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 February 2024

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:

Regulation S-T Rule 101(b)(1) only

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):

⬜

Note:

Regulation S-T Rule 101(b)(7) only

permits the submission in paper of

a Form 6-K if submitted to furnish a

report or

other document that the registrant foreign

private issuer must furnish

and make public under the laws of the

jurisdiction in

which the registrant is incorporated, domiciled

or legally organized (the registrant’s “home country”),

or under the rules of the

home country exchange on which

the registrant’s securities are traded, as long as the report

or other document is not a press

release, is not required to be and has

not been distributed to the registrant’s security holders,

and, if discussing a material

event,

has already been the subject of a Form

6-K submission or other Commission

filing on EDGAR.

Indicate by check mark whether

the registrant by furnishing the

information contained in this Form

is also thereby furnishing

the information to the Commission

pursuant to Rule 12g3-2(b) under

the Securities Exchange Act of 1934.

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 February

1, 2024 titled “Q4 2023 results”.

Q4 2023 Financial Information.

Press release issued by ABB Ltd dated

January 31, 2024 titled “Changes to composition

of ABB Board of

Directors”.

Announcements regarding transactions

in ABB Ltd’s Securities made by the directors or the

members of the

Executive Committee.

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.

—

ZURICH, SWITZERLAND, FEBRUARY 1,

2024

Q4 2023 results

Solid finish to a record year

Q4 2023

●

Orders $7.6 billion,

0%; comparable

●

Revenues $8.2 billion,

+5%; comparable +6%

●

Income from operations

$1,116 million;

margin 13.5%

●

Operational EBITA

$1,333 million;

margin

16.3%

●

Basic EPS $0.50,

-18%

●

Cash flow from operating

activities $1,897 million

;

+176%

FY 2023

●

Orders $33.8 billion,

-1%; comparable

+3%

●

Revenues $32.2 billion,

+9%; comparable +14%

●

Income from operations

$4,871 million; margin 15.1%

●

Operational EBITA

$5,427 million;

margin

16.9%

●

Basic EPS $2.02, +55%

●

Cash flow from operating

activities $4,290 million

;

+233%

●

Dividend proposal of

CHF0.87 per share

Ad hoc Announcement pursuant to Art.

53 Listing Rules of SIX Swiss Exchange

—

Q4 2023

Full year

Press Release

—

“Our strong 2023 delivery was the result of both our leading

market position in electrification and

automation, as well as ABB being a more agile and efficient company in its

execution. With our

upgraded financial and sustainability targets we look to the future

with confidence.”

Björn Rosengren,

CEO

KEY FIGURES

CHANGE

($ millions, unless otherwise indicated)

Q4 2023

Q4 2022

US$

Comparable

FY 2023

FY 2022

US$

Comparable

Orders

7,649

7,620

33,818

33,988

-1%

Revenues

8,245

7,824

32,235

29,446

14%

Gross Profit

2,848

2,658

11,214

9,710

15%

as % of revenues

34.5%

34.0%

+0.5 pts

34.8%

33.0%

+1.8 pts

Income from operations

1,116

1,185

-6%

4,871

3,337

46%

Operational EBITA

1,333

1,146

16%

13%

5,427

4,510

20%

as % of operational revenues

16.3%

14.8%

+1.5 pts

16.9%

15.3%

+1.6 pts

Income from continuing operations, net of tax

946

1,168

-19%

3,848

2,637

46%

Net income attributable to ABB

921

1,132

-19%

3,745

2,475

51%

Basic earnings per share ($)

0.50

0.61

-18%

2.02

1.30

55%

Cash flow from operating activities

1,897

687

176%

4,290

1,287

233%

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

reconciliations and definitions” in the attached

Q4 2023 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

2023

The fourth quarter

of 2023,

was a solid end to a fantastic

year.

We improved operational

performance and deliver

ed a very

strong cash flow year

-on-year. We

increased the annual return

on capital employed

(ROCE) by 460bps

to 21.1% and we are

utilizing our strong balance

sheet by recently signing

seven

small bolt-on acquisitions

with the majority adding

additional

embedded software

and AI capabilities to our customer

offerings. We

delivered in line with our

guidance, and I am

pleased with the solid

finish to the year.

Comparable order

intake remained stable

year-on-year, with

increases noted

in three out of four business

areas. Most

customer segments

improved or remained stable

with softer

demand noted mainly

in residential construction

and discrete

automation,

with the latter hampered by

normalizing order

patterns as well as

by weakness in the robotics

market. In tune

with the historical fourth

quarter pattern the book-to-bill

ratio

was below one, at 0.

93,

when revenues tend to

be supported

by end-of-the-year

systems deliveries.

Revenues amounted

to $8,245

million and increased by

(6% comparable),

supported by both higher

volumes and

contribution from earlier

implemented price increases

Thanks

to our ongoing focus on

improving the quality of

revenues, the

gross margin improved

by 50 basis points to 34.5%,

contributing to the Operational

EBITA margin improvement

150 basis points

to 16.3%. The contribution

from mainly price

and leverage on

higher volumes clearly offset

the impact mainly

from higher labor costs.

This represents the highest

fourth

quarter margin in recent

history.

The historical pattern of a

sequentially softer

fourth quarter margin

repeated, as expected.

In the quarter we generated

Cash flow from operating

activities

of $1.9 billion. This

contributed to Free Cash

Flow of $3.7

billion

for the year,

even stronger than

what we originally expected.

In my view,

the strong 2023 performance

is evidence of ABB

being a more efficient

and agile company,

but also of how

demand for our offerings

benefits from our leading

position in

markets accelerating

the energy transition towards

electrification and increased

automation and digitalization.

feel confident in

future performance,

which led us to raising our

financial and sustainability

targets at our Capital

Markets Day in

November.

In short, we are targeting

higher growth and

higher

returns while enabling

a net zero world.

Looking to 2024,

the geopolitical situation adds

uncertainty,

however we currently

expect another year of

good

performance.

We expect a positive

book-to-bill and revenues to

be supported by execution

of parts of the $21.6 billion order

backlog.

In the projects-

and systems business

we expect

continued high customer

activity,

although we face

high

comparables from

last year when large

orders came through at

a very high level.

In total, order growth

year-on-year should

show stronger momentum

in the latter part of the year

when

comparables ease.

We expect to improve

on comparable

revenues as well as

on Operational EBITA

margin,

and cash

flow should benefit

from continued strong operational

performance and our

continued focus on net

working capital

efficiency.

Considering the

improving performance, robust

cash flow and a

solid balance sheet,

the Board of Directors proposes

ordinary dividend of

CHF 0.87 per share,

up from CHF 0.84 in

the previous year

We also plan to continue

utilizing share

buybacks as a tool

to return excess cash to

shareholders also

during 2024.

Björn Rosengren

CEO

In the

first quarter of 2024

, we anticipate a low to

mid-single

digit comparable revenue

growth and the Operational

EBITA

margin to remain stable

or slightly improve year-on

-year.

In full-year 2024

, we expect a positive book

-to-bill, comparable

revenue growth to

be about 5% and the

Operational EBITA

margin to slightly improve

from the 2023 level of 16.

9%.

CEO summary

Outlook

ABB

INTERIM

REPORT

2023

Orders were flat year

-on-year (comparable 0%) at

$7,649

million,

with strong contribution

from large orders, including

one in business area

Process Automation for approximately

$150 million. This offset

a mid-single digit order

decline in

the short-cycle businesses

year-on-year. Comparable

orders increased in

three business areas, while

Robotics &

Discrete Automation declined

sharply as customers

for

machine automation continued

the sequential trend of

normalizing order patterns,

and due to inventory adjustments

in a declining robotics

market. These inventory

adjustments

are expected to level

off towards the end

of the first quarter.

Orders increased in

two out of the three regions.

Americas

was up by 3% (comparable

3%) driven by strong

improvement of 5%

(comparable 6%) in the

United States.

Asia, Middle East and

Africa remained overall

stable (up

comparable 2%)

where the strong development

in countries

like India and South

Korea more than offset

the decline in

China of 8% (comparable

7%). Europe softened by

(comparable 5%) due

mainly to a double-digit decline

Germany.

Orders in the automotive

segment softened

slightly year-on-

year due to timing impacts

for some larger orders.

General

industry and consumer

-related robotics segments

declined.

The machine builder segment

declined as customers

normalized order patterns

in the face of shortening

delivery

lead times.

In transport & infrastructure,

there were positive

developments in

marine,

ports and renewables.

The buildings segment

declined overall, weighed

down by the

residential construction

segment where the quarterly

pattern

included stabilization

in Europe and declines

in China and the

United States.

The commercial construction

segment was

broadly stable, compared

with last year,

in the United States

and Europe while China

declined.

Demand in the process

-related businesses

was strong in

most segments,

with particular strength

in the oil & gas

segment.

It held up well also

for refining, petrochemicals

and the energy-related

low carbon segments. Pulp

& paper

remained stable.

Revenues amounted

to $8,245 million and

the growth of 5%

year-on-year (comparable

6%) was driven by both

higher

volumes and a positive

price development. Execution

of the

strong order backlog

supported revenue

growth and more than

offset weakness

in parts of the short-cycle demand.

Consequently,

three out of four business

areas improved

comparable revenues,

with only Robotics & Discrete

Automation declining.

Orders and revenues

Growth

Change year-on-year

Orders

Revenues

Comparable

Portfolio changes

-1%

-2%

Total

Revenues by region

($ in millions,

unless otherwise

indicated)

CHANGE

Q4 2023

Q4 2022

US$

Comparable

Europe

2,951

2,765

The Americas

2,847

2,555

11%

14%

Asia, Middle East

and Africa

2,447

2,504

-2%

ABB Group

8,245

7,824

Orders by region

($ in millions,

unless otherwise

indicated)

CHANGE

Q4 2023

Q4 2022

US$

Comparable

Europe

2,554

2,604

-2%

-5%

The Americas

2,985

2,898

Asia, Middle East

and Africa

2,110

2,118

ABB Group

7,649

7,620

ABB

INTERIM

REPORT

2023

Gross profit

Gross profit increased

by 7% (6% constant currency)

to $2,848

million, reflecting a

gross margin improvement

of 50 basis points to

34.5%. Gross margin improved

in all four business areas

Income from operations

amounted to $1,116

million and dropped

by 6% year-on-year,

mainly due to higher restructuring

and

transformation related

costs year-on-year,

and the provision

release related to the

non-core operations

which supported last

year’s result.

Margin on Income from operations

was 13.5%, down

by 160 basis points

year-on-year.

Operational EBITA

improved by 16

year-on-year to $1,333

million and the margin

was up by 150 basis

points to 16.3%. Key

drivers

to the higher earnings were

the impacts from robust

pricing

activities and operational

leverage on higher volumes,

which more

than offset adverse

impacts from mainly

increased labor costs.

Selling, general and

administrative expenses increased

in relation

to revenues to 18%,

from 16.6% last year.

Operational EBITA in

Corporate and Other

amounted to -$67 million,

of which -$34

million related to

the underlying Corporate costs

which were lower

than expected mainly

due to real estate book

gains. The

remaining-$33

million related to the E-mobility

business where

operational performance

was hampered by the ongoing

reorganization to ensure

a more focused portfolio,

and some

inventory-related provisions.

While E-mobility is on track

towards

the improved portfolio,

the financial benefits

may not be visible

until towards the end

of 2024. Thus, we only expect

a slight

improvement in the

E-mobility Operational EBITA,

year-on-year.

Net finance expenses

Net finance expense

was $28 million,

an increase from last

year’s

level of $1 million which

was unusually low due to reversal

interest charges

related to income tax risks.

Income tax

In line with the historical

pattern, the fourth quarter

tax rate was low.

Income tax expense

was $136 million with an

effective tax rate

12.6%, lower than expected

mainly due to the geographical

profit

mix and releases of

valuation allowances on deferred

tax assets.

Net income and earnings

per share

Net income attributable

to ABB was $921 million,

representing a

reduction of 19% from

last year, as

the improved operational

performance this year

did not offset the positive

impacts from last

year’s benefits from the

provision reduction in non-core

operations

and a reduction in tax

valuation allowances.

This resulted in basic

earnings per share

of $0.50,

down from $0.61 year

-on-year.

Operational EBITA

($ millions)

Q4 2023

Q4 2022

Corporate and Other

E-mobility

(33)

(3)

Corporate costs, intersegment

eliminations and other

(34)

(72)

Total

(67)

(75)

Majority of which relates to underlying corporate

Earnings

ABB

INTERIM

REPORT

2023

Net working capital

amounted to $3,257 million,

increasing

slightly year-on-year from

$3,216

million driven mainly

by an

increase in receivables

on the back of higher revenues,

which was however

largely offset by customer

advances.

Net working capital

decreased sequentially

from $4,041

million driven mainly

by sound trade net

working capital

management resulting

in lower inventories and

receivables.

Net working capital

as a percentage of revenues

was

10.2%, down sequentially

from 12.8% and year-on-year

11.1%.

Capital expenditures

Purchases of property,

plant and equipment and

intangible

assets amounted to

$264 million.

Net debt

amounted to $1,991 million

at the end of the quarter

and decreased from $2,779

million year-on-year and declined

sequentially from $2,872

million. The sequential

net debt

decrease was driven by

the strong free cash flow

in the

quarter.

Cash flows

Cash flow from operating

activities was $1,897

million,

representing a steep

year-on-year increase

from

$687 million. All

business areas increased

cash flow from

operating activities

in the quarter.

The increase was driven

better operational performance

and a strong sequential

reduction of net working

capital in the quarter

driven by lower

inventories and receivables

as well as higher customer

advances.

Additionally,

the prior year quarter

was hampered by

settlements for the

Kusile project.

Share buyback program

A share buyback program

of up to $1 billion was

launched on

April 3, 2023. During

the fourth quarter,

6,143,500 shares were

repurchased on the

second trading line for approximately

$230

million. ABB’s total

number of issued shares,

including shares

held in treasury,

amounts to 1,882,002,575.

($ millions,

unless otherwise indicated)

Dec. 31

2023

Dec. 31

2022

Short term debt and current

maturities of long-term debt

2,607

2,535

Long-term debt

5,221

5,143

Total debt

7,828

7,678

Cash & equivalents

3,891

4,156

Restricted cash - current

Marketable securities and

short-term investments

1,928

725

Cash and marketable securities

5,837

4,899

Net debt (cash)*

1,991

2,779

Net debt (cash)* to EBITDA ratio

0.4

0.7

Net debt (cash)* to Equity ratio

0.14

0.21

At Dec. 31, 2023 and Dec. 31, 2022, net debt(cash)

excludes net pension (assets)/liabilities of

$(191) million and $(276) million, respectively.

