Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k)

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 2023

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

2, 2023 titled “Q4 2022 results”.

Q4 2022 Financial Information.

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 2,

2023

Q4 2022 results

Strong performance

improvements in Q4

and

long-term margin target

achieved early

Q4 2022

●

Orders $7.6 billion,

-8%; comparable

+2%

●

Revenues $7.8 billion,

+3%; comparable +16%

●

Income from operations

$1,185 million; margin 15.1%

●

Operational EBITA

$1,146 million;

margin

14.8%

●

Basic EPS $0.61

●

Cash flow from operating

activities was $687

million and from

operating activities

in continuing operations

it was

$720 million, including

adverse impact of approximately

$315

million due to earlier announced

settlements for Kusile

project.

FY 2022

●

Orders $34.0 billion,

+7%; comparable

+16%

●

Revenues $29.4 billion,

+2%; comparable +12%

●

Income from operations

$3,337 million; margin 11.3%

●

Operational EBITA

$4,510 million;

margin

15.3%

●

Basic EPS $1.30

●

Cash flow from operating

activities was $1,287

million and

from operating activities

in continuing operations

it was

$1,334 million

—

“2022 was another successful year for ABB,

including a further streamlining of our business

portfolio and achieving our margin target earlier than expected.

We have made ABB more

resilient. In 2023, regardless of current market uncertainty, we want to show that we can

continuously deliver an Operational EBITA margin of

at least 15%.”

Björn Rosengren

, CEO

Ad hoc Announcement pursuant to Art.

53 Listing Rules of SIX Swiss Exchange

—

Q4 2022

Full year

Press Release

KEY FIGURES

CHANGE

($ millions, unless otherwise indicated)

Q4 2022

Q4 2021

US$

Comparable

FY 2022

FY 2021

US$

Comparable

Orders

7,620

8,257

-8%

33,988

31,868

16%

Revenues

7,824

7,567

16%

29,446

28,945

12%

Gross Profit

2,658

2,397

11%

9,710

9,467

as % of revenues

34.0%

31.7%

+2.3 pts

33.0%

32.7%

+0.3 pts

Income from operations

1,185

2,975

-60%

3,337

5,718

-42%

Operational EBITA

1,146

988

16%

28%

4,510

4,122

18%

as % of operational revenues

14.8%

13.1%

+1.7 pts

15.3%

14.2%

+1.1 pts

Income from continuing operations, net of tax

1,168

2,703

-57%

2,637

4,730

-44%

Net income attributable to ABB

1,132

2,640

-57%

2,475

4,546

-46%

Basic earnings per share ($)

0.61

1.34

-55%

1.30

2.27

-43%

Cash flow from operating activities

687

1,020

-33%

1,287

3,330

-61%

Cash flow from operating activities in continuing

operations

720

1,033

-30%

1,334

3,338

-60%

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

reconciliations and definitions” in the attached

Q4 2022 Financial Information.

EPS growth rates are computed using unrounded amounts.

2021 numbers include the impact related to the

divestment of Mechanical Power Transmission.

Constant currency (not adjusted for portfolio

changes).

Amount represents total for both continuing and discontinued

operations.

ABB

INTERIM

REPORT

2022

In the fourth quarter

of 2022, we improved comparable

orders

and revenues, we increased

our Operational EBITA

by 16%,

raised our Operational

EBITA margin by

170 basis points and

lifted ROCE to 16.5%

for 2022,

to within our target range.

All in

all, this was a good

achievement in my view.

Customer activity improved

slightly or remained stable

in most

customer segments, except

for declines related to residential

construction and discrete

manufacturing.

The market outlook for

discrete manufacturing

remains solid, although

the fourth

quarter was adversely

impacted by customers

normalizing order

patterns following a

period of pre-ordering triggered

by the long

delivery lead times

in a strained value chain.

This weighed on

order intake in Robotics

& Discrete Automation,

while the other

three business areas

remained stable or

increased

comparable

orders. Revenues were

strong and increased by 3%

(16%

comparable). The Americas

region was the growth engine

for

orders, while Europe

reversed and Asia,

Middle East and Africa

remained overall largely

stable despite a decline

in China. The

escalating Covid-related

situation in China somewhat

slowed

down local business activity

towards the end of the period.

Our

priority is to keep our

people safe.

Our strong price execution

combined with increased volumes

supported the higher

gross margin and drove the

improvement

of 170 basis points

in the Operational EBITA

margin to 14.8%,

the strongest fourth

quarter margin in several years.

This

resulted in 2022

being a record year for

ABB,

in recent history,

with an Operational

EBITA margin

of 15.3%. We achieved

good

price management,

executed well on increased

volumes with

some additional support

from unusually low corporate

costs. I

am pleased how the divisions

managed challenges

like supply

chain constraints, a

tight labor market, Covid

-related lock downs

in China and a high

inflationary environment.

Cash flow of $687

million in the quarter

is the one area which

did not quite meet our

expectations as the depletion

of net

working capital was

slower than anticipated.

This will be an

important focus area

for us near term as

we deliver against our

high order backlog.

As earlier announced, the

finalization of the

Kusile-related issues

weighed on cash flow by

approximately

$315

million, while the closing of

the divestment of Power Grids

generated a net

cash contribution in investing

activities of $1.4

billion.

We remain committed

to our plans to separately

list our E-mobility

business,

subject to constructive

market conditions.

Meanwhile,

we have closed by

the end of January the pre

-IPO private

placement of approx

imately CHF525 million

for newly issued

shares to new minority

investors representing

approximately 20%

ownership of the

E-mobility business. The

proceeds will be used

to capture E-mobility’s

growth

potential through organic

and M&A investments

in hardware and

software.

Just after the close

of the fourth quarter,

we progressed with the

final part of our announced

divisional exits by signing

agreement to divest

the Power Conversion division

in the

Electrification business

area. From here on,

we will continue to

review our business portfolio

on a product group

level within our

current divisions.

One example is our decision

to initiate the exit

of the emergency lighting

business within the

Smart Buildings

division in the Electrification

business area during 2023.

By partnering with

the Swedish mining and

smelting company

Boliden to build a strategic

co-operation to use low

carbon

footprint copper in our

electromagnetic stirring

(EMS) equipment

and high-efficiency

electric motors, we took

another step towards

our 2030 target of having

a circular approach in

at least 80

percent of our products

and solutions. The aim is to

reduce

greenhouse gas

(GHG) emissions while driving

the transition to a

more circular economy.

Looking into 2023,

we currently do not ant

icipate a major set-back

in demand, although

the high inflationary environment

adds

uncertainty.

Comparable order growth,

at least in the first half of

the year, should

be somewhat hampered by

last year’s very high

order level coupled

with a normalization of customers’

order

pattern after a period of

pre-ordering in times of

a strained value

chain. I expect comparable

revenue growth to be above

5%,

supported by backlog

execution. Cash flow

should benefit from us

working down the net working

capital, and we should also

have

less adverse items

impacting comparability.

I view 2023 as a

good opportunity for

ABB to prove that we can

continuously

deliver an annual

Operational EBITA margin

of at least 15%.

Considering improving

performance, robust cash

flow and a solid

balance sheet, the

Board of Directors proposes

an ordinary

dividend of CHF0.84 per

share. Up from CHF0.82 in

the previous

year and in line with

the long-term ambition

of a rising sustainable

dividend per share

over time, while still prioritizing

a solid balance

sheet to support our

growth ambitions. We

plan to continue with

share buybacks for

full year of 2023.

Björn Rosengren

CEO

In the

first quarter of 2023

, we anticipate double-digit

comparable revenue

growth to support some improvement

the Operational EBITA

margin, year-on-year.

In full-year

2023, despite current market

uncertainty,

anticipate comparable

revenue growth to be

above 5% and we

expect to again achieve

our long-term target of

Operational

EBITA margin

of at least 15%.

CEO summary

Outlook

ABB

INTERIM

REPORT

2022

In the fourth quarter

order intake declined

by 8% (up 2%

comparable) year

-on-year to $7,620 million

with a favorable

development in most

of the process-related

segments, while

certain parts of the

short-cycle business declined

as customers

normalize order patterns.

When looking through

the adverse impact from

changes in

exchange rate, orders

remained stable or increased

in three out

of four business

areas. Robotics & Discrete

Automation

declined due to a normalization

of customers’ order patterns

following a period of pre

-buying due to a strained supply

chain

which extended delivery

lead times. This was predominantly

related to the machine

builder segment, while robotics

demand

remained broadly stable

year-on-year.

The automotive segment

improved on EV-related

investments,

while softening demand

was noted in the robotics

consumer

related segments.

In transport & infrastructure,

there was a positive development

in marine & ports and

renewables. In buildings

there was

weakness in residential

-related demand, while

commercial

construction was robust.

Demand in the process

-related business was robust

in refining,

and held up well also

for oil & gas, water

& wastewater,

power

generation and pulp

& paper.

Slightly softer momentum

was noted in metals,

where

customers seemingly

are concerned about

elevated energy

prices.

The strongest order

momentum was reported

in the Americas

on an increase of 10%

(15% comparable), supported

by a

strong development

in the US in all business areas.

Orders in

Europe decreased

by 17% (5% comparable),

including a

double-digit decline noted

in the large German

market. Asia,

Middle East and

Africa reported a decline of

15% (2%

comparable), including

a decline of 22% (12% comparable)

China. Some softening

of demand in China was

noted towards

the end of the quarter,

coinciding with the local

intensifying of

the Covid situation.

A strong momentum in

deliveries, including a good

release from

the order backlog, resulted

in revenues increasing by

3% (16%

comparable) to $7,824

million. Impacts from strong

increases in

both volume and price

more than offset adverse

effects from

changes in exchange

rates and portfolio changes,

with

contribution from all

business areas. So far,

the ABB operations

in China have maintained

production at close to

normal level

without any major impact

from the intensified

Covid-related

situation.

Orders and revenues

Orders by region

($ in millions,

unless otherwise

indicated)

CHANGE

Q4 2022

Q4 2021

US$

Comparable

Europe

2,604

3,138

-17%

-5%

The Americas

2,898

2,640

10%

15%

Asia, Middle East

and Africa

2,118

2,479

-15%

-2%

ABB Group

7,620

8,257

-8%

Growth

Change year-on-year

Orders

Revenues

Comparable

16%

-8%

-10%

Portfolio changes

-2%

-3%

Total

-8%

Revenues by region

($ in millions,

unless otherwise

indicated)

CHANGE

Q4 2022

Q4 2021

US$

Comparable

Europe

2,766

2,756

16%

The Americas

2,554

2,198

16%

22%

Asia, Middle East

and Africa

2,504

2,613

-4%

10%

ABB Group

7,824

7,567

16%

ABB

INTERIM

REPORT

2022

Gross profit

Gross profit increased

strongly by 11

(22%

constant currency) to

$2,658 million, supported

by a significant gross

margin

improvement of

230 basis points to 34.0

%. Gross margin improved

materially in all business

areas.

Income from operations

amounted to $1,185 million,

declining by

60% (56% constant

currency). Compared with

last year, earnings

were significantly supported

by the improved operational

performance, with some

additional tailwind from

a net positive

impact related to the non

-core business. This was however

than offset by the

impact of streamlining the

business portfolio, as

last year’s period included

the $2.2 billion book gain

related to the

completion of the divestment

of the Mechanical Power

Transmission

division.

Operational EBITA

Significant contribution

from successful price

management and

good operational execution

of increased volumes

were key drivers

to the improvement

in Operational EBITA.

The strong price

execution more than offset

inflationary impacts in commodities,

freight and labor.

Selling, general and administrative

expenses

declined in relation

to revenues. The operational

improvements

more than offset

the adverse impact from changes

in exchange

rates, resulting in an

Operational EBITA of

$1,146 million, an

increase of 16% (28%

local currency) year-on-year.

Operational

EBITA in Corporate

and Other improved by

$36 million

to -$72 million.

Net finance expenses

Net finance expense

was $1 million compared

with $26 million a

year ago. The primary

driver for the unusually

low quarterly amount

was a reversal of interest

charges related to

income tax risks.

Income tax

Income tax expense

was $29 million with an effective

tax rate of

2.4%, including approximately

20% impact from a release

valuation allowances

on deferred tax assets

due mainly to an

improved business

performance in the US, as

well as

approximately 3% impact

from a favorable resolution

of certain prior

year tax matters.

Net income and earnings

per share

Net income attributable

to ABB was $1,132 million

and decreased by

57%, as the last year period

included the book gain

on the

divestment of the

Mechanical Power Transmission

division. This

resulted in basic earnings

per share of $0.61,

a decline from $1.34

last year.

Earnings

ABB

INTERIM

REPORT

2022

Net working capital

amounted to $3,216 million,

increasing

year-on-year from $2,303

million but declining sequentially

from $3,407 million. The sequential

decrease reflects the

total impact from higher

trade payables and other current

liabilities offset

by the increase in receivables

triggered by

high revenue growth and

higher inventories.

That said,

inventory volumes

declined sequentially,

however changes

in exchange rates inflated

the total.

Net working capital as a

percentage of revenues

was 11.1%.

Capital expenditures

Purchases of property,

plant and equipment and

intangible

assets amounted to

$259 million.

Net debt

amounted to $2,779 million

at the end of the

quarter,

and increased from a net

cash position of $98 million,

year-on-year.

Sequentially,

it declined from $4,117

million,

mainly due to the $1.4

billion net proceeds received

from the

sale of our remaining

19.9% equity stake in

the Hitachi

Energy joint venture

in December.

Cash flows

Cash flow from operating

activities was $687

million and

declined year-on-year

from $1,020 million. An

improvement in

underlying operational

performance was more

than offset by a

lower reduction in net

working capital, mainly

due to the

increase in trade receivables

and a less favorable

timing of

payments of trade payables,

despite stronger inventory

management. In addition,

the current quarter

was adversely

impacted by the

cash outflow from the earlier

announced Kusile

settlement

of approximately $315 million,

while the prior year

included approximately

$300 million cash paid for

income taxes

related to the sale of

the Mechanical Power Transmission

business.

Share buyback program

ABB launched a new

share buyback program

of up to $3 billion

on April 1, 2022.

As of December 31, 2022,

we have returned

approximately $0.5

billion (approximately 18

million shares) in

excess of the planned

return of the Power Grids

proceeds,

which were fully

returned during the third

quarter.

During the

fourth quarter,

10,320,000 shares were

repurchased on the

second trading line

for approximately $300

million. The total

number of ABB Ltd’s

issued shares is 1,964,745,075

after the

cancellation of 88,403,189

shares in June, as approved

ABB's 2022 AGM.

($ millions,

unless otherwise indicated)

Dec. 31

2022

Dec. 31

2021

Short term debt and current

maturities of long-term debt

2,535

1,384

Long-term debt

5,143

4,177

Total debt

7,678

5,561

Cash & equivalents

4,156

4,159

Restricted cash - current

Marketable securities and

short-term investments

725

1,170

Restricted cash - non-current

–

300

Cash and marketable securities

4,899

5,659

Net debt (cash)*

2,779

(98)

Net debt (cash)* to EBITDA ratio

0.67

(0.01)

Net debt (cash)* to Equity ratio

0.21

(0.01)

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

excludes net pension (assets)/liabilities of

$(114) million and $45 million, respectively.

Balance sheet & Cash flow

ABB

INTERIM

REPORT

2022

Orders and revenues

Demand was stable

or improved in most customer

segments

year-on-year,

except for in residential

building.

Order intake

amounted to $3,565

million and including the adverse

impact

from changes in exchange

rates it declined by 2%

(up 6%

comparable).

●

Customer activity in

the Americas was very

strong driven by

the US order increase

of 25%, year-on-year.

Order intake in

Europe and Asia,

Middle East and Africa declined

by 17%

and 14% respectively,

but the comparable drop

of 4% in both

regions was materially

softer. As the

quarter progressed,

business activity

in China was increasingly

hampered by the

intensifying Covid-related

situation.

●

A smooth supply chain

supported order backlog deliveries,

solid current demand

in the flow-business and

strong price

execution all contributed

to the high revenue growth

of 6%

(16% comparable)

to $3,663 million. The positive

development was broad

across the divisions.

●

Division Smart Building

has decided to exit

its emergency

lighting business as

the strategic fit with energy

distribution

and home & building automation

is limited. This business

generates revenues

of approximately $160 million,

and the

divestment process

will be initiated in the coming

months.

●

Just after the close

of the fourth quarter,

an agreement was

signed to divest the

Power Conversion division

for $505 million in

cash. The deal is expected

to close in the second half

of 2023.

●

As from the first

quarter 2023 and in preparation

of a planned

separate listing, the

E-mobility division will no

longer be reported

as part of Electrification,

but as a sub-segment

in Corporate and

other.

Profit

By leveraging on high

comparable growth, the

Operational EBITA

increased by 13%,

significantly offsetting

the adverse impacts from

changes in exchange

rates. Operational EBITA

margin improved by

90 basis points to 15.7%,

despite a slightly negative

divisional and

geographical mix in

revenues.

●

Benefits from a strong

price execution were

a key driver to the

earnings improvement

and more than offset

year-on-year cost

increases related to

raw materials, freight and

labor.

●

Strong execution of

increased volumes improved

cost absorption

in production overall.

●

The higher volumes

and pricing more than offset

a somewhat

adverse divisional mix

triggered by higher system

-related

deliveries as Distribution

Solutions executed the order

backlog,

as well as some

margin pressure related to

lower volumes in

parts of the high

margin residential building busin

ess.

