abb2021q3fininfo

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 October 2021

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

☒

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is submitting the Form 6-K in paper

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is submitting the Form 6-K in paper

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

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release, is not required to be and has

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If “Yes” is marked, indicate below the file number assigned to the

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82-

This Form 6-K consists of the following:

Press release issued by ABB Ltd dated

October 21, 2021 titled “Q3 2021 results”.

Q3 2021 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.

—

“In the face of a difficult supply chain environment, I am pleased that we achieved a good

margin this quarter. Our cash generation was very strong, leaving ample headroom on our

balance sheet to support both organic growth and acquisitions as well as rewarding

shareholders.”

Björn Rosengren

, CEO

—

ZURICH, SWITZERLAND, OCTOBER 21,

2021

Q3 2021 results

Strong demand, supply

chain constraints

impacting

revenues

●

Orders $7.9 billion,

+29%; comparable

+26%

●

Revenues $7.0 billion

+7%; comparable +4%

●

Income from operations

$852 million; margin 12.1%

●

Operational EBITA

$1,062 million;

margin

15.1%

●

Basic EPS $0.33;

-85%

●

Cash flow from operating

activities was $1,104

million and from operating

activities in continuing

operations it was $1,119

million

Ad hoc Announcement pursuant to Art.

53 Listing Rules of SIX Swiss Exchange

—

Q3 2021

First nine months

Press Release

KEY FIGURES

CHANGE

($ millions, unless otherwise indicated)

Q3 2021

Q3 2020

US$

Comparable

9M 2021

9M 2020

US$

Comparable

Orders

7,866

6,109

29%

26%

23,611

19,509

21%

16%

Revenues

7,028

6,582

21,378

18,952

13%

Gross Profit

2,294

1,834

25%

7,070

5,731

23%

as % of revenues

32.6%

27.9%

+4.7 pts

33.1%

30.2%

+2.9 pts

Income from operations

852

n.a.

2,743

1,015

170%

Operational EBITA

1,062

787

35%

32%

3,134

2,074

51%

43%

as % of operational revenues

15.1%

12.0%

+3.1 pts

14.6%

10.9%

+3.7 pts

Income (loss) from continuing operations, net of

tax

687

(503)

n.a.

2,027

218

830%

Net income attributable to ABB

652

4,530

-86%

1,906

5,225

-64%

Basic earnings per share ($)

0.33

2.14

-85%

0.95

2.45

-61%

Cash flow from operating activities

1,104

408

171%

2,310

511

352%

Cash flow from operating activities in continuing

operations

1,119

398

181%

2,305

650

255%

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

reconciliations and definitions” in the attached

Q3 2021 Financial Information.

EPS growth rates are computed using unrounded amounts.

Constant currency (not adjusted for portfolio

changes).

Amount represents total for both continuing and discontinued

operations.

ABB INTERIM REPORT

Q3 2021

Q3 painted a mixed

picture, containing on one

hand a high

level of demand

driving strong order growth,

while on the

other hand the tight

supply chain impacted our

revenues

more than anticipated.

Still, we improved both

the

underlying operational

earnings and margin, delivered

strong cash flows,

made progress with portfolio

adjustments,

as well as delivered some

important product

launches.

Orders increased by

29%

(26% comparable)

year-on-year.

We make conscious

efforts to screen that

orders we accept

are backed up by real

demand, but in the current

environment of a strained

supply chain it is only

fair to

assume it includes

a certain element of customers

putting

through safety-orders

to secure future deliveries.

All

business areas contributed

with double-digit growth

rates

and all segments and

regions noted positive developments.

In sequential terms,

the underlying customer activity

increased somewhat

in the Americas, declined

in Europe

and remained stable

in China.

Revenues were hampered

by supply chain constraints

delaying customer

deliveries. This was primarily

related to

semiconductors

and imbalances in the overall

supply chain,

with the impact most

tangible in Electrification

and Robotics

& Discrete Automation.

Revenues increased by

(4%

comparable).

Operational EBITA

increased

by 35%

year-on-year,

and

margin expanded by

310

basis points, to 15.1

%. This

improvement however

benefited from the adverse

temporary items

in last year’s results, good development

most business areas

and unusually low corporate

costs in

the current quarter.

I am pleased we delivered

another quarter with strong

cash

flow, which

more than doubled from last

year to

USD 1.1 billion. Our balance

sheet is strong with a

net

debt/EBITDA ratio

of 0.5.

In line with our active

portfolio management

strategy, we

announced both

a divestment and an acquisition

in the

period. We agreed

to divest the Mechanical

Power

Transmission

division (Dodge) for $2.9

billion in cash and

we expect completion

of the deal before the

end of this

year.

Robotics and Discrete Automation

acquired ASTI

Mobile Robotics

Group (ASTI), a leading global

autonomous mobile

robot (AMR) manufacturer.

This deal

will support us in capturing

the potential in areas such

logistics and warehouse

automation. We are

also making

good progress with

the other portfolio activities.

I was pleased to see

the E-mobility business launch

the

Terra

360,

the world’s fastest electric

car charger.

It is the

only charger in the

market designed to simultaneously

charge up to four vehicles

with dynamic power distribution.

It has a maximum output

of 360 kW and is capable

of fully

charging any electric

car in 15 minutes or less.

This will

further cement our

leading position in the

EV-charging

space.

On a similar topic but

with focus on the mining

industry,

Process Automation

launched the ABB Ability™ eMine

comprising a portfolio

of technologies facilitating

the all-

electric mine,

including monitoring and

optimizing energy

usage. From 2022,

it will also include ABB Ability™

eMine

FastCharge which

provides high-power

electric charging for

haul trucks. It also

incorporates the ABB Ability™

eMine

Trolley System

which can reduce diesel consumption

by up

to 90%.

We were also acknowledged

for our sustainability efforts

we once again wer

included in the FTSE4Good

Index

Series with an overall

score of 4.2 on a scale from

0 to 5 (5

is the best score). We

are ranked among the best

performers in the index

globally and above sector

average.

Björn Rosengren

CEO

In the

fourth quarter of 2021

, ABB anticipates a continued

tight supply chain to

impact customer deliveries.

Comparable revenue

growth is estimated to be

broadly

similar to the third quarter.

In line with recent historical

pattern, the Operational

EBITA

margin in the

fourth quarter

is expected to decline,

sequentially.

ABB anticipates

comparable revenue growth

of 6%-8%

(update from just below

10%) for

full-year 2021

, hampered

by supply constraints

towards the end of

the year.

In 2021

, ABB expects a strong

pace of improvement from

2020 toward the 2023

operational EBITA

margin target of

the upper half of

the 13%-16% range.

CEO summary

Outlook

ABB INTERIM REPORT

Q3 2021

Demand was strong in

the third

quarter, with order

intake

amounting to $7,866

million, corresponding to a

year-on-year

increase of 29% (26

comparable) with virtually

all divisions

growing at a double

-digit pace. The strength

was broad based,

supported by both

short-cycle product and

the process-related

businesses.

Service orders increased by

20%

(18%

comparable).

Orders grew strongly

in the machine builders

and food &

beverage segments

as well as in general industries

overall.

Orders in the automotive

segment increased, driven

primarily by

high customer activity

in China.

In transport and infrastructure,

there was a very strong

order

development across

the renewables and e-mobility

segments

as well as in the buildings

segment with a positive

development

for both the residential

and non-residential segments.

The

marine segment recovered,

including a slight positive

development in the

cruise segment with customers

initiating

service spend in anticipation

of upcoming cruising

activities.

The process-related business

improved across the

customer

segments, including in

the oil & gas segment as

gas-related

activity remained stable

at a high level and oil- related

demand

improved. Process

Automation secured a large

order

amounting to approximately

$120 million to power the

Jansz-Io

Compression project

in Australia.

Customer activity in power

generation remained

stable.

From a geographical

perspective, all three

regions reported at

least 25% growth (20%

comparable), with the strong

est growth

of 31%

in the United States outpacing

China which improved by

a more modest 16% (9%

comparable) and showed

a steady

sequential pattern.

Revenues were dampened

by extended lead times

in customer

deliveries due to a

tight value chain, including

component

constraints,

tight job market and covid

restrictions. A tangible

impact from insufficient

supply of semi-conductors

affected the

ability to deliver.

Orders and revenues

Orders by region

($ in millions,

unless otherwise

indicated)

CHANGE

Q3 2021

Q3 2020

US$

Comparable

Europe

2,663

2,068

29%

27%

The Americas

2,580

1,938

33%

31%

Asia, Middle East

and Africa

2,623

2,103

25%

20%

ABB Group

7,866

6,109

29%

26%

Growth

Change year-on-year

Orders

Revenues

Comparable

26%

Portfolio changes

Total

29%

Revenues by region

($ in millions,

unless otherwise

indicated)

CHANGE

Q3 2021

Q3 2020

US$

Comparable

Europe

2,525

2,410

The Americas

2,161

1,927

12%

11%

Asia, Middle East

and Africa

2,342

2,245

ABB Group

7,028

6,582

ABB INTERIM REPORT

Q3 2021

Gross profit

Gross margin increased

to 32.6%, up 470 basis

points year-

on-year.

Gross margins were higher

in two out of four

business areas,

led by Process Automation.

There were

also fewer one-time

items. Gross profit improved

by 25%

and amounted to $2,294

million.

Income from operations

amounted to $852 million,

a solid

improvement from

last year’s $71 million. Key

drivers were

improved operational

performance as well as

the absence

of approximately $500

million in total charges related

to the

goodwill write-down

and changes in obligations

to divested

businesses,

which adversely impacted

last year’s results.

Results include restructuring

and restructuring-related

expenses of $28

million.

Operational EBITA

of $1,062

million was 35% higher (32%

constant currency)

year-on-year,

with the increased profit in

Process Automation as

the key driver,

including the

absence of last year’s

charge related to the

Kusile project.

The margin improved

by 310 basis points to 15.1%.

Three

out of four business

areas reported stable or

improved

margin. Overall,

the positive year-on-year development

was

supported by higher

volumes, stringent cost

controls

and

also due to abnormally

low costs for Corporate

& Other in

the period. Corporate

and Other Operational

EBITA

improved by $115

million to -$37 million

year-on-year,

primarily due to the

reduction of losses incur

red in non-core

businesses. Additionally,

corporate costs were

lower due to

certain tax-related

charges incurred in the

previous year

period and some positive

non-repeating items

in the current

quarter,

including a credit related to

a review of a software

license scope. Sequentially,

the Corporate and Other

Operational EBITA

improved primarily

due to higher real

estate income, and

the aforementioned positive

items

Net finance expenses

amounted to $6 million,

primarily

reflecting significantly

lower interest costs compared

with

last year.

Net finance expenses for

the full year of 2021 are

now expected at around

$100

million.

Income tax

Income tax expense

was $201 million with a

tax rate of

22.6%. The low rate

reflects certain tax benefits

recognized

from internal reorganizations

The tax rate for 2021

is still

estimated at 26%

Net income and earnings

per share

Net income attributable

to ABB was $652

million and

decreased significantly

from last year’s level which

included

the book gain related

to the divestment of Power

Grids. Basic

earnings per share

was $0.33 and decreased

from last year’s

high level of $2.14

which included book

gain impacts.

Excludes impact of acquisitions or divestments or

any significant non-operational items

Earnings

ABB INTERIM REPORT

Q3 2021

Net working capital

amounted to $2,920 million,

declining

both year-on-year from

$3,236 million and sequentially

from

$3,251 million. The

sequential decline was primarily

driven

by receivables, partially

offset by a slight increase

inventories and lower

other accrued liabilities

Net working

capital as a percentage

of revenues

was 10.2%.

Capital expenditures

Purchases of property,

plant and equipment and

intangible

assets amounted to

$166 million.

Net debt

totalled $1,898 million,

representing an increase

from last year’s net cash

position of $935 million

which

reflected the timing of

the divestment of Power

Grids.

Sequentially,

net debt was reduc

ed from $2,259 million.

The

sequential decrease primarily

reflects the impacts of strong

cash flow in the third

quarter.

The net debt to EBITDA ratio

increased year-on-year

to 0.5

from -0.4, and declined

sequentially from 0.

Cash flows

Cash flow from operating

activities in continuing operations

was $1,119

million, a significant improvement

$721 million compared

with the corresponding period

last

year.

Three out of four business areas

increased cash flow

primarily from improved

earnings. However,

the largest

year-on-year effect

came from Corporate and

Other,

reflecting the payments

in 2020 related to certain pension

plan restructurings

in connection with the optimization

of our

capital structure.

Share buyback program

The previously announced

follow-up share buyback

program of

up to $4.3 billion

was launched in early April.

This follow-up

program is part of the

plan to return

$7.8 billion of cash

proceeds from the Power

Grids divestment

to shareholders.

Under the initial program a

total of

128,620,589 shares

were repurchased for an amount

approximately $3.5

billion. Since the launch

of the follow-up

program on April 9

and through the end of the

quarter a total of

25,842,600 shares

were repurchased, including

10,908,500

shares in the third quarter.

Shares were repurchased

on the

second trading line.

The total number of ABB Ltd’s

issued

shares is 2,053,148,264.

($ millions,

unless otherwise indicated)

Sep. 30

2021

Sep. 30

2020

Dec. 31

2020

Short term debt and current

maturities of long-term debt

2,414

2,354

1,293

Long-term debt

4,270

6,319

4,828

Total debt

6,684

8,673

6,121

Cash & equivalents

3,709

3,178

3,278

Restricted cash - current

860

323

Marketable securities and

short-term investments

746

5,270

2,108

Restricted cash - non-current

300

Cash and marketable securities

4,786

9,608

6,009

Net debt/(cash)*

1,898

(935)

112

Net debt/(cash)* to EBITDA ratio

0.5

(0.4)

0.04

Net debt/(cash)* to Equity ratio

0.13

(0.05)

0.01

net debt excludes net pension liabilities $871 million

Balance sheet & Cash flow

ABB INTERIM REPORT

Q3 2021

Orders and revenues

There was a mixed

picture in the third quarter,

with strong

broad-based growth

in orders while revenues were

challenged by supply

constraints limiting the ability

to convert

orders into actual deliveries.

Consequently,

the order backlog

increased to $5,246

million. In total, orders increased

to the

high level of $3,519

million, an increase of 19%

(17%

comparable) and revenues

reached $3,196

million, up by 5%

(4% comparable).

●

Strong comparable

order growth represents a

double-digit

growth rate in almost

all divisions. Although

difficult to

exactly assess, it is

fair to assume some positive

impact

from customers

ordering safety stock in

the wake of a

generally tight supply

chain.

●

Demand improved

in the buildings segment,

with a positive

development for both

residential and non

-residential

business. Customer activity

was also high for the data

centers, food & beverage,

rail and e-mobility segments.

Activity increased moderately

in oil & gas.

●

Orders increased in

all regions, with strong double

-digit

growth rates in the

Americas and Europe outpacing

AMEA,

including a mid-single

-digit growth rate in China.

●

Shortages in the supply

chain are expected to impact

customer deliveries

also in the coming quarter.

Profit

As a headline number

the Operational EBITA

margin

declined year-on-year

to 15.9%. However,

when excluding

the non-repeating positive

impacts of about 100

basis points

in the year-earlier period,

the underlying operational

margin

improved by approximately

60 basis points.

●

The underlying operational

margin improvement

was

supported by slightly

higher volumes, active price

management and efficiency

measures, which more

than

offset the impact from

increasing raw materials

costs and

general cost inflation

emphasized by the

tight supply

situation.