Balance sheet & Cash flow

ABB

INTERIM

REPORT

2023

Orders and revenues

Overall, the short

-cycle businesses stabilized

after some

weak quarters, and

customer activity in the

project-

and

systems-related offering

was robust. Total

order intake was

virtually unchanged

from last year,

limited by the divestment

of the Power Conversion

division (up comparable

2%) at

$3,395 million, to some

extent hampered by timing

-related

impacts in medium

voltage orders.

●

Market activity was

generally solid year-on-year outside

of the areas of residential

building, which stabilized

Europe at a low level

but declined in both

United States

and China. In China

weakness was noted in

several

customer segments.

●

From a geographical

perspective order intake

remained

stable or improved

in all three regions.

Europe was up by

7% (comparable 4%).

The underlying order

intake

improved slightly in

the Americas, however

portfolio

changes limited

total order growth to -1%

(up comparable

1%). In Asia, Middle

East and Africa orders

declined by

5% (stable comparable

0%), the result of strength

comparable basis in countries

like India offsetting

weakness in China

which declined by 9% (comparable

6%).

●

Revenues amounted

to $3,698 million, representing

improvement of 6%

(comparable 8%) from last

year,

supported by both volumes

and price impacts.

This was

supported by all

divisions except for Smart Buildings

division where the

short-cycle weakness in

residential

segment weighed on

the total.

Profit

Strong operational

performance clearly offset

the small

adverse impact from

portfolio changes and

triggered a 26%

improvement in Operational

EBITA to $725

million and 310

basis points rise

in Operational EBITA

margin,

year-on-

year.

●

Strong gross margin improvement

supported by

contributions

from price, leverage on

higher volumes in

production and improved

operational efficiency.

All of

which more than offset

slightly higher spend on

labor,

R&D and Selling, General

and Administration.

CHANGE

($ millions, unless otherwise indicated)

Q4 2023

Q4 2022

US$

Comparable

FY 2023

FY 2022

US$

Comparable

Orders

3,395

3,385

15,189

15,182

Order backlog

6,808

6,404

14%

6,808

6,404

14%

Revenues

3,698

3,498

14,584

13,619

10%

Operational EBITA

725

575

26%

2,937

2,343

25%

as % of operational revenues

19.7%

16.6%

+3.1 pts

20.1%

17.2%

+2.9 pts

Cash flow from operating activities

1,068

857

25%

3,211

2,115

52%

No. of employees (FTE equiv.)

50,300

50,600

-1%

Growth

Change year-on-year

Orders

Revenues

Comparable

Portfolio changes

-3%

Total

—

Electrification

ABB

INTERIM

REPORT

2023

Orders and revenues

On continued robust

performance in the

long-cycle business

with some large

orders booked mainly in the

Traction division,

the total order intake

reached $1,937

million, up 17%

(comparable 13%)

from the relatively low comparable

last year.

Book-to-bill was at 1

for the quarter.

●

Stronger order momentum

was noted in the process-

related segments of

oil & gas, chemicals and

mining as

well as for food & beverage

and rail. A weak construction

market weighed

on demand for HVAC,

with some

slowness noted also

in pulp & paper.

●

Orders increased at

a double-digit rate in all

three regions.

Europe increased by

30% (comparable 18%).

The Americas

improved by 14% (comparable

9%) with strong contribution

from the United States

being up by 14% (comparable

10%).

Asia, Middle East and

Africa was up by 10% (comparable

12%) including China

being up by 10% (comparable

11%).

●

Revenues amounted

to $1,946 million and

were up by 5%

(comparable 2%) year

-on-year,

with price as the key positive

driver. Execution

of the order backlog supported

revenue

generation, with

the improvement rate however

hampered by

lower deliveries in the

motors business.

Profit

Operational EBITA

remained stable

year-on-year at

$318 million. Revenues

increased and gross

margin improved

somewhat,

however the Operational

EBITA margin declined

80 basis points to 16.6%.

●

While price increases

contributed to earnings,

these were more

than offset by one

-time product quality

costs which impacted

Operational EBITA

margin by approximately

60 basis points.

●

The Large Motors & Generators

division made a significant

profitability improvement,

however,

this was more than offset

mainly by the impacts

from some underabsorption

in parts of

the low voltage motor

manufacturing and higher

labor costs,

year-on-year.

Growth

Change year-on-year

Orders

Revenues

Comparable

13%

Portfolio changes

Total

17%

—

Motion

CHANGE

($ millions, unless otherwise indicated)

Q4 2023

Q4 2022

US$

Comparable

FY 2023

FY 2022

US$

Comparable

Orders

1,937

1,649

17%

13%

8,222

7,896

Order backlog

5,343

4,726

13%

5,343

4,726

13%

Revenues

1,946

1,845

7,814

6,745

16%

15%

Operational EBITA

318

1,475

1,163

27%

as % of operational revenues

16.6%

17.4%

-0.8 pts

18.9%

17.3%

+1.6 pts

Cash flow from operating activities

597

346

73%

1,532

853

80%

No. of employees (FTE equiv.)

22,300

21,100

ABB

INTERIM

REPORT

2023

Orders and revenues

Market demand remained

robust and order intake

was up

7% (comparable 5%)

to $1,870 million, with

the fourth

quarter being a strong

finish to a year in which

large orders

contributed more than

usual, which more than

compensated

for slowing momentum

in the short-cycle offering.

Fourth

quarter orders included

a booking of approximately

$150

million with long delivery

schedule.

●

Consistent with recent

quarters, customer activity

was at

a high level in all customer

segments. The market

environment remained

at a high level in the traditional

oil

& gas segment, but

there was also high activity

in the low

carbon-related areas such

as hydrogen, LNG and carbon

capture. Order momentum

was strong in the marine

segment. Customer

activity was robust in the process-

related segments of

mining, metals and remained

stable

in pulp & paper.

●

Revenues improved strongly

in all divisions and

in all

regions and amounted

to $1,727 million, supported

execution of the

order backlog. Book-to-bill

was positive

at 1.08.

Profit

Gross margin improved

and revenues were higher,

driving

the 18% year-on-year

increase in Operational

EBITA to

$239 million and

the 80 basis points

rise in Operational

EBITA margin

to 14.0%.

●

Improved project execution

and the impact from higher

volumes in the product

business both contributed

to the

higher earnings,

with some additional support

stemming

from price increases.

●

All divisions performed

at a double-digit margin

level, with

the year-on-year profitability

improvement led by the

Measurement & Analytics

business.

CHANGE

($ millions, unless otherwise indicated)

Q4 2023

Q4 2022

US$

Comparable

FY 2023

FY 2022

US$

Comparable

Orders

1,870

1,746

7,535

6,825

10%

24%

Order backlog

7,519

6,229

21%

19%

7,519

6,229

21%

19%

Revenues

1,727

1,551

11%

10%

6,270

6,044

16%

Operational EBITA

239

203

18%

909

848

as % of operational revenues

14.0%

13.2%

+0.8 pts

14.5%

14.0%

+0.5 pts

Cash flow from operating activities

444

205

117%

1,002

675

48%

No. of employees (FTE equiv.)

21,100

20,100

Growth

Change year-on-year

Orders

Revenues

Comparable

10%

Portfolio changes

Total

11%

—

Process Automation

ABB

INTERIM

REPORT

2023

Orders and revenues

Markets are still adjusting

to shorter delivery lead

times,

putting pressure on

order intake which amounted

to $550

million,

representing a sharp drop

of 31% (comparable 33%)

year-on-year.

Although the challenging market

situation is

expected to persist

near-term, the fourth quarter

of 2023 is

anticipated to have

been the trough quarter

for absolute order

intake.

●

Machine Automation

is executing the

order backlog and

successfully reducing

lead times in deliveries

after

customers pre-ordering

during the period of

supply chain

constraints in 2022.

The long-term strength

of the Machine

Automation market

is intact,

however,

the order

normalization is expected

to persist through the

next couple

of quarters.

●

Robotics

demand declined

in all customer segments

year-

on-year,

with the most significant drop

in 3C electronics.

The softening in

the automotive segment was

mostly due to

timing impacts for some

larger orders. Inventory

adjustments among channel

partners were noted in

China,

and are expected to

level off towards the end

of the first

quarter.

●

From a geographical

perspective, orders in

the Americas

declined by 19%

(21%

comparable). The decline

Europe was 34% (comparable

38%). In Asia, Middle East

and Africa orders

declined by 33%

(comparable 31%),

hampered by China

being down by 36% (comparable

34%).

●

Revenues were

down by 4% (comparable

7%) and amounted

to $852 million as the

positive price development

was more

than offset by lower

volumes in the Robotics division

where the

order backlog has normalized

and weak short-cycle

demand

weighed on customer

deliveries.

Machine Automation improved

revenues on execution

of the large order backlog.

Profit

Operational EBITA

of $118

million softened by 6% year

-on-year

on the back of lower

revenues. However,

the Operational EBITA

margin remained largely

stable at 13.8%, down

only 20 basis

points from last year.

●

Price impact and the

positive mix from higher

share of

revenues from Machine

Automation were key positive

contributors

to earnings, however slightly

more than offset by

the impact from underabsorption

in production due to low

Robotics volumes and

increased cost for labor.

CHANGE

($ millions, unless otherwise indicated)

Q4 2023

Q4 2022

US$

Comparable

FY 2023

FY 2022

US$

Comparable

Orders

550

798

-31%

-33%

3,066

4,116

-26%

-25%

Order backlog

2,141

2,679

-20%

2,141

2,679

-20%

Revenues

852

891

-4%

-7%

3,640

3,181

14%

Operational EBITA

118

125

-6%

536

340

58%

as % of operational revenues

13.8%

14.0%

-0.2 pts

14.7%

10.7%

+4 pts

Cash flow from operating activities

170

105

62%

436

214

104%

No. of employees (FTE equiv.)

11,300

10,700

Growth

Change year-on-year

Orders

Revenues

Comparable

-33%

-7%

Portfolio changes

Total

-31%

-4%

—

Robotics & Discrete Automation

ABB

INTERIM

REPORT

2023

Events from the Quarter

●

Despite ABB’s concerted

efforts, there was

one fatal

incident in the quarter

involving one contractor,

working

on a project in Algeria.

A root cause investigation

and

remediation plan are

underway.

The thoughts of the

senior management

and everyone at ABB go out

to the

family of the deceased.

The health and safety of

ABB

employees are alwa

ys of highest priority and the

foremost

standard by which

performance is measured.

ABB is

working to ensure that

such an incident never happens

again.

●

The 2023 ABB Accelerating

Circularity Challenge

led by

Motion and Electrification

set out to find innovative

customer solutions

that design out waste and

pollution

and keep products

and materials in use for

as long as

possible. More than

100 startups from around

the world

participated, the

three winners received

$30,000 each to

develop their concepts

in collaboration with ABB.

The

winners included

Molg from the United Sates

who

developed a take-back

care of a Variable

Speed Drive.

Minespider from Switzerland

won for their design of a

reliable circularity certificate

management tool. Lastly,

Excess Materials Exchange

from the Netherlands won

for

their digital platform

designed to generate value

from

Power Distribution

End-of-Life.

●

ABB’s Motion business

area successfully launched

a new

Energy Appraisal tool

that is able to assess

complex

motor-driven systems

to determine optimum energy

efficiency set ups

for its customers. Using

the tool ABB

identified an average

energy-saving potential of

percent per motor across

2,000 motors assessed.

These

findings provide compelling

evidence for both the

financial

and environmental

benefits of using ABB's leading

technology.

●

H2 Energy Esbjerg ApS contracted

ABB’s Process

Automation business

area to provide basic

electrical

engineering for the

power distribution from

grid point of

connection to electrolyzers,

and for other process

equipment at its

1 GW hydrogen production

facility in

Esbjerg and hydrogen

distribution hub in Fredericia,

Denmark. The plant

is expected to be among the

largest

hydrogen developments

in Europe.

●

In the quarter ABB’s D&I

activities focused

on the Abilities

dimension with global

events addressing mental

health

awareness topics such

as grief/loss, dyslexia and

digital

accessibility.

In addition, Abilities training

sessions were

made available firmwide.

During the European Disability

Week in November,

ABB participated in a hackathon

association with

Avec Nos Proches (Caregiving)

and in

December Karin Lepasoon,

Chief Communications

and

Sustainability Officer

was named Executive

Committee

Sponsor for Abilities

Q4 outcome

●

40% reduction year-on-year

of CO

₂

e emissions in own

operations due to a shift to

green electricity and an

increase in energy efficiency

in our operations.

●

10% decrease year-on-year in

LTIFR continuing

its

downward trend

●

3%-points increase year-on-year

in share of women in

senior management,

demonstrating strong progress

towards our target.

—

Sustainability

Q4 2023

Q4 2022

CHANGE

12M ROLLING

₂

e own operations emissions,

Ktons scope 1 and 2

-40%

160

Lost Time Injury Frequency Rate (LTIFR),

frequency / 200,000 working hours

0.09

0.10

-10%

0.13

Share of females in senior management

positions, %

21.0

17.8

+3.2 pts

20.2

₂

equivalent emissions from site, energy use, SF

₆

and fleet, previous quarter

Current quarter Includes all incidents reported until

January 10, 2024

ABB

INTERIM

REPORT

2023

During Q4 2023

●

On November 30, ABB hosted

its Capital Markets Day.

At the event, ABB provided

an update on its successful

transformation,

continuous improvements

and how the

company will benefit

from key secular trends across

its

business areas.

Both financial and sustainability

targets

were updated to

include:

o

Comparable revenue

growth of 5%-7% through

the

economic cycle

o

Operational EBITA

margin in the range

of 16%-19%

o

EPS growth of at least

high single-digit through

the

economic cycle

o

Return on Capital Employed

of >18%

o

Net-zero targets

for scopes 1, 2 and 3 for 2030

and

2050

o

Support our customers

to avoid 600Mt avoided

CO2e

emissions by 2030.

Aligned with WBCSD 2023

guidance.

●

On October 30, ABB announced

that Mathias Gaertner

has been appointed

General Counsel and Company

Secretary and a

Member of the Executive

Committee. He

will join ABB in 2024.