Growth

Change year-on-year

Orders

Revenues

Comparable

16%

-8%

-10%

Portfolio changes

Total

-2%

—

Electrification

CHANGE

($ millions, unless otherwise indicated)

Q4 2022

Q4 2021

US$

Comparable

FY 2022

FY 2021

US$

Comparable

Orders

3,565

3,638

-2%

15,901

14,381

11%

17%

Order backlog

6,933

5,458

27%

33%

6,933

5,458

27%

33%

Revenues

3,663

3,445

16%

14,105

13,187

14%

Operational EBITA

572

507

13%

2,328

2,121

10%

as % of operational revenues

15.7%

14.8%

+0.9 pts

16.5%

16.1%

+0.4 pts

Cash flow from operating activities

804

715

12%

1,887

2,181

-13%

No. of employees (FTE equiv.)

52,300

50,800

ABB

INTERIM

REPORT

2022

Orders and revenues

Order intake amounted

to $1,649 million and declined

by 11%

(0% comparable). The

development was hampered

by fewer

project orders received

although the product business

improved at a mid-single

digit rate.

●

Orders in Europe declined

by 26% (15% comparable)

from a high comparable

last year when a large Traction

order was booked.

The Americas declined

by 7% (up 5%

comparable) supported

primarily by the drives business,

which more than offset

a somewhat weaker momentum

the US motor business.

Asia, Middle East and Africa

had

the strongest momentum

at 5% (16% comparable)

including China at a

low single-digit growth rate.

Momentum in China

was somewhat impacted by

the

intensified Covid-related

situation.

●

Solid execution of the

order backlog contributed

to the

strong volume growth

in revenues which in total

improved

by 6% (20% comparable).

Comparable growth was

the

strongest in the syste

ms-related business.

Profit

Strong operational

execution of increased volume

and

pricing triggered a 130

basis point improvement

in the

Operational EBITA

margin to 17.4%. Business

performance

strongly outweighed

the adverse changes in exchange

rates, resulting in earnings

increase of 14% (26% in

local

currency).

●

Strong pricing contributed

materially to comparable

growth, and more than

offset the adverse impacts

from

cost inflation in commodities

and labor.

●

An improved supply

chain facilitated volumes

being

released from the order

backlog which triggered

improved

cost absorption in production,

year-on-year.

Growth

Change year-on-year

Orders

Revenues

Comparable

20%

-8%

-11%

Portfolio changes

-3%

Total

-11%

—

Motion

CHANGE

($ millions, unless otherwise indicated)

Q4 2022

Q4 2021

US$

Comparable

FY 2022

FY 2021

US$

Comparable

Orders

1,649

1,843

-11%

7,896

7,616

20%

Order backlog

4,726

3,749

26%

34%

4,726

3,749

26%

34%

Revenues

1,845

1,735

20%

6,745

6,925

-3%

14%

Operational EBITA

318

278

14%

1,163

1,183

-2%

as % of operational revenues

17.4%

16.1%

+1.3 pts

17.3%

17.1%

+0.2 pts

Cash flow from operating activities

346

416

-17%

853

1,362

-37%

No. of employees (FTE equiv.)

21,100

20,100

ABB

INTERIM

REPORT

2022

Orders and revenues

Robust customer activity

supported a solid order

momentum in

all divisions on a comparable

basis, although this

was more

than offset by changes

in exchange rates and business

portfolio

which resulted in a

total order decline

of 8% (up 11%

comparable).

●

Customer activity was

particularly strong in marine

& ports,

mining and refining

and renewables, but held up

well also for

oil & gas, pulp & paper,

water & wastewater and power

generation. Slightly

softer momentum was

noted in metals,

where customers seemingly

are concerned about

elevated

energy prices. Service

orders decreased by

21% (up 4

comparable) with the

total order decline weighed

down

primarily by portfolio changes

on the back of the spin

-off of

Accelleron.

●

The growth engine

for orders was the Americas

which

improved by 11%

(22%

comparable). Europe declined

by 9%

(up 15%

comparable).

Asia, Middle East and

Africa dropped

by 21% (2% comparable),

impacted by a high comparable

due to a larger order

booked last year.

In China, only a slight

slow-down in business

activity due to the escalating

Covid-

related situation was noted

towards the end of the quarter.

●

There was a good flow

of customer deliveries in virtually

all

divisions, although

revenue growth declined

in total by 14%

(up 6% comparable) hampered

by the very high base level

last year’s quarter,

changes in exchange rates

as well as the

absence of the exited

Accelleron business

in the fourth

quarter 2022.

Profit

Through improved

operational performance

in virtually all

divisions the business

area managed to almost

fully offset the

adverse margin impact

stemming from the exit

of the high-

margin Accelleron

business,

resulting in an Operational

EBITA

margin of 13.2%.

●

Gross margin improvement

was the main contributor

to strong

operational performance

supported by growth

in the digital

businesses and better

project execution.

●

The now exited Accelleron

business supported last

year’s

margin by 160 basis points.

Growth

Change year-on-year

Orders

Revenues

Comparable

11%

-8%

Portfolio changes

-11%

Total

-8%

-14%

—

Process Automation

CHANGE

($ millions, unless otherwise indicated)

Q4 2022

Q4 2021

US$

Comparable

FY 2022

FY 2021

US$

Comparable

Orders

1,746

1,898

-8%

11%

6,825

6,779

11%

Order backlog

6,229

6,079

16%

6,229

6,079

16%

Revenues

1,551

1,805

-14%

6,044

6,259

-3%

Operational EBITA

203

247

-18%

848

801

as % of operational revenues

13.2%

13.7%

-0.5 pts

14.0%

12.8%

+1.2 pts

Cash flow from operating activities

205

370

-45%

675

1,062

-36%

No. of employees (FTE equiv.)

20,100

22,000

-8%

ABB

INTERIM

REPORT

2022

Orders and revenues

Following a period

of elevated order levels

when customers

pre-ordered in response

to a strained supply chain,

growth in

the fourth quarter was

impacted by a normalization

of order

patterns in anticipation

of shorter delivery lead

times. Order

intake

declined by 27% (19% comparable).

●

The order decline from

a very high comparable

last year was

significant in the

Machine Automation division,

while Robotics

reported a virtually

stable development for

comparable

orders.

●

There were positive

developments

in the automotive and

electronics segments.

The adverse impact from

the order

normalization pattern

was predominantly noted in

the

machine builder

segment but also to some

extent in general

industry and areas

of food and beverage, pharmaceuticals

well as consumer packaged

goods.

●

Order intake declined

in all regions at a double-digit

rate,

hampered by the broad

adverse development in

Machine

Automation.

●

Improved access to

components supported

a release of

volumes from the order

backlog resulting in the

high revenue

growth of 12% (23% comparable),

with strong contribution

from both divisions.

The order backlog of $2.7

billion

facilitates near-term revenue

generation.

Profit

Operational EBITA

doubled year

-on-year and amounted

$125 million, supported

by higher production output

which

triggered a 590 basis

point margin improvement

to 14.0%.

●

Significantly higher

volumes in production improved

cost

absorption and were

the main driver in the strong

earnings increase.

●

Contribution from strong

price development

more than

offset cost inflation

in commodities and labor.

●

Earnings benefitted

from a slight positive product

mix

impact stemming from higher

share of revenues from

the

high margin product

business.

Growth

Change year-on-year

Orders

Revenues

Comparable

-19%

23%

-8%

-11%

Portfolio changes

Total

-27%

12%

—

Robotics & Discrete Automation

CHANGE

($ millions, unless otherwise indicated)

Q4 2022

Q4 2021

US$

Comparable

FY 2022

FY 2021

US$

Comparable

Orders

798

1,100

-27%

-19%

4,116

3,844

15%

Order backlog

2,679

1,919

40%

48%

2,679

1,919

40%

48%

Revenues

891

799

12%

23%

3,181

3,297

-4%

Operational EBITA

125

95%

340

355

-4%

as % of operational revenues

14.0%

8.1%

+5.9 pts

10.7%

10.8%

-0.1 pts

Cash flow from operating activities

105

129

-19%

214

374

-43%

No. of employees (FTE equiv.)

10,700

10,600

ABB

INTERIM

REPORT

2022

Quarterly highlights

●

ABB is working with Boliden,

the Swedish mining and

smelting company,

to build a strategic co-operation

to use

low carbon footprint

copper in its electromagnetic

stirring

(EMS) equipment and

high-efficiency electric

motors. The

aim is to reduce

greenhouse gas (GHG) emissions

while

driving the transition

to a more circular economy

●

ABB has been selected

to deliver the shaft generator

system with permanent

magnet technology for the

first

dedicated CO

-storage vessels

ever to be built. Due for

delivery in 2024,

the two vessels will support

the Northern

Lights carbon capture

and storage (CCS) project

transporting greenhouse

gas from industrial emitters to

onshore terminal in

Øygarden, Norway.

From there, the

will be delivered

by pipeline to dedicated

reservoirs

2,600 meters under

the seabed in the North

Sea for

permanent storage.

●

ABB launched in

December its new Abilities campaign

internally,

with a focus on supporting

employees with

physical, mental or

cognitive and emotional

challenges so

that they have equal access

to resources that can empower

them in their professional

and personal lives.

●

Every year,

the Society of Women

Engineers (SWE)

organizes the world’s

largest conference for

women in

engineering and

technology.

The conference took place

Houston, Texas,

at the end of October

and brought

together over 16,000

attendees from around

the world.

ABB is proud to be

a part of SWE’s Corporate

Partnership

Council, which annually

sponsors over 120 employees

with

global SWE memberships,

and subsequently supports

SWE’s mission

towards gender parity in

the workplace, a

goal that aligns closely

with ABB’s own strategy

for diversity

& inclusion.

Story of the quarter

●

The Energy Efficiency

Movement, which counts

ABB as a

member, published

the “Industrial energy efficiency

playbook” including 10

actions that a business

can take to

improve its energy

efficiency,

reduce energy costs and

lower emissions. Industry

is the world’s largest

consumer

of electricity,

natural gas and coal,

according to the IEA,

accounting for 42%

of total electricity demand.

This

energy consumption carries

high costs in the current

inflationary environment.

The Movement’s

recommendations range

from carrying out energy

audits

to right-sizing industrial

machines that are often

too big

for the job at hand,

which wastes energy.

Moving data

from on-site servers and

into the cloud could help

save

around 90%

of the energy consumed

by IT systems.

Speeding up the

transition from fossil fuels,

by electrifying

industrial fleets switching

gas boilers to heat pumps

using well-maintained

heat exchangers will also

offer

efficiencies.

Q4 outcome

●

54% reduction of CO

₂

e emissions in own operations

mainly by

shifting to green electricity and

a reduction of sulfur hexafluoride

gas (SF6) emissions in our operations

●

29% year-on-year decrease

in LTIFR due

to a decrease in

incidents in absolute numbers.

●

1.5%-points increase in share of women

in senior management,

demonstrating progress towards

our target.

—

Sustainability

Q4 2022

Q4 2021

CHANGE

12M ROLLING

₂

e own operations emissions,

kt scope 1 and 2

-54%

268

Lost Time Injury Frequency Rate (LTIFR),

frequency / 200,000 working hours

0.10

0.14

-29%

0.14

Share of females in senior management

positions, %

17.8

16.3

+1.5 pts

17.2

₂

equivalent emissions from site, energy use, SF6

and fleet, previous quarter

Q2 2022 emission data was restated from 88.8 to

72.6 Ktons of CO

₂

e to reflect the application

of green energy certificates retrospectively.

ABB

INTERIM

REPORT

2022

During Q4 2022

●

On December 28, ABB announced

it had completed the

previously announced

divestment to Hitachi, Ltd.

(Hitachi) of

its remaining 19.9

equity stake in the Hitachi

Energy joint

venture that was

formed from ABB’s Power

Grids business in

2020, with Hitachi holding

a stake of 80.1%. Through

the

divestment, ABB has

realized a net positive

cash inflow of

approximately $1.4

billion in the fourth quarter

2022.

●

On December

2, ABB announced that

it had reached a full

and final settlement

with the National Director

of Public

Prosecution in South

Africa, the U.S. Department

Justice, the U.S. Securities

and Exchange Commission,

and the Office of

the Attorney General of

Switzerland

related to the legacy

Kusile project in South Africa,

awarded

in 2015. The settlements

total approximately $32

million

primarily accounted

for in ABB’s third quarter

2022 financial

results and include

the expected exposure to

the German

case.

●

On October 3, ABB announce

that Accelleron Industries

AG (formerly ABB Turbocharging)

had

started trading on

SIX Swiss Exchange

in Zurich, marking the

completion of

Accelleron’s spin

-off from ABB.

After Q4 2022

●

On January 20, ABB announced

it had reached an agreement

to sell its Power

Conversion division to AcBel

Polytech Inc. for

$505 million in cash.

The transaction is subject

to regulatory

approvals and is expected

to be completed in the second

half

of 2023. Upon closing,

ABB expects to record a

small non-

operational book

gain in Income from operations

on the sale.

●

On February 1, ABB announced

its E-mobility business

had

signed an agreement

with four minority investors to

raise an

additional CHF325 million

in funds in exchange

for

approximately 12%

shareholding in the company.

The

transaction represents

the final part of ABB E-mobility

’s pre-

IPO funding tranche

through newly issued shares

Through the

private placement,

a total of approximately

CHF525 million has

been raised for approximately

20% shareholding in

ABB’s E-

mobility,

which will be used to continue

the execution of its

growth strategy,

driven by both organic

and M&A investments

in hardware and software.

●

On February 2, ABB announced

the nomination of Denise C.

Johnson, group president

of Caterpillar Inc, as a new

member

for election at the company’s

upcoming Annual General

Meeting (AGM) on March

23, 2023. At the same time,

current

member Satish Pai

will step down from the

Board.

In 2022, demand for

ABB’s offering increased

strongly year-

on-year, supported

by most customer segments

and across

all regions. Orders

amounted to $33,988

million and improved

by 7% (16% comparable).

Revenues amounted

to $29,446 million up

by 2% (12%

comparable), year-on-year.

Customer deliveries were

impacted by component

constraints in the first half,

but

shortages progressively

eased throughout the

year. As a

result, the book-to-bill ratio

amounted to 1.15 in 2022.

Income from operations

amounted to $3,337 million

down

from $5,718 million

in the year-earlier period. Results

in 2022

included a charge triggered

by the exit of the legacy

full-train

retrofit business

in non-core operations as

well as a provision

related to the legacy

Kusile project in South Africa

awarded in

2015. Results in 2021

included a book gain

of $2.2 billion

related to the divestment

of the Mechanical Power

Transmission

business.

Operational EBITA

improved by 9%

year-on-year to

$4,510 million and

the Operational EBITA

margin increased

110

basis points to 15.3%, achieving

the margin target of at

least 15% already one

year earlier than expected.

Performance

was driven by the positive

impacts from strong pricing

execution

and higher volumes,

which more than offset

cost inflation in raw

materials, freight and

labor. Additionally,

Corporate and Other

Operational EBITA

improved by $169

million to -$169 million,

partly due to higher

real estate gains and a better

non-core

result.

The net finance expenses

declined $39 million to $58

million,

roughly offsetting

the decline in non-operational

pension credits

of $51 million to $115

million compared to the

same period last

year.

Income tax expense

was $757 million with a

tax rate of

22.3%, including approximately

3% net adverse impact

primarily related

to adverse impacts from non-deductible

non-operational charges

as well as a positive impact

to a release of a valuation

allowance on deferred tax

assets

due to the

improved business performance

mainly related

to the US.

Net income attributable

to ABB was $2,475 million

and

decreased by 46%.

Basic earnings per share

was $1.30

and decreased by 43%.

Both measures were adversely

impacted by the

charges triggered by the exit

of the legacy

full-train retrofit business

in non-core operations

as well as

the provision related

to the legacy Kusile project and

include

a book gain related

to the divestment of the

Mechanical

Power Transmission

business in 2021.

Significant events

Full year 2022

ABB

INTERIM

REPORT

2022

Divestments

Company/unit

Closing date

Revenues, $ million

No. of employees

2022

Hitachi Energy JV (Power Grids, 19.9% stake)

28-Dec

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.

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 costs.

Excluding impact of acquisitions or divestments or

any significant non-operational items.

($ in millions, unless otherwise stated)

FY 2023

Net finance expenses

~(150)

Effective tax rate

~25%

Capital Expenditures

~(800)

($ in millions, unless otherwise stated)

FY 2023

Q1 2023

Corporate and Other Operational EBITA

~(300)

~(75)

Non-operating items

Acquisition-related amortization

~(220)

~(55)

Restructuring and related

~(150)

~(40)

ABB Way transformation

~(180)

~(40)

Additional 2023 guidance

Acquisitions

Company/unit

Closing date

Revenues, $ million

No. of employees

2022

Motion

PowerTech Converter

business

1-Dec

~60

300

Electrification

ASKI Industrie Elektronik GmbH

3-Oct

Electrification

Numocity Technologies

Private Ltd. (majority stake)

22-Jul

Electrification

InCharge Energy, Inc (majority stake)

26-Jan

~16

Additional figures

ABB Group

Q1 2021

Q2 2021

Q3 2021

Q4 2021

FY 2021

Q1 2022

Q2 2022

Q3 2022

Q4 2022

FY 2022

EBITDA, $ in million

1,024

1,324

1,072

3,191

6,611

1,067

794

906

1,384

4,151

Return on Capital Employed, %

n.a.

14.90

n.a.

16.50

Net debt/Equity

0.09

0.16

0.13

(0.01)

0.20

0.34

0.21

Net debt/ EBITDA 12M rolling

0.4

0.7

0.5

(0.01)

0.4

0.7

Net working capital, % of 12M rolling

revenues

10.8%

11.6%

10.2%

8.1%

12.1%

12.8%

11.7%

11.1%

Earnings per share, basic, $

0.25

0.37

0.33

1.34

2.27

0.31

0.20

0.19

0.61

1.30

Earnings per share, diluted, $

0.25

0.37

0.32

1.33

2.25

0.31

0.20

0.19

0.60

1.30

Dividend per share, CHF

n.a.