—

Electrification

Growth

Change year-on-year

Orders

Revenues

Comparable

17%

Portfolio changes

Total

19%

CHANGE

($ millions, unless otherwise indicated)

Q3 2021

Q3 2020

US$

Comparable

9M 2021

9M 2020

US$

Comparable

Orders

3,519

2,952

19%

17%

10,743

8,810

22%

18%

Order backlog

5,246

4,471

17%

5,246

4,471

17%

Revenues

3,196

3,031

9,742

8,568

14%

10%

Operational EBITA

511

493

1,614

1,159

39%

as % of operational revenues

15.9%

16.3%

-0.4 pts

16.5%

13.5%

+3 pts

Cash flow from operating activities

636

460

38%

1,466

875

68%

No. of employees (FTE equiv.)

51,100

ABB INTERIM REPORT

Q3 2021

Orders and revenues

Demand was strong across

all divisions,

and total orders

increased significantly

at 24% (22% comparable)

year-on-

year and amounted

to $1,909 million. On the back

of a

generally tight supply

chain, revenues were

somewhat

hampered and increased

by 4% (2% comparable).

●

Customer activity improved

in all segments supported

by the

short-cycle product

business and service, as

well as

improving project demand.

●

Orders increased at

a double-digit rate in all

three regions,

with Europe outperforming

the Americas and AMEA,

including a slight

growth in China.

●

Revenues were impacted

by the strained value

chain,

including component

shortages as well as

a tight labor

market in the US, which

in some cases triggered customers

to delay acceptance

of product deliveries.

●

Some impact on deliveries

is expected to remain also

the coming quarter.

Profit

On largely stable revenues

year-on-year,

the Operational

EBITA margin

remained unchanged

at 17.4%, despite cost

inflation triggered by

tight supply chain and increasing

raw

material costs.

●

Profitability was

primarily supported by a slight

volume

increase, active

price management and

a positive divisional

mix, which in combin

ation offset increasing

raw material costs

and cost inflation.

The divestment of the

Mechanical Power Transmission

division (Dodge)

for $2.9 billion in cash was

announced,

with completion of the

deal expected before

the end of the

year.

The closing of the divestment

will trigger a non-

operational pre-tax

book gain of approximately

$2.2 billion.

The transaction related

cash tax outflows are estimated

approximately $400

million.

—

Motion

Growth

Change year-on-year

Orders

Revenues

Comparable

22%

Portfolio changes

Total

24%

CHANGE

($ millions, unless otherwise indicated)

Q3 2021

Q3 2020

US$

Comparable

9M 2021

9M 2020

US$

Comparable

Orders

1,909

1,535

24%

22%

5,773

5,022

15%

10%

Order backlog

3,717

3,349

11%

3,717

3,349

11%

Revenues

1,673

1,611

5,190

4,704

10%

Operational EBITA

291

281

905

790

15%

as % of operational revenues

17.4%

0 pts

17.4%

16.8%

+0.6 pts

Cash flow from operating activities

399

379

946

859

10%

No. of employees (FTE equiv.)

21,300

20,700

ABB INTERIM REPORT

Q3 2021

Orders and revenues

Orders amounted to $1,670

million and grew by 43% (40%

comparable) from last

year’s easy comparable,

including a

large order of approximately

$120 million received.

Order-

backlog was built up

to a high level of $6 billion.

●

Orders for both products

and service business

increased

at a double-digit

pace, year-on-year,

with support from

improvements across

the process-related markets

●

Customer activity increased

in most segments except

for

a stable development

in power generation.

Worth noting

was the positive

trend in the marine service

business.

●

A large order was secured,

amounting to approximately

$120 million to supply

the overall Electrical

Power System

(EPS) for the Jansz

-Io Compression (J-IC)

natural gas

project in Australia.

●

The increase in revenues

reflects

execution of a backlog

with long lead times

and a broad-based recovery

demand with most

divisions reporting stable

to positive

growth.

Profit

Operational EBITA

amounted to $207

million resulting in a

margin of 13.7%. The

sharp improvement from

last year’s

margin of 6.4% was

330 basis points when excluding

the

adverse impact of approximately

400 basis points related

the Kusile project, which

weighed on last year’s earnings.

●

All divisions improved

their Operational EBITA

and

margin,

year-on-year.

●

The result was support

ed by positive volume

development, improved

business mix and strong project

execution.

—

Process Automation

Growth

Change year-on-year

Orders

Revenues

Comparable

40%

Portfolio changes

Total

43%

CHANGE

($ millions, unless otherwise indicated)

Q3 2021

Q3 2020

US$

Comparable

9M 2021

9M 2020

US$

Comparable

Orders

1,670

1,164

43%

40%

4,881

4,226

15%

10%

Order backlog

6,021

5,152

17%

16%

6,021

5,152

17%

16%

Revenues

1,507

1,403

4,454

4,247

Operational EBITA

207

133%

554

348

59%

as % of operational revenues

13.7%

6.4%

+7.3 pts

12.4%

8.2%

+4.2 pts

Cash flow from operating activities

231

164

41%

692

258

168%

No. of employees (FTE equiv.)

22,000

22,600

-3%

ABB INTERIM REPORT

Q3 2021

Orders and revenues

Order growth was strong

at 30% (comparable

26%) and

amounted to $935

million. Revenues amounted

to $813 million

with growth limited

to 1% (comparable -3%) adversely

impacted

by component shortages

and reduced automotive

systems

business.

●

Both the Robotics and

Machine Automation

divisions

increased orders strongly

at >20% year-on-year.

●

Customer activity increased

in all segments, with the

strongest order increase

in the machine automation,

followed

by the general industry

as well

as consumer and service

robotic segments.

●

All regions improved

at a double-digit rate,

with the Americas

and Europe outpacing

the AMEA region, including

China

orders increasing by

17%

(10% comparable) year

-on-year.

●

The decline in comparable

revenues was the combined

impact from Machine

Automation facing delayed

customer

deliveries on the back

of component shortages

and Robotics’

stable development

due to the conscious effort

to support

long-term profitability

by reducing exposure

to the automotive

systems business for

which the order backlog

is now

shrinking.

The acquisition of ASTI Mobile

Robotics Group (ASTI)

was

closed.

It is a leading global autonomous

mobile robotics

(AMR) manufacturer.

The deal adds solutions

to deliver a

unique automation

portfolio and expand

into new segments.

Profit

Operational EBITA

increased by 1

year-on-year and the

margin increased by

160

basis points to 11.1

driven by

the Robotics division

●

Despite the lack of

comparable growth, the

Operational

EBITA margin

improved, supported

by improved mix

through reduced automotive

systems sales, increased

share of service business

and efficiency measures.

●

Profitability improved

in the Robotics division,

more than

offsetting the adverse

development in Machine

Automation, which

was hampered by delayed

deliveries

and cost inflation in

a strained supply chain.

—

Robotics & Discrete Automation

Growth

Change year-on-year

Orders

Revenues

Comparable

26%

-3%

Portfolio changes

Total

30%

CHANGE

($ millions, unless otherwise indicated)

Q3 2021

Q3 2020

US$

Comparable

9M 2021

9M 2020

US$

Comparable

Orders

935

720

30%

26%

2,744

2,169

27%

20%

Order backlog

1,619

1,442

12%

11%

1,619

1,442

12%

11%

Revenues

813

806

-3%

2,498

2,106

19%

12%

Operational EBITA

18%

291

178

63%

as % of operational revenues

11.1%

9.5%

+1.6 pts

11.7%

8.5%

+3.2 pts

Cash flow from operating activities

110

-49%

245

244

No. of employees (FTE equiv.)

10,700

10,300

ABB INTERIM REPORT

Q3 2021

Quarterly highlights

●

ABB launched the world’s

fastest Electric Vehicle

(EV)

charger - Terra

360 - which can simultaneously

charge up

to four vehicles with

dynamic power distribution.

The new

charger has a maximum

output of 360kW and

is capable

of fully charging any electric

car in 15 minutes or less.

●

ABB launched ABB Ability™

eMine, a portfolio of

solutions that will help

accelerate the move towards

zero-carbon mine.

eMine™ can reduce diesel

consumption by up

to 90% while haul trucks are

on an

electric trolley system.

●

Zero production waste

to landfill has been achieved

ABB Smart Power’s manufacturing

unit in Frosinone, Italy

— 14 years ahead

of the European Union’s

Circular

Economy Package

target of no more than 10

landfilling

by 2035.

●

ABB has been selected

for inclusion 21 years

consecutively in

the FTSE4Good Index Series.

With an

overall score of 4.2

on a scale from 0 to 5 (5

is the best

score).

●

As part of the WEF’s Sustainable

Impact Summit, ABB’s

Chief Communications

and Sustainability Officer

Theodor

Swedjemark discussed

changing the way we talk

about

climate change.

Story of the quarter

ABB will deliver automation,

electrification, quality

control

systems, motors and

drives for Renewcell’s

new industrial

textile recycling production

line in Sundsvall, Sweden.

Renewcell is a Swedish

company specializing in textile

-to-

textile recycling. A paper

mill will be transformed into

the

world’s first commercial

-scale recycling plant for cellulosic

textiles – created by dissolving

natural materials such as

cellulose which is then

regenerated to create a

wide range

of fabrics. Renewcell

is already working with

several fashion

manufacturers, and

in 2020, the company and

H&M Group

entered a multi-year partnership

to replace virgin fibers with

recycled textiles

in clothing. According to

Renewcell’s

preliminary calculations,

textile fibers made from its

recycled

raw material use approximately

50 liters of fresh water

per

kg in production, compared

to around 1,600 liters for cotton

and 90 liters for non

-cotton cellulosic material

viscose.

Q3 outcome

●

reduction of CO

₂

emissions in own operations

mainly

due to continued

implementation of Green

energy contracts

●

21%

year-on-year decline in LTIFR

from the unusually

high

level in the previous

year period

—

Sustainability

Q3 2021

Q3 2020

CHANGE

12M ROLLING

CO2e own operations emissions,

kt scope 1 and 2

-7%

Lost Time Injury Frequency Rate (LTIFR),

frequency / 200,000 working hours

0.137

0.173

-21%

0.136

Share of females in senior management

positions, %

15.0

13.4

+1.6 pts

14.2

From energy use, previous quarter

ABB INTERIM REPORT

Q3 2021

During Q3 2021

●

On July 20, ABB announced

the acquisition of ASTI

Mobile Robotics

Group to drive the next

generation of

flexible automation

with Autonomous Mobile

Robots.

ASTI is a global

leader in the high growth Autonomous

Mobile Robot (AMR) market

with a broad portfolio

vehicles and software.

The acquisition adds

to RA’s

solutions to deliver

a unique automation portfolio

further

expanding into new

industry segments. Since

2015, the

company has enjoyed

close to 30% annual growth

and is

targeting approxi

mately $50 million in revenue

in 2021.

●

On July 26, ABB announced

it had signed a definitive

agreement to divest

its Mechanical Power Transmission

division (Dodge)

to RBC Bearings Incorporated

(Nasdaq:

ROLL), for $2.9 billion

in cash. The transaction

expected to be completed

by the end of this year,

subject

to customary closing

conditions, including regulatory

review.

ABB expects to book a

non-operational pre-tax

book gain of approximately

$2.2 billion on the sale of

Dodge. ABB also expects

the transaction related cash

tax

outflows to be approximately

$400 million.

After Q3 2021

In the first nine months

of 2021, demand for ABB’s

products

increased strongly

from the low level in the

previous year

period when the

adverse business impact of

the COVID-19

pandemic was significant.

Orders amounted to

$23,611

million and improved by 21

(16% comparable)

and revenues amounted

to $21,378 million,

up by 13%

(8%

comparable), with a

book-to-bill ratio of 1.10.

The recovery

was initially driven

by the short-cycle business

as from the

first quarter,

and the process-related

business

predominantly picked

up later in the period.

Demand

increased in both the

product and the service

business.

Additionally,

exchange rates had a

positive impact on order

intake and revenues.

Income from operations

amounted to $2,743

million and

more than doubled

from the year-earlier period

driven

primarily by stronger

Operational EBITA.

Results include

restructuring activities

that are progressing according

plan with restructuring

and restructuring-related

expenses of

$81 million.

Operational EBITA

improved by 5

1% year-on-year to

$3,134 million and

the Operational EBITA

margin increased

by 370 basis points

to 14.6%. Performance

was driven by

increased revenues

in combination with an

improved gross

margin, the impact

from earlier implemented

cost measures

and general stringent

cost control. While revenues

increased by 13%,

the expenses related

to selling, general

and administrative

(SG&A) increased by a

more limited 5%,

driven by higher

sales expenses. The ratio

in relation to

revenues declined

to 17.8%, from 19.1%

in the year-earlier

period. R&D expenses

increased by 13%. Corporate

and

Other Operational EBITA

improved by $

171 million to

-$230 million.

Net finance expenses

amounted to -$71 million.

Income tax

expense was -$775

million with a tax rate of 2

7.7%. Net

income attributable

to ABB was $1,906 million

and

decreased from

last year’s level which includes

the book

gain related to the divestment

of Power Grids. Basic

earnings per share

was $0.95.

Cash flow from operating

activities in continuing operations

amounted to $2,305

million, up from $650 million

in the

year-earlier period.

Significant events

First nine months 2021

ABB INTERIM REPORT

Q3 2021

Note: comparable growth calculation includes acquisitions

and divestments with revenues of greater than

$50 million.

Represents the estimated annual revenues for the

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

Divestments

Company/unit

Closing date

Revenues, $ million

No. of employees

2021

Acquisitions

Company/unit

Closing date

Revenues, $ million

No. of employees

2020

Robotics & Discrete Automation

Codian Robotics B.V.

1-Oct

2021

Electrification

Enervalis (majority stake)

26-Apr

Robotics & Discrete Automation

ASTI Mobile Robotics Group

2-Aug

300

($ in millions, unless otherwise stated)

FY 2021

Q4 2021

Net finance expenses

~(100)

~(30)

from ~(130)

Non-operational pension

(cost) / credit

~180

~50

unchanged

Effective tax rate

~26%

<20%

unchanged

Capital Expenditures

~(700)

~(250)

from ~(750)

($ in millions, unless otherwise stated)

FY 2021

Q4 2021

Corporate and Other Operational costs

~(340)

~(110)

from ~(400)

Non-operating items

Restructuring and restructuring related

~(150)

~(70)

unchanged

GEIS integration costs

~(25)

~(5)

from ~(20)

Separation costs

~(130)

~(80)

unchanged

PPA-related amortization

~(255)

~(65)

unchanged

Certain other income and expenses

related to PG divestment

~(40)

~(10)

unchanged

Additional 2021 guidance

Additional figures

ABB Group

Q1 2020

Q2 2020

Q3 2020

Q4 2020

FY 2020

Q1 2021

Q2 2021

Q3 2021

EBITDA, $ in million

600

799

302

807

2,508

1,024

1,324

1,072

Return on Capital Employed, %

n.a.

10.3%

n.a.

Net debt/Equity

0.52

0.61

(0.05)

0.01

0.09

0.16

0.13

Net debt/ EBITDA 12M rolling

2.3

2.5

(0.4)

0.04

0.4

0.7

0.5

Net working capital, % of 12M rolling revenues

12.3%

12.6%

12.5%

10.5%

10.8%

11.6%

10.2%

Earnings per share, basic, $

0.18

0.15

2.14

(0.04)

2.44

0.25

0.37

0.33

Earnings per share, diluted, $

0.18

0.15

2.14

(0.04)

2.43

0.25

0.37

0.32

Dividend per share, CHF

n.a.

0.80

n.a.

Share price at the end of period, CHF

17.01

21.33

23.45

24.71

28.56

31.39

Share price at the end of period, $

17.26

22.56

25.45

27.96

30.47

33.99

33.36

Number of employees (FTE equivalents)

143,320

142,310

106,420

105,520

105,330

106,370

106,080

No. of shares outstanding at end of period (in

millions)

2,134

2,135

2,092

2,031

2,024

2,006

1,993

Excluding two main operational exposures that are

ongoing in the non-core business and for which

exit timing is dependent on circumstances beyond

ABB’s control such as legal proceedings.