He will succeed Andrea Antonelli,

who has, as previously

announced, left the company

pursue other opportunities.

After Q4 2023

●

On January 31, ABB announced

that the Board of

Directors will propose

Johan Forssell and Mats

Rahmström as new members

for election at the

company’s Annual

General Meeting (AGM) on March

21,

2024. They will replace

Jacob Wallenberg

and Gunnar

Brock who have decided

not to stand for re-election.

ABB

will publish its invitation

to the 2024 AGM on February

23,

2024.

In 2023 the overall

demand for ABB’s offering

remained

robust,

with most customer segments

improving or remaining

stable. Weakness

in the short-cycle

businesses related

primarily to residential

construction and discrete

automation

was however more

than offset by strong momentum

in the

project-

and systems-related businesses

Orders remained

stable or increased

in three out of four business

areas, with a

decline noted only in

Robotics & Discrete Automation.

Orders

amounted to $33,

818 million and were

down 1% versus the

prior year (up 3 %

comparable).

Revenues were

supported by execution

of the large order

backlog as supply chains

normalized early in the year

and

amounted to $32,235

million, up by 9% (14% comparable),

overall implying a book

-to-bill of 1.05.

Income from operations

amounted to $4,871

million, up from

$3,337 million year-on-year.

This increase can be attributed

mostly to an improved

operational performance.

In addition,

the prior year was

hampered by charges of

approximately

$195 million due

to the exit of the legacy

full-train retrofit

business as well as

a provision of $325 million

related to the

legacy Kusile project

in South Africa awarded

in 2015.

Operational EBITA

increased by 20%

year-on-year to

$5,427 million,

up from $4,510 million in

last year’s period

and the Operational

EBITA margin

improved by 160 basis

points to 16.9%.

The increase was driven by

higher margins

across all business

areas.

Main drivers of the margin

expansion were

operating leverage on higher

volumes as

well as the impacts

from implemented price

increases,

which more than offset

inflation in labor and

input cost.

Corporate and Other

Operational EBITA

amounted to -$430

million.

This includes a loss of $167

million that can be

attributed to the E-mobility

business, which was

negatively

affected by the

ongoing reorganization

to ensure a more

focused portfolio, and

some inventory-related

provisions.

Net finance expenses

increased by $52 million

$110

million, primarily driven by higher

interest rates on

higher debt levels compared

to the prior year.

The non-

operational pension

credits decreased by $98

million to

$17 million in comparison

to last year’s period, reflecting

the

impact of higher

interest rates. Income tax

expense was

$930 million reflecting

a tax rate of 19.5%. This

includes a

net benefit realized

on a favorable resolution of

a prior year

tax matter relating

to the Power Grids business.

Net income attributable

to ABB was $3,745 million,

up from

$2,475 million year-on-year.

Basic earnings per share was

$2.02,

representing an increase

of 55%

compared with the

prior year.

Significant events

Full year 2023

ABB

INTERIM

REPORT

2023

ABB Group

Q1 2022

Q2 2022

Q3 2022

Q4 2022

FY 2022

Q1 2023

Q2 2023

Q3 2023

Q4 2023

FY 2023

EBITDA, $ in million

1,067

794

906

1,384

4,151

1,389

1,494

1,453

1,315

5,651

Return on Capital Employed, %

n.a.

16.50

n.a.

21.10

Net debt/Equity

0.20

0.34

0.21

0.30

0.31

0.21

0.14

Net debt/ EBITDA 12M rolling

0.4

0.7

0.9

0.8

0.5

0.4

Net working capital, % of 12M rolling

revenues

12.1%

12.8%

11.7%

11.1%

13.9%

14.7%

12.8%

10.2%

Earnings per share, basic, $

0.31

0.20

0.19

0.61

1.30

0.56

0.49

0.48

0.50

2.02

Earnings per share, diluted, $

0.31

0.20

0.19

0.60

1.30

0.55

0.48

0.47

0.50

2.01

Dividend per share, CHF

n.a.

0.84

n.a.

0.87

Share price at the end of period, CHF

29.12

24.57

24.90

28.06

31.37

35.18

32.80

37.30

Share price at the end of period, $

30.76

25.43

24.41

30.46

34.30

39.32

35.86

44.32

Number of employees (FTE equivalents)

104,720

106,380

106,830

105,130

106,170

108,320

107,430

107,870

No. of shares outstanding at end of period

(in millions)

1,929

1,892

1,875

1,865

1,862

1,860

1,849

1,842

Data prior to October 3, 2022, has been adjusted for

the Accelleron spin-off (Source: FactSet).

Dividend proposal subject to shareholder approval at the

2024 AGM

Additional figures

Note: comparable growth calculation includes acquisitions

and divestments with revenues of greater than

$50 million.

Represents the estimated revenues for the last fiscal

year prior to the announcement of the respective

acquisition/divestment unless otherwise stated.

Additional 2024 guidance

($ in millions, unless otherwise stated)

FY 2024

Net finance expenses

~(120)

Effective tax rate

~25%

Capital Expenditures

~(900)

($ in millions, unless otherwise stated)

FY 2024

Q1 2024

Corporate and Other Operational EBITA

~(300)

~(75)

Non-operating items

Acquisition-related amortization

~(210)

~(55)

Restructuring and related

~(200)

~(50)

ABB Way transformation

~(180)

~(55)

Divestments

Company/unit

Closing date

Revenues, $ million

No. of employees

2023

Electrification

Power Conversion division

3-Jul

~440

1,500

Electrification

Industrial Plugs & Sockets business

3-Jul

~12

Process Automation

UK technical engineering consultancy

business

1-May

~20

160

Acquisitions

Company/unit

Closing date

Revenues, $ million

No. of employees

2023

Robotics & Discrete Automation

Sevensense

21-Dec

E-mobility

Imagen Energy Inc

13-Nov

Motion

Spring Point Solutions Llc

1-Nov

E-mobility

Vourity AB

25-Oct

Electrification

Eve Systems

1-Jun

~20

Motion

Siemens low voltage NEMA Motors

2-May

~60

600

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 Operational EBITA from E-mobility business.

Includes restructuring and restructuring-related as

well as separation and integration costs.

Excludes the impact of acquisitions or divestments

or any significant non-operational items.

Acquisitions and divestments, last twelve months

ABB

INTERIM

REPORT

2023

For additional information please contact:

Media Relations

Phone: +41 43 317

71 11

Email: media.relations@ch.abb.com

Investor Relations

Phone: +41 43 317

71 11

Email: investor.relations@ch.abb.com

ABB Ltd

Affolternstrasse

8050 Zurich

Switzerland

Financial calendar

2024

March 21

Annual General Meeting, Zurich

April 18

Q1 2024 results

July 18

Q2 2024 results

October 17

Q3 2024 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,” 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

“anticipates,” “expects,”

“estimates,” “plans,” “targets

,”

“guidance,”

“likely” 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 Q4 2023

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

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.

Important notice about forward-looking information

Q4 results presentation on February 1, 2024

ABB

is a technology leader

in electrification and automation,

enabling a more sustainable

and resource-efficient

future. The

company’s solutions

connect engineering know

-how and software to

optimize how things are

manufactured, moved, powered

and

operated. Building on

over 140 years of excellence,

ABB’s more than

105,000 employees are

committed to driving innovations

that

accelerate industrial

transformation.

Q4 2023 FINANCIAL INFORMATION

February 1, 2024

Q4 2023

Financial information

Q4 2023 FINANCIAL INFORMATION

—

Financial

Information

Contents

─ 07

Key Figures

08 ─

Consolidated Financial Information

(unaudited)

34 ─

Supplemental Reconciliations and Definitions

Q4 2023 FINANCIAL INFORMATION

—

Key Figures

CHANGE

($ in millions, unless otherwise indicated)

Q4 2023

Q4 2022

US$

Comparable

(1)

Orders

7,649

7,620

Order backlog (end December)

21,567

19,867

Revenues

8,245

7,824

Gross Profit

2,848

2,658

as % of revenues

34.5%

34.0%

+0.5 pts

Income from operations

1,116

1,185

-6%

Operational EBITA

(1)

1,333

1,146

16%

13%

(2)

as % of operational revenues

(1)

16.3%

14.8%

+1.5 pts

Income from continuing operations, net of tax

946

1,168

-19%

Net income attributable to ABB

921

1,132

-19%

Basic earnings per share ($)

0.50

0.61

-18%

(3)

Cash flow from operating activities

(4)

1,897

687

176%

Cash flow from operating activities in continuing operations

1,897

720

163%

CHANGE

($ in millions, unless otherwise indicated)

FY 2023

FY 2022

US$

Comparable

(1)

Orders

33,818

33,988

-1%

Revenues

32,235

29,446

14%

Gross Profit

11,214

9,710

15%

as % of revenues

34.8%

33.0%

+1.8 pts

Income from operations

4,871

3,337

46%

Operational EBITA

(1)

5,427

4,510

20%

(2)

as % of operational revenues

(1)

16.9%

15.3%

+1.6 pts

Income from continuing operations, net of tax

3,848

2,637

46%

Net income attributable to ABB

3,745

2,475

51%

Basic earnings per share ($)

2.02

1.30

55%

(3)

Cash flow from operating activities

(4)

4,290

1,287

233%

Cash flow from operating activities in continuing operations

4,301

1,334

222%

(1)

For a reconciliation

of non-GAAP measures

see “

Supplemental

Reconciliations

and Definitions

” on page 34.

(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.

Q4 2023 FINANCIAL INFORMATION

CHANGE

($ in millions, unless otherwise indicated)

Q4 2023

Q4 2022

US$

Local

Comparable

Orders

ABB Group

7,649

7,620

-1%

Electrification

3,395

3,385

-1%

Motion

1,937

1,649

17%

15%

13%

Process Automation

1,870

1,746

Robotics & Discrete Automation

550

798

-31%

-33%

Corporate and Other

125

257

Intersegment eliminations

(228)

(215)

Order backlog (end December)

ABB Group

21,567

19,867

Electrification

6,808

6,404

14%

Motion

5,343

4,726

13%

Process Automation

7,519

6,229

21%

19%

Robotics & Discrete Automation

2,141

2,679

-20%

Corporate and Other

(incl. intersegment eliminations)

(244)

(171)

Revenues

ABB Group

8,245

7,824

Electrification

3,698

3,498

Motion

1,946

1,845

Process Automation

1,727

1,551

11%

10%

Robotics & Discrete Automation

852

891

-4%

-7%

Corporate and Other

229

258

Intersegment eliminations

(207)

(219)

Income from operations

ABB Group

1,116

1,185

Electrification

670

569

Motion

292

316

Process Automation

259

183

Robotics & Discrete Automation

101

Corporate and Other

(incl. intersegment eliminations)

(204)

Income from operations %

ABB Group

13.5%

15.1%

Electrification

18.1%

16.3%

Motion

15.0%

17.1%

Process Automation

15.0%

11.8%

Robotics & Discrete Automation

11.6%

11.3%

Operational EBITA

ABB Group

1,333

1,146

16%

13%

Electrification

725

575

26%

24%

Motion

318

-1%

Process Automation

239

203

18%

19%

Robotics & Discrete Automation

118

125

-6%

Corporate and Other

(1)

(incl. intersegment eliminations)

(67)

(75)

Operational EBITA %

ABB Group

16.3%

14.8%

Electrification

19.7%

16.6%

Motion

16.6%

17.4%

Process Automation

14.0%

13.2%

Robotics & Discrete Automation

13.8%

14.0%

Cash flow from operating activities

ABB Group

1,897

687

Electrification

1,068

857

Motion

597

346

Process Automation

444

205

Robotics & Discrete Automation

170

105

Corporate and Other

(incl. intersegment eliminations)

(382)

(793)

Discontinued operations

–

(33)

(1)

Corporate and Other at Q4 2023 and Q4 2022 includes losses of $33 million and $3 million, respectively, relating to E-mobility.

Q4 2023 FINANCIAL INFORMATION

CHANGE

($ in millions, unless otherwise indicated)

FY 2023

FY 2022

US$

Local

Comparable

Orders

ABB Group

33,818

33,988

-1%

Electrification

15,189

15,182

Motion

8,222

7,896

Process Automation

7,535

6,825

10%

12%

24%

Robotics & Discrete Automation

3,066

4,116

-26%

-25%

Corporate and Other

720

787

Intersegment eliminations

(914)

(818)

Order backlog (end December)

ABB Group

21,567

19,867

Electrification

6,808

6,404

14%

Motion

5,343

4,726

13%

Process Automation

7,519

6,229

21%

19%

Robotics & Discrete Automation

2,141

2,679

-20%

Corporate and Other

(incl. intersegment eliminations)

(244)

(171)

Revenues

ABB Group

32,235

29,446

11%

14%

Electrification

14,584

13,619

10%

Motion

7,814

6,745

16%

17%

15%

Process Automation

6,270

6,044

16%

Robotics & Discrete Automation

3,640

3,181

14%

Corporate and Other

769

653

Intersegment eliminations

(842)

(796)

Income from operations

ABB Group

4,871

3,337

Electrification

2,800

2,140

Motion

1,390

1,092

Process Automation

947

663

Robotics & Discrete Automation

446

247

Corporate and Other

(incl. intersegment eliminations)

(712)

(805)

Income from operations %

ABB Group

15.1%

11.3%

Electrification

19.2%

15.7%

Motion

17.8%

16.2%

Process Automation

15.1%

11.0%

Robotics & Discrete Automation

12.3%

7.8%

Operational EBITA

ABB Group

5,427

4,510

20%

Electrification

2,937

2,343

25%

27%

Motion

1,475

1,163

27%

Process Automation

909

848

10%

Robotics & Discrete Automation

536

340

58%

Corporate and Other

(1)

(incl. intersegment eliminations)

(430)

(184)

Operational EBITA %

ABB Group

16.9%

15.3%

Electrification

20.1%

17.2%

Motion

18.9%

17.3%

Process Automation

14.5%

14.0%

Robotics & Discrete Automation

14.7%

10.7%

Cash flow from operating activities

ABB Group

4,290

1,287

Electrification

3,211

2,115

Motion

1,532

853

Process Automation

1,002

675

Robotics & Discrete Automation

436

214

Corporate and Other

(incl. intersegment eliminations)

(1,880)

(2,523)

Discontinued operations

(11)

(47)

(1)

Corporate and Other at FY 2023 and FY 2022 includes losses of $167 million and $15 million, respectively, relating to E-mobility.