0.82

n.a.

0.84

Share price at the end of period, CHF

27.56

30.30

33.68

29.12

24.57

24.90

28.06

Share price at the end of period, $

28.99

32.33

31.73

36.31

30.76

25.43

24.41

30.46

Number of employees (FTE equivalents)

105,330

106,370

106,080

104,420

104,720

106,380

106,830

105,130

No. of shares outstanding at end of period

(in millions)

2,024

2,006

1,993

1,958

1,929

1,892

1,875

1,865

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

the Accelleron spin-off (Source: FactSet).

Dividend proposal subject to shareholder approval at the

2023 AGM

Acquisitions and divestments, last twelve months

ABB

INTERIM

REPORT

2022

For additional information please contact:

Media Relations

Phone: +41 43 317

71 11

Email: media.relations@c

h.abb.com

Investor Relations

Phone: +41 43 317

71 11

Email: investor.relations@ch.abb.com

ABB Ltd

Affolternstrasse

8050 Zurich

Switzerland

Financial calendar

2023

March 23

Annual General Meeting

April 25

Q1 2023 results

July 20

Q2 2023 results

October 18

Q3 2023 results

November 30

Capital Markets Day

in Frosinone, Italy

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,” “Earnings,”

“Balance sheet & cash

flow,” “Robotics and

Discrete

Automation” and “Significant

events”. 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,” “likely” or similar

expressions.

However,

there are many risks

and uncertainties, many

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 2022

results press release

and presentation slides

are available on the

ABB News Center at

www.abb.com/news

and on the Investor

Relations

homepage at www.abb.com/investorrelations.

A conference call and

webcast for analysts

and investors is

scheduled to begin

today at 10:00 a.m. CET.

pre-register for the conference

call or to join the

webcast, please

refer to the ABB website:

www.abb.com/investorrelations.

The recorded session

will be available after

the event on

ABB’s website.

Q4 results presentation on February 2, 2023

Important notice about forward-looking information

ABB

(ABBN: SIX Swiss

Ex) 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 more than 130

years of excellence,

ABB’s ~105,000 employees

are committed to driving innovations

that accelerate industrial

transformation.

Q4 2022

FINANCIAL

INFORMATION

February 2, 2023

Q4 2022

Financial information

Q4 2022

FINANCIAL

INFORMATION

—

Financial

Information

Contents

─ 07

Key Figures

08 ─

Consolidated

Financial

Information

(unaudited)

35 ─

Supplemental

Reconciliations

and Definitions

Q4 2022

FINANCIAL

INFORMATION

—

Key Figures

CHANGE

($ in millions, unless otherwise indicated)

Q4 2022

Q4 2021

US$

Comparable

(1)

Orders

7,620

8,257

-8%

Order backlog (end December)

19,867

16,607

20%

29%

Revenues

7,824

7,567

16%

Gross Profit

2,658

2,397

11%

as % of revenues

34.0%

31.7%

+2.3 pts

Income from operations

1,185

2,975

-60%

Operational EBITA

(1)

1,146

988

16%

28%

(2)

as % of operational revenues

(1)

14.8%

13.1%

+1.7 pts

Income from continuing operations, net of tax

1,168

2,703

-57%

Net income attributable to ABB

1,132

2,640

-57%

Basic earnings per share ($)

0.61

1.34

-55%

(3)

Cash flow from operating activities

(4)

687

1,020

-33%

Cash flow from operating activities in continuing operations

720

1,033

-30%

CHANGE

($ in millions, unless otherwise indicated)

FY 2022

FY 2021

US$

Comparable

(1)

Orders

33,988

31,868

16%

Revenues

29,446

28,945

12%

Gross Profit

9,710

9,467

as % of revenues

33.0%

32.7%

+0.3 pts

Income from operations

3,337

5,718

-42%

Operational EBITA

(1)

4,510

4,122

18%

(2)

as % of operational revenues

(1)

15.3%

14.2%

+1.1 pts

Income from continuing operations, net of tax

2,637

4,730

-44%

Net income attributable to ABB

2,475

4,546

-46%

Basic earnings per share ($)

1.30

2.27

-43%

(3)

Cash flow from operating activities

(4)

1,287

3,330

-61%

Cash flow from operating activities in continuing operations

1,334

3,338

-60%

(1)

For a reconciliation of non-GAAP measures see “

Supplemental Reconciliations and Definitions

” on page 35.

(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 2022

FINANCIAL

INFORMATION

CHANGE

($ in millions, unless otherwise indicated)

Q4 2022

Q4 2021

US$

Local

Comparable

Orders

ABB Group

7,620

8,257

-8%

Electrification

3,565

3,638

-2%

Motion

1,649

1,843

-11%

-3%

Process Automation

1,746

1,898

-8%

11%

Robotics & Discrete Automation

798

1,100

-27%

-19%

Corporate and Other

(incl. intersegment eliminations)

(138)

(222)

Order backlog (end December)

ABB Group

19,867

16,607

20%

26%

29%

Electrification

6,933

5,458

27%

33%

Motion

4,726

3,749

26%

33%

34%

Process Automation

6,229

6,079

16%

Robotics & Discrete Automation

2,679

1,919

40%

49%

48%

Corporate and Other

(incl. intersegment eliminations)

(700)

(598)

Revenues

ABB Group

7,824

7,567

13%

16%

Electrification

3,663

3,445

16%

Motion

1,845

1,735

17%

20%

Process Automation

1,551

1,805

-14%

-6%

Robotics & Discrete Automation

891

799

12%

23%

Corporate and Other

(incl. intersegment eliminations)

(126)

(217)

Income from operations

ABB Group

1,185

2,975

Electrification

557

418

Motion

316

2,464

Process Automation

183

193

Robotics & Discrete Automation

101

Corporate and Other

(incl. intersegment eliminations)

(145)

Income from operations %

ABB Group

15.1%

39.3%

Electrification

15.2%

12.1%

Motion

17.1%

142.0%

Process Automation

11.8%

10.7%

Robotics & Discrete Automation

11.3%

5.6%

Operational EBITA

ABB Group

1,146

988

16%

28%

Electrification

572

507

13%

26%

Motion

318

278

14%

26%

Process Automation

203

247

-18%

-8%

Robotics & Discrete Automation

125

95%

117%

Corporate and Other

(incl. intersegment eliminations)

(72)

(108)

Operational EBITA %

ABB Group

14.8%

13.1%

Electrification

15.7%

14.8%

Motion

17.4%

16.1%

Process Automation

13.2%

13.7%

Robotics & Discrete Automation

14.0%

8.1%

Cash flow from operating activities

ABB Group

687

1,020

Electrification

804

715

Motion

346

416

Process Automation

205

370

Robotics & Discrete Automation

105

129

Corporate and Other

(incl. intersegment eliminations)

(740)

(597)

Discontinued operations

(33)

(13)

Q4 2022

FINANCIAL

INFORMATION

CHANGE

($ in millions, unless otherwise indicated)

FY 2022

FY 2021

US$

Local

Comparable

Orders

ABB Group

33,988

31,868

13%

16%

Electrification

15,901

14,381

11%

17%

Motion

7,896

7,616

11%

20%

Process Automation

6,825

6,779

11%

Robotics & Discrete Automation

4,116

3,844

16%

15%

Corporate and Other

(incl. intersegment eliminations)

(750)

(752)

Order backlog (end December)

ABB Group

19,867

16,607

20%

26%

29%

Electrification

6,933

5,458

27%

33%

Motion

4,726

3,749

26%

33%

34%

Process Automation

6,229

6,079

16%

Robotics & Discrete Automation

2,679

1,919

40%

49%

48%

Corporate and Other

(incl. intersegment eliminations)

(700)

(598)

Revenues

ABB Group

29,446

28,945

12%

Electrification

14,105

13,187

14%

Motion

6,745

6,925

-3%

14%

Process Automation

6,044

6,259

-3%

Robotics & Discrete Automation

3,181

3,297

-4%

Corporate and Other

(incl. intersegment eliminations)

(629)

(723)

Income from operations

ABB Group

3,337

5,718

Electrification

2,159

1,841

Motion

1,092

3,276

Process Automation

663

713

Robotics & Discrete Automation

247

269

Corporate and Other

(incl. intersegment eliminations)

(824)

(381)

Income from operations %

ABB Group

11.3%

19.8%

Electrification

15.3%

14.0%

Motion

16.2%

47.3%

Process Automation

11.0%

11.4%

Robotics & Discrete Automation

7.8%

8.2%

Operational EBITA

ABB Group

4,510

4,122

18%

Electrification

2,328

2,121

10%

20%

Motion

1,163

1,183

-2%

Process Automation

848

801

15%

Robotics & Discrete Automation

340

355

-4%

Corporate and Other

(incl. intersegment eliminations)

(169)

(338)

Operational EBITA %

ABB Group

15.3%

14.2%

Electrification

16.5%

16.1%

Motion

17.3%

17.1%

Process Automation

14.0%

12.8%

Robotics & Discrete Automation

10.7%

10.8%

Cash flow from operating activities

ABB Group

1,287

3,330

Electrification

1,887

2,181

Motion

853

1,362

Process Automation

675

1,062

Robotics & Discrete Automation

214

374

Corporate and Other

(incl. intersegment eliminations)

(2,295)

(1,641)

Discontinued operations

(47)

(8)

Q4 2022

FINANCIAL

INFORMATION

Operational EBITA

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions, unless otherwise indicated)

Q4 22

Q4 21

Q4 22

Q4 21

Q4 22

Q4 21

Q4 22

Q4 21

Q4 22

Q4 21

Revenues

7,824

7,567

3,663

3,445

1,845

1,735

1,551

1,805

891

799

Foreign exchange/commodity timing

differences in total revenues

(62)

(44)

(29)

(22)

(10)

(12)

(5)

Operational revenues

7,762

7,523

3,634

3,423

1,823

1,725

1,539

1,800

892

794

Income from operations

1,185

2,975

557

418

316

2,464

183

193

101

Acquisition-related amortization

Restructuring, related and

implementation costs

(1)

Changes in obligations related to

divested businesses

(71)

(7)

–

Changes in pre-acquisition estimates

–

Gains and losses from sale of businesses

(2,184)

–

(2,195)

–

Acquisition- and divestment-related

expenses and integration costs

–

Other income/expense relating to the

Power Grids joint venture

(10)

–

Certain other non-operational items

(28)

–

(2)

(9)

–

Foreign exchange/commodity timing

differences in income from operations

(69)

(32)

(40)

(25)

(17)

(9)

(16)

(3)

Operational EBITA

1,146

988

572

507

318

278

203

247

125

Operational EBITA margin (%)

14.8%

13.1%

15.7%

14.8%

17.4%

16.1%

13.2%

13.7%

14.0%

8.1%

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions, unless otherwise indicated)

FY 22

FY 21

FY 22

FY 21

FY 22

FY 21

FY 22

FY 21

FY 22

FY 21

Revenues

29,446

28,945

14,105

13,187

6,745

6,925

6,044

6,259

3,181

3,297

Foreign exchange/commodity timing

differences in total revenues

(1)

(14)

(7)

Operational revenues

29,474

28,944

14,091

13,188

6,731

6,927

6,077

6,264

3,187

3,290

Income from operations

3,337

5,718

2,159

1,841

1,092

3,276

663

713

247

269

Acquisition-related amortization

229

250

116

117

Restructuring, related and

implementation costs

(1)

347

160

Changes in obligations related to

divested businesses

(88)

–

Changes in pre-acquisition estimates

(6)

–

(1)

–

Gains and losses from sale of businesses

(2,193)

(1)

(2,196)

–

(13)

–

Acquisition- and divestment-related

expenses and integration costs

195

132

134

Other income/expense relating to the

Power Grids joint venture

–

Certain other non-operational items

385

(18)

(24)

(5)

–

(7)

–

Foreign exchange/commodity timing

differences in income from operations

(2)

(5)

Operational EBITA

4,510

4,122

2,328

2,121

1,163

1,183

848

801

340

355

Operational EBITA margin (%)

15.3%

14.2%

16.5%

16.1%

17.3%

17.1%

14.0%

12.8%

10.7%

10.8%

(1)

Includes impairment of certain assets.

Q4 2022

FINANCIAL

INFORMATION

Depreciation and Amortization

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions)

Q4 22

Q4 21

Q4 22

Q4 21

Q4 22

Q4 21

Q4 22

Q4 21

Q4 22

Q4 21

Depreciation

130

141

Amortization

including total acquisition-related amortization of:

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions)

FY 22

FY 21

FY 22

FY 21

FY 22

FY 21

FY 22

FY 21

FY 22

FY 21

Depreciation

531

575

265

276

105

123

Amortization

283

318

141

149

including total acquisition-related amortization of:

229

250

116

117

Orders received and revenues by region

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

Com-

Q4 22

Q4 21

US$

Local

parable

Q4 22

Q4 21

US$

Local

parable

Europe

2,604

3,138

-17%

-5%

2,766

2,756

15%

16%

The Americas

2,898

2,640

10%

11%

15%

2,554

2,198

16%

17%

22%

of which United States

2,167

1,995

13%

1,898

1,579

20%

26%

Asia, Middle East and Africa

2,118

2,479

-15%

-5%

-2%

2,504

2,613

-4%

10%

of which China

976

1,255

-22%

-13%

-12%

1,133

1,234

-8%

ABB Group

7,620

8,257

-8%

7,824

7,567

13%

16%

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

Com-

FY 22

FY 21

US$

Local

parable

FY 22

FY 21

US$

Local

parable

Europe

11,778

11,857

-1%

13%

10,286

10,529

-2%

12%

The Americas

11,825

9,940

19%

20%

28%

9,572

8,686

10%

11%

19%

of which United States

8,920

7,453

20%

29%

7,021

6,397

10%

19%

Asia, Middle East and Africa

10,385

10,071

10%

9,588

9,730

-1%

of which China

5,087

5,036

4,696

4,932

-5%

ABB Group

33,988

31,868

13%

16%

29,446

28,945

12%

Q4 2022

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, 2022

Dec. 31, 2021

Dec. 31, 2022

Dec. 31, 2021

Sales of products

24,471

23,745

6,525

6,101

Sales of services and other

4,975

5,200

1,299

1,466

Total revenues

29,446

28,945

7,824

7,567

Cost of sales of products

(16,804)

(16,364)

(4,365)

(4,275)

Cost of services and other

(2,932)

(3,114)

(801)

(895)

Total cost of sales

(19,736)

(19,478)

(5,166)

(5,170)

Gross profit

9,710

9,467

2,658

2,397

Selling, general and administrative expenses

(5,132)

(5,162)

(1,299)

(1,354)

Non-order related research and development expenses

(1,166)

(1,219)

(322)

Other income (expense), net

(75)

2,632

148

2,254

Income from operations

3,337

5,718

1,185

2,975

Interest and dividend income

Interest and other finance expense

(130)

(148)

(23)

(40)

Non-operational pension (cost) credit

115

166

Income from continuing operations before taxes

3,394

5,787

1,197

2,985

Income tax expense

(757)

(1,057)

(29)

(282)

Income from continuing operations, net of

tax

2,637

4,730

1,168

2,703

Loss from discontinued operations, net of tax

(43)

(80)

(7)

(35)

Net income

2,594

4,650

1,161

2,668

Net income attributable to noncontrolling interests and

redeemable noncontrolling interests

(119)

(104)

(29)

(28)

Net income attributable to ABB

2,475

4,546

1,132

2,640

Amounts attributable to ABB shareholders:

Income from continuing operations, net of tax

2,517

4,625

1,138

2,674

Loss from discontinued operations, net of tax

(42)

(79)

(6)

(34)

Net income

2,475

4,546

1,132

2,640

Basic earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

1.33

2.31

0.61

1.35

Loss from discontinued operations, net of tax

(0.02)

(0.04)

0.00

(0.02)

Net income

1.30

2.27

0.61

1.34

Diluted earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

1.32

2.29

0.60

1.34

Loss from discontinued operations, net of tax

(0.02)

(0.04)

0.00

(0.02)

Net income

1.30

2.25

0.60

1.33

Weighted-average number of shares outstanding

(in millions) used to compute:

Basic earnings per share attributable to ABB shareholders

1,899

2,001

1,870

1,974

Diluted earnings per share attributable to ABB shareholders

1,910

2,019

1,881

1,991

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

See Notes to the Consolidated Financial Information

Q4 2022

FINANCIAL

INFORMATION

—

ABB Ltd Condensed Consolidated Statements of Comprehensive

Income (unaudited)

Year ended

Three months ended

($ in millions)

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2022

Dec. 31, 2021

Total comprehensive income, net of

tax

2,189

4,567

1,414

2,845

Total comprehensive income

attributable to noncontrolling interests and

redeemable noncontrolling interests, net of tax

(87)

(108)

(29)

(27)

Total comprehensive income attributable

to ABB shareholders, net of tax

2,102

4,459

1,385

2,818

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

See Notes to the Consolidated Financial Information

Q4 2022

FINANCIAL

INFORMATION

—

ABB Ltd Consolidated Balance Sheets (unaudited)

($ in millions)