Costs relating to the announced

exits and the potential E-mobility listing.

Excluding share of net income from JV.

Excludes impact of acquisitions or divestments or

any significant non-operational items.

Acquisitions and divestments, last twelve months

ABB INTERIM REPORT

Q3 2021

For additional information please contact:

Media Relations

Phone: +41 43 317

71 11

Email:

media.relations@ch.abb.com

Investor Relations

Phone: +41 43 317

71 11

Email:

investor.relations@ch.abb.com

ABB Ltd

Affolternstrasse

8050 Zurich

Switzerland

Financial calendar

2021

December 7

ABB Group CMD in Zurich

2022

February 3

Q4 results

March 1 – 2

ABB Motion CMD in Helsinki

March 3

ABB Process Automation

CMD in Helsinki

March 24

Annual General Meeting

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 “Outlook”,

“Share buyback program”,

“Sustainability” 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

“intends,” “anticipates

,” “expects,”

“believes,” “estimates,”

“plans,” “targets” or similar

expressions. However,

there are many risks and

uncertainties, many

of which are beyond our control,

that

could cause our

actual results to differ

materially from the

forward-looking information

and statements made in

this

press release and which

could affect our ability

to achieve

any or all of our stated

targets. The 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 Q3 2021 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. CEST.

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.

Q3 results presentation on October 21, 2021

Important notice about forward-looking information

ABB

(ABBN: SIX Swiss

Ex) is a leading global

technology company

that energizes the transformation

of society and industry to

achieve a more productive,

sustainable future. By connecting

software to its electrification,

robotics, automation and

motion

portfolio, ABB pushes

the boundaries of technology

to drive performance

to new levels. With a history

of excellence stretching

back

more than 130 years,

ABB’s success is

driven by about 105,000 talented

employees in over 100 countries.

Q3 2021

FINANCIAL

INFORMATION

October 21, 2021

Q3 2021

Financial information

Q3 2021

FINANCIAL

INFORMATION

—

Financial

Information

Contents

─ 07

Key Figures

─

Consolidated

Financial

Information

(unaudited)

39 ─

Supplemental

Reconciliations

and Definitions

Q3 2021

FINANCIAL

INFORMATION

—

Key Figures

CHANGE

($ in millions, unless otherwise indicated)

Q3 2021

Q3 2020

US$

Comparable

(1)

Orders

7,866

6,109

29%

26%

Order backlog (end September)

16,012

13,878

15%

Revenues

7,028

6,582

Gross Profit

2,294

1,834

25%

as % of revenues

32.6%

27.9%

+4.7 pts

Income from operations

852

n.a.

Operational EBITA

(1)

1,062

787

35%

32%

(2)

as % of operational revenues

(1)

15.1%

12.0%

+3.1 pts

Income (loss) from continuing operations, net of tax

687

(503)

n.a.

Net income attributable to ABB

652

4,530

-86%

Basic earnings per share ($)

0.33

2.14

-85%

(3)

Cash flow from operating activities

(4)

1,104

408

171%

Cash flow from operating activities in continuing operations

1,119

398

181%

CHANGE

($ in millions, unless otherwise indicated)

9M 2021

9M 2020

US$

Comparable

(1)

Orders

23,611

19,509

21%

16%

Revenues

21,378

18,952

13%

Gross Profit

7,070

5,731

23%

as % of revenues

33.1%

30.2%

+2.9 pts

Income from operations

2,743

1,015

170%

Operational EBITA

(1)

3,134

2,074

51%

43%

(2)

as % of operational revenues

(1)

14.6%

10.9%

+3.7 pts

Income from continuing operations, net of tax

2,027

218

830%

Net income attributable to ABB

1,906

5,225

-64%

Basic earnings per share ($)

0.95

2.45

-61%

(3)

Cash flow from operating activities

(4)

2,310

511

352%

Cash flow from operating activities in continuing operations

2,305

650

255%

(1)

For a reconciliation of non-GAAP measures see “

Supplemental Reconciliations and Definitions

” on page 39.

(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.

Q3 2021

FINANCIAL

INFORMATION

CHANGE

($ in millions, unless otherwise indicated)

Q3 2021

Q3 2020

US$

Local

Comparable

Orders

ABB Group

7,866

6,109

29%

27%

26%

Electrification

3,519

2,952

19%

17%

Motion

1,909

1,535

24%

22%

Process Automation

1,670

1,164

43%

40%

Robotics & Discrete Automation

935

720

30%

27%

26%

Corporate and Other

(incl. intersegment eliminations)

(167)

(262)

Order backlog (end September)

ABB Group

16,012

13,878

15%

Electrification

5,246

4,471

17%

Motion

3,717

3,349

11%

Process Automation

6,021

5,152

17%

16%

Robotics & Discrete Automation

1,619

1,442

12%

11%

Corporate and Other

(incl. intersegment eliminations)

(591)

(536)

Revenues

ABB Group

7,028

6,582

Electrification

3,196

3,031

Motion

1,673

1,611

Process Automation

1,507

1,403

Robotics & Discrete Automation

813

806

-2%

-3%

Corporate and Other

(incl. intersegment eliminations)

(161)

(269)

Income from operations

ABB Group

852

Electrification

434

387

Motion

244

256

Process Automation

183

Robotics & Discrete Automation

(236)

Corporate and Other

(incl. intersegment eliminations)

(77)

(411)

Income from operations %

ABB Group

12.1%

1.1%

Electrification

13.6%

12.8%

Motion

14.6%

15.9%

Process Automation

12.1%

5.3%

Robotics & Discrete Automation

8.4%

(29.3)%

Operational EBITA

ABB Group

1,062

787

35%

32%

Electrification

511

493

Motion

291

281

Process Automation

207

133%

128%

Robotics & Discrete Automation

18%

16%

Corporate and Other

(incl. intersegment eliminations)

(37)

(152)

Operational EBITA %

ABB Group

15.1%

12.0%

Electrification

15.9%

16.3%

Motion

17.4%

Process Automation

13.7%

6.4%

Robotics & Discrete Automation

11.1%

9.5%

Cash flow from operating activities

(1)

ABB Group

1,104

408

Electrification

636

460

Motion

399

379

Process Automation

231

164

Robotics & Discrete Automation

110

Corporate and Other

(incl. intersegment eliminations)

(203)

(715)

Discontinued operations

(15)

(1)

Commencing Q1 2021, depreciation relating to certain real estate assets, previously reported in Corporate and Other, has been reallocated to the individual

operating segments utilizing these assets. Comparatives have been restated.

Q3 2021

FINANCIAL

INFORMATION

CHANGE

($ in millions, unless otherwise indicated)

9M 2021

9M 2020

US$

Local

Comparable

Orders

ABB Group

23,611

19,509

21%

16%

Electrification

10,743

8,810

22%

17%

18%

Motion

5,773

5,022

15%

10%

Process Automation

4,881

4,226

15%

10%

Robotics & Discrete Automation

2,744

2,169

27%

20%

Corporate and Other

(incl. intersegment eliminations)

(530)

(718)

Order backlog (end September)

ABB Group

16,012

13,878

15%

Electrification

5,246

4,471

17%

Motion

3,717

3,349

11%

Process Automation

6,021

5,152

17%

16%

Robotics & Discrete Automation

1,619

1,442

12%

11%

Corporate and Other

(incl. intersegment eliminations)

(591)

(536)

Revenues

ABB Group

21,378

18,952

13%

Electrification

9,742

8,568

14%

10%

Motion

5,190

4,704

10%

Process Automation

4,454

4,247

Robotics & Discrete Automation

2,498

2,106

19%

12%

Corporate and Other

(incl. intersegment eliminations)

(506)

(673)

Income from operations

ABB Group

2,743

1,015

Electrification

1,423

891

Motion

812

731

Process Automation

520

316

Robotics & Discrete Automation

224

(186)

Corporate and Other

(incl. intersegment eliminations)

(236)

(737)

Income from operations %

ABB Group

12.8%

5.4%

Electrification

14.6%

10.4%

Motion

15.6%

15.5%

Process Automation

11.7%

7.4%

Robotics & Discrete Automation

9.0%

-8.8%

Operational EBITA

ABB Group

3,134

2,074

51%

43%

Electrification

1,614

1,159

39%

30%

Motion

905

790

15%

Process Automation

554

348

59%

49%

Robotics & Discrete Automation

291

178

63%

53%

Corporate and Other

(1)

(incl. intersegment eliminations)

(230)

(401)

Operational EBITA %

ABB Group

14.6%

10.9%

Electrification

16.5%

13.5%

Motion

17.4%

16.8%

Process Automation

12.4%

8.2%

Robotics & Discrete Automation

11.7%

8.5%

Cash flow from operating activities

(2)

ABB Group

2,310

511

Electrification

1,466

875

Motion

946

859

Process Automation

692

258

Robotics & Discrete Automation

245

244

Corporate and Other

(incl. intersegment eliminations)

(1,044)

(1,586)

Discontinued operations

(139)

(1)

Corporate and Other includes Stranded corporate costs of $40 million for the nine months ended September 30, 2020.

(2)

Commencing Q1 2021, depreciation relating to certain real estate assets, previously reported in Corporate and Other, has been reallocated to the individual

operating segments utilizing these assets. Comparatives have been restated.

Q3 2021

FINANCIAL

INFORMATION

Operational EBITA

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions, unless otherwise indicated)

Q3 21

Q3 20

Q3 21

Q3 20

Q3 21

Q3 20

Q3 21

Q3 20

Q3 21

Q3 20

Revenues

7,028

6,582

3,196

3,031

1,673

1,611

1,507

1,403

813

806

Foreign exchange/commodity timing

differences in total revenues

(13)

(8)

(6)

(1)

(5)

Operational revenues

7,051

6,569

3,207

3,023

1,677

1,615

1,516

1,397

812

801

Income from operations

852

434

387

244

256

183

(236)

Acquisition-related amortization

Restructuring, related and

implementation costs

Changes in obligations related to

divested businesses

203

–

Changes in pre-acquisition estimates

(14)

–

Gains and losses from sale of businesses

–

(1)

–

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

331

–

291

Foreign exchange/commodity timing

differences in income from operations

(23)

(18)

(1)

(9)

(1)

(2)

Operational EBITA

1,062

787

511

493

291

281

207

Operational EBITA margin (%)

15.1%

12.0%

15.9%

16.3%

17.4%

13.7%

6.4%

11.1%

9.5%

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions, unless otherwise indicated)

9M 21

9M 20

9M 21

9M 20

9M 21

9M 20

9M 21

9M 20

9M 21

9M 20

Revenues

21,378

18,952

9,742

8,568

5,190

4,704

4,454

4,247

2,498

2,106

Foreign exchange/commodity timing

differences in total revenues

(4)

(3)

(7)

(2)

(3)

Operational revenues

21,421

18,948

9,765

8,570

5,202

4,701

4,464

4,240

2,496

2,103

Income (loss) from operations

2,743

1,015

1,423

891

812

731

520

316

224

(186)

Acquisition-related amortization

191

197

Restructuring, related and

implementation costs

190

Changes in obligations related to

divested businesses

204

–

Changes in pre-acquisition estimates

(6)

–

Gains and losses from sale of businesses

(9)

(1)

–

(13)

–

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

(58)

378

(13)

(5)

–

293

Foreign exchange/commodity timing

differences in income from operations

(16)

(1)

(13)

(10)

(2)

(1)

Operational EBITA

3,134

2,074

1,614

1,159

905

790

554

348

291

178

Operational EBITA margin (%)

14.6%

10.9%

16.5%

13.5%

17.4%

16.8%

12.4%

8.2%

11.7%

8.5%

Q3 2021

FINANCIAL

INFORMATION

Depreciation and Amortization

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions)

Q3 21

Q3 20

Q3 21

Q3 20

Q3 21

Q3 20

Q3 21

Q3 20

Q3 21

Q3 20

Depreciation

(1)

142

147

Amortization

including total acquisition-related amortization of:

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions)

9M 21

9M 20

9M 21

9M 20

9M 21

9M 20

9M 21

9M 20

9M 21

9M 20

Depreciation

(1)

434

439

202

206

Amortization

243

247

113

105

including total acquisition-related amortization of:

191

197

(1)

Commencing Q1 2021, depreciation related to certain real estate assets, previously reported in Corporate and Other, has been reallocated to the individual operating segments

utilizing these assets. Comparatives have been restated.

Orders received and revenues by region

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

Com-

Q3 21

Q3 20

US$

Local

parable

Q3 21

Q3 20

US$

Local

parable

Europe

2,663

2,068

29%

28%

27%

2,525

2,410

The Americas

2,580

1,938

33%

32%

31%

2,161

1,927

12%

11%

of which United States

1,934

1,475

31%

1,610

1,443

12%

Asia, Middle East and Africa

2,623

2,103

25%

20%

2,342

2,245

of which China

1,260

1,089

16%

1,210

1,182

-4%

Intersegment orders/revenues

(1)

–

ABB Group

7,866

6,109

29%

27%

26%

7,028

6,582

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

Com-

9M 21

9M 20

US$

Local

parable

9M 21

9M 20

US$

Local

parable

Europe

8,719

7,062

23%

17%

7,773

6,998

11%

The Americas

7,300

5,936

23%

21%

6,488

5,891

10%

of which United States

5,459

4,512

21%

4,818

4,522

Asia, Middle East and Africa

7,592

6,389

19%

12%

7,117

5,955

20%

13%

14%

of which China

3,781

3,036

25%

15%

3,699

2,860

29%

20%

21%

Intersegment orders/revenues

(1)

–

122

–

108

ABB Group

23,611

19,509

21%

16%

21,378

18,952

13%

(1)

Intersegment orders/revenues during the six months ended June 30, 2020, include sales to the Power Grids business which is presented as discontinued operations and thus these

sales are not eliminated from Total orders/revenues.