Q4 2023 FINANCIAL INFORMATION

Operational EBITA

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions, unless otherwise indicated)

Q4 23

Q4 22

Q4 23

Q4 22

Q4 23

Q4 22

Q4 23

Q4 22

Q4 23

Q4 22

Revenues

8,245

7,824

3,698

3,498

1,946

1,845

1,727

1,551

852

891

Foreign exchange/commodity timing

differences in total revenues

(66)

(62)

(15)

(31)

(35)

(22)

(21)

(12)

Operational revenues

8,179

7,762

3,683

3,467

1,911

1,823

1,706

1,539

854

892

Income from operations

1,116

1,185

670

569

292

316

259

183

101

Acquisition-related amortization

Restructuring, related and

implementation costs

(1)

127

(4)

Changes in obligations related to

divested businesses

(71)

–

Gains and losses from sale of businesses

(4)

–

Acquisition- and divestment-related

expenses and integration costs

(4)

Certain other non-operational items

(28)

–

(14)

(8)

Foreign exchange/commodity timing

differences in income from operations

(59)

(69)

(25)

(45)

(28)

(17)

(13)

(16)

–

Operational EBITA

1,333

1,146

725

575

318

239

203

118

125

Operational EBITA margin (%)

16.3%

14.8%

19.7%

16.6%

17.4%

14.0%

13.2%

13.8%

14.0%

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions, unless otherwise indicated)

FY 23

FY 22

FY 23

FY 22

FY 23

FY 22

FY 23

FY 22

FY 23

FY 22

Revenues

32,235

29,446

14,584

13,619

7,814

6,745

6,270

6,044

3,640

3,181

Foreign exchange/commodity timing

differences in total revenues

(41)

(3)

(20)

(23)

(14)

(18)

Operational revenues

32,194

29,474

14,581

13,599

7,791

6,731

6,252

6,077

3,644

3,187

Income from operations

4,871

3,337

2,800

2,140

1,390

1,092

947

663

446

247

Acquisition-related amortization

220

229

104

Restructuring, related and

implementation costs

(1)

219

347

Changes in obligations related to

divested businesses

(3)

(88)

–

Gains and losses from sale of businesses

(101)

(75)

(1)

–

(26)

–

Acquisition- and divestment-related

expenses and integration costs

195

(7)

134

Certain other non-operational items

165

452

–

(10)

(8)

Foreign exchange/commodity timing

differences in income from operations

(18)

(6)

(19)

(13)

Operational EBITA

5,427

4,510

2,937

2,343

1,475

1,163

909

848

536

340

Operational EBITA margin (%)

16.9%

15.3%

20.1%

17.2%

18.9%

17.3%

14.5%

14.0%

14.7%

10.7%

(1)

Includes impairment of certain assets.

Q4 2023 FINANCIAL INFORMATION

Depreciation and Amortization

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions)

Q4 23

Q4 22

Q4 23

Q4 22

Q4 23

Q4 22

Q4 23

Q4 22

Q4 23

Q4 22

Depreciation

133

130

Amortization

including total acquisition-related amortization of:

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions)

FY 23

FY 22

FY 23

FY 22

FY 23

FY 22

FY 23

FY 22

FY 23

FY 22

Depreciation

517

531

256

253

108

105

Amortization

263

283

109

129

including total acquisition-related amortization of:

220

229

104

Orders received and revenues by region

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

Com-

Q4 23

Q4 22

US$

Local

parable

Q4 23

Q4 22

US$

Local

parable

Europe

2,554

2,604

-2%

-7%

-5%

2,951

2,765

The Americas

2,985

2,898

2,847

2,555

11%

10%

14%

of which United States

2,277

2,167

2,105

1,898

11%

15%

Asia, Middle East and Africa

2,110

2,118

2,447

2,504

-2%

of which China

895

976

-8%

-7%

1,064

1,133

-6%

-5%

ABB Group

7,649

7,620

-1%

8,245

7,824

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

Com-

FY 23

FY 22

US$

Local

parable

FY 23

FY 22

US$

Local

parable

Europe

11,458

11,778

-3%

-4%

-1%

11,568

10,285

12%

11%

14%

The Americas

12,437

11,825

11,090

9,573

16%

15%

18%

of which United States

9,204

8,920

8,248

7,023

17%

21%

Asia, Middle East and Africa

9,923

10,385

-4%

9,577

9,588

of which China

4,488

5,087

-12%

-7%

-5%

4,468

4,696

-5%

-1%

ABB Group

33,818

33,988

-1%

32,235

29,446

11%

14%

Q4 2023 FINANCIAL INFORMATION

—

Consolidated Financial Information

ABB Ltd Consolidated Income Statements (unaudited)

Year ended

Three months ended

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

Dec. 31, 2023

Dec. 31, 2022

Dec. 31, 2023

Dec. 31, 2022

Sales of products

27,010

24,471

6,800

6,525

Sales of services and other

5,225

4,975

1,445

1,299

Total revenues

32,235

29,446

8,245

7,824

Cost of sales of products

(17,938)

(16,804)

(4,545)

(4,365)

Cost of services and other

(3,083)

(2,932)

(852)

(801)

Total cost of sales

(21,021)

(19,736)

(5,397)

(5,166)

Gross profit

11,214

9,710

2,848

2,658

Selling, general and administrative expenses

(5,543)

(5,132)

(1,485)

(1,299)

Non-order related research and development expenses

(1,317)

(1,166)

(366)

(322)

Other income (expense), net

517

(75)

119

148

Income from operations

4,871

3,337

1,116

1,185

Interest and dividend income

165

Interest and other finance expense

(275)

(130)

(78)

(23)

Non-operational pension (cost) credit

115

(6)

Income from continuing operations before taxes

4,778

3,394

1,082

1,197

Income tax expense

(930)

(757)

(136)

(29)

Income from continuing operations, net of

tax

3,848

2,637

946

1,168

Loss from discontinued operations, net of tax

(24)

(43)

(8)

(7)

Net income

3,824

2,594

938

1,161

Net income attributable to noncontrolling

interests and redeemable noncontrolling interests

(79)

(119)

(17)

(29)

Net income attributable to ABB

3,745

2,475

921

1,132

Amounts attributable to ABB shareholders:

Income from continuing operations, net of tax

3,769

2,517

929

1,138

Loss from discontinued operations, net of tax

(24)

(42)

(8)

(6)

Net income

3,745

2,475

921

1,132

Basic earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

2.03

1.33

0.50

0.61

Loss from discontinued operations, net of tax

(0.01)

(0.02)

0.00

Net income

2.02

1.30

0.50

0.61

Diluted earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

2.02

1.32

0.50

0.60

Loss from discontinued operations, net of tax

(0.01)

(0.02)

0.00

Net income

2.01

1.30

0.50

0.60

Weighted-average number of shares outstanding

(in millions) used to compute:

Basic earnings per share attributable to ABB shareholders

1,855

1,899

1,845

1,870

Diluted earnings per share attributable to ABB shareholders

1,867

1,910

1,856

1,881

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

See Notes to the Consolidated Financial Information

Q4 2023 FINANCIAL INFORMATION

—

ABB Ltd Condensed Consolidated Statements of Comprehensive

Income (unaudited)

Year ended

Three months ended

($ in millions)

Dec. 31, 2023

Dec. 31, 2022

Dec. 31, 2023

Dec. 31, 2022

Total comprehensive income, net of

tax

3,315

2,189

586

1,414

Total comprehensive income

attributable to noncontrolling interests and

redeemable noncontrolling interests, net of tax

(84)

(87)

(30)

(29)

Total comprehensive income attributable

to ABB shareholders, net of tax

3,231

2,102

556

1,385

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

See Notes to the Consolidated Financial Information

Q4 2023 FINANCIAL INFORMATION

—

ABB Ltd Consolidated Balance Sheets (unaudited)

($ in millions)

Dec. 31, 2023

Dec. 31, 2022

Cash and equivalents

3,891

4,156

Restricted cash

Marketable securities and short-term investments

1,928

725

Receivables, net

7,446

6,858

Contract assets

1,090

954

Inventories, net

6,149

6,028

Prepaid expenses

235

230

Other current assets

520

601

Total current assets

21,277

19,570

Property, plant and equipment, net

4,142

3,911

Operating lease right-of-use assets

893

841

Investments in equity-accounted companies

187

130

Prepaid pension and other employee benefits

780

916

Intangible assets, net

1,223

1,406

Goodwill

10,561

10,511

Deferred taxes

1,381

1,396

Other non-current assets

496

467

Total assets

40,940

39,148

Accounts payable, trade

4,847

4,904

Contract liabilities

2,844

2,216

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

2,607

2,535

Current operating leases

249

220

Provisions for warranties

1,210

1,028

Other provisions

1,201

1,171

Other current liabilities

5,046

4,455

Total current liabilities

18,004

16,529

Long-term debt

5,221

5,143

Non-current operating leases

666

651

Pension and other employee benefits

686

719

Deferred taxes

669

729

Other non-current liabilities

1,548

2,105

Total liabilities

26,794

25,876

Commitments and contingencies

Redeemable noncontrolling interest

Stockholders’ equity:

Common stock, CHF 0.12 par value

(1,882 million and 1,965 million shares issued at December 31,

2023 and 2022, respectively)

163

171

Additional paid-in capital

141

Retained earnings

19,724

20,082

Accumulated other comprehensive loss

(5,070)

(4,556)

Treasury stock, at cost

(40 million and 100 million shares at December 31, 2023

and 2022, respectively)

(1,414)

(3,061)

Total ABB stockholders’ equity

13,410

12,777

Noncontrolling interests

647

410

Total stockholders’ equity

14,057

13,187

Total liabilities and stockholders’

equity

40,940

39,148

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

See Notes to the Consolidated Financial Information

Q4 2023 FINANCIAL INFORMATION

—

ABB Ltd Consolidated Statements of Cash Flows (unaudited)

Year ended

Three months ended

($ in millions)

Dec. 31, 2023

Dec. 31, 2022

Dec. 31, 2023

Dec. 31, 2022

Operating activities:

Net income

3,824

2,594

938

1,161

Loss from discontinued operations, net of tax

Adjustments to reconcile net income (loss) to

net cash provided by operating activities:

Depreciation and amortization

780

814

199

Changes in fair values of investments

(29)

(33)

(1)

Pension and other employee benefits

(48)

(125)

(18)

Deferred taxes

(25)

(344)

(161)

Loss from equity-accounted companies

102

Net gain from derivatives and foreign exchange

(55)

(23)

(11)

(67)

Net gain from sale of property,

plant and equipment

(116)

(84)

(77)

(20)

Net loss (gain) from sale of businesses

(101)

(4)

Other

158

Changes in operating assets and liabilities:

Trade receivables, net

(661)

(831)

158

(174)

Contract assets and liabilities

412

416

169

Inventories, net

(3)

(1,599)

435

Accounts payable, trade

(106)

395

(69)

Accrued liabilities

254

136

114

Provisions, net

211

(70)

105

(382)

Income taxes payable and receivable

(190)

(94)

(181)

(113)

Other assets and liabilities, net

(44)

(36)

Net cash provided by operating activities – continuing

operations

4,301

1,334

1,897

720

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

operations

(11)

(47)

–

(33)

Net cash provided by operating activities

4,290

1,287

1,897

687

Investing activities:

Purchases of investments

(1,957)

(321)

(854)

(50)

Purchases of property, plant and

equipment and intangible assets

(770)

(762)

(264)

(259)

Acquisition of businesses (net of cash acquired)

and increases in cost-

and equity-accounted companies

(225)

(288)

(65)

(62)

Proceeds from sales of investments

610

697

Proceeds from maturity of investments

149

Proceeds from sales of property,

plant and equipment

147

127

Proceeds from sales of businesses (net of transaction costs

and cash disposed) and cost-

and equity-accounted companies

553

1,541

1,549

Net cash from settlement of foreign currency derivatives

(109)

(166)

(33)

(12)

Changes in loans receivable, net

320

(5)

309

Other investing activities

(14)

(2)

(4)

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

operations

(1,592)

1,207

(1,119)

1,629

Net cash used in investing activities – discontinued

operations

(23)

(226)

(1)

(135)

Net cash provided by (used in) investing activities

(1,615)

981

(1,120)

1,494

Financing activities:

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

(1,365)

1,366

(368)

(109)

Increase in debt

2,586

3,849

295

Repayment of debt

(1,567)

(2,703)

(130)

(678)

Delivery of shares

154

394

Purchase of treasury stock

(1,258)

(3,553)

(349)

(302)

Dividends paid

(1,713)

(1,698)

–

Cash associated with the spin-off of the Turbocharging

Division

–

(172)

–

(172)

Dividends paid to noncontrolling shareholders

(93)

(99)

(4)

(16)

Proceeds from issuance of subsidiary shares

328

216

–

216

Other financing activities

Net cash used in financing activities – continuing

operations

(2,897)

(2,394)

(786)

(697)

Net cash provided by financing activities – discontinued

operations

–

Net cash used in financing activities

(2,897)

(2,394)

(786)

(697)

Effects of exchange rate changes on cash and equivalents

and restricted cash

(43)

(189)

Net change in cash and equivalents and restricted cash

(265)

(315)

1,486

Cash and equivalents and restricted cash, beginning of period

4,174

4,489

3,887

2,688

Cash and equivalents and restricted cash, end of period

3,909

4,174

3,909

4,174

Supplementary disclosure of cash flow information:

Interest paid

250

Income taxes paid

1,147

1,188

282

281

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

See Notes to the Consolidated Financial Information

Q4 2023 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, 2022

178

22,477

(4,088)

(3,010)

15,579

378

15,957

Net income

(1)

2,475

124

2,599

Foreign currency translation

adjustments, net of tax of $0

(608)

(31)

(639)

Effect of change in fair value of

available-for-sale securities,

net of tax of $(5)

(21)

Unrecognized income (expense)

related to pensions and other

postretirement plans,

net of tax of $86

256

(1)

255

Change in derivative instruments

and hedges, net of tax of $2

–

Issuance of subsidiary shares

120

206

Other changes in

noncontrolling interests

(34)

(24)

Dividends to

noncontrolling shareholders

–

(100)

Dividends to shareholders

(1,700)

Spin-off of the Turbocharging Division

(177)

(95)

(272)

(12)

(284)

Cancellation of treasury shares

(8)

(4)

(2,864)

2,876

–

Share-based payment arrangements

Purchase of treasury stock

(3,502)

Delivery of shares

(51)

(130)

575

394

Other

Balance at December 31, 2022

171

141

20,082

(4,556)

(3,061)

12,777

410

13,187

Balance at January 1, 2023

171

141

20,082

(4,556)

(3,061)

12,777

410

13,187

Net income

(1)

3,745

3,828

Foreign currency translation

adjustments, net of tax of $(2)

(286)

(281)

Effect of change in fair value of

available-for-sale securities,

net of tax of $3

Unrecognized income (expense)

related to pensions and other

postretirement plans,

net of tax of $(45)

(237)

Change in derivative instruments

and hedges, net of tax of $(1)

(2)

Issuance of subsidiary shares

170

168

338

Other changes in

noncontrolling interests

(31)

(37)

(68)

(1)

Dividends to

noncontrolling shareholders

–

(93)

Dividends to shareholders

(1,706)

Cancellation of treasury shares

(7)

(201)

(2,359)

2,567

–

Share-based payment arrangements

101

103

Purchase of treasury stock

(1,247)

Delivery of shares

(173)

327

154

Other

(2)

Balance at December 31, 2023

163

19,724

(5,070)

(1,414)

13,410

647

14,057

(1)

Amounts attributable to noncontrolling interests for the year ended December 31, 2023 and 2022, exclude net losses of $4 million and $5 million, respectively, related to redeemable

noncontrolling interests, which are reported in the mezzanine equity section on the Consolidated Balance Sheets. See Note 4 for details.