Dec. 31, 2022

Dec. 31, 2021

Cash and equivalents

4,156

4,159

Restricted cash

Marketable securities and short-term investments

725

1,170

Receivables, net

6,858

6,551

Contract assets

954

990

Inventories, net

6,028

4,880

Prepaid expenses

230

206

Other current assets

505

573

Current assets held for sale and in discontinued operations

136

Total current assets

19,570

18,695

Restricted cash, non-current

–

300

Property, plant and equipment, net

3,911

4,045

Operating lease right-of-use assets

841

895

Investments in equity-accounted companies

130

1,670

Prepaid pension and other employee benefits

916

892

Intangible assets, net

1,406

1,561

Goodwill

10,511

10,482

Deferred taxes

1,396

1,177

Other non-current assets

467

543

Total assets

39,148

40,260

Accounts payable, trade

4,904

4,921

Contract liabilities

2,216

1,894

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

2,535

1,384

Current operating leases

220

230

Provisions for warranties

1,028

1,005

Other provisions

1,171

1,386

Other current liabilities

4,323

4,367

Current liabilities held for sale and in discontinued operations

132

381

Total current liabilities

16,529

15,568

Long-term debt

5,143

4,177

Non-current operating leases

651

689

Pension and other employee benefits

719

1,025

Deferred taxes

729

685

Other non-current liabilities

2,085

2,116

Non-current liabilities held for sale and in discontinued operations

Total liabilities

25,876

24,303

Commitments and contingencies

Redeemable noncontrolling interest

–

Stockholders’ equity:

Common stock, CHF 0.12 par value

(1,965 million and 2,053 million shares issued at December 31,

2022 and 2021, respectively)

171

178

Additional paid-in capital

141

Retained earnings

20,082

22,477

Accumulated other comprehensive loss

(4,556)

(4,088)

Treasury stock, at cost

(100 million and 95 million shares at December 31, 2022

and 2021, respectively)

(3,061)

(3,010)

Total ABB stockholders’ equity

12,777

15,579

Noncontrolling interests

410

378

Total stockholders’ equity

13,187

15,957

Total liabilities and stockholders’

equity

39,148

40,260

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

See Notes to the Consolidated Financial Information

Q4 2022

FINANCIAL

INFORMATION

—

ABB Ltd Consolidated Statements of Cash Flows (unaudited)

Year ended

Three months ended

($ in millions)

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2022

Dec. 31, 2021

Operating activities:

Net income

2,594

4,650

1,161

2,668

Loss from discontinued operations, net of tax

Adjustments to reconcile net income (loss) to

net cash provided by operating activities:

Depreciation and amortization

814

893

199

216

Changes in fair values of investments

(33)

(123)

(9)

Pension and other employee benefits

(125)

(216)

(18)

(57)

Deferred taxes

(348)

(289)

(165)

(371)

Loss from equity-accounted companies

102

100

Net loss (gain) from derivatives and foreign exchange

(23)

(67)

(50)

Net loss (gain) from sale of property,

plant and equipment

(84)

(38)

(20)

(16)

Net loss (gain) from sale of businesses

(2,193)

(2,184)

Other

117

Changes in operating assets and liabilities:

Trade receivables, net

(831)

(142)

(174)

Contract assets and liabilities

416

102

Inventories, net

(1,599)

(771)

(79)

Accounts payable, trade

395

659

298

Accrued liabilities

136

454

118

Provisions, net

(70)

(48)

(382)

Income taxes payable and receivable

(94)

117

(113)

209

Other assets and liabilities, net

(36)

Net cash provided by operating activities – continuing

operations

1,334

3,338

720

1,033

Net cash used in operating activities – discontinued operations

(47)

(8)

(33)

(13)

Net cash provided by operating activities

1,287

3,330

687

1,020

Investing activities:

Purchases of investments

(321)

(1,528)

(50)

(1,114)

Purchases of property, plant and

equipment and intangible assets

(762)

(820)

(259)

(361)

Acquisition of businesses (net of cash acquired)

and increases in cost-

and equity-accounted companies

(288)

(241)

(62)

(14)

Proceeds from sales of investments

697

2,272

633

Proceeds from maturity of investments

Proceeds from sales of property,

plant and equipment

127

Proceeds from sales of businesses (net of transaction costs

and cash disposed) and cost-

and equity-accounted companies

1,541

2,958

1,549

2,865

Net cash from settlement of foreign currency derivatives

(166)

(121)

(12)

(46)

Changes in loans receivable, net

320

(19)

309

Other investing activities

(14)

(4)

Net cash provided by investing activities – continuing

operations

1,207

2,671

1,629

2,023

Net cash used in investing activities – discontinued

operations

(226)

(364)

(135)

(281)

Net cash provided by investing activities

981

2,307

1,494

1,742

Financing activities:

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

1,366

(83)

(109)

(296)

Increase in debt

3,849

1,400

295

Repayment of debt

(2,703)

(1,538)

(678)

(775)

Delivery of shares

394

826

Purchase of treasury stock

(3,553)

(3,708)

(302)

(1,267)

Dividends paid

(1,698)

(1,726)

–

Cash associated with the spin-off of the Turbocharging

Division

(172)

–

(172)

–

Dividends paid to noncontrolling shareholders

(99)

(98)

(16)

(7)

Proceeds from issuance of subsidiary shares

216

–

216

–

Other financing activities

(41)

(24)

Net cash used in financing activities – continuing

operations

(2,394)

(4,968)

(697)

(2,307)

Net cash provided by financing activities – discontinued

operations

–

Net cash used in financing activities

(2,394)

(4,968)

(697)

(2,307)

Effects of exchange rate changes on cash and equivalents

and restricted cash

(189)

(81)

(6)

Net change in cash and equivalents and restricted cash

(315)

588

1,486

449

Cash and equivalents and restricted cash, beginning of period

4,489

3,901

2,688

4,040

Cash and equivalents and restricted cash, end of period

4,174

4,489

4,174

4,489

Supplementary disclosure of cash flow information:

Interest paid

132

Income taxes paid

1,188

1,292

281

499

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

See Notes to the Consolidated Financial Information

Q4 2022

FINANCIAL

INFORMATION

—

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

($ in millions)

Common

stock

Additional

paid-in

capital

Retained

earnings

Accumulated

other

comprehensive

loss

Treasury

stock

Total ABB

stockholders’

equity

Non-

controlling

interests

Total

stockholders’

equity

Balance at January 1, 2021

188

22,946

(4,002)

(3,530)

15,685

314

15,999

Net income

4,546

104

4,650

Foreign currency translation

adjustments, net of tax of $0

(534)

(530)

Effect of change in fair value of

available-for-sale securities,

net of tax of $(4)

(15)

Unrecognized income (expense)

related to pensions and other

postretirement plans,

net of tax of $22

467

Change in derivative instruments

and hedges, net of tax of $(1)

(5)

Changes in noncontrolling interests

(37)

(20)

(57)

(2)

Dividends to

noncontrolling shareholders

–

(98)

Dividends to shareholders

(1,730)

Cancellation of treasury shares

(10)

(17)

(3,130)

3,157

–

Share-based payment arrangements

Purchase of treasury stock

(3,682)

Delivery of shares

(84)

(136)

1,046

826

Other

Balance at December 31, 2021

178

22,477

(4,088)

(3,010)

15,579

378

15,957

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

(1)

Amounts attributable to noncontrolling interests for the year ended December 31, 2022, exclude net losses of $5 million 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 2022

FINANCIAL

INFORMATION

—

Notes to the Consolidated Financial Information (unaudited)

─

Note 1

The Company and basis of presentation

ABB Ltd and its subsidiaries (collectively,

the Company) together form a 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, 2021.

The preparation

of financial information in conformity with U.S. GAAP requires

management to make assumptions and estimates that directly affect

the amounts

reported in the Consolidated Financial Information. These accounting

assumptions and estimates include:

●

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 used to record expected costs for employee severance

in connection with restructuring programs,

●

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,

●

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.

Q4 2022

FINANCIAL

INFORMATION

─

Note 2

Recent accounting pronouncements

Applicable for current periods

Business Combinations — Accounting for contract

assets and contract liabilities from contracts with customers

In January 2022, the Company early adopted a new accounting

standard update, which provides guidance on the accounting for

revenue contracts acquired in a

business combination. The update requires contract assets

and liabilities acquired in a business combination to be recognized

and measured at the date of

acquisition in accordance with the principles for recognizing revenues

from contracts with customers.

The Company has applied this accounting standard update

prospectively starting with acquisitions closing after January

1, 2022.

Disclosures about government assistance

In January 2022, the Company adopted a new accounting standard

update,

which requires entities to disclose certain types of government

assistance. Under the

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

type of the assistance received, including any significant

terms and conditions, (ii) its related

accounting policy, and (iii) the effect

such transactions have on its financial statements. The Company

has applied this accounting standard update

prospectively.

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

consolidated financial statements.

Applicable for future periods

Facilitation of the effects of reference rate reform on financial

reporting

In March 2020, an accounting standard update was issued which provides

temporary optional expedients and exceptions to the current

guidance on contract

modifications and hedge accounting to ease the financial reporting burdens

related to the expected market transition from the London

Interbank Offered Rate

(LIBOR) and other interbank offered rates to alternative reference

rates. This update, along with clarifications outlined

in subsequent updates issued during

January 2021 and December 2022, can be adopted and applied

no later than December 31, 2024, with early

adoption permitted. The Company expects to adopt

this update during the second half of 2023 and does

not expect this update to have a significant impact on its consolidated

financial statements.

Disclosure about supplier finance program obligations

In September 2022, an accounting standard update was issued which

requires entities to disclose information related to supplier

finance programs. Under the

update, the Company is required to annually disclose (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. This update is effective for the Company

retrospectively for all in-scope transactions for annual periods

beginning January 1, 2023, with the exception

the rollforward disclosures,

which are effective prospectively for annual periods

beginning January 1, 2024, with early adoption permitted. The Company

does not

expect this update to have a significant impact on its consolidated financial

statements.

The total outstanding supplier finance obligation included

in “Accounts

payable, trade” in the Consolidated Balance Sheet at December 31,

2022, amounted to $477 million.

─

Note 3

Discontinued operations and assets held for sale

Divestment of the Power Grids business

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

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

The transaction was executed through the

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

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

Cash consideration received at the closing date

was $9,241 million net of cash disposed.

Further, for accounting purposes,

the 19.9 percent ownership interest retained by the Company

was deemed to have

been both divested and reacquired at its fair value on July

1, 2020.

The Company also obtained a put option, exercisable

with three-months’ notice commencing in

April 2023. The combined fair value of the retained investment

and the related put option amounted to $1,779 million

and was recorded as both an equity-method

investment and as part of the proceeds for the sale of the

entire Power Grids business (see Note 4).

In connection with the divestment, the Company recorded

liabilities in discontinued operations for estimated future costs and other cash

payments of $487 million

for various contractual items relating to the sale of the business

including required future cost reimbursements payable

to Hitachi Energy, costs

to be incurred by

the Company for the direct benefit of Hitachi Energy and

an amount due to Hitachi Ltd in connection with the expected purchase

price finalization of the closing

debt and working capital balances. In October 2021, the Company

and Hitachi concluded an agreement to settle the various amounts

owing by the Company.

The

net difference between the agreed amounts and the amounts

initially estimated by the Company was recorded

in 2021 in discontinued operations as an

adjustment to “Change to net gain recognized on sale

of the Power Grids business” in the table below.

During the year and three months ended December

31,

2022, total cash payments of $102 million (excluding payments

related to the guarantees, see Note 10), and $11

million, respectively, were made

in connection

with these liabilities. During the year and three months ended

December 31, 2021, total cash payments (including the amounts

paid under the settlement

agreement) of $364 million and $281 million, respectively,

were made in connection with these liabilities.

At December 31, 2022, the remaining amount recorded

was $53 million.

Upon closing of the sale, the Company entered into various

transition services agreements (TSAs). Pursuant to these

TSAs, the Company and Hitachi Energy

provide to each other, on an interim, transitional

basis, various services. The services

provided by the Company primarily include finance, information technology,

human resources and certain other administrative services.

Under the current terms, the TSAs will continue for up

to 3 years, and can only be extended on an

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

is reasonably necessary to avoid a material adverse

impact on the business. In the

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, respectively, in TSA-related

income for such services that is reported in Other income

(expense), net.

the year and three months ended December 31, 2021,

Other income (expense) included $173 million

and $46 million, respectively, of

TSA-related income for such

services.

Discontinued operations

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

all Power Grids-related assets and liabilities have

been sold. As this divestment represented

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

operations and financial results, the

results of operations for this business have been

presented as

discontinued operations and the assets and liabilities are presented

as held for sale and in discontinued operations

for all periods presented. 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. Assets

and liabilities

relating

to, as well as the net financial results of, these contracts

will continue to be included in discontinued operations until they

have been completed or

otherwise transferred to Hitachi Energy.

Q4 2022

FINANCIAL

INFORMATION

Amounts recorded in discontinued operations were as follows:

Year ended

Three months ended

($ in millions)

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2022

Dec. 31, 2021

Expenses

(38)

(18)

(13)

(5)

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

(10)

(65)

(33)

Loss from operations

(48)

(83)

(12)

(38)

Net interest income and other finance expense

–

Loss from discontinued operations before taxes

(48)

(81)

(12)

(36)

Income tax

Loss from discontinued operations, net of

tax

(43)

(80)

(7)

(35)

Of the total Loss from discontinued operations before taxes

in the table above, $(47) million and $(80) million

in the year ended December 31, 2022 and 2021,

respectively, and $(11

)

million and $(35) million in the three months

ended December 31, 2022 and 2021, respectively,

are attributable to the Company, while

the

remainder is attributable to noncontrolling interests.

In addition,

the Company also has retained obligations (primarily for environmental

and taxes) related to other businesses

disposed or otherwise exited that

qualified as discontinued operations. Changes to these retained obligations

are also included in Loss from discontinued operations,

net of tax, above.

The major components of assets and liabilities held for sale and

in discontinued operations in the Company’s Consolidated

Balance Sheets are summarized as

follows:

($ in millions)

Dec. 31, 2022

(1)

Dec. 31, 2021

(1)

Receivables, net

131

Other current assets

Current assets held for sale and in discontinued

operations

136

Accounts payable, trade

Other liabilities

310

Current liabilities held for sale and in discontinued

operations

132

381

Other non-current liabilities

Non-current liabilities held for sale and in discontinued

operations

(1)

At December 31, 2022 and 2021,

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

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

─

Note 4

Acquisitions and equity-accounted companies

Acquisition of controlling interests

Acquisitions of controlling interests were as follows:

Year ended December 31,

Three months ended December 31,

($ in millions, except number of acquired businesses)

2022

2021

2022

2021

Purchase price for acquisitions (net of cash acquired)

(1)

195

212

(3)

Aggregate excess of purchase price

over fair value of net assets acquired

(2)

229

161

Number of acquired businesses

(1)

Excluding changes in cost- and equity-accounted companies.

(2)

Recorded as goodwill.

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

and “Aggregate excess of purchase price over fair value of

net assets acquired” amounts for the year

ended December 31, 2022, relate primarily to the acquisition of InCharge

Energy, Inc. (In-Charge)

and in the year ended December 31, 2021, relate primarily

the acquisition of ASTI Mobile Robotics Group (ASTI).

Acquisitions of controlling interests have been accounted for

under the acquisition method and have been included in

the Company’s consolidated financial

statements since the date of acquisition.

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

Division of

its Electrification 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.

On August 2, 2021, the Company acquired the shares

of ASTI. ASTI is headquartered in Burgos, Spain, and

is a global autonomous mobile robot (AMR)

manufacturer. The resulting cash outflows

for the Company amounted to $186 million (net of cash

acquired). The acquisition expands the Company’s

robotics and

automation offering in its Robotics & Discrete Automation

operating segment.

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.

Q4 2022

FINANCIAL

INFORMATION

Business divestments and spin-offs

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

and three months ended December 31, 2022,

“Income continuing operations before taxes”,

included income of

$134 million and $1 million, respectively,

from this Division. In the year and three months ended

December 31, 2021, “Income continuing operations

before taxes”,

included income of $186 million and $53 million, respectively,

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 ABB and subsequently

collected in October 2022.

In the year and three months ended December 31, 2021,

the Company received proceeds (net of transactions

costs and cash disposed) of $2,958 million and

$2,865 million, respectively, relating to

divestments of consolidated businesses and recorded gains of

$2,193 million and $2,184 million, respectively

in “Other

income (expense), net” on the sales of such businesses.

These are primarily due to the divestment of the Company’s

Mechanical Power Transmission Division

(Dodge) to RBC Bearings Inc. Certain amounts included in

the net gain for the sale of the Dodge business

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. In the year and three months

ended December 31, 2021, “Income from continuing operations

before taxes”, included net income

of $115 million and $9 million, respectively,

from the Dodge business which, prior to its sale was

part of the Company’s Motion operating segment.

Investments in equity-accounted companies

In connection with the divestment of its Power Grids business

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

retained a 19.9 percent interest in the business.

For

accounting purposes the 19.9 percent interest was deemed to

have been both divested and reacquired, with a fair

value at the transaction date of $1,661 million.

The fair value was based on a discounted cash flow model

considering the expected results of the future business operations

of Hitachi Energy and using relevant

market inputs including a risk-adjusted weighted-average cost

of capital.

The Company also obtained an option, exercisable with three-months’

notice commencing April 2023, granting it

the right to require Hitachi to purchase this

investment at fair value, subject to a minimum floor price equivalent

to a 10 percent discount compared to the price paid for

the initial 80.1 percent. This option was

initially valued at $118 million using

a standard option pricing model with inputs considering the

nature of the investment and the expected period until

option

exercise. As this option is not separable from the investment the

value has been combined with the value of the underlying investment

and is accounted for

together. Hitachi also

received a call option requiring the Company

to sell the remaining 19.9 percent interest in Hitachi

Energy at any time at a price consistent

with what was paid by Hitachi to acquire the initial 80.1 percent

or at fair value, if higher.

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 10).

The

sale of the remaining investment was completed in December 2022,

resulting in net cash proceeds of $1,552

million and a gain of $43 million which was recorded

in “Other income (expense), net”.

In July 2020, the Company concluded that based on its continuing

involvement with the Power Grids business, including

the membership in its governing board of

directors, it had significant influence over Hitachi Energy.

