

and liabilities measured at fair value on a recurring basis:

●

Securities in “Marketable securities and short-term investments”

and “Other non-current assets”:

If quoted market prices in active markets for identical

assets are available, these are considered Level 1 inputs; however,

when markets are not active, these inputs

are considered Level 2. If such quoted

market prices are not available, fair value is determined using

market prices for similar assets or

present value techniques, applying an appropriate risk-

free interest rate adjusted for non-performance risk. The inputs

used in present value techniques are observable and fall

into the Level 2 category.

●

Derivatives

: The fair values of derivative instruments are determined using

quoted prices of identical instruments from an

active market, if available

(Level 1 inputs). If quoted prices are not available, price quotes

for similar instruments, appropriately adjusted, or present

value techniques, based on

available market data, or option pricing models are used. Cash

-settled call options hedging the Company’s WAR

liability are valued based on bid prices

of the equivalent listed warrant. The fair values obtained using price

quotes for similar instruments or valuation techniques

represent a Level 2 input

unless significant unobservable inputs are used.

Non-recurring fair value measures

The Company elects to record private equity investments without readily

determinable fair values at cost, less impairment, adjusted by

observable price changes.

The Company reassesses at each reporting period whether these

investments continue to qualify for this treatment. During the

three months ended March 31,

2022 and 2021,

the Company recognized, in Other income (expense), net

fair value gains of $29 million and $10 million, respectively,

related to certain of its

private equity investments based on observable market price changes

for an identical or similar investment of the same

issuer. The fair values were determined

using level 2 inputs. The carrying values of investments, carried at

fair value on a non-recurring basis, at March 31,

2022, and December 31, 2021, totaled

$226 million and $228 million, respectively.

Apart from the transactions above, there were no additional significant

non-recurring fair value measurements during the

three months ended March 31, 2022 and

2021.

Disclosure about financial instruments carried on a cost

basis

The fair values of financial instruments carried on a cost

basis were as follows:

March 31, 2022

($ in millions)

Carrying value

Level 1

Level 2

Level 3

Total fair value

Assets

Cash and equivalents (excluding securities with original

maturities up to 3 months):

Cash

2,318

–

2,318

Time deposits

2,898

–

2,898

–

2,898

Restricted cash

–

Marketable securities and short-term investments

(excluding securities):

Time deposits

202

–

202

–

202

Restricted cash, non-current

300

–

300

Liabilities

Short-term debt and current maturities of long-term debt

(excluding finance lease obligations)

3,084

1,488

1,596

–

3,084

Long-term debt (excluding finance lease obligations)

6,000

6,028

–

6,077

Q1 2022

FINANCIAL

INFORMATION

December 31, 2021

($ in millions)

Carrying value

Level 1

Level 2

Level 3

Total fair value

Assets

Cash and equivalents (excluding securities with original

maturities up to 3 months):

Cash

2,422

Time deposits

1,737

Restricted cash

Marketable securities and short-term investments

(excluding securities):

Time deposits

300

Restricted cash, non-current

300

Liabilities

Short-term debt and current maturities of long-term debt

(excluding finance lease obligations)

1,357

1,288

1,357

Long-term debt (excluding finance lease obligations)

4,043

4,234

4,292

The Company uses the following methods and assumptions in

estimating fair values of financial instruments carried

on a cost basis:

●

Cash and equivalents (excluding securities with original maturities

up to 3 months), Restricted cash, current

and non-current, and Marketable securities

and short-term investments (excluding securities):

The carrying amounts approximate the fair values as the

items are short-term in nature or, for cash

held in banks, are equal to the deposit amount.

●

Short-term debt and current maturities of long-term debt (excluding

finance lease obligations):

Short-term debt includes commercial paper,

bank

borrowings and overdrafts. The carrying amounts of short-term

debt and current maturities of long-term debt, excluding

finance lease obligations,

approximate their fair values.

●

Long-term debt (excluding finance lease obligations):

Fair values of bonds are determined using quoted market

prices (Level 1 inputs), if available. For

bonds without available quoted market prices and other long-term

debt, the fair values are determined using a discounted cash flow

methodology

based upon borrowing rates of similar debt instruments and reflecting

appropriate adjustments for non-performance risk

(Level 2 inputs).