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

See Notes to the Consolidated Financial Information

Q4 2023 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 technology

leader in electrification and automation, enabling a more sustainable

and

resource-efficient future. The Company’s solutions connect

engineering know-how and software to optimize how things

are manufactured, moved, powered, and

operated.

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, 2022.

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:

●

estimates to determine valuation allowances for deferred tax assets

and amounts recorded for unrecognized tax benefits,

●

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,

●

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,

●

assumptions and projections, principally related to future material,

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

percentage-of-

completion on projects where revenue is recognized over time,

as well as the amount of variable consideration the

Company expects to be entitled to,

●

assumptions used in the calculation of pension and postretirement

benefits and the fair value of pension plan assets,

●

estimates used to record expected costs for employee severance

in connection with restructuring programs,

●

assumptions used in determining inventory obsolescence and net

realizable value,

●

growth rates, discount rates and other assumptions used to determine

impairment of long-lived assets and in testing goodwill

for impairment,

●

estimates and assumptions used in determining the fair values

of assets and liabilities assumed in business

combinations, and

●

estimates and assumptions used in determining the initial fair value

of retained noncontrolling interests

and certain obligations in connection with

divestments.

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.

Certain amounts reported in the Consolidated Financial Information for

prior periods have been reclassified to conform to the

current year’s presentation. These

changes relate primarily to the reorganization of the Company’s

operating segments (see Note 17 for details).

Q4 2023 FINANCIAL INFORMATION

─

Note 2

Recent accounting pronouncements

Applicable for current periods

Disclosure about supplier finance program obligations

In January 2023, the Company adopted an accounting standard

update which requires entities to disclose information related

to supplier finance programs. Under

the update, the Company is required to disclose annually

(i) the key terms of the program, (ii) the amount of the supplier

finance obligations outstanding and where

those obligations are presented in the balance sheet at the reporting

date, and (iii) a rollforward of the supplier finance obligation

program within the reporting

period. The Company adopted this update retrospectively for all

in-scope transactions, with the exception of the rollforward

disclosures, which will be adopted

prospectively for annual periods beginning January 1, 2024.

Apart from the additional disclosure requirements, this

update does not have a significant impact on

the Company’s consolidated financial statements.

The total outstanding supplier finance obligation included in “Accounts

payable, trade” in the Consolidated Balance Sheets

at December 31, 2023 and

December 31, 2022, amounted to $415 million and $477 million,

respectively. The Company’s

payment terms related to suppliers’ finance programs are not

impacted by the suppliers’ decisions to sell amounts under the

arrangements and are typically consistent with local market

practices.

Facilitation of the effects of reference rate reform on financial

reporting

In January 2023, the Company adopted an accounting standard

update 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. The Company is applying this standard

update as relevant contract and hedge

accounting relationship modifications are made during the course

of the transition period ending December 31, 2024. This

update does not have a significant

impact on the Company’s consolidated financial statements.

Applicable for future periods

Improvements to reportable segment disclosures

In November 2023, an accounting standard update was issued which

requires the Company to disclose additional reportable segment

information primarily

through enhanced disclosures about significant segment expenses

and extending certain annual disclosure requirements

to quarterly. This update

is effective for

the Company for annual periods beginning January 1, 2024, and

interim periods beginning January 1, 2025, and is to be

applied retrospectively to each prior

reporting period presented. The Company is currently evaluating

the impact of adopting this update on its consolidated

financial statements.

Improvements to income tax disclosures

In December 2023, an accounting standard update was issued which

requires the Company to disclose additional information

related to income taxes. Under the

update, the Company is required to annually disclose by jurisdiction

(i) additional disaggregated information within the

tax rate reconciliation and (ii) income taxes

paid. This update is effective for the Company prospectively,

with retrospective adoption permitted, for annual

periods beginning January 1, 2025. The Company

currently evaluating the impact of adopting this update on

its consolidated financial statements.

─

Note 3

Discontinued operations

In 2020, the Company completed the divestment of its

Power Grids business to Hitachi Ltd (Hitachi).

As this divestment represented a strategic shift that would

have a major effect on the Company’s operations

and financial results, the results of operations for this

business are presented as discontinued operations. Certain

of the business contracts in the Power Grids business

continue to be executed by subsidiaries of the Company for the

benefit/risk of Hitachi Energy.

The remaining

business activities of the Power Grids business being executed by

the Company are not significant.

Upon closing of the sale, the Company entered into various

transition services agreements (TSAs),

some of which continue to have services performed. Pursuant

to these TSAs, the Company and Hitachi Energy provide to

each other, on a transitional basis,

various services. The services provided by the Company

primarily

include finance, information technology,

human resources and certain other administrative services.

The TSAs were to be performed for up to 3 years with the

possibility to agree on extensions on an exceptional basis for

business-critical services which are reasonably necessary

to avoid a material adverse impact on the

business. The TSA for information technology services was

extended until mid-2025. In the year and three

months ended December 31, 2023, the Company has

recognized within its continuing operations, general and administrative

expenses incurred to perform the TSAs, offset

by $121 million and $20 million in

TSA-related income for such services that is reported in Other

income (expense), net. In the year and three months ended

December 31, 2022, the Company has

recognized within its continuing operations, general and administrative

expenses incurred to perform the TSAs, offset

by $162 million and $47 million in

TSA-related income for such services that is reported in Other

income (expense), net.

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 at the time of their

disposal. Changes to these retained obligations are also included

in Loss from discontinued operations, net

of tax.

Q4 2023 FINANCIAL INFORMATION

─

Note 4

Acquisitions and equity-accounted companies

Acquisition of controlling interests

Acquisitions of controlling interests were as follows:

Year ended December 31,

Three months ended December 31,

($ in millions, except number of acquired businesses)

2023

2022

2023

2022

Purchase price for acquisitions (net of cash acquired)

(1)

175

195

Aggregate excess of purchase price over

fair value of net assets acquired

(2)

142

229

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 in the year ended

December 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 Comp

any’s consolidated financial

statements since the date of acquisition.

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

In-Charge to a 60 percent controlling interest through

a stock purchase agreement. In-Charge

headquartered in Santa Monica, USA, and is a provider of

turn-key commercial electric vehicle charging hardware and

software solutions. The resulting cash

outflows for the Company amounted to $134

million (net of cash acquired of $4 million). The acquisition

expands the market presence of the E-mobility

operating

segment, 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),

net” in the year ended December 31, 2022. The Company

entered into

an agreement with the remaining noncontrolling shareholders

allowing either 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.

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.

Business divestments

In the year and three months ended December 31, 2023,

the Company received proceeds (net of transaction costs

and cash disposed) of $553 million and

$1 million, respectively, relating to

divestments of consolidated businesses and recorded

gains of $101 million and $4 million, respectively,

in “Other income

(expense), net” on the sale of such businesses. These are primarily

due the divestment of the Company’s

Power Conversion Division to AcBel Polytech Inc.,

which

prior to its sale was part of the Company’s Electrification

operating segment. Certain amounts included in the net gain for

the sale of Power Conversion Division

are estimated or otherwise subject to change in value and, as

a result, the Company may record additional adjustments

to the gain in future periods which are

not

expected to have a material impact on the consolidated financial statements.

On September 7, 2022, the shareholders approved the spin-off

of the Company’s Turbocharging Division

into an independent, publicly traded company,

Accelleron

Industries AG (Accelleron), which was completed through the

distribution of common stock of Accelleron to the stockholders

of ABB on October 3, 2022. As a

result of the spin-off of this Division, the Company distributed

net assets of $272 million, net of amounts

attributable to noncontrolling interests of $12 million,

which

was reflected as a reduction in Retained earnings. In addition,

total accumulated comprehensive income of $95

million, including the cumulative translation

adjustment, was reclassified to Retained earnings. Cash and cash

equivalents distributed with Accelleron was $172 million.

The results of operations of the

Turbocharging Division, are included in the continuing

operations of the Process Automation operating segment

for all periods presented through to the spin

-off

date. In the year ended December 31, 2022, Income continuing operations

before taxes, included income of $134 million from

this Division. In anticipation of the

spin-off, the Company granted to a subsidiary of Accelleron access

to funds in the form of a short-term intercompany loan.

At the spin-off date, this loan, having a

principal amount of 300 million Swiss francs ($306 million at

the date of spin-off), was due to the Company

and subsequently collected in October 2022.

Investments in equity-accounted companies

In connection with the divestment of its Power Grids business

to Hitachi in 2020 (see Note 3), the Company

initially retained a 19.9

percent interest in the business

until December 2022, when the retained investment was sold to Hitachi.

During the Company’s period of ownership

of the retained 19.9 percent interest, based on

its continuing involvement with the Power Grids business, including

the membership in its governing board of directors,

the Company concluded that it had

significant influence over Hitachi Energy.

As a result, the investment was accounted for using the

equity method through to the date of its sale.

In September 2022, the Company and Hitachi agreed terms to sell

the Company’s remaining investment in Hitachi

Energy to Hitachi and simultaneously settle

certain outstanding contractual obligations relating to the initial sale

of the Power Grids business, including certain

indemnification guarantees (see Note 15). The

sale of the remaining investment was completed in December 2022,

resulting in cash proceeds of $1,552 million

and a gain of $43 million which was recorded in

“Other income (expense), net”.

In the year and three months ended December 31, 2023

and 2022,

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:

Year ended December 31,

Three months ended December 31,

($ in millions)

2023

2022

2023

2022

Income (loss) from equity-accounted companies, net of taxes

(16)

(22)

(5)

Basis difference amortization (net of deferred income tax benefit)

–

(80)

–

(14)

Loss from equity-accounted companies

(16)

(102)

(5)

(2)

Q4 2023 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:

December 31, 2023

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

1,449

Time deposits

2,923

2,460

463

Equity securities

1,250

1,282

5,622

–

5,654

3,909

1,745

Changes in fair value recorded

in other comprehensive income

Debt securities available-for-sale:

U.S. government obligations

189

(8)

183

189

(8)

183

–

183

Total

5,811

(8)

5,837

3,909

1,928

Of which:

Restricted cash, current

December 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

1,715

Time deposits

2,459

Equity securities

345

355

4,519

–

4,529

4,174

355

Changes in fair value recorded

in other comprehensive income

Debt securities available-for-sale:

U.S. government obligations

269

(15)

255

Other government obligations

Corporate

(7)

391

(22)

370

–

370

Total

4,910

(22)

4,899

4,174

725

Of which:

Restricted cash, current

Q4 2023 FINANCIAL INFORMATION

─

Note 6

Derivative financial instruments

The Company is exposed to certain currency,

commodity and interest rate 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 purchas

es, 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.

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)

December 31, 2023

December 31, 2022

Foreign exchange contracts

12,335

13,509

Embedded foreign exchange derivatives

1,137

933

Cross-currency interest rate swaps

886

855

Interest rate contracts

1,606

2,830

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,

steel 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

December 31, 2023

December 31, 2022

Copper swaps

metric tonnes

35,015

29,281

Silver swaps

ounces

2,359,363

2,012,213

Steel swaps

metric tonnes

10,206

–

Aluminum swaps

metric tonnes

5,900

6,825

Cash flow hedges

As noted above, the Company mainly uses forward foreign exchange

contracts to manage the foreign exchange risk

of its operations and commodity swaps to

manage its commodity risks. 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 year

and three months ended December 31, 2023 and 202

2, 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”.

The effect of derivative instruments, designated and qualifying

as fair value hedges, on the Consolidated Income

Statements was as follows:

Year ended December 31,

Three months ended December 31,

($ in millions)

2023

2022

2023

2022

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

Interest rate contracts

Designated as fair value hedges

(91)

(8)

Hedged item

(45)

(14)

Cross-currency interest rate swaps

Designated as fair value hedges

(134)

(9)

Hedged item

(40)

135

(42)

Q4 2023 FINANCIAL INFORMATION

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

Year ended December 31,

Three months ended December 31,

($ in millions)

Location

2023

2022

2023

2022

Foreign exchange contracts

Total revenues

145

(56)

158

145

Total cost of sales

(71)

(51)

(36)

SG&A expenses

(1)

(8)

Non-order related research

and development

(7)

–

(3)

(2)

Interest and other finance expense

(240)

(128)

(224)

Embedded foreign exchange

Total revenues

(3)

(21)

(15)

contracts

Total cost of sales

(11)

Commodity contracts

Total cost of sales

(3)

(47)

Other

Interest and other finance expense

–

Total

(129)

(193)

(133)

121

(1)

SG&A expenses represent

“Selling, general and

administrative expenses”.

The fair values of derivatives included in the Consolidated Balance

Sheets were as follows:

December 31, 2023

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

–

230

Other

–

Total

–

232

Derivatives not designated as hedging instruments:

Foreign exchange contracts

123

177

Commodity contracts

–

Interest rate contracts

–

Other equity contracts

–

Embedded foreign exchange derivatives

Total

159

207

Total fair value

169

230

246

December 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

–

288

Other

–

Total

–

349

Derivatives not designated as hedging instruments:

Foreign exchange contracts

140

Commodity contracts

–

Interest rate contracts

–

Embedded foreign exchange derivatives

Total

169

112

Total fair value

184

121

367

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.