Q3 2021

FINANCIAL

INFORMATION

—

Consolidated Financial Information

ABB Ltd Consolidated Income Statements (unaudited)

Nine months ended

Three months ended

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

Sep. 30, 2021

Sep. 30, 2020

Sep. 30, 2021

Sep. 30, 2020

Sales of products

17,644

15,391

5,770

5,363

Sales of services and other

3,734

3,561

1,258

1,219

Total revenues

21,378

18,952

7,028

6,582

Cost of sales of products

(12,089)

(11,047)

(3,981)

(4,008)

Cost of services and other

(2,219)

(2,174)

(753)

(740)

Total cost of sales

(14,308)

(13,221)

(4,734)

(4,748)

Gross profit

7,070

5,731

2,294

1,834

Selling, general and administrative expenses

(3,808)

(3,624)

(1,231)

(1,192)

Non-order related research and development expenses

(897)

(791)

(296)

(270)

Impairment of goodwill

–

(311)

–

(311)

Other income (expense), net

378

Income from operations

2,743

1,015

852

Interest and dividend income

Interest and other finance expense

(108)

(191)

(17)

(79)

Non-operational pension (cost) credit

130

(272)

(343)

Income (loss) from continuing operations

before taxes

2,802

591

888

(339)

Income tax expense

(775)

(373)

(201)

(164)

Income (loss) from continuing operations,

net of tax

2,027

218

687

(503)

Income (loss) from discontinued operations, net of tax

(45)

5,043

(9)

5,038

Net income

1,982

5,261

678

4,535

Net income attributable to noncontrolling interests

(76)

(36)

(26)

(5)

Net income attributable to ABB

1,906

5,225

652

4,530

Amounts attributable to ABB shareholders:

Income (loss) from continuing operations, net of tax

1,951

190

661

(513)

Income (loss) from discontinued operations, net of tax

(45)

5,035

(9)

5,043

Net income

1,906

5,225

652

4,530

Basic earnings per share attributable to ABB shareholders:

Income (loss) from continuing operations, net of tax

0.97

0.09

0.33

(0.24)

Income (loss) from discontinued operations, net of tax

(0.02)

2.36

0.00

2.38

Net income

0.95

2.45

0.33

2.14

Diluted earnings per share attributable to ABB shareholders:

Income (loss) from continuing operations, net of tax

0.96

0.09

0.33

(0.24)

Income (loss) from discontinued operations, net of tax

(0.02)

2.36

0.00

2.38

Net income

0.94

2.45

0.32

2.14

Weighted-average number of shares outstanding

(in millions) used to compute:

Basic earnings per share attributable to ABB shareholders

2,011

2,129

2,001

2,119

Diluted earnings per share attributable to ABB shareholders

2,028

2,135

2,019

2,119

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

See Notes to the Consolidated Financial Information

Q3 2021

FINANCIAL

INFORMATION

—

ABB Ltd Condensed Consolidated Statements of Comprehensive

Income (unaudited)

Nine months ended

Three months ended

($ in millions)

Sep. 30, 2021

Sep. 30, 2020

Sep. 30, 2021

Sep. 30, 2020

Total comprehensive income, net of

tax

1,722

6,244

516

5,760

Total comprehensive income

attributable to noncontrolling interests, net of tax

(81)

(58)

(26)

(31)

Total comprehensive income attributable

to ABB shareholders, net of tax

1,641

6,186

490

5,729

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

See Notes to the Consolidated Financial Information

Q3 2021

FINANCIAL

INFORMATION

—

ABB Ltd Consolidated Balance Sheets (unaudited)

($ in millions)

Sep. 30, 2021

Dec. 31, 2020

Cash and equivalents

3,709

3,278

Restricted cash

323

Marketable securities and short-term investments

746

2,108

Receivables, net

6,728

6,820

Contract assets

1,139

985

Inventories, net

4,864

4,469

Prepaid expenses

217

201

Other current assets

511

760

Current assets held for sale and in discontinued operations

1,048

282

Total current assets

18,993

19,226

Restricted cash, non-current

300

Property, plant and equipment, net

3,910

4,174

Operating lease right-of-use assets

931

969

Investments in equity-accounted companies

1,683

1,784

Prepaid pension and other employee benefits

423

360

Intangible assets, net

1,627

2,078

Goodwill

10,524

10,850

Deferred taxes

888

843

Other non-current assets

549

504

Total assets

39,828

41,088

Accounts payable, trade

4,642

4,571

Contract liabilities

1,940

1,903

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

2,414

1,293

Current operating leases

206

270

Provisions for warranties

1,014

1,035

Other provisions

1,384

1,519

Other current liabilities

4,233

4,181

Current liabilities held for sale and in discontinued operations

817

644

Total current liabilities

16,650

15,416

Long-term debt

4,270

4,828

Non-current operating leases

753

731

Pension and other employee benefits

1,066

1,231

Deferred taxes

770

661

Other non-current liabilities

1,934

2,025

Non-current liabilities held for sale and in discontinued operations

197

Total liabilities

25,519

25,089

Commitments and contingencies

Stockholders’ equity:

Common stock, CHF 0.12 par value

(2,053 million and 2,168 million shares issued at September

30, 2021, and December 31, 2020, respectively)

178

188

Additional paid-in capital

Retained earnings

19,837

22,946

Accumulated other comprehensive loss

(4,266)

(4,002)

Treasury stock, at cost

(61 million and 137 million shares at September 30, 2021, and

December 31, 2020, respectively)

(1,814)

(3,530)

Total ABB stockholders’ equity

13,951

15,685

Noncontrolling interests

358

314

Total stockholders’ equity

14,309

15,999

Total liabilities and stockholders’

equity

39,828

41,088

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

See Notes to the Consolidated Financial Information

Q3 2021

FINANCIAL

INFORMATION

—

ABB Ltd Consolidated Statements of Cash Flows (unaudited)

Nine months ended

Three months ended

($ in millions)

Sep. 30, 2021

Sep. 30, 2020

Sep. 30, 2021

Sep. 30, 2020

Operating activities:

Net income

1,982

5,261

678

4,535

Loss (income) from discontinued operations, net of tax

(5,043)

(5,038)

Adjustments to reconcile net income (loss) to

net cash provided by operating activities:

Depreciation and amortization

677

686

220

231

Impairment of goodwill

–

311

–

311

Changes in fair values of investments

(114)

(86)

(1)

(25)

Pension and other employee benefits

(159)

(27)

(65)

Deferred taxes

(159)

(27)

(158)

Net loss (gain) from derivatives and foreign exchange

Net loss (gain) from sale of property,

plant and equipment

(22)

(24)

(7)

(20)

Fair value adjustment on assets and liabilities held for sale

–

Other

144

114

Changes in operating assets and liabilities:

Trade receivables, net

(182)

(37)

232

(103)

Contract assets and liabilities

(73)

128

Inventories, net

(692)

(201)

(399)

(2)

Accounts payable, trade

361

(98)

102

Accrued liabilities

336

(58)

283

(50)

Provisions, net

(79)

(19)

156

Income taxes payable and receivable

(92)

(78)

(36)

Other assets and liabilities, net

(8)

(110)

129

Net cash provided by operating activities – continuing

operations

2,305

650

1,119

398

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

operations

(139)

(15)

Net cash provided by operating activities

2,310

511

1,104

408

Investing activities:

Purchases of investments

(414)

(5,982)

(67)

(4,368)

Purchases of property, plant and

equipment and intangible assets

(459)

(432)

(166)

(129)

Acquisition of businesses (net of cash acquired)

and increases in cost-

and equity-accounted companies

(227)

(99)

(199)

(19)

Proceeds from sales of investments

1,639

1,288

318

833

Proceeds from maturity of investments

–

Proceeds from sales of property,

plant and equipment

Proceeds from sales of businesses (net of transaction costs

and cash disposed) and cost-

and equity-accounted companies

(133)

Net cash from settlement of foreign currency derivatives

(75)

(3)

170

Other investing activities

(25)

(11)

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

operations

648

(5,184)

(69)

(3,437)

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

operations

(83)

9,091

(13)

9,201

Net cash provided by (used in) investing activities

565

3,907

(82)

5,764

Financing activities:

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

213

(525)

(61)

(4,107)

Increase in debt

1,378

360

374

Repayment of debt

(763)

(663)

(13)

(95)

Delivery of shares

786

383

Purchase of treasury stock

(2,441)

(1,270)

(470)

(1,270)

Dividends paid

(1,726)

(1,736)

–

Dividends paid to noncontrolling shareholders

(91)

(82)

(11)

Other financing activities

(17)

(67)

(23)

Net cash used in financing activities – continuing

operations

(2,661)

(3,600)

(172)

(5,018)

Net cash provided by financing activities – discontinued

operations

–

Net cash used in financing activities

(2,661)

(3,569)

(172)

(5,004)

Effects of exchange rate changes on cash and equivalents

and restricted cash

(75)

(55)

(41)

Adjustment for the net change in cash and equivalents and restricted

cash

in discontinued operations

–

609

Net change in cash and equivalents and restricted cash

139

794

809

1,820

Cash and equivalents and restricted cash, beginning of period

3,901

3,544

3,231

2,518

Cash and equivalents and restricted cash, end of period

4,040

4,338

4,040

4,338

Supplementary disclosure of cash flow information:

Interest paid

111

Income taxes paid

793

689

250

227

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

See Notes to the Consolidated Financial Information

Q3 2021

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, 2020

188

19,640

(5,590)

(785)

13,526

454

13,980

Adoption of accounting

standard update

(82)

(9)

(91)

Comprehensive income:

Net income

5,225

5,261

Foreign currency translation

adjustments, net of tax of $4

600

622

Effect of change in fair value of

available-for-sale securities,

net of tax of $4

Unrecognized income (expense)

related to pensions and other

postretirement plans,

net of tax of $114

351

Change in derivative instruments

and hedges, net of tax of $(2)

Total comprehensive income

6,186

6,244

Changes in noncontrolling interests

(16)

Change in noncontrolling interests

in connection with divestments

–

(138)

Dividends to

noncontrolling shareholders

–

(98)

Dividends to shareholders

(1,758)

Share-based payment arrangements

Purchase of treasury stock

(1,533)

Delivery of shares

(17)

400

383

Call options

(1)

Balance at September 30, 2020

188

23,025

(4,629)

(1,919)

16,744

286

17,030

Balance at January 1, 2021

188

22,946

(4,002)

(3,530)

15,685

314

15,999

Comprehensive income:

Net income

1,906

1,982

Foreign currency translation

adjustments, net of tax of $2

(366)

(361)

Effect of change in fair value of

available-for-sale securities,

net of tax of $(3)

(10)

Unrecognized income (expense)

related to pensions and other

postretirement plans,

net of tax of $10

114

Change in derivative instruments

and hedges, net of tax of $0

(3)

Total comprehensive income

1,641

1,722

Changes in noncontrolling interests

(37)

(20)

(57)

(2)

Dividends to

noncontrolling shareholders

–

(92)

Dividends to shareholders

(1,730)

Cancellation of treasury shares

(10)

(17)

(3,130)

3,157

–

Share-based payment arrangements

Purchase of treasury stock

(2,430)

Delivery of shares

(68)

(136)

990

786

Other

Balance at September 30, 2021

178

19,837

(4,266)

(1,814)

13,951

358

14,309

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

See Notes to the Consolidated Financial Information

Q3 2021

FINANCIAL

INFORMATION

—

Notes to the Consolidated Financial Information (unaudited)

─

Note 1

The Company and basis of presentation

ABB Ltd and its subsidiaries (collectively,

the Company) together form a leading global technology

company, connecting software

to its electrification, robotics,

automation and motion portfolio to drive performance to new

levels.

The Company’s Consolidated Financial Information is prepared

in accordance with United States of America generally accepted

accounting principles (U.S.

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

Financial Information does not include all the

information and notes required under U.S. GAAP for

annual consolidated financial statements. Therefore, such financial

information should be read in conjunction with the audite

consolidated financial statements in

the Company’s Annual Report for the year ended December

31, 2020.

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

requires management to make assumptions

and estimates that directly affect the amounts

reported in the Consolidated Financial Information. These accounting

assumptions and estimates include:

●

growth rates, discount rates and other assumptions used to determine

impairment of long-lived assets and

in testing goodwill for impairment,

●

estimates to determine valuation allowances for deferred tax assets

and amounts recorded for unrecognized tax benefits,

●

assumptions used in determining inventory obsolescence and net

realizable value,

●

estimates and assumptions used in determining the initial fair value

of retained noncontrolling interest and certain obligations

in connection with

divestments,

●

estimates and assumptions used in determining the fair values

of assets and liabilities assumed in business

combinations,

●

assumptions used in the determination of corporate costs

directly attributable to discontinued operations,

●

estimates of loss contingencies associated with litigation or

threatened litigation and other claims and inquiries,

environmental damages, product

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

●

estimates used to record expected costs for employee severance

in connection with restructuring programs,

●

estimates related to credit losses expected to occur over

the remaining life of financial assets such as trade and other

receivables, loans and other

instruments,

●

assumptions used in the calculation of pension and postretirement

benefits and the fair value of pension plan assets, and

●

assumptions and projections, principally related to future material,

labor and project-related overhead costs, used in determining

the percentage-of-

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

the Company expects to be entitled to.

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

estimates and assumptions.

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

construction activities) has an operating cycle that

exceeds one year. For classification of

current assets

and liabilities related to such activities, the Company elected to

use the duration of the individual contracts as

its operating cycle. Accordingly, there

are accounts

receivable, contract assets, inventories and provisions related to

these contracts which will not be realized within one

year that have been classified as current.

Basis of presentation

In the opinion of management, the unaudited Consolidated Financial

Information contains all necessary

adjustments to present fairly the financial position, results

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

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

Consolidated Financial

Information is presented in United States dollars ($)

unless otherwise stated. Due to rounding, numbers presented

in the Consolidated Financial Information may

not add to the totals provided.

Certain amounts reported in the Interim Consolidated Financial

Information for prior periods have been reclassified

to conform to the current year’s presentation.

These changes primarily relate to the reallocation of certain real

estate assets, previously reported within Corporate

and Other, into the operating segments

which

utilize the assets.

─

Note 2

Recent accounting pronouncements

Applicable for current periods

Simplifying the accounting for income taxes

In January 2021, the Company adopted a new accounting standard

update,

which enhances and simplifies various aspects of the

income tax accounting guidance

related to intraperiod tax allocations, ownership changes in investments

and certain aspects of interim period tax accounting. Depending

on the amendment, the

adoption was applied on either a retrospective, modified retrospective,

or prospective basis. This update does not have

a significant impact on the Company’s

Consolidated Financial Statements.

Applicable for future periods

Facilitation of the effects of reference rate reform on financial

reporting

In March 2020, an accounting standard update was issued

which provides temporary optional expedients and exceptions

to the current guidance on contract

modifications and hedge accounting to ease the financial reporting

burdens

related to the expected market transition from the London

Interbank Offered Rate

(LIBOR) and other interbank offered rates to alternative reference

rates.

This update, along with clarifications outlined in a subsequent

update issued in January

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

2022, with early adoption permitted. The Company

is currently evaluating the impact of adopting

this optional guidance on its Consolidated Financial Statements.

Q3 2021

FINANCIAL

INFORMATION

─

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 ABB PG”)

Cash consideration received at the closing date

was $9,241 million net of cash disposed.

Further, for accounting purposes,

the 19.9 percent ownership interest retained by the Company

is deemed to have been

both divested and reacquired at its fair value on July 1, 2020. The

Company also obtained a put option, exercisable

commencing in April 2023, allowing the

Company to require Hitachi to purchase the remaining interest

for fair value, subject to a minimum floor price equivalent

to a 10 percent discount compared to

the

price paid for the initial 80.1 percent. The combined fair va

lue of the retained investment and the related put option, which

initially was estimated to be

$1,808 million, was recorded at fair value on July 1, 2020, and

was accounted for as part of the proceeds

for the sale of the entire Power Grids business (see

Note 4). This fair value was subsequently remeasured to $1,779

million in the three months ended December 31,

2020.

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 ABB PG, costs incurred by the

Company for the direct benefit of Hitachi ABB PG, and an

amount due to Hitachi Ltd in connection with the expected

purchase price finalization of the closing

debt

and working capital balances. From the date of the disposal

through September 30, 2021, $116

million of these liabilities had been paid and are reported as

reductions in the cash consideration received, of which $8

million and $13

million was paid during the nine months and

three months ended September 30, 2021,

respectively. At September 30, 2021, the

remaining amount recorded was $380 million.

As a result of the Power Grids sale, the Company recognized

an initial net gain of $5,320 million, net of transaction costs,

for the sale of the entire Power Grids

business,

which was included in Income from discontinued operations, net

of tax, in the nine and three months ended September

30, 2020.

Included in the initial

calculation of the net gain was a cumulative translation loss

relating to the Power Grids business of $439 million which

was reclassified from Accumulated other

comprehensive loss (see Note 16). Certain amounts included

in the net gain were estimated or otherwise subject

to change in value and the Company has

recorded adjustments to the gain in periods subsequent to divestment.

The net gain was reduced by $179 million

in the three months ended December 31, 2020.

In addition, in

the nine and three months ended September 30, 2021, t

hese further adjustments have decreased the net gain

by $32 million and $5 million,

respectively.