─

Note 8

Contract assets and liabilities

The following table provides information about Contract assets

and Contract liabilities:

($ in millions)

March 31, 2022

December 31, 2021

March 31, 2021

Contract assets

1,072

990

1,044

Contract liabilities

2,080

1,894

1,855

Contract assets primarily relate to the Company’s right to receive

consideration for work completed but for which no invoice

has been issued at the reporting date.

Contract assets are transferred to receivables when rights

to receive payment become unconditional.

Contract liabilities primarily relate to up-front advances received on

orders from customers as well as amounts invoiced

to customers in excess of revenues

recognized, primarily for long-term projects. Contract

liabilities are reduced as work is performed and as revenues

are recognized.

The significant changes in the Contract assets and Contract liabilities

balances were as follows:

Three months ended March 31,

2022

2021

Contract

($ in millions)

assets

liabilities

assets

liabilities

Revenue recognized, which was included in the Contract liabilities

balance at Jan 1, 2022/2021

(518)

(497)

Additions to Contract liabilities - excluding amounts recognized as

revenue during the period

701

493

Receivables recognized that were included in the Contract

asset balance at Jan 1, 2022/2021

(318)

(275)

At March 31, 2022, the Company had unsatisfied performance obligations

totaling $18,901 million and, of this amount, the Company

expects to fulfill approximately

67 percent of the obligations in 2022, approximately 23 percent

of the obligations in 2023 and the balance thereafter.

Q1 2022

FINANCIAL

INFORMATION

─

Note 9

Debt

The Company’s total debt at March 31, 2022, and December

31, 2021, amounted to $9,285 million and $5,561 million,

respectively.

Short-term debt and current maturities of long-term debt

The Company’s “Short-term debt and current maturities of

long-term debt” consisted of the following:

($ in millions)

March 31, 2022

December 31, 2021

Short-term debt

1,812

Current maturities of long-term debt

1,302

1,306

Total

3,114

1,384

Short-term debt primarily represented issued commercial paper and

short-term bank borrowings from various banks.

At March 31, 2022,

$1,530 million was

outstanding under the $2 billion Euro- commercial paper program

in the United States, whereas at December 31, 2021, no

amount was outstanding under this

program.

Long-term debt

The Company’s long-term debt at March 31, 2022, and

December 31, 2021, amounted to $6,171 million and $4,177

million, respectively.

Outstanding bonds (including maturities within the next 12 months)

were as follows:

March 31, 2022

December 31, 2021

(in millions)

Nominal outstanding

Carrying value

(1)

Nominal outstanding

Carrying value

(1)

Bonds:

2.875% USD Notes, due 2022

USD

1,250

1,252

USD

1,250

1,258

0.625% EUR Instruments, due 2023

EUR

700

779

EUR

700

800

0% CHF Bonds, due 2023

CHF

275

297

0.625% EUR Instruments, due 2024

EUR

700

774

0% EUR Instruments, due 2024

EUR

500

559

0.75% EUR Instruments, due 2024

EUR

750

828

EUR

750

860

0.3% CHF Bonds, due 2024

CHF

280

302

CHF

280

306

0.75% CHF Bonds, due 2027

CHF

425

459

3.8% USD Notes, due 2028

(2)

USD

383

381

USD

383

381

1.0% CHF Bonds, due 2029

CHF

170

183

CHF

170

186

0% EUR Notes, due 2030

EUR

800

801

EUR

800

862

4.375% USD Notes, due 2042

(2)

USD

609

590

USD

609

589

Total

7,205

5,242

(1)

USD carrying values include unamortized debt issuance costs, bond discounts or premiums, as well as adjustments for fair value hedge accounting, where appropriate.

(2)

Prior to completing a cash tender offer in November 2020, the original principal amount outstanding,

on each of the 3.8% USD Notes,

due 2028,

and the 4.375% USD Notes,

due

2042, was USD 750 million.

In March 2022, the Company issued the following CHF bonds

(i) CHF 275 million of zero interest bonds, due 2023, and (ii) CHF

425 million of 0.75 percent bonds,

due 2027 with interest payable annually in arrears. The aggregate

net proceeds of these CHF bond issues,

after discount and fees, amounted to CHF 699 million

(equivalent to approximately $751 million on date of issuance).