Q4 2023 FINANCIAL INFORMATION

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 December 31, 2023 and 2022, have been presented

on a gross basis.

The Company’s netting agreements and other similar arrangements

allow net settlements under certain conditions.

At December 31, 2023 and 2022, information

related to these offsetting arrangements was as follows:

($ in millions)

December 31, 2023

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

176

(111)

–

Total

176

(111)

–

($ in millions)

December 31, 2023

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

445

(111)

–

334

Total

445

(111)

–

334

($ in millions)

December 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

194

(96)

–

Total

194

(96)

–

($ in millions)

December 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

458

(96)

–

362

Total

458

(96)

–

362

Q4 2023 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 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 of

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, 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:

December 31, 2023

($ in millions)

Level 1

Level 2

Level 3

Total fair value

Assets

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

Equity securities

–

1,282

–

1,282

Debt securities—U.S. government obligations

183

–

183

Derivative assets—current in “Other current assets”

–

169

–

169

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

–

Total

183

1,486

–

1,669

Liabilities

Derivative liabilities—current in “Other current liabilities”

–

230

–

230

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

–

246

–

246

Total

–

476

–

476

Q4 2023 FINANCIAL INFORMATION

December 31, 2022

($ in millions)

Level 1

Level 2

Level 3

Total fair value

Assets

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

Equity securities

–

355

–

355

Debt securities—U.S. government obligations

255

–

255

Debt securities—European government obligations

–

Debt securities—Corporate

–

Derivative assets—current in “Other current assets”

–

184

–

184

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

–

Total

255

681

–

936

Liabilities

Derivative liabilities—current in “Other current liabilities”

–

121

–

121

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

–

367

–

367

Total

–

488

–

488

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”:

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. 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

There were no significant non-recurring fair value measurements

during the years ended December 31, 2023 and 2022.

Disclosure about financial instruments carried on a cost

basis

The fair values of financial instruments carried on a cost

basis were as follows:

December 31, 2023

($ 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

1,431

–

1,431

Time deposits

2,460

–

2,460

–

2,460

Restricted cash

–

Marketable securities and short-term investments

(excluding securities):

Time deposits

463

–

463

–

463

Liabilities

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

(excluding finance lease obligations)

2,576

2,521

–

2,576

Long-term debt (excluding finance lease obligations)

5,060

5,096

–

5,101

December 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

1,697

–

1,697

Time deposits

2,459

–

2,459

–

2,459

Restricted cash

–

Liabilities

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

(excluding finance lease obligations)

2,500

1,068

1,432

–

2,500

Long-term debt (excluding finance lease obligations)

4,976

4,813

–

4,843

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, 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.

Q4 2023 FINANCIAL INFORMATION

●

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)

December 31, 2023

December 31, 2022

December 31, 2021

Contract assets

1,090

954

990

Contract liabilities

2,844

2,216

1,894

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. Management expects

that the majority of the amounts will be

collected within one year of the respective balance sheet date.

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 predominantly on 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:

Year ended December 31,

2023

2022

Contract

($ in millions)

assets

liabilities

assets

liabilities

Revenue recognized, which was included in the Contract liabilities

balance at Jan 1, 2023/2022

(1,311)

(1,043)

Additions to Contract liabilities - excluding amounts recognized as

revenue during the period

1,845

1,481

Receivables recognized that were included in the Contract

assets balance at Jan 1, 2023/2022

(622)

(591)

The Company considers its order backlog to represent its

unsatisfied performance obligations. At December 31, 2023,

the Company had unsatisfied performance

obligations totaling $21,567 million and, of this amount, the Company

expects to fulfill approximately 69 percent of the obligations

in 2024, approximately

16 percent of the obligations in 2025 and the balance thereafter.

Q4 2023 FINANCIAL INFORMATION

─

Note 9

Debt

The Company’s total debt at December 31, 2023 and

2022, amounted to $7,828 million and $7,678 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)

December 31, 2023

December 31, 2022

Short-term debt

1,448

Current maturities of long-term debt

2,520

1,087

Total

2,607

2,535

Short-term debt primarily represented issued commercial paper and

short-term bank borrowings from various banks.

At December 31, 2023, no amount was

outstanding under the $2 billion Euro-commercial paper program, while

at December 31, 2022, $1,383 million was outstanding

under this program.

In September 2023, the Company repaid at maturity its CHF

275 million 0% Bonds, equivalent to $302 million on date

of repayment.

In May 2023, the Company

repaid at maturity its EUR 700 million 0.625% Instruments,

equivalent to $772 million on date of repayment.

Long-term debt

The Company’s long-term debt at December 31, 2023 and

2022, amounted to $5,221 million and $5,143 million, respectively.

Outstanding bonds (including maturities within the next 12 months)

were as follows:

December 31, 2023

December 31, 2022

(in millions)

Nominal outstanding

Carrying value

(1)

Nominal outstanding

Carrying value

(1)

Bonds:

0.625% EUR Instruments, due 2023

EUR

700

742

0% CHF Bonds, due 2023

CHF

275

298

0.625% EUR Instruments, due 2024

EUR

700

768

EUR

700

720

Floating Rate EUR Instruments, due 2024

EUR

500

554

EUR

500

536

0.75% EUR Instruments, due 2024

EUR

750

819

EUR

750

769

0.3% CHF Bonds, due 2024

CHF

280

335

CHF

280

303

2.1% CHF Bonds, due 2025

CHF

150

179

CHF

150

162

1.965% CHF Bonds, due 2026

CHF

325

387

3.25% EUR Instruments, due 2027

EUR

500

551

0.75% CHF Bonds, due 2027

CHF

425

507

CHF

425

460

3.8% USD Notes, due 2028

(2)

USD

383

382

USD

383

381

1.9775% CHF Bonds, due 2028

CHF

150

179

1.0% CHF Bonds, due 2029

CHF

170

203

CHF

170

184

0% EUR Instruments, due 2030

EUR

800

749

EUR

800

677

2.375% CHF Bonds, due 2030

CHF

150

178

CHF

150

162

3.375% EUR Instruments, due 2031

EUR

750

818

2.1125% CHF Bonds, due 2033

CHF

275

327

4.375% USD Notes, due 2042

(2)

USD

609

591

USD

609

590

Total

7,527

5,984

(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 January 2023, the Company issued the following EUR Instruments:

(i) EUR 500 million of 3.25 percent Instruments,

due 2027, and (ii) EUR 750 million of

3.375 percent Instruments, due 2031, both paying interest

annually in arrears. The aggregate net proceeds

of these EUR Instruments, after discount and

fees,

amounted to EUR 1,235 million (equivalent to approximately

$1,338 million on date of issuance).

In September 2023, the Company issued the following CHF

Bonds:

(i) CHF 325 million of 1.965 percent Bonds, due 2026,

(ii) CHF 150 million of 1.9775 percent

Bonds, due 2028,

and (iii) CHF 275 million of 2.1125

percent Bonds, due 2033,

all paying interest annually in arrears. The aggregate net proceeds

of these CHF

Bonds, after fees, amounted to CHF 748 million (equivalent to

approximately $825 million on date of issuance).

Subsequent events

In January 2024, the Company issued the following EUR Instruments

(i) EUR 500 million of 3.125 percent notes,

due 2029, and (ii) EUR 750 million of

3.375 percent notes,

due 2034, both paying interest annually in arrears.

The aggregate net proceeds of these EUR Instruments, after discount

and fees, amounted

to EUR 1,243 million (equivalent to approximately $1,360 million

on date of issuance).

Q4 2023 FINANCIAL INFORMATION

─

Note 10

Commitments and contingencies

Contingencies—Regulatory, Compliance

and Legal

Regulatory

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 SIU 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

made a provision of approximately $325 million which was

recorded in

Other income (expense), net, during the third quarter of 2022.

In December 2022, the Company settled with the SEC and

DoJ as well as the authorities in South

Africa and Switzerland. The matter is still pending with the

authorities in Germany,

but the Company does not believe that it will need to record

any additional

provisions for this matter.

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 December 31, 2023 and 2022, the Company had aggregate

liabilities of $101 million and $86 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)

December 31, 2023

December 31, 2022

Performance guarantees

3,451

4,300

Financial guarantees

Total

(1)

3,545

4,396

(1)

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 December 31,

2023 and 2022, were not significant.

The Company is party to various guarantees providing financial

or performance assurances to certain third parties. These guarantees,

which have various

maturities up to 2032, 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 December 31, 2023 and 2022, the

maximum potential payable under these

guarantees amounts to $874 million and $843 million, respectively,

and these guarantees have various original maturities

ranging from five to ten years.

The Company retained obligations for financial and performance guarantees

related to the sale of the Power Grids business

(see Note 3 for details). At both

December 31, 2023 and 2022,

the performance and financial guarantees have

been fully indemnified by Hitachi Ltd. These guarantees,

which have various

maturities up to 2032, 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 these

guarantees at December 31, 2023 and

2022, is approximately $2.2 billion and $3.0 billion, respectively.

On completing the sale of the Company’s

remaining 19.9 percent interest in Hitachi Energy Ltd. to

Hitachi in 2022, the Company also settled certain existing indemnification

guarantees that were due to be settled concurrent with

such transaction. As a result, in

2022, the Company recorded $136 million of cash outflows

for the settlement of these liabilities (recorded in discontinued

operations).

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 December 31, 2023 and 2022, the total outstanding performance

bonds aggregated to $3.1 billion and $2.9 billion, respectively

There have been no

significant amounts reimbursed to financial institutions under these types

of arrangements in the year and three months ended

December 31, 2023 and 2022.

Q4 2023 FINANCIAL INFORMATION

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)

2023

2022

Balance at January 1,

1,028

1,005

Net change in warranties due to acquisitions, divestments and spin-offs

–

(24)

Claims paid in cash or in kind

(171)

(157)

Net increase in provision for changes in estimates, warranties

issued and warranties expired

327

252

Exchange rate differences

(48)

Balance at December 31,

1,210

1,028

Provisions for contractual penalties

During the three months ended December 31, 2022, the Company

reversed a provision of $61 million it had previously

recorded relating to one of its divested

businesses based on a settlement proposal issued by the ruling court

As the provision related to a customer contractual obligation,

the adjustment was reported

as an increase in Sales of products and resulted in an increase

in earnings per share (basic and diluted) of $0.03 for both the

year and three months ended

December 31, 2022. In addition, as this amount relates

to a divested business, it has been excluded from the Company’s

primary measure of segment

performance, Operational EBITA (See

Note 17).

─

Note 11

Income taxes

The effective tax rate of 19.5 percent in the year ended

December 31, 2023, was lower than the effective

tax rate of 22.3 percent in the year ended December

31,

2022, primarily due to a net benefit realized on a favorable resolution

of an uncertain tax position in the year ended December

31, 2023, while 2022 included

positive impacts from a reversal of a valuation allowance in the

Americas partially offset by the negative

impact of non-deductible regulatory penalties

in connection

with the Kusile project.

In February 2023, on completion of a tax audit, the Company

obtained resolution of the uncertain tax position for which

an amount was recorded within Other non-

current liabilities as of December 31, 2022. In the year ended

December 31, 2023, the Company released the

provision of $206 million, due to the resolution of

this

matter,

which resulted in an increase of $0.11

in earnings per share (basic and diluted) for the year

ended December 31, 2023.

─

Note 12

Employee benefits

The Company operates defined benefit pension plans, defined contribution

pension plans, and termination indemnity plans,

in accordance with local regulations

and practices. At December 31, 2023, the Company’s

most significant defined benefit pension plans are in Switzerland

as well as in Germany, the United

Kingdom, and the United States. 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 31. The funding policies of the Company’s

plans are consistent with the local

government and tax requirements.

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

Other postretirement

Switzerland

International

benefits

Year ended December 31,

2023

2022

2023

2022

2023

2022

Operational pension cost:

Service cost

–

Operational pension cost

–

Non-operational pension cost (credit):

Interest cost

166

Expected return on plan assets

(129)

(116)

(157)

(153)

–

Amortization of prior service cost (credit)

(8)

(9)

(2)

(1)

(2)

Amortization of net actuarial loss

–

(4)

(3)

Curtailments, settlements and special termination benefits

(16)

–

Non-operational pension cost (credit)

(76)

(108)

(3)

(19)

(4)

Net periodic benefit cost (credit)

(36)

(58)

108

(19)

(4)

Q4 2023 FINANCIAL INFORMATION

($ in millions)

Defined pension benefits

Other postretirement

Switzerland

International

benefits

Three months ended December 31,

2023

2022

2023

2022

2023

2022

Operational pension cost:

Service cost

–

Operational pension cost

–

Non-operational pension cost (credit):

Interest cost

–

Expected return on plan assets

(35)

(29)

(41)

(40)

–

Amortization of prior service cost (credit)

(2)

(4)

–

(1)

Amortization of net actuarial loss

–

(1)

Curtailments, settlements and special termination benefits

–

Non-operational pension cost (credit)

(11)

(18)

–

(2)

Net periodic benefit cost (credit)

–

(8)

–

(2)

The components of net periodic benefit cost other than the service

cost component are included in the line “Non-operational

pension cost (credit)” in the income

statement.

Employer contributions were as follows:

($ in millions)

Defined pension benefits

Other postretirement

Switzerland

International

benefits

Year ended December 31,

2023

2022

2023

2022

2023

2022

Total contributions

to defined benefit pension and

Other postretirement

Switzerland

International

benefits

Three months ended December 31,

2023

2022

2023

2022

2023

2022

Total contributions

to defined benefit pension and

other postretirement benefit plans

Of which, discretionary contributions to defined benefit

pension plans

–

─

Note 13

Stockholder's equity

At the Annual General Meeting of Shareholders (AGM) on March

23, 2023, shareholders approved the proposal of the

Board of Directors to distribute 0.84

Swiss

francs per share to shareholders. The declared dividend amounted

to $1,706 million, with the Company disburs

ing a portion in March and the remaining amounts

in April.