Certain obligations relating to the divestment continue to be subject

to uncertainty and will be adjusted

in future periods but these adjustments are not

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

In the nine and three months ended September 30, 2020,

the Company recorded $262 million, in Income tax expense

within discontinued operations in connection

with the reorganization of the legal entity structure of the Power

Grids business required to facilitate the sale.

Certain entities of the Power Grids business for which the legal

process or other regulatory delays resulted in the Company

not yet having transferred legal titles

Hitachi have been accounted for as being sold since control of

the business as well as all risks and rewards of the business

have been fully transferred to Hitachi

ABB PG. The proceeds for these entities are included in the cash

proceeds described above and certain funds have been

placed in escrow

pending completion of

the transfer process. At September 30, 2021, and December

31, 2020, current restricted cash includes $12 million

and $302 million, respectively, relat

ing to these

proceeds.

The Company has recognized liabilities in discontinued operations

in connection with the divestment for certain indemnities

(see Note 11 for additional

information). The Company has also recorded an initial liability of

$258 million representing the fair value of the right

granted to Hitachi ABB PG for the use of the

ABB brand for up to 8 years.

Upon closing of the sale, the Company entered into various

transition services agreements (TSAs). Pursuant to these

TSAs, the Company and Hitachi ABB PG

provide to each other, on an interim, transitional

basis, various services. The s

ervices 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

nine and three months ended September 30, 2021, the Company

has recognized within its continuing operations, general

and administrative expenses incurred to

perform the TSA, offset by $127 million and $39

million, respectively, in

TSA related income for such services that is reported

in Other income (expense). In the

nine and three months ended September 30, 2020, Other income

(expense) included $42 million 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 ABB PG. 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

otherwise transferred to Hitachi ABB PG.

Prior to the divestment, interest expense that was not directly

attributable to or related to the Company’s

continuing business or discontinued business was

allocated to discontinued operations based on the ratio of

net assets to be sold less debt that was required to be

paid as a result of the planned disposal

transaction to the sum of total net assets of the Company plus

consolidated debt. General corporate overhead was

not allocated to discontinued operations.

Operating results of the discontinued operations, are summarized

as follows:

Nine months ended

Three months ended

($ in millions)

Sep. 30, 2021

Sep. 30, 2020

Sep. 30, 2021

Sep. 30, 2020

Total revenues

–

4,008

–

Total cost of sales

–

(3,058)

–

Gross profit

–

950

–

Expenses

(13)

(804)

(4)

(23)

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

(32)

5,320

(5)

5,320

Income (loss) from operations

(45)

5,466

(9)

5,297

Net interest and other finance expense

–

(5)

–

Non-operational pension (cost) credit

–

(94)

–

Income (loss) from discontinued operations before

taxes

(45)

5,367

(9)

5,297

Income tax

–

(324)

–

(259)

Income (loss) from discontinued operations, net

of tax

(45)

5,043

(9)

5,038

Q3 2021

FINANCIAL

INFORMATION

Of the total Income (loss) from discontinued operations before taxes

in the table above, $(45) million and $5,355 million in the nine

months ended September 30,

2021 and 2020,

respectively, and $(9) million

and $5,300 million in the three months ended September

30, 2021

and 2020,

respectively, are attributable

to the

Company, while the remainder is attributable

to noncontrolling interests.

Until the date of the divestment, Income from discontinued operations

before taxes excluded stranded costs

which were previously able to be allocated to the

Power Grids operating segment.

As a result, for the nine months ended September 30, 2020, $

40 million of allocated overhead and other management costs,

which were previously included in the measure of segment

profit for the Power Grids operating segment are reported

as part of Corporate and Other. In the

table

above, Net interest and other finance expense in the nine

months ended September 30, 2020, included

$20 million of interest expense which was recorded

on an

allocated basis in accordance with the Company’s

accounting policy election until the divestment date.

In addition, as required by U.S. GAAP,

subsequent to

December 17, 2018, (the date of the original agreement to sell

the Power Grids business) the Company has

not recorded depreciation or amortization on the

property, plant and equipment, and

intangible assets reported as discontinued operations.

Included in the reported Total revenues

of the Company for the nine months ended September

30, 2020, are revenues for sales from the Company’s

operating

segments to the Power Grids business of $108 million, which represent

intercompany transactions that, prior to Power Grids

being classified as a discontinued

operation, were eliminated in the Company’s consolidated

financial statements (see Note 18). Subsequent to the divestment,

sales to Hitachi ABB PG are reported

as third-party revenues.

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 Income (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)

Sep. 30, 2021

(1)

Dec. 31, 2020

(1)

Receivables, net

163

280

Inventories, net

Other current assets

Current assets held for sale and in discontinued

operations

166

282

Accounts payable, trade

107

188

Other liabilities

505

456

Current liabilities held for sale and in discontinued

operations

612

644

Other non-current liabilities

197

Non-current liabilities held for sale and in discontinued

operations

197

(1)

At September 30, 2021, and December 31, 2020, 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.

Planned business divestments classified as held for sale

The Company classifies its long-lived assets or disposal

groups to be sold as held for sale in the period in which all of

the held for sale criteria are met. The

Company initially measures a long-lived asset or disposal group

that is classified as held for sale at the lower of its carrying

value or fair value less any costs

sell. Any resulting loss is recognized in the period in which

the held for sale criteria are met,

while gains are not recognized on the sale of a

long-lived asset or

disposal group until the date of sale. The Company assesses

the fair value of a long-lived asset or disposal group less any costs

to sell at each reporting period

and until the asset or disposal group is no longer classified

as held for sale.

In July 2021, the Company entered into an agreement to divest

its Mechanical Power Transmission D

ivision (Dodge) to RBC Bearings Inc.

for cash proceeds of

$2.9 billion.

The Dodge business is part of the Company’s

Motion operating segment and the divestment is expected

to be completed in the fourth quarter of

2021.

As this planned divestment does not qualify as a discontinued operation,

the results of operations for this business are included

in the Company’s continuing

operations for all periods presented. The assets and liabilities of

this business are shown as assets and liabilities held for

sale in the Company’s Consolidated

Balance Sheet at September 30, 2021. The carrying amounts of the

major classes of assets and liabilities held for sale relating

to this planned divestment are as

follows:

($ in millions)

Sep. 30, 2021

Assets

Receivables, net

Inventories, net

121

Property, plant and equipment, net

113

Other intangible assets, net

216

Goodwill

335

Other assets

Current assets held for sale

882

Liabilities

Accounts payable, trade

Deferred taxes

Other liabilities

100

Current liabilities held for sale

205

In the nine and three months ended September 30, 2021, Income

from continuing operations before taxes includes

income of $106 million and $35 million,

respectively, from the Dodge business.

In the nine and three months ended September 30,

2020, income of $71 million and $22 million, respectively,

from this

business were included in Income from continuing operations

before taxes.

Q3 2021

FINANCIAL

INFORMATION

─

Note 4

Acquisitions, divestments and equity-accounted companies

Acquisitions

Acquisitions were as follows:

Nine months ended September 30,

Three months ended September 30,

($ in millions, except number of acquired businesses)

2021

2020

2021

2020

Purchase price for acquisitions (net of cash acquired)

(1)

216

190

Aggregate excess of purchase price

over fair value of net assets acquired

(2)

159

148

Number of acquired businesses

(1)

Excluding changes in cost- and equity-accounted companies

(2)

Recorded as goodwill. For all periods presented, amounts include adjustments arising during the measurement period of acquisitions.

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 nine

months ended September 30, 2021, relate primarily to 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 Comp

any’s Consolidated Financial

Statements since the date of acquisition.

While the Company uses its best estimates and assumptions

as part of the purchase price allocation process

to value assets acquired and liabilities assumed at

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 availa

ble.

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 $190 million (net of cash

acquired of $7 million). The acquisition expands the Company’s

robotics and automation offering in its Robotics and Discrete

Automation operating segment.

There were no significant business acquisitions for the nine

and three months ended September 30, 2020.

Investments in equity-accounted companies

In connection with the divestment of its Power Grids business

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

percent interest in the business. For

accounting purposes, the 19.9 percent interest is deemed to have

been both divested and reacquired, with a fair value

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 ABB PG and

using relevant market inputs including

a risk-adjusted weighted-average cost of capital. The Company

also obtained a right to require Hitachi to purchase this

investment (see Note 3) with a floor price

equivalent to a 10 percent discount compared to the price paid

for the initial 80.1 percent. This option was

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.

The Company has concluded that based on its continuing involvement

with the Power Grids business, including membership

in its governing board of directors, it

has significant influence over Hitachi ABB PG. As a result,

the investment (including the value of the option)

is accounted for using the equity method.

The difference between the initial carrying value of the

Company's investment in Hitachi ABB PG at fair value and

its proportionate share of the underlying net

assets,

created basis differences of $8,570 million ($1,705 million for the

Company’s 19.9% ownership),

which are allocated as follows:

Allocated

Weighted-average

($ in millions)

Amount

useful life

Inventories

169

5 months

Order backlog

727

2 years

Property, plant and equipment

(1)

1,016

Intangible assets

(2)

1,731

9 years

Other contractual rights

251

2 years

Other assets

Deferred tax liabilities

(942)

Goodwill

6,026

Less: Amount attributed to noncontrolling interest

(451)

Basis difference

8,570

(1)

Property, plant and equipment includes assets subject to amortization having an initial fair value difference of $686 million and a weighted-average useful life of 14 years.

(2)

Intangible assets include brand license agreement, technology and customer relationships.

For assets subject to depreciation or amortization, the Company

amortizes these basis differences over

the estimated remaining useful lives of the assets

that

gave rise to this difference,

recording the amortization,

net of related deferred tax benefit, as a reduction of

income from equity accounted companies.

Certain

other assets are recorded as an expense as the benefits from

the assets are realized. As of September 30,

2021, the Company determined that no impairment of

its equity-accounted investments existed.

Q3 2021

FINANCIAL

INFORMATION

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, expect ownership share in %)

September 30, 2021

December 31, 2020

Hitachi Energy Ltd

19.9%

1,620

1,710

Others

Total

1,683

1,784

In the nine and three months ended September 30, 2021 and

2020,

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:

Nine months ended September 30,

Three months ended September 30,

($ in millions)

2021

2020

2021

2020

Income from equity-accounted companies, net of taxes

Basis difference amortization (net of deferred income tax benefit)

(94)

(52)

(33)

(52)

Loss from equity-accounted companies

(83)

(40)

(26)

(44)

Divestment of the solar inverters business

In February 2020, the Company completed the sale of its

solar inverters business for no consideration. Under the

agreement, which was reached in July 2019,

the

Company was required to transfer $143 million of cash

to the buyer on the closing date. In addition, payments

totaling EUR 132 million ($145 million) are required

to be transferred to the buyer from 2020 through 2025.

In the year ended December 31, 2019, the Company

recorded a loss of $421 million, representing the

excess of the carrying value, which includes a loss of $99 million

arising from the cumulative translation adjustment, over

the estimated fair value of this business

During the nine months ended September 30, 2020, a loss

of $33 million was included in “Other income (expense),

net” for changes in fair value of this business

which $14 million was recorded in the three months. The

loss in 2020 includes the $99 million reclassification from other

comprehensive income of the currency

translation adjustment related to the business.

The fair value was based on the estimated current market values

using Level 3 inputs, considering the agreed-upon sale terms

with the buyer. The solar

inverters

business, which includes the solar inverters business acquired as

part of the Power-One acquisition in 2013, was

part of the Company’s Electrification segment.

As this divestment does not qualify as a discontinued operation, the

results of operations for this business prior to its disposal

are included in the Company’s

continuing operations for all periods presented.

Including the above loss of $33 million,

the nine months and three months ended September

30, 2020, Income from continuing operations before

taxes includes

net losses of $63 million and $30 million,

respectively, from the solar

inverters business prior to its sale.

─

Note 5

Cash and equivalents, marketable securities and short-term investments

Cash and equivalents, marketable securities and short-term

investments consisted of the following:

September 30, 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

2,053

Time deposits

1,988

1,987

Equity securities

394

409

4,435

–

4,450

4,040

410

Changes in fair value recorded

in other comprehensive income

Debt securities available-for-sale:

U.S. government obligations

198

(2)

208

European government obligations

(1)

Corporate

(1)

325

(4)

336

–

336

Total

4,760

(4)

4,786

4,040

746

Of which:

Restricted cash, current

Restricted cash, non-current

300

Q3 2021

FINANCIAL

INFORMATION

December 31, 2020

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

2,388

Time deposits

1,513

Equity securities

1,704

1,716

5,605

–

5,617

3,901

1,716

Changes in fair value recorded

in other comprehensive income

Debt securities available-for-sale:

U.S. government obligations

274

293

European government obligations

Corporate

367

–

392

–

392

Total

5,972

–

6,009

3,901

2,108

Of which:

Restricted cash, current

323

Restricted cash, non-current

300

Q3 2021

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 foreig

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 Com

pany’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)

September 30, 2021

December 31, 2020

September 30, 2020

Foreign exchange contracts

9,401

12,610

14,316

Embedded foreign exchange derivatives

881

1,134

1,013

Cross-currency interest rate swaps

926

–

Interest rate contracts

3,102

3,227

4,128

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

September 30, 2021

December 31, 2020

September 30, 2020

Copper swaps

metric tonnes

34,615

39,390

37,245

Silver swaps

ounces

2,593,338

1,966,677

1,916,958

Aluminum swaps

metric tonnes

6,700

8,112

8,418

Equity derivatives

At September 30, 2021, December 31, 2020, and September 30,

2020, the Company held 11

million, 22 million and 27 million cash-settled call options

indexed to

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

25 million, $21 million and $22 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 nine and three months ended September,

30,

2021 and 2020, 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”.

Q3 2021

FINANCIAL

INFORMATION

The effect of derivative instruments, designated and qualifying

as fair value hedges, on the Consolidated Income

Statements was as follows:

Type of derivative designated

Nine months ended September 30, 2021

as a fair value hedge

Gains (losses) recognized in income on

Gains (losses) recognized in income

derivatives designated as fair value hedges

on hedged item

($ in millions)

Location

Interest rate contracts

Interest and other finance expense

(40)

Interest and other finance expense

Cross-currency interest rate swaps

Interest and other finance expense

(27)

Interest and other finance expense

Total

(67)

Type of derivative designated

Nine months ended September 30, 2020

as a fair value hedge

Gains (losses) recognized in income on

Gains (losses) recognized in income

derivatives designated as fair value hedges

on hedged item

($ in millions)

Location

Interest rate contracts

Interest and other finance expense

(20)

Total

(20)

Type of derivative designated

Three months ended September 30, 2021

as a fair value hedge

Gains (losses) recognized in income on

Gains (losses) recognized in income

derivatives designated as fair value hedges

on hedged item

($ in millions)

Location

Interest rate contracts

Interest and other finance expense

(13)

Interest and other finance expense

Cross-currency interest rate swaps

Interest and other finance expense

(2)

Interest and other finance expense

Total

(15)

Type of derivative designated

Three months ended September 30, 2020

as a fair value hedge

Gains (losses) recognized in income on

Gains (losses) recognized in income

derivatives designated as fair value hedges

on hedged item

($ in millions)

Location

Interest rate contracts

Interest and other finance expense

(5)

Interest and other finance expense

Total

(5)

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 subsidiar

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

Nine months ended September 30,

Three months ended September 30,

($ in millions)

Location

2021

2020

2021

2020

Foreign exchange contracts

Total revenues

(49)

(37)

(39)

Total cost of sales

(24)

–

SG&A expenses

(1)

(2)

(6)

Non-order related research

and development

(2)

(1)

–

Interest and other finance expense

(121)

107

(2)

139

Embedded foreign exchange

Total revenues

(14)

(4)

(1)

(10)

contracts

Total cost of sales

(3)

(2)

(1)

–

Commodity contracts

Total cost of sales

(16)

Other

Interest and other finance expense

–

(1)

–

Total

(160)

127

(54)

187

(1)

SG&A expenses represent

“Selling, general and

administrative expenses”.