Also in March 2022, the Company issued the following EUR notes,

both due in 2024, (i) EUR 700 million,

paying interest annually in arrears at a fixed rate of

0.625 percent per annum, and (ii) EUR 500 million floating

rate notes,

paying interest quarterly in arrears at a variable rate of

70 basis points above the 3-month

EURIBOR. In relation to these EUR Notes, the Company recorded net

proceeds (after the respective discount and premium,

as well as fees) of EUR 1,203 million

(equivalent to $1,335 million on the date of issuance).

In line with the Company’s policy of reducing its currency

and interest rate exposures, interest rate swaps have been used to

modify the characteristics of the

CHF 425 million Bonds, due 2027, and the EUR 700 million Notes,

due 2024. After considering the impact of these

interest rate swaps, the CHF 425 million

Bonds

and EUR 700 million Notes, effectively become floating rate

obligations.

─

Note 10

Commitments and contingencies

Contingencies—Regulatory, Compliance

and Legal

Regulatory

As a result of an internal investigation, the Company self-reported

to the Securities and Exchange Commission (SEC)

and the Department of Justice (DoJ) in the

United States as well as to the Serious Fraud Office (SFO)

in the United Kingdom concerning certain of its past dealings

with Unaoil and its subsidiaries, including

alleged improper payments made by these entities to third parties.

In May 2020, the SFO closed its investigation, which

it originally announced in February 2017,

as the case did not meet the relevant test for prosecution.

The Company continues to cooperate with the U.S.

authorities as requested. At this time, it is not

possible for the Company to make an informed judgment about

the outcome of this matter.

Based on findings during an internal investigation, the Company

self-reported to the SEC and the DoJ, in the United

States, to the Special Investigating Unit (SIU)

and the National Prosecuting Authority (NPA)

in South Africa as well as to various authorities in

other countries potential suspect payments and other compliance

concerns in connection with some of the Company’s dealings

with Eskom and related persons. Many of those parties

have expressed an interest in, or

commenced an investigation into, these matters and the Company is

cooperating fully with them. The Company paid $104

million to Eskom in December 2020 as

part of a full and final settlement with Eskom and the Special Investigating

Unit relating to improper payments and other compliance

issues associated with the

Controls and Instrumentation Contract, and its Variation

Orders for Units 1 and 2 at Kusile. The Company

continues to cooperate fully with the authorities in their

review of the Kusile project and is in discussions with them regarding

a coordinated resolution. Although the Company believes

that there could be an unfavorable

outcome in one or more of these ongoing reviews, at this time

it is not possible for the Company to make

an informed judgment about the possible financial impact.

Q1 2022

FINANCIAL

INFORMATION

General

The Company is aware of proceedings, or the threat of proceedings,

against it and others in respect of private claims by

customers and other third parties with

regard to certain actual or alleged anticompetitive practices.

Also, the Company is subject to other claims and legal proceedings,

as well as investigations carried

out by various law enforcement authorities. With respect to the

above-mentioned claims, regulatory matters,

and any related proceedings, the Company will bear

the related costs, including costs necessary to resolve

them.

Liabilities recognized

At March 31, 2022, and December 31, 2021, the Company had

aggregate liabilities of $106 million and $104 million,

respectively, included in “Other

provisions”

and “Other non

‑

current liabilities”, for the above regulatory,

compliance and legal contingencies, and none of the individual liabilities

recognized was significant. As

it is not possible to make an informed judgment on, or reasonably

predict, the outcome of certain matters

and as it is not possible, based on information currently

available to management, to estimate the maximum potential

liability on other matters, there could be adverse outcomes beyond

the amounts accrued.

Guarantees

General

The following table provides quantitative data regarding the

Company’s third-party guarantees. The maximum

potential payments represent a “worst-case

scenario”, and do not reflect management’s expected

outcomes.

Maximum potential payments

($ in millions)

March 31, 2022

December 31, 2021

Performance guarantees

4,320

4,540

Financial guarantees

Indemnification guarantees

(1)

134

136

Total

(2)

4,508

4,728

(1)

Certain indemnifications provided to Hitachi in connection with the divestment of Power Grids are without limit.

(2)

Maximum potential payments include amounts in both continuing and discontinued operations.