In March 2023, the Company completed the share buyback

program that was launched in April 2022. This program was executed

on a second trading line on the

SIX Swiss Exchange. Through this program, the Company purchased

a total of 67 million shares for approximately

$2.0 billion, of which 8 million shares were

purchased in the first quarter of 2023 (resulting in an

increase in Treasury stock of $253 million

Also in March 2023, the Company announced a new share buyback

program of up to $1 billion. This program, which was

launched in April 2023, is being executed

on a second trading line on the SIX Swiss Exchange and is planned

to run until the Company’s 2024 AGM. Through

this program, the Company purchased, from

the program’s launch in April 2023 to December 31,

2023, 17 million shares, resulting in an increase in Treasury

stock of $640 million.

In the second quarter of 2023, the Company cancelled 83

million shares which had been purchased under its share

buyback program. This resulted in a decrease

in Treasury stock of $2,567

million and a corresponding total decrease in Capital

stock, Additional paid-in capital and Retained earnings.

In addition to the share buyback programs, the Company

purchased 9 million of its own shares on the open market

in the year ended December 31, 2023, mainly

for use in connection with its employee share plans, resulting

in an increase in Treasury

stock of $354 million.

In the year ended December 31, 2023, the Company delivered,

out of treasury stock, approximately 6 million shares in connection

with its Management Incentive

Plan.

In February 2023, the Company obtained funding through

a private placement of shares in its ABB E-Mobility subsidiary,

ABB E-mobility Holding Ltd

(ABB E-Mobility),

receiving gross proceeds of 325 million Swiss francs

(approximately $351 million) and reducing the Company’s

ownership in ABB E-Mobility from

92 percent to 81 percent. This resulted in an increase

in Additional paid-in capital of $170

million. In December 2023, an agreement was

reached to increase the

ownership percentage of the investors participating in these private placements

to 25 percent for no additional consideration.

Q4 2023 FINANCIAL INFORMATION

─

Note 14

Earnings per share

Basic earnings per share is calculated by dividing income by the

weighted-average number of shares outstanding during

the period. Diluted earnings per share is

calculated by dividing income by the weighted-average number of shares

outstanding during the period, assuming that all potentially

dilutive securities were

exercised, if dilutive. Potentially dilutive securities comprise outstanding

written call options, and outstanding options and

shares granted subject to certain

conditions under the Company’s share-based payment arrangements.

Basic earnings per share

Year ended December 31,

Three months ended December 31,

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

2023

2022

2023

2022

Amounts attributable to ABB shareholders:

Income from continuing operations, net of tax

3,769

2,517

929

1,138

Loss from discontinued operations, net of tax

(24)

(42)

(8)

(6)

Net income

3,745

2,475

921

1,132

Weighted-average number of shares outstanding

(in millions)

1,855

1,899

1,845

1,870

Basic earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

2.03

1.33

0.50

0.61

Loss from discontinued operations, net of tax

(0.01)

(0.02)

0.00

Net income

2.02

1.30

0.50

0.61

Diluted earnings per share

Year ended December 31,

Three months ended December 31,

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

2023

2022

2023

2022

Amounts attributable to ABB shareholders:

Income from continuing operations, net of tax

3,769

2,517

929

1,138

Loss from discontinued operations, net of tax

(24)

(42)

(8)

(6)

Net income

3,745

2,475

921

1,132

Weighted-average number of shares outstanding (in millions)

1,855

1,899

1,845

1,870

Effect of dilutive securities:

Call options and shares

Adjusted weighted-average number of shares outstanding

(in millions)

1,867

1,910

1,856

1,881

Diluted earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

2.02

1.32

0.50

0.60

Loss from discontinued operations, net of tax

(0.01)

(0.02)

0.00

Net income

2.01

1.30

0.50

0.60

Q4 2023 FINANCIAL INFORMATION

─

Note 15

Reclassifications out of accumulated other comprehensive loss

The following table shows changes in “Accumulated other comprehensive

loss” (OCI) attributable to ABB, by component, net

of tax:

Unrealized gains

Pension and

Foreign currency

(losses) on

other

Derivative

translation

available-for-sale

postretirement

instruments

($ in millions)

adjustments

securities

plan adjustments

and hedges

Total OCI

Balance at January 1, 2022

(2,993)

(1,089)

(8)

(4,088)

Other comprehensive (loss) income:

Other comprehensive (loss) income

before reclassifications

(685)

(23)

226

(12)

(494)

Amounts reclassified from OCI

Total other comprehensive (loss)

income

(639)

(21)

255

–

(405)

Spin-off of the Turbocharging Division

(93)

–

(5)

–

(98)

Less:

Amounts attributable to

noncontrolling interests

(34)

–

(1)

–

(35)

Balance at December 31, 2022

(3,691)

(19)

(838)

(8)

(4,556)

Other comprehensive (loss) income:

Other comprehensive (loss) income

before reclassifications

(290)

(283)

(10)

(578)

Amounts reclassified from OCI

Total other comprehensive (loss)

income

(281)

(237)

(2)

(509)

Less:

Amounts attributable to

noncontrolling interests and

redeemable noncontrolling interests

–

Balance at December 31, 2023

(3,977)

(8)

(1,075)

(10)

(5,070)

The following table reflects amounts reclassified out of OCI

in respect of Foreign currency translation adjustments

and Pension and other postretirement plan

adjustments:

Year ended

Three months ended

($ in millions)

Location of (gains) losses

December 31,

Details about OCI components

reclassified from OCI

2023

2022

2023

2022

Foreign currency translation adjustments:

Changes attributable to divestments

Other income (expense), net

–

Net loss on complete or substantially complete

liquidations of foreign subsidiaries

Other income (expense), net

–

Amounts reclassified from OCI

–

Pension and other postretirement plan adjustments:

Amortization of prior service cost (credit)

Non-operational pension (cost) credit

(11)

(13)

(2)

(5)

Amortization of net actuarial loss

Non-operational pension (cost) credit

Net gain (loss) from settlements and curtailments

Non-operational pension (cost) credit

Changes attributable to divestments

Other income (expense), net

(8)

Total before tax

Tax

Income tax expense

(10)

(16)

(9)

(6)

Amounts reclassified from OCI

The amounts in respect of Unrealized gains (losses)

on available-for-sale securities and Derivative instruments

and hedges were not significant for the year and

three months ended December 31, 2023 and 2022.

Q4 2023 FINANCIAL INFORMATION

─

Note 16

Restructuring and related expenses

Restructuring-related activities

In the year and three months ended December 31, 2023

and 2022, the Company executed various restructuring

-related activities and incurred the following

expenses:

Year ended December 31,

Three months ended December 31,

($ in millions)

2023

2022

2023

2022

Employee severance costs

120

Estimated contract settlement, loss order and other costs

209

Inventory and long-lived asset impairments

Total

176

297

116

Expenses associated with these activities are recorded in the following

line items in the Consolidated Income Statements:

Year ended December 31,

Three months ended December 31,

($ in millions)

2023

2022

2023

2022

Total cost of sales

Selling, general and administrative expenses

Non-order related research and development expenses

–

Other income (expense), net

231

Total

176

297

116

During the second quarter of 2022, the Company completed a

plan to fully exit its full train retrofit business

by transferring the remaining contracts to a third party.

The Company recorded $195 million of restructuring expenses

in connection with this business exit primarily for contract

settlement costs. Prior to exiting this

business, the business was reported as part of the Company’s

non-core business activities within Corporate and Other.

At December 31, 2023 and 2022,

$250 million and $198 million, respectively,

was recorded for restructuring-related liabilities and

is included primarily in Other

provisions.

─

Note 17

Operating segment data

The Chief Operating Decision Maker (CODM) is the Chief

Executive Officer. The CODM

allocates resources to and assesses the performance of

each operating

segment using the information outlined below. The

Company is organized into the following segments, based

on products and services: Electrification, Motion,

Process Automation and Robotics & Discrete Automation. The remaining

operations of the Company are included in

Corporate and Other.

Effective January 1, 2023, the E-mobility Division

is no longer managed within the Electrification segment

and has become a separate operating segment. This

new segment does not currently meet any of the size thresholds

to be considered a reportable segment and as such is presented

within Corporate and Other.

The

segment information for the year and three months ended December

31, 2023 and 2022, and at December 31, 2022,

has been recast to reflect this change.

A description of the types of products and services

provided by each reportable segment is as follows:

●

Electrification:

manufactures and sells electrical products and solutions

which are designed to provide safe, smart and

sustainable electrical flow from

the substation to the socket. The portfolio of increasingly digital and

connected solutions includes renewable power

solutions, modular substation

packages, distribution automation products, switchboards and

panelboards, switchgear, UPS solutions,

circuit breakers, measuring and sensing

devices, control products, wiring accessories, enclosures and cabling

systems and intelligent home and building solutions,

designed to integrate and

automate lighting, heating, ventilation, security and data communication

networks.

The products and services are delivered through six operating

Divisions: Distribution Solutions, Smart Power,

Smart Buildings, Installation Products

and Service, as well as, prior to its sale in July 2023, the Power

Conversion Division.

●

Motion:

designs, manufactures, and sells drives, motors, generators

and traction converters that are driving the low-carbon future

for industries, cities,

infrastructure and transportation. These products, digital technology

and related services enable industrial customers

to increase energy efficiency,

improve safety and reliability, and achieve

precise control of their processes. Building on over 140

years of cumulative experience in electric

powertrains, Motion combines domain expertise and technology

to deliver the optimum solution for a wide range of applications

in all industrial

segments. In addition, Motion, along with its partners,

has a leading global service presence. These products and services

are delivered through seven

operating Divisions: Large Motors and Generators, IEC LV

Motors, NEMA Motors, Drive Products, System Drives,

Service and Traction.

Q4 2023 FINANCIAL INFORMATION

●

Process Automation:

offers a broad range of industry-specific,

integrated automation, electrification and digital solutions,

as well as lifecycle services for

the process,

hybrid and marine industries. The product portfolio includes

control technologies, industrial software, advanced

analytics, sensing and

measurement technology, and marine

propulsion systems. In addition,

Process Automation offers a comprehensive range

of services,

from repair to

advanced digital capabilities such as remote monitoring, preventive

maintenance, asset performance management, emission

monitoring and

cybersecurity.

The products, systems and services are currently delivered through four operating

Divisions: Energy Industries, Process Industries,

Marine & Ports and Measurement & Analytics,

as well as, prior to its spin-off in October

2022, the Turbocharging Division (Accelleron).

●

Robotics & Discrete Automation:

delivers its products, solutions and services

through two operating Divisions: Robotics provides industrial and

collaborative robots, autonomous mobile robotics, mapping and

navigation solutions, robotic solutions, field services,

spare parts and digital services.

Machine Automation specializes in automation solutions based

on its programmable logic controllers (PLC), industrial

PCs (IPC), servo motion,

transport systems and machine vision. Both divisions offer

software across the entire life cycle, including

engineering and simulation software as well as

a comprehensive range of digital solutions.

Corporate and Other:

Corporate includes headquarter costs, the Company’s

corporate real estate activities and the Corporate

Treasury Operations while Other

includes the E-mobility operating segment, other non-core

operating activities as well as the operating activities

of certain divested businesses.

The primary measure of profitability on which the operating segments

are evaluated is Operational EBITA, which

represents income from operations excluding:

●

amortization expense on intangibles arising upon acquisition (acquisition

-related amortization),

●

restructuring, related and implementation costs,

●

changes in the amount recorded for obligations related to divested

businesses occurring after the divestment date (changes

in obligations related to

divested businesses),

●

gains and losses from sale of businesses (including fair value adjustment

on assets and liabilities held for sale,

if any),

●

acquisition- and divestment-related expenses and integration costs,

●

certain other non-operational items, as well as

●

foreign exchange/commodity timing differences in income

from operations consisting of: (a) unrealized gains

and losses on derivatives (foreign

exchange, commodities, embedded derivatives), (b) realized

gains and losses on derivatives where the underlying hedged

transaction has not yet been

realized, and (c) unrealized foreign exchange movements on receivables/payables

(and related assets/liabilities).

Certain other non-operational items generally includes certain regulatory,

compliance and legal costs, certain asset write downs/impairments

and certain other fair

value changes, changes in estimates relating to opening balance

sheets of acquired businesses (changes in pre-acquisition

estimates), as well as other items

which are determined by management on a case-by-case

basis.

The CODM primarily reviews the results of each segment on

a basis that is before the elimination of profits

made on inventory sales between segments. Segment

results below are presented before these eliminations, with a total deduction

for intersegment profits to arrive at the Company’s

consolidated Operational EBITA.

Intersegment sales and transfers are accounted for as if the sales

and transfers were to third parties, at current market prices.

The following tables present disaggregated segment revenues from

contracts with customers, Operational EBITA,

and the reconciliations of consolidated

Operational EBITA to Income from continuing

operations before taxes for the year and three months

ended December 31, 2023 and 2022, as well as

total assets

at December 31, 2023 and 2022.

Year ended December 31, 2023

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

4,547

2,455

2,294

1,932

340

11,568

The Americas

5,926

2,562

1,738

573

291

11,090

of which: United States

4,456

2,123

1,076

358

235

8,248

Asia, Middle East and Africa

3,899

2,276

2,212

1,119

9,577

of which: China

1,775

1,148

707

804

4,468

14,372

7,293

6,244

3,624

702

32,235

Product type

Products

13,437

6,219

3,661

3,063

630

27,010

Services and other

935

1,074

2,583

561

5,225

14,372

7,293

6,244

3,624

702

32,235

Third-party revenues

14,372

7,293

6,244

3,624

702

32,235

Intersegment revenues

212

521

(775)

–

Total revenues

(1)

14,584

7,814

6,270

3,640

(73)

32,235

Q4 2023 FINANCIAL INFORMATION

Year ended December 31, 2022

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

4,199

2,031

2,248

1,494

313

10,285

The Americas

5,140

2,148

1,566

524

195

9,573

of which: United States

3,769

1,787

943

373

151

7,023

Asia, Middle East and Africa

4,053

2,101

2,199

1,155

9,588

of which: China

1,948

1,147

666

897

4,696

13,392

6,280

6,013

3,173

588

29,446

Product type

Products

12,535

5,380

3,311

2,695

550

24,471

Services and other

857

900

2,702

478

4,975

13,392

6,280

6,013

3,173

588

29,446

Third-party revenues

13,392

6,280

6,013

3,173

588

29,446

Intersegment revenues

227

465

(731)

–

Total revenues

(1)

13,619

6,745

6,044

3,181

(143)

29,446

Three months ended December 31, 2023

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

1,136

597

631

476

111

2,951

The Americas

1,533

638

459

142

2,847

of which: United States

1,164

521

278

2,105

Asia, Middle East and Africa

987

577

632

233

2,447

of which: China

419

282

205

147

1,064

3,656

1,812

1,722

851

204

8,245

Product type

Products

3,387

1,524

994

710

185

6,800

Services and other

269

288

728

141

1,445

3,656

1,812

1,722

851

204

8,245

Third-party revenues

3,656

1,812

1,722

851

204

8,245

Intersegment revenues

134

(182)

–

Total revenues

(1)

3,698

1,946

1,727

852

8,245

Three months ended December 31, 2022

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

1,074

601

522

424

144

2,765

The Americas

1,341

574

431

147

2,555

of which: United States

992

480

262

106

1,898

Asia, Middle East and Africa

1,033

537

592

317

2,504

of which: China

442

259

168

251

1,133

3,448

1,712

1,545

888

231

7,824

Product type

Products

3,207

1,449

891

760

218

6,525

Services and other

241

263

654

128

1,299

3,448

1,712

1,545

888

231

7,824

Third-party revenues

3,448

1,712

1,545

888

231

7,824

Intersegment revenues

133

(192)

–

Total revenues

(1)

3,498

1,845

1,551

891

7,824

(1)

Due to rounding,

numbers presented

may not add

to the totals

provided.