As a result, the investment (including the value

of the option) was accounted for using the equity method

through the date of its sale in December 2022.

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

companies and respective percentage of ownership

is as follows:

Ownership as of

Carrying value at

($ in millions, except ownership share in %)

December 31, 2021

December 31, 2022

December 31, 2021

Hitachi Energy Ltd

19.9%

–

1,609

Others

130

Total

130

1,670

In the year and three months ended December 31, 2022

and 2021,

the Company recorded its share of the earnings

of investees accounted for under the equity

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

Year ended December 31,

Three months ended December 31,

($ in millions)

2022

2021

2022

2021

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

(22)

Basis difference amortization (net of deferred income tax benefit)

(80)

(138)

(14)

(44)

Loss from equity-accounted companies

(102)

(100)

(2)

(17)

Subsequent event

On January 19, 2023, the Company reached an agreement to sell

its Power Conversion Division to AcBel Polytech Inc.

for $505 million in cash. The transaction is

subject to regulatory approvals and is expected to be completed

in the second half of 2023.

Q4 2022

FINANCIAL

INFORMATION

─

Note 5

Cash and equivalents, marketable securities and short-term investments

Cash and equivalents, marketable securities and short-term

investments consisted of the following:

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

Total

4,910

(22)

4,899

4,174

725

Of which:

Restricted cash, current

December 31, 2021

Cash and

Marketable

Gross

equivalents

securities

unrealized

and restricted

and short-term

($ in millions)

Cost basis

gains

losses

Fair value

cash

investments

Changes in fair value

recorded in net income

Cash

2,752

Time deposits

2,037

1,737

300

Equity securities

569

587

5,358

–

5,376

4,489

887

Changes in fair value recorded

in other comprehensive income

Debt securities available-for-sale:

U.S. government obligations

203

(1)

209

Corporate

(1)

277

(2)

283

–

283

Total

5,635

(2)

5,659

4,489

1,170

Of which:

Restricted cash, current

Restricted cash, non-current

300

Q4 2022

FINANCIAL

INFORMATION

─

Note 6

Derivative financial instruments

The Company is exposed to certain currency,

commodity, interest rate and equity

risks arising from its global operating, financing and

investing activities. The

Company uses derivative instruments to reduce and manage the

economic impact of these exposures.

Currency risk

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

of its subsidiaries are exposed to currency risk

in their operating activities from entering into

transactions in currencies other than their functional currency.

To manage such

currency risks, the Company’s policies require its

subsidiaries to hedge their

foreign currency exposures from binding sales and purchase

contracts denominated in foreign currencies. For forecasted foreign currency

denominated sales of

standard products and the related foreign currency denominated purchases,

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

100 percent of the forecasted

foreign currency denominated exposures, depending on the

length of the forecasted exposures. Forecasted

exposures greater than 12 months are not hedged.

Forward foreign exchange contracts are the main instrument

used to protect the Company against the volatility of future

cash flows (caused by changes in

exchange rates) of contracted and forecasted sales and purchases

denominated in foreign currencies. In addition, within

its treasury operations, the Company

primarily uses foreign exchange swaps and forward foreign exchange

contracts to manage the currency and timing mismatches

arising in its liquidity management

activities.

Commodity risk

Various commodity products

are used in the Company’s manufacturing activities.

Consequently it is exposed to volatility in future cash flows

arising from changes

in commodity prices. To

manage the price risk of commodities, the Company’s

policies require that its subsidiaries hedge the commodity

price risk exposures from

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

of 100 percent) of the forecasted commodity exposure over

the next 12 months or longer (up to

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

manage the associated price risks of commodities.

Interest rate risk

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

and cross-currency interest rate swaps are used to manage

the interest rate and foreign

currency risk associated with certain debt and generally such

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

to time, the Company uses

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

futures or forward rate agreements to manage interest

rate risk arising from the Company’s

balance sheet structure but does not designate such instruments

as hedges.

Equity risk

The Company is exposed to fluctuations in the fair value of

its warrant appreciation rights (WARs)

issued under its management

incentive plan. A WAR gives its

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

an equivalent listed warrant on the date of exercise.

To eliminate

such risk, the Company has

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

Company, which entitle the Company

to receive amounts equivalent to its obligations

under the

outstanding WARs.

Volume of derivative activity

In general, while the Company’s primary objective in

its use of derivatives is to minimize exposures arising from

its business, certain derivatives are designated

and qualify for hedge accounting treatment while others either are

not designated or do not qualify for hedge accounting.

Foreign exchange and interest rate derivatives

The gross notional amounts of outstanding foreign exchange and

interest rate derivatives (whether designated as

hedges or not) were as follows:

Type of derivative

Total notional amounts

($ in millions)

December 31, 2022

December 31, 2021

Foreign exchange contracts

13,509

11,276

Embedded foreign exchange derivatives

933

815

Cross-currency interest rate swaps

855

906

Interest rate contracts

2,830

3,541

Derivative commodity contracts

The Company uses derivatives to hedge its direct or indirect exposure

to the movement in the prices of commodities which are

primarily copper, silver and

aluminum. The following table shows the notional amounts of outstanding

derivatives (whether designated as hedges or not), on

a net basis, to reflect the

Company’s requirements for these commodities:

Type of derivative

Unit

Total notional amounts

December 31, 2022

December 31, 2021

Copper swaps

metric tonnes

29,281

36,017

Silver swaps

ounces

2,012,213

2,842,533

Aluminum swaps

metric tonnes

6,825

7,125

Equity derivatives

At December 31, 2022 and 2021, the Company held 8 million

and 9 million cash-settled call options indexed to

ABB Ltd shares (conversion ratio 5:1) with a total

fair value of $15 million and $29 million, respectively.

Cash flow hedges

As noted above, the Company mainly uses forward foreign exchange

contracts to manage the foreign exchange risk

of its operations, commodity swaps to

manage its commodity risks and cash-settled call options to

hedge its WAR liabilities. The Company applies cash

flow hedge accounting in only limited cases. In

these cases, the effective portion of the changes in their

fair value is recorded in “Accumulated other comprehensive

loss” and subsequently reclassified into

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

the underlying hedged transaction affects

earnings. For the year and three months ended December

31,

2022 and 2021, there were no significant amounts recorded for cash

flow hedge accounting activities.

Fair value hedges

To reduce its interest

rate exposure arising primarily from its debt issuance activities,

the Company uses interest rate swaps

and cross-currency interest rate

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

the changes in the fair value of these instruments,

as well as the changes in the fair value of

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

as offsetting gains and losses in “Interest

and other finance expense”.

Q4 2022

FINANCIAL

INFORMATION

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)

2022

2021

2022

2021

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

Interest rate contracts

Designated as fair value hedges

(91)

(55)

(8)

(15)

Hedged item

Cross-currency interest rate swaps

Designated as fair value hedges

(134)

(37)

(9)

(10)

Hedged item

135

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

2022

2021

2022

2021

Foreign exchange contracts

Total revenues

(56)

145

Total cost of sales

(53)

(36)

(29)

SG&A expenses

(1)

(8)

Non-order related research

and development

–

(2)

–

Interest and other finance expense

(128)

(173)

(52)

Embedded foreign exchange

Total revenues

(3)

(7)

(15)

contracts

Total cost of sales

(11)

(2)

Commodity contracts

Total cost of sales

(47)

Other

Interest and other finance expense

–

Total

(193)

(145)

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, 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

Cash-settled call options

–

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

Q4 2022

FINANCIAL

INFORMATION

December 31, 2021

Derivative assets

Derivative liabilities

Current in

Non-current in

Current in

Non-current in

“Other current

“Other non-current

“Other current

“Other non-current

($ in millions)

assets”

liabilities”

Derivatives designated as hedging instruments:

Foreign exchange contracts

–

Interest rate contracts

–

Cross-currency interest rate swaps

–

109

Cash-settled call options

–

Total

114

Derivatives not designated as hedging instruments:

Foreign exchange contracts

108

107

Commodity contracts

–

Interest rate contracts

–

Embedded foreign exchange derivatives

Total

138

130

Total fair value

176

133

131

Close-out netting agreements provide for the termination, valuation

and net settlement of some or all outstanding transactions

between two counterparties on the

occurrence of one or more pre-defined trigger events.

Although the Company is party to close-out netting agreements

with most derivative counterparties, the fair values in the

tables above and in the Consolidated

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

related to these offsetting arrangements was as follows:

($ 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

($ in millions)

December 31, 2021

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement or

of recognized

eligible for set-off

collateral

Net asset

similar arrangement

assets

in case of default

received

exposure

Derivatives

200

(104)

–

Total

200

(104)

–

($ in millions)

December 31, 2021

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement or

of recognized

eligible for set-off

collateral

Net liability

similar arrangement

liabilities

in case of default

pledged

exposure

Derivatives

238

(104)

–

134

Total

238

(104)

–

134

Q4 2022

FINANCIAL

INFORMATION

─

Note 7

Fair values

The Company uses fair value measurement principles to record certain

financial assets and liabilities on a recurring basis

and, when necessary,

to record certain

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

as well as to determine fair value disclosures for certain financial

instruments carried at amortized cost

in the financial statements. Financial assets and liabilities recorded

at fair value on a recurring basis include foreign currency,

commodity and interest rate

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

securities. Non-financial assets recorded at fair value

on a non-recurring basis include

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

to impairments.

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

asset or paid to transfer a liability in an orderly transaction

between market participants at the

measurement date. In determining fair value, the Company

uses various valuation techniques including the market

approach (using observable market data for

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

cash flow models) and the cost approach (using costs

a market participant would incur

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

fair value of assets and liabilities are defined by a three

-level hierarchy, depending on the

nature 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 valuati

on models may be both

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

is classified as Level 2 unless the unobservable portion

of the adjustment or

the unobservable input to the valuation model is significant, in

which case the fair value measurement would be

classified as Level 3. Assets and

liabilities valued or disclosed using Level 2 inputs include investments

in certain funds, certain debt securities that are not actively

traded, interest rate

swaps, cross-currency interest rate swaps, commodity

swaps, cash-settled call options, forward foreign exchange

contracts, foreign exchange swaps and

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

and debt.

Level 3:

Valuation inputs are based on

the Company’s assumptions of relevant market

data (unobservable input).

Whenever quoted prices involve bid-ask spreads, the Company

ordinarily determines fair values based on mid-market

quotes. However, for the purpose of

determining the fair value of cash-settled call options serving

as hedges of the Company’s management incentive

plan, bid prices are used.

When determining fair values based on quoted prices

in an active market, the Company considers if the

level of transaction activity for the financial instrument

has

significantly decreased or would not be considered orderly.

In such cases, the resulting changes in valuation

techniques would

be disclosed. If the market is

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

is required to use another valuation technique, such

as an income approach.

Recurring fair value measures

The fair values of financial assets and liabilities measured at

fair value on a recurring basis were as follows:

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

Debt securities—U.S. government obligations

255

Debt securities—Other government obligations

Debt securities—Corporate

Derivative assets—current in “Other current assets”

184

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

Total

255

681

–

936

Liabilities

Derivative liabilities—current in “Other current liabilities”

121

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

367

Total

–

488

–

488

Q4 2022

FINANCIAL

INFORMATION

December 31, 2021

($ in millions)

Level 1

Level 2

Level 3

Total fair value

Assets

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

Equity securities

587

Debt securities—U.S. government obligations

209

Debt securities—Corporate

Derivative assets—current in “Other current assets”

176

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

Total

209

878

–

1,087

Liabilities

Derivative liabilities—current in “Other current liabilities”

133

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

131

Total

–

264

–

264

The Company uses the following methods and assumptions in

estimating fair values of financial assets

and liabilities measured at fair value on a recurring basis:

●

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

If quoted market prices in active markets for identical assets

are available, these are

considered Level 1 inputs; however,

when markets are not active, these inputs are

considered Level 2. If such quoted market prices are not

available,

fair value is determined using market prices for similar assets

or present value techniques, applying an appropriate risk-free

interest rate adjusted for

non-performance risk. The inputs used in present value techniques

are observable and fall into the Level 2 category.

●

Derivatives

: The fair values of derivative instruments are determined using

quoted prices of identical instruments from an

active market, if available

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

for similar instruments, appropriately adjusted, or present value

techniques, based on

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

call options hedging the Company’s WAR

liability are valued based on bid prices

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

quotes for similar instruments or valuation techniques

represent a Level 2 input

unless significant unobservable inputs are used.

Non-recurring fair value measures

The Company elects to record private equity investments without readily

determinable fair values at cost, less impairment, adjusted

for observable price changes.

The Company reassesses at each reporting period whether these

investments continue to qualify for this treatment. Durin

the year ended December 31, 2022

and 2021,

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

net”, net fair value gains of $52 million and

$108 million, respectively,

related to certain of its

private equity investments based on observable market price changes

for an identical or similar investment of the same

issuer of which net loss of $4 million and

net gain of $2 million were recognized in the three months

ended December 31, 2022 and 2021, respectively.

The fair values were determined using Level

inputs. The carrying values of these investments, carried

at fair value on a non-recurring basis, at December

31, 2022 and 2021,

totaled $106 million and

$169 million, respectively.

Apart from the transactions above, there were no additional significant

non-recurring fair value measurements during the

year ended December 31, 2022 and

2021.

Disclosure about financial instruments carried on a cost

basis

The fair values of financial instruments carried on a cost

basis were as follows:

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

Time deposits

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

Q4 2022

FINANCIAL

INFORMATION

December 31, 2021

($ in millions)

Carrying value

Level 1

Level 2

Level 3

Total fair value

Assets

Cash and equivalents (excluding securities with original

maturities up to 3 months):

Cash

2,422

Time deposits

1,737

Restricted cash

Marketable securities and short-term investments

(excluding securities):

Time deposits

300

Restricted cash, non-current

300

Liabilities

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

(excluding finance lease obligations)

1,357

1,288

1,357

Long-term debt (excluding finance lease obligations)

4,043

4,234

4,292

The Company uses the following methods and assumptions in

estimating fair values of financial instruments carried

on a cost basis:

●

Cash and equivalents (excluding securities with original maturities

up to 3 months), Restricted cash, current

and non-current, and Marketable securities

and short-term investments (excluding securities):

The carrying amounts approximate the fair values as the

items are short-term in nature or, for cash

held in banks, are equal to the deposit amount.

●

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

finance lease obligations):

Short-term debt includes commercial paper,

bank

borrowings and overdrafts. The carrying amounts of short-term debt

and current maturities of long-term debt, excluding finance

lease obligations,

approximate their fair values.

●

Long-term debt (excluding finance lease obligations):

Fair values of bonds are determined using quoted market

prices (Level 1 inputs), if available. For

bonds without available quoted market prices and other long-term

debt, the fair values are determined using a discounted cash

flow methodology

based upon borrowing rates of similar debt instruments and reflecting

appropriate adjustments for non-performance risk

(Level 2 inputs).

─

Note 8

Contract assets and liabilities

The following table provides information about Contract assets

and Contract liabilities:

($ in millions)

December 31, 2022

December 31, 2021

December 31, 2020

Contract assets

954

990

985

Contract liabilities

2,216

1,894

1,903

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

In addition to the amounts

presented as Contract liabilities in the table above, $59 million

are non-current and are included in Other non-current liabilities

in the Balance Sheet.

The significant changes in the Contract assets and Contract liabi

lities balances were as follows:

Year ended December 31,

2022

2021

Contract

($ in millions)

assets

liabilities

assets

liabilities

Revenue recognized, which was included in the Contract liabilities

balance at Jan 1, 2022/2021

(1,043)

(1,086)

Additions to Contract liabilities - excluding amounts recognized as

revenue during the period

1,481

1,136

Receivables recognized that were included in the Contract

assets balance at Jan 1, 2022/2021

(591)

(566)

The Company considers its order backlog to represent its

unsatisfied performance obligations. At December 31, 2022,

the Company had unsatisfied performance

obligations totaling $19,867 million and, of this amount, the Company

expects to fulfill approximately 77 percent of the obligations

in 2023, approximately

13 percent of the obligations in 2024 and the balance thereafter.

Q4 2022

FINANCIAL

INFORMATION

─

Note 9

Debt

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

2021, amounted to $7,678 million and $5,561 million,

respectively.

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

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

long-term debt” consisted of the following:

($ in millions)

December 31, 2022

December 31, 2021

Short-term debt

1,448

Current maturities of long-term debt

1,087

1,306

Total

2,535

1,384

Short-term debt primarily represented issued commercial paper and

short-term bank borrowings from various banks.

At December 31, 2022, $1,383 million was

outstanding under the $2 billion Euro-commercial paper program.

At December 31, 2021, no amount was outstanding

under this program.

On May 9, 2022, the Company repaid on maturity its USD

1,250 million 2.875% Notes.

Long-term debt

The Company’s long-term debt at December

31, 2022 and 2021, amounted to $5,143 million and $4,177

million, respectively.

Outstanding bonds (including maturities within the next 12 months)

were as follows:

December 31, 2022

December 31, 2021

(in millions)

Nominal outstanding

Carrying value

(1)

Nominal outstanding

Carrying value

(1)

Bonds:

2.875% USD Notes, due 2022

USD

1,250

1,258

0.625% EUR Instruments, due 2023

EUR

700

742

EUR

700

800

0% CHF Bonds, due 2023

CHF

275

298

–

0.625% EUR Instruments, due 2024

EUR

700

720

–

Floating Rate EUR Instruments, due 2024

EUR

500

536

–

0.75% EUR Instruments, due 2024

EUR

750

769

EUR

750

860

0.3% CHF Bonds, due 2024

CHF

280

303

CHF

280

306

2.1% CHF Bonds, due 2025

CHF

150

162

–

0.75% CHF Bonds, due 2027

CHF

425

460

–

3.8% USD Notes, due 2028

(2)

USD

383

381

USD

383

381

1.0% CHF Bonds, due 2029

CHF

170

184

CHF

170

186

0% EUR Notes, due 2030

EUR

800

677

EUR

800

862

2.375% CHF Bonds, due 2030

CHF

150

162

–

4.375% USD Notes, due 2042

(2)

USD

609

590

USD

609

589

Total

5,984

5,242

(1)

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

(2)

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

on each of the 3.8% USD Notes,

due 2028,

and the 4.375% USD Notes,

due

2042, was USD 750 million.