The carrying amount of liabilities recorded in the Consolidated

Balance Sheets reflects the Company’s best estimate of

future payments, which it may incur as

part

of fulfilling its guarantee obligations. In respect of the above guarantees,

the carrying amounts of liabilities at March

31, 2022, and December 31, 2021, amounted

to $148 million and $156 million, respectively,

the majority of which is included in discontinued operations

The Company is party to various guarantees providing financial

or performance assurances to certain third parties. These guarantees,

which have various

maturities up to 2035, mainly consist of performance guarantees

whereby (i) the Company guarantees

the performance of a third party’s product or service

according to the terms of a contract and (ii) as member

of a consortium/joint-venture that includes third parties, the

Company guarantees not only its own

performance but also the work of third parties. Such guarantees

may include guarantees that a project will be completed

within a specified time. If the third party

does not fulfill the obligation, the Company will compensate the

guaranteed party in cash or in kind. The original

maturity dates for the majority of these

performance guarantees range from one to ten years.

In conjunction with the divestment of the high-voltage cable

and cables accessories businesses, the Company has

entered into various performance guarantees

with other parties with respect to certain liabilities of the

divested business. At March 31, 2022, and December 31,

2021, the maximum potential payable under

these guarantees amounts to $891 million and $911

million, respectively, and these

guarantees have various original maturities ranging from five

to ten years.

The Company retained obligations for financial, performance

and indemnification guarantees related to the Power Grids

business sold on July 1, 2020 (see Note 3

for details). The performance and financial guarantees have been

indemnified by Hitachi, at the same proportion of its ownership

in Hitachi Energy Ltd

(80.1 percent). These guarantees, which have various maturities

up to 2035, primarily consist of bank guarantees, standby

letters of credit,

business performance

guarantees and other trade-related guarantees, the majority of which

have original maturity dates ranging from one to ten years.

The maximum amount payable

under the guarantees at March 31, 2022, and December 31,

2021, is approximately $3.1 billion and $3.2 billion,

respectively, and the carrying

amounts of liabilities

(recorded in discontinued operations) at March 31, 2022, and

December 31, 2021, amounted to $134 million and

$136 million, respectively.

Commercial commitments

In addition, in the normal course of bidding for and executing certain

projects, the Company has entered into standby

letters of credit, bid/performance bonds

and

surety bonds (collectively “performance bonds”) with various

financial institutions. Customers can draw on such

performance bonds in the event that the Company

does not fulfill its contractual obligations. The Company would

then have an obligation to reimburse the financial institution

for amounts paid under the performance

bonds. At both March 31, 2022, and December 31, 2021, the

total outstanding performance bonds aggregated to

$3.6 billion, of each of these amounts, $0.1

billion

relates to discontinued operations. There have been no significant

amounts reimbursed to financial institutions

under these types of arrangements in the three

months ended March 31, 2022 and 2021.

Product and order-related contingencies

The Company calculates its provision for product warranties

based on historical claims experience and specific review

of certain contracts. The reconciliation of the

“Provisions for warranties”, including guarantees of product performance,

was as follows:

($ in millions)

2022

2021

Balance at January 1,

1,005

1,035

Net change in warranties due to acquisitions, divestments and liabilities

held for sale

–

Claims paid in cash or in kind

(36)

(54)

Net increase in provision for changes in estimates, warranties

issued and warranties expired

Exchange rate differences

(8)

(33)

Balance at March 31,

999

1,012

Q1 2022

FINANCIAL

INFORMATION

─

Note 11

Employee benefits

The Company operates defined benefit pension plans, defined contribution

pension plans, and termination indemnity

plans, in accordance with local regulations

and practices. These plans cover a large portion of the Company’s

employees and provide benefits to employees

in the event of death, disability,

retirement, or

termination of employment. Certain of these plans are multi-employer

plans. The Company also operates other postretirement benefit plans

including

postretirement health care benefits, and other employee-related

benefits for active employees including long-service

award plans. The measurement date used for

the Company’s employee benefit plans is December

The funding policies of the Company’s plans

are consistent with the local government and tax

requirements.

The following tables include amounts relating to defined benefit pension

plans and other postretirement benefits for continui

ng operations.

Net periodic benefit cost of the Company’s defined benefit

pension and other postretirement benefit plans consisted of

the following:

($ in millions)

Defined pension benefits