Q4 2023 FINANCIAL INFORMATION

Year ended

Three months ended

December 31,

($ in millions)

2023

2022

2023

2022

Operational EBITA:

Electrification

2,937

2,343

725

575

Motion

1,475

1,163

318

Process Automation

909

848

239

203

Robotics & Discrete Automation

536

340

118

125

Corporate and Other

‒

E-mobility

(167)

(15)

(33)

(3)

‒ Corporate costs, Intersegment elimination and other

(263)

(169)

(34)

(72)

Total

5,427

4,510

1,333

1,146

Acquisition-related amortization

(220)

(229)

(56)

(55)

Restructuring, related and implementation costs

(1)

(219)

(347)

(127)

(47)

Changes in obligations related to divested businesses

(2)

Gains and losses from sale of businesses

101

(7)

(3)

Acquisition- and divestment-related expenses and integration

costs

(74)

(195)

(19)

(24)

Foreign exchange/commodity timing differences in

income from operations:

Unrealized gains and losses on derivatives (foreign exchange,

commodities, embedded derivatives)

139

Realized gains and losses on derivatives where the underlying hedged

transaction has not yet been realized

(48)

–

Unrealized foreign exchange movements on receivables/payables (and

related assets/liabilities)

(13)

(15)

(38)

(70)

Certain other non-operational items:

Other income/expense relating to the Power Grids joint venture

(57)

Regulatory, compliance and legal costs

–

(317)

–

Business transformation costs

(2)

(205)

(152)

(66)

(38)

Changes in pre-acquisition estimates

(4)

(10)

–

(10)

Gains and losses from sale of investments in

equity-accounted companies

–

Certain other fair value changes, including asset impairments

(10)

(13)

Other non-operational items

(4)

(6)

Income from operations

4,871

3,337

1,116

1,185

Interest and dividend income

165

Interest and other finance expense

(275)

(130)

(78)

(23)

Non-operational pension (cost) credit

115

(6)

Income from continuing operations before taxes

4,778

3,394

1,082

1,197

(1)

Includes impairment

of certain

assets.

(2)

Amount includes

ABB Way process

transformation

costs of

$188 million

and $131 million

for year ended

December 31,

2023 and 2022,

respectively,

and $66 million

and

$33 million

for the three

months ended

December 31,

2023 and 2022

respectively.

Total assets

(1)

($ in millions)

December 31, 2023

December 31, 2022

Electrification

12,668

12,500

Motion

7,016

6,565

Process Automation

4,971

4,598

Robotics & Discrete Automation

5,047

4,901

Corporate and Other

(2)

11,238

10,584

Consolidated

40,940

39,148

(1)

Total assets are after intersegment eliminations and therefore reflect third

-party assets only.

(2)

At December 31,

2023 and 2022

respectively,

Corporate and

Other includes

$57 million

and $96 million

of assets in

the Power

Grids business

which is reported

discontinued

operations

(see Note 3).

Q4 2023 FINANCIAL INFORMATION

—

Supplemental Reconciliations

and Definitions

The following reconciliations and definitions include measures

which ABB uses to supplement its Consolidated

Financial Information (unaudited) which is

prepared in accordance with United

States generally accepted accounting principles (U.S. GAAP). Certain

of these financial measures are, or may

be,

considered non-GAAP financial measures as defined in the

rules of the U.S. Securities and Exchange

Commission (SEC).

While ABB’s management believes that

the non-GAAP financial measures herein are useful

in evaluating ABB’s operating

results, this information should

be considered as supplemental in nature

and not as a substitute for the related financial information

prepared in accordance with

U.S. GAAP. Therefore

these measures should not be viewed in

isolation but considered together with the

Consolidated Financial Information (unaudited) prepared in accordance

with U.S. GAAP as of and for

the year and three months ended

December 31, 2023.

Comparable growth rates

Growth rates for certain key figures may be presented and discussed

on a “comparable” basis. The comparable growth rate measures

growth on a constant

currency basis. Since we are a global company,

the comparability of our operating results reported

in U.S. dollars is affected by foreign

currency exchange rate

fluctuations. We calculate the impacts from foreign currency

fluctuations by translating the current-year periods’ reported key

figures into U.S. dollar amounts using

the exchange rates in effect for the comparable periods

in the previous year.

Comparable growth rates are also adjusted for changes

in our business portfolio. Adjustments to our business

portfolio occur due to acquisitions, divestments,

by exiting specific business activities or customer markets. The adjustment

for portfolio changes is calculated as follows: where

the results of any business

acquired or divested have not been consolidated and reported for the

entire duration of both the current and comparable

periods, the reported key figures of such

business are adjusted to exclude the relevant key figures of any corresponding

quarters which are not comparable when computing the comparable

growth rate.

Certain portfolio changes which do not qualify as divestments under

U.S. GAAP have been treated in a similar manner to

divestments. Changes in our portfolio

where we have exited certain business activities or customer markets

are adjusted as if the relevant business

was divested in the period when the decision to

cease business activities was taken. We do not adjust

for portfolio changes where the relevant business

has annualized revenues of less than $50 million.

The following tables provide reconciliations of reported growth rates

of certain key figures to their respective comparable growth

rate.

Comparable growth rate reconciliation by Business Area

Q4 2023 compared to Q4 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Electrification

-1%

Motion

17%

-2%

13%

-1%

-2%

Process Automation

-2%

11%

-1%

10%

Robotics & Discrete Automation

-31%

-2%

-33%

-4%

-3%

-7%

ABB Group

-1%

FY 2023 compared to FY 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Electrification

10%

Motion

-1%

16%

-2%

15%

Process Automation

10%

12%

24%

11%

16%

Robotics & Discrete Automation

-26%

-25%

14%

ABB Group

-1%

14%

Q4 2023 FINANCIAL INFORMATION

Regional comparable growth rate reconciliation

Regional comparable growth rate reconciliation for ABB Group

- Quarter

Q4 2023 compared to Q4 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-2%

-5%

The Americas

-1%

11%

-1%

14%

of which: United States

-1%

11%

15%

Asia, Middle East and Africa

-2%

of which: China

-8%

-7%

-6%

-5%

ABB Group

-1%

Regional comparable growth rate reconciliation by Business

Area - Quarter

Q4 2023 compared to Q4 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-5%

The Americas

-1%

14%

-1%

21%

of which: United States

-3%

17%

11%

28%

Asia, Middle East and Africa

-5%

-4%

of which: China

-9%

-6%

-4%

-2%

Electrification

-1%

Q4 2023 compared to Q4 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

30%

-8%

-4%

18%

-1%

-5%

-1%

-7%

The Americas

14%

-2%

-3%

12%

-1%

-4%

of which: United States

14%

-1%

-3%

10%

-1%

-3%

Asia, Middle East and Africa

10%

12%

of which: China

10%

11%

Motion

17%

-2%

13%

-1%

-2%

Q4 2023 compared to Q4 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-4%

21%

-3%

18%

The Americas

13%

-3%

10%

-1%

of which: United States

30%

-5%

25%

-1%

Asia, Middle East and Africa

10%

11%

of which: China

-4%

-1%

-5%

14%

15%

Process Automation

-2%

11%

-1%

10%

Q4 2023 compared to Q4 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-34%

-4%

-38%

12%

-5%

The Americas

-19%

-2%

-21%

-3%

-2%

-5%

of which: United States

-19%

-16%

Asia, Middle East and Africa

-33%

-31%

-28%

-27%

of which: China

-36%

-34%

-42%

-41%

Robotics & Discrete Automation

-31%

-2%

-33%

-4%

-3%

-7%

Q4 2023 FINANCIAL INFORMATION

Regional comparable growth rate reconciliation for ABB Group

– Year to date

FY 2023 compared to FY 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-3%

-1%

12%

-1%

14%

The Americas

16%

-1%

18%

of which: United States

17%

21%

Asia, Middle East and Africa

-4%

of which: China

-12%

-5%

ABB Group

-1%

14%

Regional comparable growth rate reconciliation by Business

Area – Year to date

FY 2023 compared to FY 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-2%

The Americas

15%

19%

of which: United States

-1%

18%

23%

Asia, Middle East and Africa

-2%

-4%

of which: China

-9%

-3%

-9%

-3%

Electrification

10%

FY 2023 compared to FY 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-2%

-1%

19%

-3%

-1%

15%

The Americas

-1%

-2%

20%

-4%

16%

of which: United States

-1%

-2%

19%

-3%

16%

Asia, Middle East and Africa

10%

14%

of which: China

-1%

Motion

-1%

16%

-2%

15%

FY 2023 compared to FY 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

13%

27%

12%

14%

The Americas

22%

-1%

30%

11%

-1%

10%

20%

of which: United States

25%

-3%

12%

34%

14%

12%

26%

Asia, Middle East and Africa

-2%

12%

14%

12%

17%

of which: China

-3%

14%

16%

13%

22%

Process Automation

10%

12%

24%

11%

16%

FY 2023 compared to FY 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-28%

30%

-3%

27%

The Americas

-11%

-1%

-12%

10%

-2%

of which: United States

-17%

-3%

-1%

-4%

Asia, Middle East and Africa

-29%

-25%

-3%

of which: China

-35%

-31%

-10%

-7%

Robotics & Discrete Automation

-26%

-25%

14%

Q4 2023 FINANCIAL INFORMATION

Order backlog growth rate reconciliation

December 31, 2023 compared to December 31, 2022

US$

Foreign

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

Electrification

14%

Motion

13%

-4%

-1%

Process Automation

21%

-2%

19%

Robotics & Discrete Automation

-20%

ABB Group

-2%

Other growth rate reconciliations

Q4 2023 compared to Q4 2022

Service orders growth rate

Services revenues growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Electrification

10%

-1%

11%

Motion

32%

-1%

31%

-1%

Process Automation

29%

-3%

26%

11%

-1%

10%

Robotics & Discrete Automation

10%

-2%

11%

-3%

ABB Group

22%

-2%

20%

11%

-1%

10%

FY 2023 compared to FY 2022

Service orders growth rate

Services revenues growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Electrification

10%

Motion

13%

15%

19%

21%

Process Automation

21%

25%

-4%

18%

15%

Robotics & Discrete Automation

10%

17%

ABB Group

10%

18%

10%

16%

Q4 2023 FINANCIAL INFORMATION

Operational EBITA as

% of operational revenues (Operational EBITA margin)

Definition

Operational EBITA margin

Operational EBITA margin is Operational

EBITA as a percentage of

operational revenues.

Operational EBITA

Operational earnings before interest, taxes and acquisition-related

amortization (Operational EBITA)

represents Income from operations excluding:

●

acquisition-related amortization (as defined below),

●

restructuring, related and implementation costs,

●

changes in the amount recorded for obligations related to divested

businesses occurring after the divestment date (changes

in obligations related to

divested businesses),

●

gains and losses from sale of businesses (including fair value adjustment

on assets and liabilities held for sale,

if any),

●

acquisition- and divestment-related expenses and integration costs,

●

certain other non-operational items, as well as

●

foreign exchange/commodity timing differences in income

from operations consisting of: (a) unrealized gains

and losses on derivatives (foreign

exchange, commodities, embedded derivatives), (b) realized

gains and losses on derivatives where the underlying hedged

transaction has not yet been

realized, and (c) unrealized foreign exchange movements on receivables/payables

(and related assets/liabilities).

Certain other non-operational items generally includes certain regulatory,

compliance and legal costs, certain asset write downs/

impairments and certain other fair

value changes, changes in estimates relating to opening balance

sheets of acquired businesses (changes in pre-acquisition

estimates), as well as other items

which are determined by management on a case-by-case

basis.

Operational EBITA is our measure of

segment profit but is also used by management to evaluate

the profitability of the Company

as a whole.

Acquisition-related amortization

Amortization expense on intangibles arising upon acquisitions.

Restructuring, related and implementation costs

Restructuring, related and implementation costs consists

of restructuring and other related expenses, as well as internal and external

costs relating to the

implementation of group-wide restructuring programs.

Operational revenues

The Company presents operational revenues solely for the purpose

of allowing the computation of Operational EBITA

margin. Operational revenues are Total

revenues adjusted for foreign exchange/commodity timing differences

in total revenues of: (i) unrealized gains and losses

on derivatives, (ii) realized gains and

losses on derivatives where the underlying hedged transaction

has not yet been realized, and (iii) unrealized foreign

exchange movements on receivables (and

related assets). Operational revenues are not intended to be an

alternative measure to Total

revenues, which represent our revenues measured

in accordance

with U.S. GAAP.

Reconciliation

The following tables provide reconciliations of consolidated Operational

EBITA to Net Income and Operational

EBITA Margin by business.

Reconciliation of consolidated Operational EBITA

to Net Income

Year ended December 31,

Three months ended December 31,

($ in millions)

2023

2022

2023

2022

Operational EBITA

5,427

4,510

1,333

1,146

Acquisition-related amortization

(220)

(229)

(56)

(55)

Restructuring, related and implementation costs

(1)

(219)

(347)

(127)

(47)

Changes in obligations related to divested businesses

(2)

Gains and losses from sale of businesses

101

(7)

(3)

Acquisition- and divestment-related expenses and integration

costs

(74)

(195)

(19)

(24)

Certain other non-operational items

(165)

ABB LTD 6-K