Q3 2021

FINANCIAL

INFORMATION

The fair values of derivatives included in the Consolidated Balance

Sheets were as follows:

September 30, 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

–

Cash-settled call options

–

Total

Derivatives not designated as hedging instruments:

Foreign exchange contracts

105

Commodity contracts

–

Interest rate contracts

–

Embedded foreign exchange derivatives

Total

106

141

Total fair value

147

143

December 31, 2020

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

–

Cash-settled call options

–

Total

Derivatives not designated as hedging instruments:

Foreign exchange contracts

221

106

Commodity contracts

–

Interest rate contracts

–

Embedded foreign exchange derivatives

Total

292

143

Total fair value

308

114

145

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 September 30, 2021, and December

31, 2020, have been presented on a gross

basis.

The Company’s netting agreements and other similar arrangements

allow net settlements under certain conditions.

At September 30, 2021, and December 31,

2020, information related to these offsetting arrangements was

as follows:

($ in millions)

September 30, 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

180

(103)

–

Total

180

(103)

–

($ in millions)

September 30, 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

219

(103)

–

116

Total

219

(103)

–

116

Q3 2021

FINANCIAL

INFORMATION

($ in millions)

December 31, 2020

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

410

(106)

–

304

Total

410

(106)

–

304

($ in millions)

December 31, 2020

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

147

(106)

–

Total

147

(106)

–

─

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 valuation

models may be both

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

is classified as Level 2 unless the unobservable portion

of the adjustment or

the unobservable input to the valuation model is significant,

in which case the fair value measurement would be

classified as Level 3. Assets and

liabilities valued or disclosed using Level 2 inputs include investments

in certain funds, certain debt securities that are not actively

traded, interest rate

swaps, cross-currency interest rate swaps, commodity

swaps, cash-settled call options, forward foreign exchange

contracts, foreign exchange swaps and

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

and debt.

Level 3:

Valuation inputs are based on

the Company’s assumptions of relevant market

data (unobservable input).

Whenever quoted prices involve bid-ask spreads, the Company

ordinarily determines fair values based on mid-market

quotes. However, for the purpose of

determining the fair value of cash-settled call options serving

as hedges of the Company’s management incentive

plan, bid prices are used.

When determining fair values based on quoted prices

in an active market, the Company considers if the

level of transaction activity for the financial instrument

has

significantly decreased or would not be considered orderly.

In such cases, the resulting changes in valuation

techniques would be disclosed. If the market is

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

is required to use another valuation technique, such

as an income approach.

Q3 2021

FINANCIAL

INFORMATION

Recurring fair value measures

The fair values of financial assets and liabilities measured at

fair value on a recurring basis were as follows:

September 30, 2021

($ in millions)

Level 1

Level 2

Level 3

Total fair value

Assets

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

Equity securities

409

Debt securities—U.S. government obligations

208

Debt securities—European government obligations

Debt securities—Corporate

Securities in “Other non-current assets”:

Debt securities—U.S. government obligations

Derivative assets—current in “Other current assets”

147

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

Total

345

667

–

1,012

Liabilities

Derivative liabilities—current in “Other current liabilities”

143

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

liabilities”

Total

–

238

–

238

December 31, 2020

($ in millions)

Level 1

Level 2

Level 3

Total fair value

Assets

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

Equity securities

1,716

Debt securities—U.S. government obligations

293

Debt securities—European government obligations

Debt securities—Corporate

Derivative assets—current in “Other current assets”

308

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

114

Total

317

2,213

–

2,530

Liabilities

Derivative liabilities—current in “Other current liabilities”

145

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

liabilities”

Total

–

191

–

191

The Company uses the following methods and assumptions in

estimating fair values of financial assets

and liabilities measured at fair value on a recurring basis:

●

Securities in “Marketable securities and short-term investments

”

and “Other non-current assets”:

If quoted market prices in active markets for identical

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

when markets are not active, these inputs

are considered Level 2. If such quoted

market prices are not available, fair value is determined using

market prices for similar assets or present value techniques,

applying an appropriate risk-

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

used in present value techniques are observable and fall

into the Level 2 category.

●

Derivatives

: The fair values of derivative instruments are determined using

quoted prices of identical instruments from an

active market, if available

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

for similar instruments, appropriately adjusted, or present value

techniques, based on

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

-settled call options hedging the Company’s WAR

liability are valued based on bid prices

of the equivalent listed warrant. The fair values obtained using

price quotes for similar instruments or valuation techniques

represent a Level 2 input

unless significant unobservable inputs are used.

Non-recurring fair value measures

The Company elects to record private equity investments without readily

determinable fair values at cost, less impairment, adjusted

by observable price changes.

The Company reassesses at each reporting period whether these

investments continue to qualify for this treatment. In

the nine months ended September 30, 2021

and 2020, the Company recognized, in Other income (expense), net

fair value gains of $106 million and $72 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 a net loss of $3 million and

a net

gain of $14 million was recognized in the three months ended

September 30, 2021 and 2020, respectively.

The fair values of these investments at September

30,

2021 and 2020, totaled $160 million and $97 million, respectively,

and were determined using level 2 inputs.

During the nine months ended September 30, 2020, the Company

recorded a $33 million fair value adjustment,

of which $14 million was recorded in the three

months ended September 30,2020, for the solar inverters

business which met the criteria to be classified as held for

sale in June 2019 and was sold in February

2020 (see Note 4 for details).

In the three months ended September 30, 2020, the Company

recorded goodwill impairment charges of $311

million. The fair value measurements used

in the

analyses were calculated using the income approach (discounted

cash flow method). The discounted cash flow models

were calculated using unobservable inputs,

which classified the fair value measurement as Level 3 (see Note

9 for additional information including further detailed info

rmation related to these charges and

significant unobservable inputs)

Apart from the transactions above, there were no additional significant

non-recurring fair value measurements during the

nine and three months ended

September 30, 2021 and 2020.

Q3 2021

FINANCIAL

INFORMATION

Disclosure about financial instruments carried on a cost

basis

The fair values of financial instruments carried on a cost

basis were as follows:

September 30, 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

1,722

Time deposits

1,987

Restricted cash

Restricted cash, non-current

300

Liabilities

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

(excluding finance lease obligations)

2,391

1,662

729

2,391

Long-term debt (excluding finance lease obligations)

4,116

4,322

4,395

December 31, 2020

($ 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

1,765

Time deposits

1,513

Restricted cash

323

Restricted cash, non-current

300

Liabilities

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

(excluding finance lease obligations)

1,266

497

769

1,266

Long-term debt (excluding finance lease obligations)

4,668

4,909

4,998

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)

September 30, 2021

December 31, 2020

September 30, 2020

Contract assets

1,139

985

1,100

Contract liabilities

1,940

1,903

1,828

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

consideration for work completed but for which no invoice

has been issued at the reporting date.

Contract assets are transferred to receivables when rights

to receive payment become unconditional.

Contract liabilities primarily relate to up-front advances received on

orders from customers as well as amounts invoiced

to customers in excess of revenues

recognized, primarily for long-term projects. Contract liabilities

are reduced as work is performed and as revenues are recognized

Q3 2021

FINANCIAL

INFORMATION

The significant changes in the Contract assets and Contract liabilities

balances were as follows:

Nine months ended September 30,

2021

2020

Contract

($ in millions)

assets

liabilities

assets

liabilities

Revenue recognized, which was included in the Contract liabilities

balance at Jan 1, 2021/2020

(939)

(746)

Additions to Contract liabilities - excluding amounts recognized as

revenue during the period

1,032

867

Receivables recognized that were included in the Contract

asset balance at Jan 1, 2021/2020

(502)

(448)

At September 30, 2021,

the Company had unsatisfied performance obligations

totaling $16,012 million and, of this amount, the Company

expects to fulfill

approximately 36 percent of the obligations in 2021, approximately

45 percent of the obligations in 2022 and the balance

thereafter.

─

Note 9

Goodwill

Goodwill is reviewed for impairment annually as of October 1,

or more frequently if events or circumstances

indicate that the carrying value may not be

recoverable.

Goodwill is evaluated for impairment at the reporting unit

level, which for the Company is determined to be one level

below its operating segments.

When evaluating goodwill for impairment, the Company uses

either a qualitative or quantitative assessment method

for each reporting unit. The qualitative

assessment involves determining, based on an evaluation

of qualitative factors, if it is more likely than not that the

fair value of a reporting unit is less than its

carrying value. If, based on this qualitative assessment, it is

determined to be more likely than not that the reporting

unit’s fair value is less than its carrying

value, a

quantitative impairment test (described below) is performed, otherwise

no further analysis is required. If the Company

elects not to perform the qualitative

assessment for a reporting unit, then a quantitative impairment test

is performed.

When performing a quantitative impairment test, the Company

calculates the fair value of a reporting unit using an

income approach based on the present value of

future cash flows, applying a discount rate that represents

the reporting unit’s weighted-average cost

of capital, and compares it to the reporting unit’s

carrying

value. If the carrying value of the net assets of a reporting

unit exceeds the fair value of the reporting unit then

the Company records an impairment charge equal

to the difference, provided that the loss recognized

does not exceed the total amount of goodwill allocated

to that reporting unit.

The changes in “Goodwill” were as follows:

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Balance at January 1, 2020

4,372

2,436

1,615

2,381

10,825

Goodwill acquired during the year

–

Impairment of Goodwill

–

(290)

(21)

(311)

Exchange rate differences and other

116

–

244

Balance at December 31, 2020

(1)

4,527

2,456

1,639

2,228

–

10,850

Goodwill acquired during the period

–

148

–

159

Goodwill allocated to disposals

–

(7)

–

(7)

Goodwill allocated to assets

held for sale

–

(335)

–

(335)

Exchange rate differences and other

(54)

(4)

(15)

(70)

–

(143)

Balance at September 30, 2021

(1)

4,484

2,117

1,617

2,306

–

10,524

(1)

At September 30, 2021 and December 31, 2020,

gross goodwill amounted to $10,809 million and $11,152 million, respectively, and accumulated impairment charges, relating to the

Robotics & Discrete Automation segment,

amounted to $285 million and $302 million, respectively.

The Company adopted a new operating model on July 1, 2020,

which resulted in a change to the identification of the

goodwill reporting units. Previously,

the

reporting units were the same as the operating segments for

Electrification, Motion and Robotics & Discrete Automation,

while for the Process Automation

operating segment the reporting units were determined to be

at the Division level, which is one level below the operating segment.

The new operating model

provides the Divisions with full ownership and accountability

for their respective strategies, performance and resources

and based on these changes, the Company

concluded that the reporting units would change and be the respective

Divisions within each operating segment. This change re

sulted only in an allocation of

goodwill within the operating segments and thus there is no change

to segment level goodwill in the table above.

As a result of the new allocation of goodwill, an interim quantitative

impairment test was conducted both before and after

the changes which were effective July

2020.

In the “before” test, it was concluded that the

fair value of the Company’s reporting units exceeded

the carrying value under the historical reporting

unit

structure.

The impairment test was performed for the new reporting

units and the fair value of each was determined using

a discounted cash flow fair value estimate based

on objective information available at the measurement date. The significant

assumptions used to develop the estimates of fair value

for each reporting unit

included management’s best estimates of the expected

future results and discount rates specific to the reporting unit.

The fair value estimates were based on

assumptions that the Company believed to be reasonable,

but which are inherently uncertain and thus, actual

results may differ from those estimates. The fair

values for each of the individual reporting units and their associated

goodwill were determined using Level 3 measurements.

Q3 2021

FINANCIAL

INFORMATION

The interim quantitative impairment test indicated that the estimated

fair values of the reporting units were substantially in excess

of their carrying value for all

reporting units except for the Machine Automation reporting unit within

the Robotics & Discrete Automation operating segment.

The contraction of the global

economy in 2020, particularly in end-customer industries related

to this reporting unit and considerable uncertainty

around the continued pace of macroeconomic

recovery generally led to a reduction in the fair values of the

reporting units, thus affecting this reporting unit.

Also, at the division level, this reporting unit does

not

benefit from shared cash flows generated within an entire

operating segment. In addition, the book value of the Machine

Automation Division includes a significant

amount of intangible assets recognized in past acquisitions,

resulting in a proportionately higher book value than the

other reporting unit within the Robotics &

Discrete Automation Business Area. With the fair value of the reporting

unit lower due to the economic conditions, the

existing book value of the intangible assets

combined with the newly allocated reporting unit goodwill led

to the carrying value of the Machine Automation

reporting unit exceeding its fair value. During 2020,

goodwill impairment charge of $290 million was recorded to reduce

the carrying value of this reporting unit to its

implied fair value. The remaining goodwill for the

Machine Automation reporting unit was $554 million as of December

31, 2020.

─

Note 10

Debt

The Company’s total debt at September 30, 2021,

and December 31, 2020, amounted to $6,684 million and

$6,121 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)

September 30, 2021

December 31, 2020

Short-term debt

715

153

Current maturities of long-term debt

1,699

1,140

Total

2,414

1,293

Short-term debt primarily represented issued commercial paper and

short-term bank borrowings from various banks.

At September 30, 2021, and December 31,

2020, $304 million and $32 million, respectively,

was outstanding under the $2 billion commercial paper

program in the United States. At September 30, 2021,

$347 million was outstanding under the $2 billion Euro-commercial

paper program. No amount was outstanding under this

program at December 31, 2020.

On June 15, 2021, the Company repaid at maturity its

USD 650 million 4.0% Notes.

Long-term debt

The Company’s long-term debt at September 30, 2021,

and December 31, 2020,

amounted to $4,270 million and $4,828 million, respectively.

Outstanding bonds (including maturities within the next 12 months)

were as follows:

September 30, 2021

December 31, 2020

(in millions)

Nominal outstanding

Carrying value

(1)

Nominal outstanding

Carrying value

(1)

Bonds:

4.0% USD Notes, due 2021

USD

650

649

2.25% CHF Bonds, due 2021

CHF

350

375

CHF

350

403

2.875% USD Notes, due 2022

USD

1,250

1,264

USD

1,250

1,280

0.625% EUR Instruments, due 2023

EUR

700

819

EUR

700

875

0.75% EUR Instruments, due 2024

EUR

750

884

EUR

750

946

0.3% CHF Notes, due 2024

CHF

280

299

CHF

280

317

3.8% USD Notes, due 2028

(2)

USD

383

381

USD

383

381

1.0% CHF Notes, due 2029

CHF

170

181

CHF

170

192

0% EUR Notes, due 2030

EUR

800

891

–

4.375% USD Notes, due 2042

(2)

USD

609

589

USD

609

589

Total

5,683

5,632

(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 USD750 million.

In January 2021, the Company issued zero percent notes having

a principal amount of EUR 800 million and due

in 2030. The Company recorded net proceeds

(after underwriting fees) of EUR 791 million (equivalent to $960

million on the date of issuance). In line with the

Company’s policy of reducing its currency

and

interest rate exposures,

cross-currency interest rate swaps

have been used to modify the characteristics of the EUR 800

million Notes, due 2030. After considering

the impact of these cross-currency interest rate swaps

the EUR Notes, due 2030, effectively became a floating

rate U.S. dollar obligation.

Subsequent events

On October 11, 2021, the Company repaid

at maturity its CHF 350 million 2.25

percent% Bonds, equivalent to $378 million on date of repayment.