In March 2022, the Company issued the following CHF bonds

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

425 million of bonds, due 2027

with a coupon of 0.75 percent payable annually in arrears.

The aggregate net proceeds of these CHF bond issues,

after discount and fees, amounted to CHF

699 million (equivalent to approximately $751 million on the date

of issuance).

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

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

annually in arrears at a fixed rate of

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

rate notes,

paying interest quarterly in arrears at a variable rate of

70 basis points above the 3-month

EURIBOR. In relation to these EUR Instruments, the Company

recorded net proceeds (after the respective discount

and premium, as well as fees) of

EUR 1,203 million (equivalent to $1,335 million on the date

of issuance). Interest rate swaps have been used

to modify the characteristics of the EUR 700 million

Instruments, due 2024. After considering the impact of these interest

rate swaps, these Instruments effectively become floati

ng rate obligations.

In October 2022, the Company issued the following CHF bonds: (i)

CHF 150 million of 2.1

percent bonds, due 2025, and (ii) CHF

150 million of 2.375 percent

bonds, due 2030 with interest payable annually in arrears. The aggregate

net proceeds of these CHF bond issues,

after discount and fees, amounted to

CHF 299 million (equivalent to approximately $304 million on

date of issuance).

Subsequent events

On January 16, 2023, the Company issued the following EUR

Instruments: (i) EUR 500 million of 3.25 percent notes,

due 2027, and (ii) EUR 750 million of

3.375 percent notes,

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).

As of February 1, 2023, the Company has repaid substantially

all amounts previously outstanding at December 31, 2022,

under the $2 billion Euro-commercial

paper program.

Q4 2022

FINANCIAL

INFORMATION

─

Note 10

Commitments and contingencies

Contingencies—Regulatory, Compliance

and Legal

Regulatory

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

to the Securities and Exchange Commission

(SEC) and the Department of Justice (DoJ) in the

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

in the United Kingdom concerning certain of its past dealings

with Unaoil and its subsidiaries, including

alleged improper payments made by these entities to third parties.

In May 2020, the SFO closed its investigation, which

it originally announced in February 2017,

as the case did not meet the relevant test for prosecution

and in December 2022 this matter was closed without action

by the DOJ as part of the Kusile settlement.

Based on findings during an internal investigation, the Company

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

States, to the Special Investigating Unit (SIU)

and the National Prosecuting Authority (NPA)

in South Africa as well as to various authorities in other countries

potential suspect payments and other compliance

concerns in connection with some of the Company’s dealings

with Eskom and related persons. Many of those parties

have expressed an interest in, or

commenced an investigation into, these matters and the Company

is cooperating fully with them. The Company paid $104

million to Eskom in December 2020 as

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

Unit relating to improper payments and other compliance

issues associated with the

Controls and Instrumentation Contract, and its Variation

Orders for Units 1 and 2 at Kusile. The Company

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, 2022 and 2021, the Company had aggregate

liabilities of $86 million and $104 million, respectively,

included in “Other provisions” and “Other

non

‑

current liabilities”, for the above regulatory,

compliance and legal contingencies, and none of the

individual liabilities recognized was significant. As it

is not

possible to make an informed judgment on, or reasonably predict, the

outcome of certain matters and as it is not possible,

based on information currently available

to management, to estimate the maximum potential liability on other

matters, there could be adverse outcomes beyond

the amounts accrued.

Guarantees

General

The following table provides quantitative data regarding the Company’s

third-party guarantees. The maximum potential payments

represent a “worst-case

scenario”, and do not reflect management’s expected

outcomes.

Maximum potential payments

($ in millions)

December 31, 2022

December 31, 2021

Performance guarantees

4,300

4,540

Financial guarantees

Indemnification guarantees

(1)

–

136

Total

(2)

4,396

4,728

(1)

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

(2)

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

The carrying amount of liabilities recorded in the Consolidated

Balance Sheets reflects the Company’s best estimate of

future payments, which it may incur as part

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

the carrying amounts of liabilities at December 31,

2022 and 2021, amounted to $1 million

and $156 million, respectively, the

majority of which is included in discontinued operations.

The Company is party to various guarantees providing financial

or performance assurances to certain third parties. These guarantees,

which have various

maturities up to 2035, mainly consist of performance guarantees

whereby (i) the Company guarantees

the performance of a third party’s product or service

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

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

Company guarantees not only its own

performance but also the work of third parties. Such guarantees

may include guarantees that a project will be

completed within a specified time. If the third party

does not fulfill the obligation, the Company will compensate the

guaranteed party in cash or in kind. The original

maturity dates for the majority of these

performance guarantees range from one to ten years.

In conjunction with the divestment of the high-voltage cable

and cables accessories businesses, the Company has

entered into various performance guarantees

with other parties with respect to certain liabilities of the

divested business. At December 31, 2022 and 2021, the

maximum potential payable under these

guarantees amounts to $843 million and $911

million, respectively, and

these guarantees have various maturities ranging from five to

ten years.

The Company retained obligations for financial, performance

and indemnification guarantees related to the sale of the

Power Grids business (see Note 3 for

details). The performance and financial guarantees have been

indemnified by Hitachi at the same proportion of

its ownership in Hitachi Energy Ltd, (increasing

from 80.1 percent at December 31, 2021, to 100 percent at December

31, 2022). These guarantees, which have various

maturities up to 2035, primarily consist of

bank guarantees, standby letters of credit, business performance

guarantees and other trade-related guarantees, the

majority of which have original maturity dates

ranging from one to ten years. The maximum amount payable

under these guarantees at December 31, 2022 and 2021,

is approximately $3.0 billion and

$3.2 billion, respectively. On completing

the sale of the Company’s remaining 19.9

percent interest in Hitachi Energy to Hitachi,

the Company also settled certain

existing indemnification guarantees that were due to be settled concurrent

with such transaction. As a result, in the year and

three months ended December 31,

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, 2022 and 2021, the total outstanding performance

bonds aggregated to $2.9 billion and $3.6 billion, respectively

of each of these

amounts $0.1 billion relates

to discontinued operations. There have been

no significant amounts reimbursed to financial institutions under

these types of

arrangements in the year and three months ended December 31,

2022 and 2021.

Q4 2022

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)

2022

2021

Balance at January 1,

1,005

1,035

Net change in warranties due to acquisitions, divestments, spin

-offs and liabilities held for sale

(24)

Claims paid in cash or in kind

(157)

(222)

Net increase in provision for changes in estimates, warranties

issued and warranties expired

252

226

Exchange rate differences

(48)

(35)

Balance at December 31,

1,028

1,005

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 22.3 percent in year ended December

31, 2022, was higher than the effective tax

rate of 18.3 percent in the same period in 2021, primarily

because 2021 includes a non-taxable gain in connection with

the sale of the Dodge business while 2022 included

impacts of changes in valuation allowances

primarily a positive impact from a reversal of a valuation allowance

in the Americas for $208 million (recorded in the fourth

quarter) offset partially by the negative

impact of non-deductible regulatory penalties in connection with the

Kusile project.

─

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, 2022, 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,

2022

2021

2022

2021

2022

2021

Operational pension cost:

Service cost

–

Operational pension cost

–

Non-operational pension cost (credit):

Interest cost

(5)

Expected return on plan assets

(116)

(153)

(178)

–

Amortization of prior service cost (credit)

(9)

(2)

(3)

Amortization of net actuarial loss

–

(3)

(2)

Curtailments, settlements and special termination benefits

–

Non-operational pension cost (credit)

(108)

(129)

(3)

(34)

(4)

(3)

Net periodic benefit cost (credit)

(58)

(68)

(4)

(2)

Q4 2022

FINANCIAL

INFORMATION

($ in millions)

Defined pension benefits

Other postretirement

Switzerland

International

benefits

Three months ended December 31,

2022

2021

2022

2021

2022

2021

Operational pension cost:

Service cost

–

Operational pension cost

–

Non-operational pension cost (credit):

Interest cost

(2)

–

Expected return on plan assets

(29)

(28)

(40)

(45)

–

Amortization of prior service cost (credit)

(4)

(3)

–

(1)

(2)

Amortization of net actuarial loss

–

(1)

–

Curtailments, settlements and special termination benefits

–

Non-operational pension cost (credit)

(18)

(32)

(3)

(2)

(1)

Net periodic benefit cost (credit)

(8)

(16)

(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,

2022

2021

2022

2021

2022

2021

Total contributions

to defined benefit pension and

Other postretirement

Switzerland

International

benefits

Three months ended December 31,

2022

2021

2022

2021

2022

2021

Total contributions

to defined benefit pension and

other postretirement benefit plans

Of which, discretionary contributions to defined benefit

pension plans

–

During the year and three months ended December 31, 202

2, total contributions included non-cash contributions of

marketable debt securities having a fair value

at the contribution date of $12 million.

These non-cash contributions were made

to certain of the Company’s pension plans in Germany

during the three months

ended December 31, 2022. During the year and three months ended

December 31, 2021, total contributions

included non-cash contributions of marketable debt

securities having a fair value at the contribution date of $53 million.

These non-cash contributions were made to certain of the

Company’s pension plans in

Germany and the United Kingdom during the three months ended December

31, 2021.

─

Note 13

Stockholder's

equity

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

24, 2022, shareholders approved the proposal of the

Board of Directors to distribute 0.82

Swiss

francs per share to shareholders. The declared dividend amounted

to $1,700 million, with the Company disburs

ing a portion in March and the remaining amounts

in April.

In March 2022, the Company completed the share buyback

program that was launched in April 2021. This program was executed

on a second trading line on the

SIX Swiss Exchange. Through this program, the Company purchased

a total of 90 million shares for approximately

$3.1 billion, of which 31 million shares were

purchased in the first quarter of 2022 (resulting in an

increase in Treasury stock of $1,089 million).

At the 2022 AGM, shareholders approved the cancellation

88 million shares which had been purchased under the share buyback

programs launched in July 2020 and April 2021.

The cancellation was completed in the

second quarter of 2022, resulting

in a decrease in Treasury stock

of $2,876 million and a corresponding total decrease in Capital stock,

Additional paid-in capital

and Retained Earnings.

Also in March 2022, the Company announced a new share buyback

program of up to $3 billion. This program, which was

launched in April 2022, is being executed

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

to run until the Company’s 2023 AGM. Through

this program, the Company purchased, from

the program’s launch in April 2022 to December 31,

2022, 60 million shares, resulting in an increase in Treasury

stock of $1,753 million.

In addition to the share buyback programs, the Company

purchased 20 million of its own shares on the open market

in 2022, mainly for use in connection with

its

employee share plans, resulting in an increase in Treasury

stock of $660 million.

In 2022, the Company delivered, out of treasury stock,

16 million shares in connection with its Management Incentive Plan.

In November 2022, the Company received gross proceeds

of 203 million Swiss francs ($216 million) through

a private placement of shares in its ABB E-Mobility

subsidiary, ABB E-mobility Holding Ltd

(ABB E-Mobility),

reducing the Company's

beneficial ownership in the subsidiary from 100 percent to 92 percent. This

resulted in an increase in Additional paid-in capital of $120 million.

Subsequent event

In January 2023, the Company signed an agreement to increase

the amount of funding raised through the private placement

of shares in ABB E-mobility,

increasing the total funding by an additional 325 million Swiss

francs. The transaction is scheduled to be closed in the beginning

of February 2023 and, after

completion of this transaction, the Company will have a beneficial

ownership in ABB E-Mobility of 81 percent.

Q4 2022

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 $)

2022

2021

2022

2021

Amounts attributable to ABB shareholders:

Income from continuing operations, net of tax

2,517

4,625

1,138

2,674

Loss from discontinued operations, net of tax

(42)

(79)

(6)

(34)

Net income

2,475

4,546

1,132

2,640

Weighted-average number of shares outstanding

(in millions)

1,899

2,001

1,870

1,974

Basic earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

1.33

2.31

0.61

1.35

Loss from discontinued operations, net of tax

(0.02)

(0.04)

0.00

(0.02)

Net income

1.30

2.27

0.61

1.34

Diluted earnings per share

Year ended December 31,

Three months ended December 31,

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

2022

2021

2022

2021

Amounts attributable to ABB shareholders:

Income from continuing operations, net of tax

2,517

4,625

1,138

2,674

Loss from discontinued operations, net of tax

(42)

(79)

(6)

(34)

Net income

2,475

4,546

1,132

2,640

Weighted-average number of shares outstanding (in millions)

1,899

2,001

1,870

1,974

Effect of dilutive securities:

Call options and shares

Adjusted weighted-average number of shares outstanding

(in millions)

1,910

2,019

1,881

1,991

Diluted earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

1.32

2.29

0.60

1.34

Loss from discontinued operations, net of tax

(0.02)

(0.04)

0.00

(0.02)

Net income

1.30

2.25

0.60

1.33

Q4 2022

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, 2021

(2,460)

(1,556)

(3)

(4,002)

Other comprehensive (loss) income:

Other comprehensive (loss) income

before reclassifications

(521)

(10)

411

(112)

Amounts reclassified from OCI

(9)

(5)

(13)

Total other comprehensive (loss)

income

(530)

(15)

467

(5)

(83)

Less:

Amounts attributable to

noncontrolling interests

–

Balance at December 31, 2021

(1)

(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 and

redeemable noncontrolling interests

(34)

–

(1)

–

(35)

Balance at December 31, 2022

(3,691)

(19)

(838)

(8)

(4,556)

(1)

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

The following table reflects amounts reclassified out of OCI

in respect of 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

2022

2021

2022

2021

Foreign currency translation adjustments:

Changes attributable to divestments

Other income (expense), net

(9)

Net loss on complete or substantially complete

liquidations of foreign subsidiaries

Other income (expense), net

–

Amounts reclassified from OCI

(9)

Pension and other postretirement plan adjustments:

Amortization of prior service cost (credit)

Non-operational pension (cost) credit

(1)

(13)

(14)

(5)

Amortization of net actuarial loss

Non-operational pension (cost) credit

(1)

Net gain (loss) from settlements and curtailments

Non-operational pension (cost) credit

(1)

Changes attributable to divestments

Other income (expense), net

(8)

Total before tax

Tax

Income tax expense

(16)

(6)

(5)

Changes attributable to divestments

Other income (expense), net

–

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, 2022 and 2021.

Q4 2022

FINANCIAL

INFORMATION

─

Note 16

Restructuring and related expenses

Other restructuring-related activities

In the year and three months ended December 31, 2022

and 2021, the Company executed various other restructuring

-related activities and incurred the following

expenses:

Year ended December 31,

Three months ended December 31,

($ in millions)

2022

2021

2022

2021

Employee severance costs

101

Estimated contract settlement, loss order and other costs

209

Inventory and long-lived asset impairments

Total

297

156

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)

2022

2021

2022

2021

Total cost of sales

Selling, general and administrative expenses

Non-order related research and development expenses

–

Other income (expense), net

231

Total

297

156

During

the second

quarter

of 2022,

the Company

completed

a plan

(initiated

in 2021)

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, 2022

and 2021,

$198 million

and $212

million,

respectively,

was recorded

for other

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.

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 electric vehicle

charging infrastructure, renewable

power solutions, modular substation packages, distribution automation

products, switchboard 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 seven operating Divisions: Distribution Solutions,

Smart Power, Smart Buildings, E-Mobility,

Installation Products, Power Conversion

and Service.

●

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 130

years of cumulative experience in electric

powertrains, the Business Area combines domain expertise and

technology to deliver the optimum solution for a wide range

of applications in all

industrial segments. In addition, the Business Area, 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,

as well as, prior to its sale in November 2021, the Mechanical

Power Transmission Division.

Q4 2022

FINANCIAL

INFORMATION

●

Process Automation:

develops and sells a broad range of industry-specific,

integrated automation, electrification and digital systems

and solutions, as

well as digital solutions, lifecycle services, advanced industrial analytics

and artificial intelligence applications and suites for the

process, marine and

hybrid industries. Products and solutions include control technologies,

advanced process control software and manufacturing execution

systems,

sensing, measurement and analytical instrumentation, marine

propulsion systems and turbochargers. In addition, the

Business Area offers a

comprehensive range of services ranging from repair to advanced services

such as remote monitoring, preventive maintenance,

asset performance

management, emission monitoring and cybersecurity

services. The products, systems and services

are delivered through five 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 and Machine Automation.

Robotics includes industrial robots, autonomous mobile robotics,

software, robotic solutions, field services, spare parts, and

digital services. Machine

Automation specializes in solutions based on its programmable

logic controllers (PLC), industrial PCs (IPC), servo

motion, transport systems and

machine vision.

Both Divisions offer engineering and simulation software

as well as a comprehensive range of digital solutions.

Corporate and Other:

includes headquarter costs,

the Company’s corporate real estate activities, Corporate Treasury

Operations, historical operating activities of

certain divested businesses and other non-core operating activities.

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),

●

changes in estimates relating to opening balance sheets of acquired

businesses (changes in pre-acquisition estimates),

●

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

on assets and liabilities held for sale),

●

acquisition- and divestment-related expenses and integration costs,

●

other income/expense relating to the Power Grids joint venture,

●

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, 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, 2022 and 2021, as well as

total assets

at December 31, 2022 and 2021.

Year ended December 31, 2022

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

4,449

2,031

2,248

1,494

10,285

The Americas

5,332

2,148

1,566

524

9,573

of which: United States

3,918

1,787

943

373

7,023

Asia, Middle East and Africa

4,123

2,101

2,199

1,155

9,588

of which: China

1,984

1,147

666

897

4,696

13,904

6,280

6,013

3,173

29,446

Product type

Products

12,179

5,380

1,337

1,863

20,766

Systems

830

–

1,974

832

3,705

Services and other

895

900

2,702

478

–

4,975

13,904

6,280

6,013

3,173

29,446

Third-party revenues

13,904

6,280

6,013

3,173

29,446

Intersegment revenues

201

465

(705)

–

Total revenues

(1)

14,105

6,745

6,044

3,181

(629)

29,446

Q4 2022

FINANCIAL

INFORMATION

Year ended December 31, 2021

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

4,517

2,015

2,416

1,578

10,529

The Americas

4,465

2,346

1,431

439

8,686

of which: United States

3,304

1,952

833

308

–

6,397

Asia, Middle East and Africa

3,975

2,111

2,367

1,270

9,730

of which: China

2,087

1,156

740

949

–

4,932

12,957

6,472

6,214

3,287

28,945

Product type

Products

10,706

5,555

1,496

2,159

19,920

Systems

1,367

–

1,802

645

3,825

Services and other

884

917

2,916

483

–

5,200

12,957

6,472

6,214

3,287

28,945

Third-party revenues

12,957

6,472

6,214

3,287

28,945

Intersegment revenues

230

453

(738)

–

Total revenues

(1)

13,187

6,925

6,259

3,297

(723)

28,945

Three months ended December 31, 2022

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

1,158

601

522

424

2,765

The Americas

1,403

574

431

147

–

2,555

of which: United States

1,048

480

262

106

1,898

Asia, Middle East and Africa

1,057

537

592

317

2,504

of which: China

454

259

168

251

1,133

3,618

1,712

1,545

888

7,824

Product type

Products

3,146

1,449

292

526

(2)

5,411

Systems

218

–

599

234

1,114

Services and other

254

263

654

128

–

1,299

3,618

1,712

1,545

888

7,824

Third-party revenues

3,618

1,712

1,545

888

7,824

Intersegment revenues

133

(187)

–

Total revenues

(1)

3,663

1,845

1,551

891

(126)

7,824

Three months ended December 31, 2021

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

1,160

532

700

377

(13)

2,756

The Americas

1,153

514

421

108

2,198

of which: United States

839

412

256

–

1,579

Asia, Middle East and Africa

1,070

557

673

313

–

2,613

of which: China

510

295

193

235

–

1,233

3,383

1,603

1,794

798

(11)

7,567

Product type

Products

2,600

1,353

399

520

(11)

4,861

Systems

543

–

544

153

–

1,240

Services and other

240

250

851

125

–

1,466

3,383

1,603

1,794

798

(11)

7,567

Third-party revenues

3,383

1,603

1,794

798

(11)

7,567

Intersegment revenues

132

(206)

–

Total revenues

(1)

3,445

1,735

1,805

799

(217)

7,567

(1)

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

Q4 2022

FINANCIAL

INFORMATION

Year ended

Three months ended

December 31,

($ in millions)

2022

2021

2022

2021

Operational EBITA:

Electrification

2,328

2,121

572

507

Motion

1,163

1,183

318

278

Process Automation

848

801

203

247

Robotics & Discrete Automation

340

355

125

Corporate and Other

‒

Non-core and divested businesses

(39)

(3)

–

‒ Corporate costs and Other Intersegment elimination

(174)

(299)

(69)

(108)

Total

4,510

4,122

1,146

988

Acquisition-related amortization

(229)

(250)

(55)

(59)

Restructuring, related and implementation costs

(1)

(347)

(160)

(47)

(79)

Changes in obligations related to divested businesses

(9)

Changes in pre-acquisition estimates

(10)

–

Gains and losses from sale of businesses

(7)

2,193

(3)

2,184

Acquisition- and divestment-related expenses and integration

costs

(195)

(132)

(24)

(58)

Other income/expense relating to the Power Grids joint venture

(57)

(34)

–

Foreign exchange/commodity timing differences in

income from operations:

Unrealized gains and losses on derivatives (foreign exchange,

commodities, embedded derivatives)

(54)

139

Realized gains and losses on derivatives where the underlying hedged

transaction has not yet been realized

(48)

(2)

–

(7)

Unrealized foreign exchange movements on receivables/payables (and

related assets/liabilities)

(15)

(70)

(13)

Certain other non-operational items:

Regulatory, compliance and legal costs

(317)

–

Business transformation costs

(2)

(152)

(92)

(38)

(33)

Favorable resolution of an uncertain purchase price adjustment

Gains and losses from sale of investments in

equity-accounted companies

–

Certain other fair value changes, including asset impairments

119

(13)

Other non-operational items

(19)

(15)

(12)

Income from operations

3,337

5,718

1,185

2,975

Interest and dividend income

Interest and other finance expense

(130)

(148)

(23)

(40)

Non-operational pension (cost) credit

115

166

Income from continuing operations before taxes

3,394

5,787

1,197

2,985

(1)

Includes impairment of certain assets.

(2)

Amount includes ABB Way process transformation costs of $131 million and $80 million for year ended December 31, 2022 and 2021, respectively, and $33 million and $28 million for

the three months ended December 31, 2022 and 2021, respectively.

Total assets

(1)

($ in millions)

December 31, 2022

December 31, 2021

Electrification

13,992

12,831

Motion

6,565

5,936

Process Automation

4,598

5,009

Robotics & Discrete Automation

4,901

4,860

Corporate and Other

(2)

9,092

11,624

Consolidated

39,148

40,260

(1)

Total assets are after intersegment eliminations and therefore reflect third-party assets only.

(2)

At December 31, 2022 and 2021, respectively, Corporate and Other includes $96 million and $136 million of assets in the Power Grids business which is reported as discontinued

operations (see Note 3). In addition, at December 31, 2021, Corporate and Other included

$1,609 million, related to the equity investment in Hitachi Energy Ltd, which was

subsequently sold in December 2022 (see Note 4).

2023 Realignment of segments

Commencing in January 2023, the E-mobility Division is no

longer managed within the Electrification Business Area

and has become an independent Division and

a separate operating segment. The Division does not currently meet

any of the size thresholds to be considered a reportable

segment and will be presented within

Corporate and Other.

Q4 2022

FINANCIAL

INFORMATION

Q4 2022

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

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, 2022.

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 2022 compared to Q4 2021

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

-2%

10%

16%

Motion

-11%

11%

20%

Process Automation

-8%

11%

-14%

11%

Robotics & Discrete Automation

-27%

-19%

12%

11%

23%

ABB Group

-8%

10%

16%

FY 2022 compared to FY 2021

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

11%

17%

14%

Motion

20%

-3%

14%

Process Automation

11%

-3%

Robotics & Discrete Automation

-1%

15%

-4%

-1%

ABB Group

16%

12%

Q4 2022

FINANCIAL

INFORMATION

Regional comparable growth rate reconciliation

Regional comparable growth rate reconciliation for ABB Group

- Quarter

Q4 2022 compared to Q4 2021

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

-17%

12%

-5%

15%

16%

The Americas

10%

15%

16%

22%

of which: United States

13%

20%

26%

Asia, Middle East and Africa

-15%

10%

-2%

-4%

11%

10%

of which: China

-22%

-12%

-8%

10%

ABB Group

-8%

10%

16%

Regional comparable growth rate reconciliation by Business

Area - Quarter

Q4 2022 compared to Q4 2021

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

-17%

13%

-4%

-1%

16%

15%

The Americas

20%

21%

22%

of which: United States

25%

Asia, Middle East and Africa

-14%

10%

-4%

-2%

12%

10%

of which: China

-15%

10%

-5%

-12%

10%

-2%

Electrification

-2%

10%

16%

Q4 2022 compared to Q4 2021

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

-26%

11%

-15%

17%

26%

The Americas

-7%

10%

12%

25%

of which: United States

-9%

10%

16%

13%

30%

Asia, Middle East and Africa

11%

16%

-2%

12%

10%

of which: China

-8%

11%

-9%

10%

Motion

-11%

11%

20%

Q4 2022 compared to Q4 2021

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

-9%

12%

15%

-25%

10%

11%

-4%

The Americas

11%

22%

12%

16%

of which: United States

13%

16%

Asia, Middle East and Africa

-21%

10%

-2%

-12%

13%

of which: China

-42%

-30%

-13%

17%

13%

Process Automation

-8%

11%

-14%

11%

Q4 2022 compared to Q4 2021

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%

10%

-18%

13%

16%

29%

The Americas

-13%

-12%

36%

-1%

35%

of which: United States

-34%

49%

Asia, Middle East and Africa

-33%

-25%

11%

13%

of which: China

-35%

-27%

13%

20%

Robotics & Discrete Automation

-27%

-19%

12%

11%

23%

Q4 2022

FINANCIAL

INFORMATION

Regional comparable growth rate reconciliation for ABB Group

– Year to date

FY 2022 compared to FY 2021

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

-1%

14%

13%

-2%

14%

12%

The Americas

19%

28%

10%

19%

of which: United States

20%

29%

10%

19%

Asia, Middle East and Africa

10%

-1%

of which: China

-5%

ABB Group

16%

12%

Regional comparable growth rate reconciliation by Business

Area – Year to date

FY 2022 compared to FY 2021

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

-1%

14%

13%

-2%

15%

13%

The Americas

30%

31%

19%

20%

of which: United States

36%

19%

Asia, Middle East and Africa

10%

of which: China

-5%

-1%

-5%

-1%

Electrification

11%

17%

14%

FY 2022 compared to FY 2021

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

14%

18%

15%

16%

The Americas

-4%

25%

23%

-8%

26%

19%

of which: United States

-3%

29%

26%

-8%

28%

21%

Asia, Middle East and Africa

12%

19%

of which: China

12%

-1%

Motion

20%

-3%

14%

FY 2022 compared to FY 2021

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

-10%

12%

-7%

12%

The Americas

21%

26%

14%

of which: United States

15%

18%

13%

18%

Asia, Middle East and Africa

-2%

-7%

of which: China

-9%

-3%

-10%

-2%

Process Automation

11%

-3%

FY 2022 compared to FY 2021

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%

-1%

15%

-5%

13%

-1%

The Americas

15%

19%

of which: United States

21%

Asia, Middle East and Africa

10%

15%

-9%

-4%

of which: China

18%

22%

-5%

-1%

Robotics & Discrete Automation

-1%

15%

-4%

-1%

Q4 2022

FINANCIAL

INFORMATION

Order backlog growth rate reconciliation

December 31, 2022 compared to December 31, 2021

US$

Foreign

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

Electrification

27%

33%

Motion

26%

34%

Process Automation

16%

Robotics & Discrete Automation

40%

-1%

48%

ABB Group

20%

29%

Other growth rate reconciliations

Q4 2022 compared to Q4 2021

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

13%

10%

15%

Motion

-2%

10%

11%

16%

Process Automation

-21%

18%

-23%

18%

Robotics & Discrete Automation

10%

14%

10%

14%

ABB Group

-11%

11%

-11%

11%

FY 2022 compared to FY 2021

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

14%

Motion

15%

-2%

Process Automation

-2%

10%

-7%

Robotics & Discrete Automation

13%

-1%

ABB Group

12%

-4%

Q4 2022

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),

●

changes in estimates relating to opening balance sheets of acquired

businesses (changes in pre-acquisition estimates),

●

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

on assets and liabilities held for sale),

●

acquisition- and divestment-related expenses and integration costs,

●

other income/expense relating to the Power Grids joint venture,

●

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, 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.

Other income/expense relating to the Power Grids joint

venture

Other income/expense relating to the Power Grids joint venture

consists of amounts recorded in Income from continuing

operations before taxes relating to the

divested Power Grids business including the income/loss under the

equity method for the investment in Hitachi Energy

Ltd. (Hitachi Energy), amortization of

deferred brand income as well as changes in value of other

obligations relating to the divestment.

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)

2022

2021

2022

2021

Operational EBITA

4,510

4,122

1,146

988

Acquisition-related amortization

(229)

(250)

(55)

(59)

Restructuring, related and implementation costs

(1)

(347)

(160)

(47)

(79)

Changes in obligations related to divested businesses

(9)

Changes in pre-acquisition estimates

(10)

–

Gains and losses from sale of businesses

(7)

2,193

(3)

2,184

Acquisition- and divestment-related expenses and integration

costs

(195)

(132)

(24)

(58)

Other income/expense relating to the Power Grids joint venture

(57)

(34)

–

Certain other non-operational items

(385)

(40)

Foreign exchange/commodity timing differences in

income from operations

(31)

(36)

Income from operations

3,337

5,718

1,185

2,975

Interest and dividend income

Interest and other finance expense

(130)

(148)

(23)

(40)

Non-operational pension (cost) credit

115

166

Income from continuing operations before taxes

3,394

5,787

1,197

2,985

Income tax expense

(757)

(1,057)

(29)

(282)

Income from continuing operations, net of

tax

2,637

4,730

1,168

2,703

Loss from discontinued operations, net of tax

(43)

(80)

(7)

(35)

Net income

2,594

4,650

1,161

2,668

(1)

Includes impairment of certain assets.

Q4 2022

FINANCIAL

INFORMATION

Reconciliation of Operational EBITA

margin by business

Three months ended December 31, 2022

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

3,663

1,845

1,551

891

(126)

7,824

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

(74)

(35)

(25)

(10)

(5)

(149)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(2)

(1)

Unrealized foreign exchange movements

on receivables (and related assets)

Operational revenues

3,634

1,823

1,539

892

(126)

7,762

Income (loss) from operations

557

316

183

101

1,185

Acquisition-related amortization

–

Restructuring, related and

implementation costs

Changes in obligations related to

divested businesses

–

(72)

(71)

Changes in pre-acquisition estimates

–

Gains and losses from sale of businesses

–

Acquisition- and divestment-related expenses

and integration costs

(1)

Other income/expense relating to the

Power Grids joint venture

–

(10)

Certain other non-operational items

–

(9)

(19)

(28)

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

(86)

(27)

(21)

(6)

(139)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(1)

(2)

–

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

Operational EBITA

572

318

203

125

(72)

1,146

Operational EBITA margin (%)

15.7%

17.4%

13.2%

14.0%

n.a.

14.8%

In the three months ended December 31, 2022, certain other non

-operational items in the table above includes the following:

Three months ended December 31, 2022

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational items:

Regulatory, compliance and legal costs

–

(16)

Certain other fair values changes,

including asset impairments

–

Business transformation costs

(1)

–

Favorable resolution of an uncertain

purchase price adjustment

–

(15)

–

(15)

Gains and losses from sale of investments

in equity-accounted companies

–

(43)

Other non-operational items

(5)

–

(2)

(5)

Total

–

(9)

(19)

(28)

(1)

Amounts

include ABB Way process transformation costs of $33 million for the three months ended December 31, 2022.

Q4 2022

FINANCIAL

INFORMATION

Three months ended December 31, 2021

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

3,445

1,735

1,805

799

(217)

7,567

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

(20)

(13)

(10)

(4)

(7)

(54)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

(1)

Unrealized foreign exchange movements

on receivables (and related assets)

(3)

–

Operational revenues

3,423

1,725

1,800

794

(219)

7,523

Income (loss) from operations

418

2,464

193

(145)

2,975

Acquisition-related amortization

–

Restructuring, related and

implementation costs

Changes in obligations related to

divested businesses

–

(7)

Gains and losses from sale of businesses

(2,195)

–

(2,184)

Acquisition- and divestment-related expenses

and integration costs

–

(1)

Certain other non-operational items

–

(2)

–

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

(30)

(12)

(2)

(3)

(5)

(52)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

–

Operational EBITA

507

278

247

(108)

988

Operational EBITA margin (%)

14.8%

16.1%

13.7%

8.1%

n.a.

13.1%

In the three months ended December 31, 2021, certain other non

-operational items in the table above includes the following:

Three months ended December 31, 2021

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational items:

Regulatory, compliance and legal costs

–

(3)

Certain other fair values changes,

including asset impairments

–

(2)

(1)

Business transformation costs

(1)

–

Favorable resolution of an uncertain

purchase price adjustment

–

(1)

–

(1)

Other non-operational items

(3)

–

(1)

–

Total

–

(2)

–

(1)

Amounts

include ABB Way process transformation costs of $28 million for the three months ended December 31, 2021.

Q4 2022

FINANCIAL

INFORMATION

Year ended December 31, 2022

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

14,105

6,745

6,044

3,181

(629)

29,446

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

(38)

(18)

–

(27)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

Unrealized foreign exchange movements

on receivables (and related assets)

(2)

(13)

–

Operational revenues

14,091

6,731

6,077

3,187

(612)

29,474

Income (loss) from operations

2,159

1,092

663

247

(824)

3,337

Acquisition-related amortization

116

–

229

Restructuring, related and

implementation costs

(1)

263

347

Changes in obligations related to

divested businesses

–

(89)

(88)

Changes in pre-acquisition estimates

–

(1)

–

Gains and losses from sale of businesses

(1)

–

Acquisition- and divestment-related expenses

and integration costs

134

–

195

Other income/expense relating to the

Power Grids joint venture

–

Certain other non-operational items

(24)

–

(7)

416

385

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

(32)

(5)

(32)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

(12)

Operational EBITA

2,328

1,163

848

340

(169)

4,510

Operational EBITA margin (%)

16.5%

17.3%

14.0%

10.7%

n.a.

15.3%

(1)

Includes impairment of certain assets.