Q3 2021

FINANCIAL

INFORMATION

─

Note 11

Commitments and contingencies

Contingencies—Regulatory, Compliance

and Legal

Regulatory

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

to the Securities and Exchange Commission (SEC)

and the Department of Justice (DoJ) in the

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

in the United Kingdom concerning certain of its past dealings

with Unaoil and its subsidiaries, including

alleged improper payments made by these entities to third parties.

In May 2020, the SFO closed its investigation, which

it originally announced in February 2017,

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

The Company continues to cooperate with the U.S.

authorities as requested. At this time, it is not

possible for the Company to make an informed judgment about

the outcome of this matter.

Based on findings during an internal investigation, the Company

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

States, to the Special Investigating Unit (SIU)

and the National Prosecuting Authority (NPA)

in South Africa as well as to various authorities in

other countries potential suspect payments and other compliance

concerns in connection with some of the Company’s dealings

with Eskom and related persons. Many of those parties

have expressed an interest in, or

commenced an investigation into, these matters and the Company is

cooperating fully with them. The Company paid $104

million to Eskom in December 2020 as

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

Unit relating to improper payments and other compliance

issues associated with the

Controls and Instrumentation Contract, and its Variation

Orders for Units 1 and 2 at Kusile. The Company

continues to cooperate fully with the National

Prosecuting Authority in South Africa as well as other author

ities in their review of the Kusile project. Although the Company

believes that there could be an

unfavorable outcome in one or more of these ongoing reviews,

at this time it is not possible for the Company to make an informed

judgment about the possible

financial impact.

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 September 30, 2021, and December 31, 2020, the Comp

any had aggregate liabilities of $98 million and $100 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)

September 30, 2021

December 31, 2020

Performance guarantees

5,413

6,726

Financial guarantees

339

Indemnification guarantees

(1)

127

177

Total

(2)

5,594

7,242

(1)

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

(2)

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

The carrying amount of liabilities recorded in the Consolidated

Balance Sheets reflects the Company’s best estimate

of future payments, which it may incur as

part

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

the carrying amounts of liabilities at September 30,

2021, and December 31, 2020,

amounted to $148 million and $135 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 September 30, 2021, and December

31, 2020, the maximum potential payable under

these guarantees amounts to $933 million and $994 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 Power Grids

business sold on July 1, 2020 (see Note 3

for details). The performance and financial guarantees have been

indemnified by Hitachi, at the same proportion of its ownership

in Hitachi ABB Power Grids

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

up to 2035, primarily consist of bank guarantees,

standby letters of credit,

business performance

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

have original maturity dates ranging from one to ten

years. The maximum amount payable

under the guarantees at September 30, 2021, and December

31, 2020, are approximately $4.1 billion and $5.5

billion, respectively,

and the carrying amounts of

liabilities (recorded in discontinued operations) at September 30,

2021, and December 31, 2020,

amounted to $127 million and $135 million, respectively

Commercial commitments

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

projects, the Company has entered into standby

letters of credit, bid/performance bonds

and

surety bonds (collectively “performance bonds”) with various

financial institutions. Customers can draw on such

performance bonds in the event that the Company

does not fulfill its contractual obligations. The Company would

then have an obligation to reimburse the financial institutio

for amounts paid under the performance

bonds. At September 30, 2021, and December 31, 2020, the

total outstanding performance bonds aggregated to

$3.6 billion and $4.3 billion, respectively,

of which

$0.3 billion and $0.3 billion,

respectively, relate to

discontinued operations. There have been no significant

amounts reimbursed to financial institutions under

these

types of arrangements in the nine and three months ended

September 30, 2021 and 2020.

Q3 2021

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)

2021

2020

Balance at January 1,

1,035

816

Net change in warranties due to acquisitions, divestments and liabilities

held for sale

–

Claims paid in cash or in kind

(176)

(153)

Net increase in provision for changes in estimates, warranties

issued and warranties expired

190

284

Exchange rate differences

(35)

Balance at September 30,

1,014

966

During 2020,

the Company recorded changes in a previously

estimated amount for a product warranty relating to a divested business,

increasing the related

liability by $143 million during the nine and three months

ended September 30, 2020.

The corresponding increase was included in Cost of

sales of products and

resulted in a decrease in earnings per share (basic and diluted)

of $0.07 for both the nine and three months

ended September 30, 2020. As these costs

relate to a

divested business,

they have been excluded from the Company’s primary measure

of segment performance, Operational EBITA (

see Note 18). The warranty

liability has been recorded based on the information currently available

and is subject to change in the future.

─

Note 12

Income taxes

In calculating income tax expense, the Company uses an estimate

of the annual effective tax rate based upon the

facts and circumstance known at each

interim

period. On a quarterly basis, the actual effective tax rate

is adjusted, as appropriate, based upon changed facts

and circumstances, if any, as

compared to those

forecasted at the beginning of the year and each interim period

thereafter.

The effective tax rate of 27.7 percent in the nine months

ended September 30, 2021, was lower than the effective

tax rate of 63.1 percent in the nine months

ended September 30, 2020, primarily because 2020 includes

impacts of non-deductible goodwill impairment (see

Note 9), the non-deductibility of the non-

operational pension costs due to certain settlements in 2020

(see Note 13) as well as the impact of no tax benefit

being recorded for the charge recorded in

connection with changes in estimated warranty provisions relating

to a divested business (see Note 11).

In addition, the rate in 2020 reflects a net benefit

from a

favorable resolution of an uncertain tax position during the first

quarter as well as increases to the valuation allowance

in certain countries.

─

Note 13

Employee benefits

The Company operates defined benefit pension plans, defined contribution

pension plans, and termination indemnity plans,

in accordance with local regulations

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

employees and provide benefits to employees

in the event of death, disability,

retirement, or

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

plans. The Company also operates other postretirement benefit plans

including

postretirement health care benefits, and other

employee-related benefits for active employees including

long-service award plans. The measurement date used

for

the Company’s employee benefit plans is December

31. The funding policies of the Company’s plans

are consistent with the local

government and tax

requirements.

The following tables include amounts relating to defined benefit pension

plans and other postretirement benefits for both

continuing and discontinued operations.

During the nine and three months ended September 30, 2020,

the Company took steps to transfer certain defined benefit pension risks

in three international

countries to external financial institutions and thus settle these

obligations for accounting purposes. In connection

with these transactions the Company made net

payments of $273 million in the three months ended September

30, 2020, and incurred non-operational pension costs

of $379 million which are included in

curtailments, settlements and special termination benefits in the table

below. The Company also recorded $101

million in the nine months ended September 30,

2020, for a similar settlement of pension obligations in discontinued

operations.

Net periodic benefit cost of the Company’s defined benefit

pension and other postretirement benefit plans consisted of

the following:

($ in millions)

Defined pension benefits

Other postretirement

Switzerland

International

benefits

Nine months ended September 30,

2021

2020

2021

2020

2021

2020

Operational pension cost:

Service cost

–

Operational pension cost

–

Non-operational pension cost (credit):

Interest cost

(3)

Expected return on plan assets

(88)

(93)

(133)

(196)

–

Amortization of prior service cost (credit)

(6)

(10)

(2)

(1)

(2)

Amortization of net actuarial loss

–

(2)

Curtailments, settlements and special termination benefits

(1)

–

(1)

487

–

Non-operational pension cost (credit)

(97)

(94)

(31)

462

(2)

Net periodic benefit cost (credit)

(52)

(34)

–

528

(2)

Q3 2021

FINANCIAL

INFORMATION

($ in millions)

Defined pension benefits

Other postretirement

Switzerland

International

benefits

Three months ended September 30,

2021

2020

2021

2020

2021

2020

Operational pension cost:

Service cost

–

Operational pension cost

–

Non-operational pension cost (credit):

Interest cost

(1)

–

Expected return on plan assets

(30)

(28)

(42)

(63)

–

Amortization of prior service cost (credit)

(1)

(3)

(1)

–

(1)

Amortization of net actuarial loss

–

(1)

–

Curtailments, settlements and special termination benefits

–

379

–

Non-operational pension cost (credit)

(32)

(28)

(9)

371

(1)

–

Net periodic benefit cost (credit)

(17)

(13)

–

387

(1)

–

(1)

In the nine

months ended September 30, 2020, amounts include $101 million in discontinued operations for the settlement of the pension plan in Sweden.

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. Net periodic benefit cost includes $121 million for the

nine months ended September 30, 2020 related to discontinued

operations.

Employer contributions were as follows:

($ in millions)

Defined pension benefits

Other postretirement

Switzerland

International

benefits

Nine months ended September 30,

2021

2020

2021

2020

2021

2020

Total contributions

to defined benefit pension and

Other postretirement

Switzerland

International

benefits

Three months ended September 30,

2021

2020

2021

2020

2021

2020

Total contributions

to defined benefit pension and

other postretirement benefit plans

168

288

Of which, discretionary contributions to defined benefit

pension plans

–

152

273

–

During the nine and three months ended September 30, 2020,

total contributions included non-cash contributions of marketable

debt securities having a fair value

at the contribution date of $152 million, contributed to one of the

Company’s pension plans in Switzerland.

The Company expects to make contributions totaling approximately

$172 million and $8

million to its defined pension plans and other postretirement

benefit plans,

respectively, for the full year 2021.

Q3 2021

FINANCIAL

INFORMATION

─

Note 14

Stockholder's

equity

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

25, 2021, shareholders approved the proposal of the

Board of Directors to distribute 0.80 Swiss

francs per share to shareholders. The declared dividend amounted

to $1,730 million, with the Company disburs

ing a portion in March and the remaining amounts

in April.

In March 2021, the Company completed its initial share buyback

program which was launched in July 2020. The share buyback

program was executed on a

second trading line on the SIX Swiss Exchange. Through this

buyback program, the Company purchased a total

of approximately 129 million shares for

approximately $3.5 billion, of which 20 million shares were

purchased in the first quarter of 2021 (resulting

in an increase in Treasury stock

of $628 million). At the

AGM on March 25, 2021, shareholders approved the cancellation

of 115 million

of the shares purchased under this buyback program and

the cancellation was

completed in the second quarter of 2021,

resulting in a decrease in Treasury

stock of $3,157 million and a corresponding total decrease in Capital

stock,

Additional

paid-in capital and Retained earnings.

Also in March 2021, the Company announced a follow-up share

buyback program of up to $4.3 billion. This buyback

program, which was launched in April 2021, is

being executed on a second trading line on the SIX Swiss

Exchange and is planned to run until the Company’s

AGM in March 2022. Through this follow-up

buyback program, the Company purchased,

in the second and third quarters of 2021, approximately

26 million shares,

resulting in an increase in Treasury

stock of

$887 million. At the March 2022 AGM, the Company intends

to request shareholder approval to cancel the shares

purchased through this follow-up share buyback

program as well as those shares purchased under the initial share

buyback program that were not proposed for cancellation

at the Company’s AGM in March

2021.

In addition to the share buyback programs,

the Company purchased 29 million of its own shares on

the open market in the nine months ended September

30,

2021, mainly for use in connection with its employee share

plans, resulting in an increase in Treasury

stock of $915 million.

In the nine months ended September 30, 2021, the Company

delivered, out of treasury stock, 36 million shares in connection

with its Management Incentive Plan.

─

Note 15

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

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

Nine months ended September 30,

Three months ended September 30,

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

2021

2020

2021

2020

Amounts attributable to ABB shareholders:

Income (loss) from continuing operations, net of tax

1,951

190

661

(513)

Income (loss) from discontinued operations, net of tax

(45)

5,035

(9)

5,043

Net income

1,906

5,225

652

4,530

Weighted-average number of shares outstanding

(in millions)

2,011

2,129

2,001

2,119

Basic earnings per share attributable to ABB shareholders:

Income (loss) from continuing operations, net of tax

0.97

0.09

0.33

(0.24)

Income (loss) from discontinued operations, net of tax

(0.02)

2.36

0.00

2.38

Net income

0.95

2.45

0.33

2.14

Diluted earnings per share

Nine months ended September 30,

Three months ended September 30,

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

2021

2020

2021

2020

Amounts attributable to ABB shareholders:

Income (loss) from continuing operations, net of tax

1,951

190

661

(513)

Income (loss) from discontinued operations, net of tax

(45)

5,035

(9)

5,043

Net income

1,906

5,225

652

4,530

Weighted-average number of shares outstanding (in millions)

2,011

2,129

2,001

2,119

Effect of dilutive securities:

Call options and shares

–

Adjusted weighted-average number of shares outstanding

(in millions)

2,028

2,135

2,019

2,119

Diluted earnings per share attributable to ABB shareholders:

Income (loss) from continuing operations, net of tax

0.96

0.09

0.33

(0.24)

Income (loss) from discontinued operations, net of tax

(0.02)

2.36

0.00

2.38

Net income

0.94

2.45

0.32

2.14

Q3 2021

FINANCIAL

INFORMATION

─

Note 16

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, 2020

(3,450)

(2,145)

(5)

(5,590)

Other comprehensive (loss) income:

Other comprehensive (loss) income

before reclassifications

(136)

(30)

Amounts reclassified from OCI

538

(12)

487

–

1,013

Total other comprehensive (loss)

income

622

351

983

Less:

Amounts attributable to

noncontrolling interests

–

Balance at September 30, 2020

(2,850)

(1,794)

(4)

(4,629)

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

(361)

(10)

(301)

Amounts reclassified from OCI

–

(9)

Total other comprehensive (loss)

income

(361)

(10)

114

(3)

(260)

Less:

Amounts attributable to

noncontrolling interests

Balance at September 30, 2021

(1)

(2,825)

(1,442)

(6)

(4,266)

(1)

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

Q3 2021

FINANCIAL

INFORMATION

The following table reflects amounts reclassified out of OCI

in respect of Foreign currency translation adjustments

and Pension and other postretirement plan

adjustments:

Nine months ended

Three months ended

($ in millions)

Location of (gains) losses

September 30,

Details about OCI components

reclassified from OCI

2021

2020

2021

2020

Foreign currency translation adjustments:

Currency translation loss (gain):

Income from discontinued

- Divestment of Power Grids business (see Note 3)

operations, net of tax

–

439

–

439

Currency translation loss:

- Divestment of solar inverters business (see Note 4)

Other income (expense), net

–

Amounts reclassified from OCI

–

538

–

439

Pension and other postretirement plan adjustments:

Amortization of prior service cost (credit)

Non-operational pension (cost) credit

(1)

(9)

(7)

(2)

–

Amortization of net actuarial loss

Non-operational pension (cost) credit

(1)

Net gain (loss) from pension settlements and curtailments

Non-operational pension (cost) credit

(1)

487

379

Reclassification of OCI relating to pensions on

Income from discontinued

divestment of the Power Grids business

operations, net of tax

–

Total before tax

649

490

Tax

Income tax expense

(127)

(3)

(91)

Reclassification of OCI relating to tax on pensions on

Income from discontinued

divestment of the Power Grids business

operations, net of tax

–

(35)

–

(35)

Amounts reclassified from OCI

487

364

(1)

Amounts

include total credits of $94 million for the nine months ended September 30, 2020, reclassified from OCI to Income from discontinued operations.

The amounts in respect of Unrealized gains (losses)

on available-for-sale securities and Derivative instruments

and hedges were not significant for the nine and

three months ended September 30, 2021 and 2020.

Q3 2021

FINANCIAL

INFORMATION

─

Note 17

Restructuring and related expenses

OS program

From December 2018 to December 2020,

the Company executed a two-year restructuring

program with the objective to simplify the Company’s

business model

and structure through the implementation of a new organizational

structure driven by its businesses. The program resulted

in the elimination of the country and

regional structures within the previous matrix organization,

including the elimination of the three regional Executive Committee roles.

The operating businesses are

now responsible for both their customer-facing activities and business

support functions, while the remaining Group-level corporate

activities primarily focus on

Group strategy, portfolio and performance

management and capital allocation.