In the year ended December 31, 2022, certain other non-operational

items in the table above includes the following:

Year ended December 31, 2022

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational items:

Regulatory, compliance and legal costs

–

317

Certain other fair values changes,

including asset impairments

(57)

–

(45)

Business transformation costs

(1)

–

132

152

Favorable resolution of an uncertain

purchase price adjustment

–

(15)

–

(15)

Gains and losses from sale of investments

in equity-accounted companies

–

(43)

Other non-operational items

–

Total

(24)

–

(7)

416

385

(1)

Amounts

include ABB Way process transformation costs of $131 million for the year ended December 31, 2022.

Q4 2022

FINANCIAL

INFORMATION

Year ended December 31, 2021

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

13,187

6,925

6,259

3,297

(723)

28,945

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

(4)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(2)

–

Unrealized foreign exchange movements

on receivables (and related assets)

(19)

(3)

(6)

(32)

Operational revenues

13,188

6,927

6,264

3,290

(725)

28,944

Income (loss) from operations

1,841

3,276

713

269

(381)

5,718

Acquisition-related amortization

117

250

Restructuring, related and

implementation costs

160

Changes in obligations related to

divested businesses

–

Changes in pre-acquisition estimates

(6)

–

(6)

Gains and losses from sale of businesses

(2,196)

(13)

–

(2,193)

Acquisition- and divestment-related expenses

and integration costs

–

132

Other income/expense relating to the

Power Grids joint venture

–

Certain other non-operational items

(5)

–

(15)

(18)

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

(2)

(6)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

(1)

(2)

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

(9)

(3)

(7)

(2)

(20)

Operational EBITA

2,121

1,183

801

355

(338)

4,122

Operational EBITA margin (%)

16.1%

17.1%

12.8%

10.8%

n.a.

14.2%

In the year ended December 31, 2021, certain other non-operational

items in the table above includes the following:

Year ended December 31, 2021

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational items:

Certain other fair values changes,

including asset impairments

(15)

–

(104)

(119)

Business transformation costs

–

Favorable resolution of an uncertain

purchase price adjustment

(5)

–

(1)

–

(6)

Other non-operational items

(2)

–

Total

(5)

–

(15)

(18)

(1)

Amounts

include ABB Way process transformation costs of $80 million for the year ended December 31, 2021.

Q4 2022

FINANCIAL

INFORMATION

Net debt

Definition

Net debt

Net debt is defined as Total

debt less Cash and marketable securities.

Total debt

Total debt is the sum

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

debt, and Long-term debt.

Cash and marketable securities

Cash and marketable securities is the sum of Cash and equivalents,

Restricted cash (current and non-current)

and Marketable securities and short-term

investments.

Reconciliation

December 31,

($ in millions)

2022

2021

2020

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

2,535

1,384

1,293

Long-term debt

5,143

4,177

4,828

Total debt

7,678

5,561

6,121

Cash and equivalents

4,156

4,159

3,278

Restricted cash - current

323

Marketable securities and short-term investments

725

1,170

2108

Restricted cash - non-current

–

300

Cash and marketable securities

4,899

5,659

6,009

Net debt (cash)

2,779

(98)

112

Net debt/Equity ratio

Definition

Net debt/Equity ratio

Net debt/Equity ratio is defined as Net debt divided by Equity.

Equity

Equity is defined as Total

stockholders’ equity.

Reconciliation

($ in millions, unless otherwise indicated)

December 31, 2022

December 31, 2021

Total stockholders'

equity

13,187

15,957

Net debt (cash) (as defined above)

2,779

(98)

Net debt (cash) / Equity ratio

0.21

-0.01

Net debt/EBITDA ratio

Definition

Net debt/EBITDA ratio

Net debt/EBITDA ratio is defined as Net debt divided by

EBITDA.

EBITDA

EBITDA is defined as Income from operations for the trailing

twelve months preceding the balance sheet date before depreciati

on and amortization for the same

trailing twelve-month period.

Reconciliation

($ in millions, unless otherwise indicated)

December 31, 2022

December 31, 2021

Income from operations

3,337

5,718

Depreciation and Amortization

814

893

EBITDA

4,151

6,611

Net debt (cash) (as defined above)

2,779

(98)

Net debt (cash) / EBITDA

0.67

-0.01

Q4 2022

FINANCIAL

INFORMATION

Net working capital as a percentage of revenues

Definition

Net working capital as a percentage of revenues

Net working capital as a percentage of revenues is calculated

as Net working capital divided by Adjusted revenues for the

trailing twelve months.

Net working capital

Net working capital is the sum of (i) receivables, net, (ii) contract

assets, (iii) inventories, net, and (iv) prepaid expenses; less

(v) accounts payable, trade, (vi)

contract liabilities (including non-current amounts)

and (vii) other current liabilities (excluding primarily:

(a) income taxes payable, (b) current derivative liabilities,

(c)

pension and other employee benefits, (d) payables under the share

buyback program, (e) liabilities related to certain other restructuring

-related activities and

(f) liabilities related to the divestment of the Power Grids business

); and including the amounts related to these accounts which have been

presented as either

assets or liabilities held for sale but excluding any amounts included

in discontinued operations.

Adjusted revenues for the trailing twelve months

Adjusted revenues for the trailing twelve months includes total revenues

recorded by ABB in the twelve months preceding the relevant

balance sheet date adjusted

to eliminate revenues of divested businesses and the estimated

impact of annualizing revenues of certain acquisitions

which were completed in the same trailing

twelve-month period.

Reconciliation

December 31,

($ in millions, unless otherwise indicated)

2022

2021

2020

Net working capital:

Receivables, net

6,858

6,551

6,820

Contract assets

954

990

985

Inventories, net

6,028

4,880

4,469

Prepaid expenses

230

206

201

Accounts payable, trade

(4,904)

(4,921)

(4,571)

Contract liabilities

(1)

(2,275)

(1,894)

(1,903)

Other current liabilities

(2)

(3,675)

(3,509)

(3,283)

Net working capital

3,216

2,303

2,718

Total revenues for the

twelve months ended

29,446

28,945

26,134

Adjustment to annualize/eliminate revenues of certain acquisitions/divestments

(513)

(517)

(167)

Adjusted revenues for the trailing twelve months

28,933

28,428

25,967

Net working capital as a percentage of revenues (%)

11.1%

8.1%

10.5%

(1)

Amount includes certain amounts relating to contract liabilities that are presented in other non-current liabilities.

(2)

Amounts exclude $648 million, $858 million and $898 million at December 31, 2022, 2021 and 2020, respectively, related primarily to (a) income taxes payable, (b) current derivative

liabilities, (c) pension and other employee benefits, (d) payables under the share buyback program and (e) liabilities related to the divestment of the Power Grids business.

Q4 2022

FINANCIAL

INFORMATION

Free cash flow conversion to net income

Definition

Free cash flow conversion to net income

Free cash flow conversion to net income is calculated as

free cash flow divided by Adjusted net income attributable

to ABB.

Adjusted net income attributable to ABB

Adjusted net income attributable to ABB is calculated as net income

attributable to ABB adjusted for: (i) impairment of

goodwill, (ii) losses from extinguishment of

debt, and (iii) gains arising on the sale of the equity-accounted

investment in Hitachi Energy Ltd., the Mechanical Power Transmission

Division (Dodge) and the

Power Grids business, the latter being included in discontinued operations.

Free cash flow

Free cash flow is calculated as net cash provided by operating activities

adjusted for: (i) purchases of property,

plant and equipment and intangible assets

and (ii)

proceeds from sales of property,

plant and equipment.

Free cash flow conversion to net income

Twelve months to

($ in millions, unless otherwise indicated)

December 31, 2022

December 31, 2021

Net cash provided by operating activities – continuing

operations

1,334

3,338

Adjusted for the effects of continuing operations:

Purchases of property, plant and

equipment and intangible assets

(762)

(820)

Proceeds from sale of property, plant and

equipment

127

Free cash flow from continuing operations

699

2,611

Net cash used in operating activities – discontinued operations

(47)

(8)

Free cash flow

652

2,603

Adjusted net income attributable to ABB

(1)

2,442

2,416

Free cash flow conversion to net income

27%

108%

(1)

Adjusted net income attributable to ABB for the year ended December 31, 2022, is adjusted to exclude the gain on the sale of Hitachi Energy Joint Venture of $43 million and

reductions to the gain on the sale of Power Grids of $10 million. For the year ended December 31, 2021, Adjusted net income attributable to ABB is adjusted to exclude the gain on

the sale of Dodge of $2,195

million and reductions to the gain on the sale of Power Grids of $65 million.

Q4 2022

FINANCIAL

INFORMATION

Net finance expenses

Definition

Net finance expenses is calculated as Interest and dividend income

less Interest and other finance expense.

Reconciliation

Year ended December 31,

Three months ended December 31,

($ in millions)

2022

2021

2022

2021

Interest and dividend income

Interest and other finance expense

(130)

(148)

(23)

(40)

Net finance expenses

(58)

(97)

(1)

(26)

Book-to-bill ratio

Definition

Book-to-bill ratio is calculated as Orders received divided by Total

revenues.

Reconciliation

Year ended December 31,

2022

2021

($ in millions, except Book-to-bill presented as a ratio)

Orders

Revenues

Book-to-bill

Orders

Revenues

Book-to-bill

Electrification

15,901

14,105

1.13

14,381

13,187

1.09

Motion

7,896

6,745

1.17

7,616

6,925

1.10

Process Automation

6,825

6,044

1.13

6,779

6,259

1.08

Robotics & Discrete Automation

4,116

3,181

1.29

3,844

3,297

1.17

Corporate and Other

(incl. intersegment eliminations)

(750)

(629)

n.a.

(752)

(723)

n.a.

ABB Group

33,988

29,446

1.15

31,868

28,945

1.10

Three months ended December 31,

2022

2021

($ in millions, except Book-to-bill presented as a ratio)

Orders

Revenues

Book-to-bill

Orders

Revenues

Book-to-bill

Electrification

3,565

3,663

0.97

3,638

3,445

1.06

Motion

1,649

1,845

0.89

1,843

1,735

1.06

Process Automation

1,746

1,551

1.13

1,898

1,805

1.05

Robotics & Discrete Automation

798

891

0.90

1,100

799

1.38

Corporate and Other

(incl. intersegment eliminations)

(138)

(126)

n.a.

(222)

(217)

n.a.

ABB Group

7,620

7,824

0.97

8,257

7,567

1.09

Q4 2022

FINANCIAL

INFORMATION

Return on Capital employed (ROCE)

Definition

Return on Capital employed (ROCE)

Return on Capital employed is calculated as Operational EBITA

after tax, divided by the average of the period’s

opening and closing Capital employed,

adjusted to

reflect impacts from the timing of significant acquisitions/divestments

occurring during the period.

Capital employed

Capital employed is calculated as the sum of Adjusted total fixed

assets and Net working capital (as defined above).

Adjusted total fixed assets

Adjusted total fixed assets is the sum of (i) property,

plant and equipment, net, (ii) goodwill, (iii) other

intangible assets, net, (iv) investments in equity-accounted

companies,

and (v) operating lease right-of-use assets,

less (vi) deferred tax liabilities recognized in certain

acquisitions.

Notional tax on Operational EBITA

The Notional tax on Operational EBITA

is computed using the adjusted group effective tax

rate multiplied by Operational EBITA.

Adjusted Group effective tax rate

The Adjusted Group effective tax rate is computed by

dividing an adjusted income tax expense by an

adjusted pre-tax income. Certain amounts recorded

income before taxes and the related income tax expense (primarily

due to gains and losses from sale of businesses

and in 2022, regulatory penalties in connection

with the Kusile project)

are removed from the reported amounts when computing

these adjusted amounts. Certain other amounts recorded in

income tax expense

are also excluded from the computation to determine the Adjusted

Group effective tax rate.

Reconciliation

December 31,

($ in millions, unless otherwise indicated)

2022

2021

2020

Adjusted total fixed assets:

Property, plant and equipment, net

3,911

4,045

4,174

Goodwill

10,511

10,482

10,850

Other intangible assets, net

1,406

1,561

2,078

Investments in equity-accounted companies

130

1,670

1,784

Operating lease right-of-use assets

841

895

969

Total fixed assets

16,799

18,653

19,855

Less: Deferred taxes recognized in certain acquisitions

(1)

(358)

(417)

(597)

Adjusted total fixed assets

16,441

18,236

19,258

Net working capital - (as defined above)

3,216

2,303

2,718

Capital employed

19,657

20,539

21,976

Average Capital employed:

Capital employed at the end of the previous year

20,539

21,976

20,141

(2)

Capital employed at the end of the current year

19,657

20,539

21,976

20,098

21,258

21,059

Adjusted for timing of acquisitions/divestments

948

224

–

Average Capital employed

21,046

21,482

21,059

Operational EBITA for the year ended

4,510

4,122

2,899

Notional tax on Operational EBITA

(1,037)

(929)

(731)

Operational EBITA after tax

3,473

3,193

2,168

Return on Capital employed (ROCE)

16.5%

14.9%

10.3%

(1)

Amount relates to GEIS acquired in 2018, B&R acquired in 2017, Power-One acquired in 2013, Thomas & Betts acquired in 2012 and Baldor acquired in 2011.

(2)

Adjusted to include $1,196 million of operating lease right-of-use assets, recorded on adoption of the new lease accounting standard on January 1, 2019.

Q4 2022

FINANCIAL

INFORMATION

2023 Realignment of segments - Electrification Business Area excluding E-Mobility

Commencing in January 2023, the E-mobility Division is no

longer managed within the Electrification Business Area

and has become an independent Division and

a separate operating segment. The Division does not currently meet

any of the size thresholds to be considered a reportable

segment and will be presented within

Corporate and Other. The tables below present

Operational EBITA and Operational

EBITA margin for 2022 and 2021,

restated to reflect the new structure.

Year ended

December 31, 2022

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

13,619

6,745

6,044

3,181

(143)

29,446

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

(37)

(18)

(1)

(27)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

Unrealized foreign exchange movements

on receivables (and related assets)

(2)

(9)

–

Operational revenues

13,599

6,731

6,077

3,187

(120)

29,474

Income (loss) from operations

2,140

1,092

663

247

(805)

3,337

Acquisition-related amortization

104

229

Restructuring, related and

implementation costs

(1)

263

347

Changes in obligations related to

divested businesses

–

(89)

(88)

Changes in pre-acquisition estimates

–

(1)

–

Gains and losses from sale of businesses

(1)

–

Acquisition- and divestment-related expenses

and integration costs

134

195

Other income/expense relating to the

Power Grids joint venture

–

Certain other non-operational items

–

(7)

362

385

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

(30)

(5)

(7)

(32)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

(9)

Operational EBITA

2,343

1,163

848

340

(184)

4,510

Operational EBITA margin (%)

17.2%

17.3%

14.0%

10.7%

n.a.

15.3%

(1)

Includes impairment of certain assets.

Q4 2022

FINANCIAL

INFORMATION

Year ended December 31, 2021

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

12,894

6,925

6,259

3,297

(430)

28,945

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

(2)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(2)

–

Unrealized foreign exchange movements

on receivables (and related assets)

(18)

(3)

(6)

(32)

Operational revenues

12,894

6,927

6,264

3,290

(431)

28,944

Income (loss) from operations

1,827

3,276

713

269

(367)

5,718

Acquisition-related amortization

115

250

Restructuring, related and

implementation costs

160

Changes in obligations related to

divested businesses

–

Changes in pre-acquisition estimates

(6)

–

(6)

Gains and losses from sale of businesses

(2,196)

(13)

–

(2,193)

Acquisition- and divestment-related expenses

and integration costs

132

Other income/expense relating to the

Power Grids joint venture

–

Certain other non-operational items

–

(33)

(18)

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

(2)

(3)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

(1)

(2)

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

(8)

(3)

(7)

(2)

–

(20)

Operational EBITA

2,120

1,183

801

355

(337)

4,122

Operational EBITA margin (%)

16.4%

17.1%

12.8%

10.8%

n.a.

14.2%

Q4 2022

FINANCIAL

INFORMATION

—

ABB Ltd

Corporate Communications

P.O. Box

8131

8050

Zurich

Switzerland

Tel:

+41 (0)43

317 71

www.abb.com

October 1 — December 31, 2022

ABB Ltd announces that the following

members of the Executive Committee

or Board of Directors of ABB

have purchased,

sold or been granted ABB’s registered shares, call options

and warrant appreciation rights (“WARs”), in the following amounts:

Name

Date

Description

Received *

Purchased

Sold

Price

Gunnar Brock

November 01, 2022

2,388

CHF

26.43

David Constable

November 01, 2022

2,316

CHF

26.43

Frederico Curado

November 01, 2022

4,799

CHF

26.43

Lars Förberg

November 01, 2022

5,736

CHF

26.43

Jennifer Xin-Zhe Li

November 01, 2022

2,338

CHF

26.43

Geraldine Matchett

November 01, 2022

3,121

CHF

26.43

David Meline

November 01, 2022

2,895

CHF

26.43

Satish Pai

November 01, 2022

4,523

CHF

26.43

Peter Voser

November 01, 2022

21,565

CHF

26.43

Jacob Wallenberg

November 01, 2022

3,257

CHF

26.43

Key:

* Received instruments were delivered

as part of the ABB Ltd Director’s or

Executive Committee Member’s

compensation or as compensation

for foregone

benefits

SIGNATURES

Pursuant to the requirements of the Securities

Exchange Act of 1934, the registrant

has duly caused this report to be signed

its behalf by the undersigned, thereunto

duly authorized.

ABB LTD

Date: February 2, 2023.

By:

/s/ Ann-Sofie Nordh

Name:

Ann-Sofie Nordh

Title:

Group Senior Vice President and

Head of Investor Relations

Date: February 2, 2023.

By:

/s/ Richard A. Brown

Name:

Richard A. Brown

Title:

Group Senior Vice President and

Chief Counsel Corporate & Finance

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