As of December 31, 2020, the Company had incurred substantially

all costs related to the OS program.

Liabilities associated with the OS program are included primarily

in Other provisions. The following table shows the activity from

the beginning of the program to

September 30, 2021, by expense type:

Employee

Contract settlement,

($ in millions)

severance costs

loss order and other costs

Total

Liability at January 1, 2018

–

Expenses

–

Liability at December 31, 2018

–

Expenses

111

112

Cash payments

(44)

(1)

(45)

Change in estimates

(30)

–

(30)

Exchange rate differences

(3)

–

(3)

Liability at December 31, 2019

–

Expenses

119

136

Cash payments

(91)

(15)

(106)

Change in estimates

(10)

–

(10)

Exchange rate differences

–

Liability at December 31, 2020

121

123

Expenses

Cash payments

(58)

(3)

(61)

Change in estimates

(8)

–

(8)

Exchange rate differences

(5)

–

(5)

Liability at September 30, 2021

The following table outlines the costs incurred in the nine and

three months ended September 30, 2020, and the cumulative

net costs incurred to December 31,

2020:

Net cost incurred

Cumulative net

Nine months ended

Three months ended

cost incurred up to

($ in millions)

September 30, 2020

December 31, 2020

Electrification

Motion

Process Automation

(1)

Robotics & Discrete Automation

Corporate and Other

114

Total

303

(1) Formerly named the Industrial Automation operating segment.

The Company recorded the following expenses, net of changes

in estimates, under this program:

Cumulative costs

Nine months ended

Three months ended

incurred up to

($ in millions)

September 30, 2020

(1)

September 30, 2020

(2)

December 31, 2020

Employee severance costs

255

Estimated contract settlement, loss order and other costs

Inventory and long-lived asset impairments

Total

303

(1)

Of which $23 million was recorded in Total cost of sales and $53 million in Other Income (expense), net.

(2)

Of which $12 million was recorded in Total cost of sales and $14 million in Other Income (expense), net.

Q3 2021

FINANCIAL

INFORMATION

Other restructuring-related activities

In addition, during 2021 and 2020, the Company executed

various other restructuring-related activities and

incurred the following charges, net of changes in

estimates:

Nine months ended September 30,

Three months ended September 30,

($ in millions)

2021

2020

2021

2020

Employee severance costs

Estimated contract settlement, loss order and other costs

Inventory and long-lived asset impairments

Total

Expenses associated with these activities are recorded in the

following line items in the Consolidated Income

Statements:

Nine months ended September 30,

Three months ended September 30,

($ in millions)

2021

2020

2021

2020

Total cost of sales

Selling, general and administrative expenses

Non-order related research and development expenses

–

Other income (expense), net

Total

At September 30, 2021, and December 31, 2020,

$185 million and $233 million, respectively,

were recorded for other restructuring-related liabilities and

were

included primarily in Other provisions.

─

Note 18

Operating segment data

The Chief Operating Decision Maker (CODM) is the Chief

Executive Officer. The

CODM allocates resources to and assesses the performance of

each operating

segment using the information outlined below. The

Company is organized into the following segments, based

on products and services: Electrification, Motion,

Process Automation, and Robotics & Discrete Automation. The remaining

operations of the Company are included in Corporate

and Other.

Effective January 1, 2021, the Industrial Automation segment

was renamed the Process Automation segment.

In addition, the Company changed its method of

allocating real estate assets to its operating segments whereby

these assets are now accounted for directly in the individual

operating segment which utilizes the

asset rather than as a cost recharged to the operating segment

from Corporate and Other.

As a result, while this change had no

impact on segment revenues or

profits (Operational EBITA), certain real

estate assets previously reported within Corporate and

Other have been allocated to the total segment

assets of each

individual operating segment.

Total

assets at December 31, 2020, has been recast

to reflect this allocation change.

A description of the types of products and services

provided by each reportable segment is as follows:

●

Electrification:

manufactures and sells electrical products and solutions

which are designed to provide safe, smart and

sustainable electrical flow from

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

connected solutions includes 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 networ

ks.

The products and services are

delivered through six operating Divisions: Distribution Solutions,

Smart Power, Smart B

uildings, E-mobility,

Installation Products and Power Conversion.

●

Motion:

manufactures and sells drives, motors, generators,

traction converters and mechanical power transmission

products 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 partners, has an unmatched global service

presence. These products

and services are delivered through eight operating Divisions:

Large Motors and Generators, IEC LV

Motors, NEMA Motors, Drive Products, System

Drives, Service, Traction and Mechanical

Power Transmission.

●

Process Automation:

develops and sells a broad range of industry

-specific, integrated automation, electrification and

digital systems and solutions, as

well as 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, Turbocharging, and Measurement

& Analytics.

●

Robotics & Discrete Automation:

delivers its products,

solutions and services through two operating Divisions:

Robotics and Machine Automation.

Robotics includes:

industrial robots, software, robotic solutions and systems,

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 headquarters, 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, wh

ich 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),

Q3 2021

FINANCIAL

INFORMATION

●

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

(including impairment

of goodwill) 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 nine and three months

ended September 30, 2021 and 2020, as well as total

assets

at September 30, 2021, and December 31, 2020.

Nine months ended September 30, 2021

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

3,357

1,483

1,716

1,201

7,773

The Americas

3,312

1,832

1,010

331

6,488

of which: United States

2,465

1,540

577

236

–

4,818

Asia, Middle East and Africa

2,905

1,554

1,694

957

7,117

of which: China

1,577

861

547

714

–

3,699

9,574

4,869

4,420

2,489

21,378

Product type

Products

8,106

4,202

1,254

1,639

15,216

Systems

824

–

1,101

492

2,428

Services and other

644

667

2,065

358

–

3,734

9,574

4,869

4,420

2,489

21,378

Third-party revenues

9,574

4,869

4,420

2,489

21,378

Intersegment revenues

168

321

(532)

–

Total revenues

(2)

9,742

5,190

4,454

2,498

(506)

21,378

Nine months ended September 30, 2020

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

2,852

1,396

1,705

1,031

6,998

The Americas

2,966

1,646

987

289

5,891

of which: United States

2,296

1,404

616

203

4,522

Asia, Middle East and Africa

2,452

1,285

1,460

733

5,955

of which: China

1,270

658

433

498

2,860

8,270

4,327

4,152

2,053

18,844

Product type

Products

7,075

3,702

864

1,200

12,890

Systems

583

–

1,266

551

(7)

2,393

Services and other

612

625

2,022

302

–

3,561

8,270

4,327

4,152

2,053

18,844

Third-party revenues

8,270

4,327

4,152

2,053

18,844

Intersegment revenues

(1)

298

377

(715)

108

Total revenues

(2)

8,568

4,704

4,247

2,106

(673)

18,952

Q3 2021

FINANCIAL

INFORMATION

Three months ended September 30, 2021

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

1,091

463

574

387

2,525

The Americas

1,091

609

352

107

2,161

of which: United States

810

511

214

–

1,610

Asia, Middle East and Africa

955

507

569

315

(4)

2,342

of which: China

524

284

171

231

–

1,210

3,137

1,579

1,495

809

7,028

Product type

Products

2,549

1,357

454

581

4,946

Systems

374

–

341

106

824

Services and other

214

222

700

122

–

1,258

3,137

1,579

1,495

809

7,028

Third-party revenues

3,137

1,579

1,495

809

7,028

Intersegment revenues

(169)

–

Total revenues

(2)

3,196

1,673

1,507

813

(161)

7,028

Three months ended September 30, 2020

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

1,010

459

579

379

(17)

2,410

The Americas

995

531

298

102

1,927

of which: United States

746

449

171

1,443

Asia, Middle East and Africa

939

488

501

305

2,245

of which: China

509

288

165

219

1,182

2,944

1,478

1,378

786

(4)

6,582

Product type

Products

2,439

1,258

230

446

4,381

Systems

294

–

466

234

(12)

982

Services and other

211

220

682

106

–

1,219

2,944

1,478

1,378

786

(4)

6,582

Third-party revenues

2,944

1,478

1,378

786

(4)

6,582

Intersegment revenues

(1)

133

(265)

–

Total revenues

(2)

3,031

1,611

1,403

806

(269)

6,582

(1)

Intersegment revenues until June 30, 2020,

include sales to the Power Grids business which is presented as discontinued operations and therefore these sales are not eliminated

from total revenues.

(2)

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

Q3 2021

FINANCIAL

INFORMATION

Nine months ended

Three months ended

September 30,

($ in millions)

2021

2020

2021

2020

Operational EBITA:

Electrification

1,614

1,159

511

493

Motion

905

790

291

281

Process Automation

554

348

207

Robotics & Discrete Automation

291

178

Corporate and Other

‒

Non-core and divested businesses

(39)

(107)

(10)

(88)

‒ Stranded corporate costs

–

(40)

–

‒ Corporate costs and Other Intersegment elimination

(191)

(254)

(27)

(64)

Total

3,134

2,074

1,062

787

Acquisition-related amortization

(191)

(197)

(62)

(67)

Restructuring, related and implementation costs

(1)

(81)

(190)

(28)

(83)

Changes in obligations related to divested businesses

(16)

(204)

(10)

(203)

Changes in pre-acquisition estimates

(11)

Gains and losses from sale of businesses

(4)

–

Fair value adjustment on assets and liabilities held for sale

–

(33)

–

(14)

Acquisition- and divestment-related expenses and integration

costs

(74)

(43)

(44)

(16)

Other income/expense relating to the Power Grids joint venture

(34)

(15)

Foreign exchange/commodity timing differences in

income from operations:

Unrealized gains and losses on derivatives (foreign exchange,

commodities, embedded derivatives)

(106)

(49)

Realized gains and losses on derivatives where the underlying hedged

transaction has not yet been realized

(4)

Unrealized foreign exchange movements on receivables/payables (and

related assets/liabilities)

(16)

(5)

Certain other non-operational items:

Costs for divestment of Power Grids

–

(110)

–

(11)

Regulatory, compliance and legal costs

(3)

(6)

(1)

(6)

Business transformation costs

(2)

(59)

(19)

(20)

(7)

Favorable resolution of an uncertain purchase price adjustment

–

Certain other fair value changes, including asset impairments

(3)

118

(240)

(298)

Other non-operational items

(3)

(11)

(5)

(9)

Income from operations

2,743

1,015

852

Interest and dividend income

Interest and other finance expense

(108)

(191)

(17)

(79)

Non-operational pension (cost) credit

130

(272)

(343)

Income from continuing operations before taxes

2,802

591

888

(339)

(1)

Amount includes implementation costs in relation to the OS program of $47 million and $17 million for the nine and three months ended September 30, 2020, respectively.

(2)

Amount includes ABB Way process transformation costs of $52 million and $19 million for the nine and three months ended September 30, 2021, respectively.

(3)

Amount in 2020 includes goodwill impairment charges of $311 million.

Total assets

(1)

($ in millions)

September 30, 2021

December 31, 2020

Electrification

12,943

12,800

Motion

(2)

6,678

6,495

Process Automation

4,928

5,008

Robotics & Discrete Automation

5,010

4,794

Corporate and Other

(3)

10,269

11,991

Consolidated

39,828

41,088

(1)

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

(2)

At September 30, 2021, Motion includes $882 million of assets held for sale in relation to the planned sale of its Mechanical Power Transmission Division (see Note 3).

(3)

At September 30, 2021, and December 31, 2020, respectively, Corporate and Other includes $166 million and $282 million of assets in the Power Grids business which is reported as

discontinued operations (see Note 3), In addition, at

September 30, 2021, and December 31, 2020, Corporate and Other includes $1,620 million and $1,710 million, respectively,

related to the equity investment in Hitachi ABB Power Grids Ltd (see Note 4).

Q3 2021

FINANCIAL

INFORMATION

Q3 2021

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

nine and

three months

ended

September

30, 2021.

On January

1, 2020,

the Company

adopted

a new

accounting

update

for the

measurement

of credit

losses

on financial

instruments

Consistent

with the

method

of adoption

elected,

comparable

information

has not

been restated

to reflect

the adoption

of this

new standard

and accounting

update

and

continues

to be

measured

and reported

under the

accounting

standard

in effect

for those

periods

presented.

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, or

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

Q3 2021 compared to Q3 2020

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

19%

-2%

17%

-1%

Motion

24%

-2%

22%

-2%

Process

Automation

43%

-3%

40%

-2%

Robotics & Discrete Automation

30%

-3%

-1%

26%

-3%

-1%

-3%

ABB Group

29%

-2%

-1%

26%

-3%

9M 2021 compared to 9M 2020

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

22%

-4%

18%

14%

-5%

10%

Motion

15%

-5%

10%

-4%

Process

Automation

15%

-5%

10%

-5%

Robotics & Discrete Automation

27%

-7%

20%

19%

-7%

12%

ABB Group

21%

-5%

16%

13%

-5%

Q3 2021

FINANCIAL

INFORMATION

Regional comparable growth rate reconciliation

Regional comparable growth rate reconciliation for ABB Group

- Quarter

Q3 2021 compared to Q3 2020

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

29%

-1%

27%

-1%

The Americas

33%

-1%

31%

12%

-1%

11%

of which: United States

31%

12%

Asia, Middle East and Africa

25%

-5%

20%

-3%

of which: China

16%

-7%

-6%

-4%

ABB Group

29%

-2%

-1%

26%

-3%

Regional comparable growth rate reconciliation by Business

Area - Quarter

Q3 2021 compared to Q3 2020

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

18%

-1%

17%

The Americas

29%

-1%

28%

of which: United States

29%

Asia, Middle East and Africa

10%

-5%

-4%

-3%

of which: China

11%

-6%

-7%

-4%

Electrification

19%

-2%

17%

-1%

Q3 2021 compared to Q3 2020

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

32%

-1%

31%

-4%

The Americas

15%

-1%

14%

15%

-1%

14%

of which: United States

14%

-1%

13%

14%

Asia, Middle East and Africa

30%

-6%

24%

-4%

-3%

of which: China

-7%

-4%

-6%

-10%

Motion

24%

-2%

22%

-2%

Q3 2021 compared to Q3 2020

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

12%

-2%

10%

-3%

-2%

-5%

The Americas

90%

-1%

89%

19%

-1%

18%

of which: United States

117%

26%

-1%

25%

Asia, Middle East and Africa

51%

-4%

47%

14%

-4%

10%

of which: China

49%

-8%

41%

-6%

-2%

Process Automation

43%

-3%

40%

-2%

Q3 2021 compared to Q3 2020

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

37%

-2%

33%

-1%

-2%

-4%

The Americas

40%

-4%

36%

-2%

of which: United States

30%

Asia, Middle East and Africa

19%

-5%

14%

-5%

-3%

of which: China

17%

-7%

10%

-7%

-2%

Robotics & Discrete Automation

30%

-3%

-1%

26%

-3%

-1%

-3%

Q3 2021

FINANCIAL

INFORMATION

Regional comparable growth rate reconciliation for ABB Group

– Year to date

9M 2021 compared to 9M 2020

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

23%

-6%

17%

11%

-6%

The Americas

23%

-2%

21%

10%

-1%

of which: United States

21%

-1%

Asia, Middle East and Africa

19%

-7%

12%

20%

-7%

14%

of which: China

25%

-10%

15%

29%

-9%

21%

ABB Group

21%

-5%

16%

13%

-5%

Regional comparable growth rate reconciliation by Business

Area – Year to date

9M 2021 compared to 9M 2020

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

23%

-6%

17%

14%

-5%

The Americas

25%

-1%

24%

11%

-1%

11%

of which: United States

22%

Asia, Middle East and Africa

17%

-7%

11%

16%

-7%

11%

of which: China

26%

-9%

17%

23%

-9%

14%

Electrification

22%

-4%

18%

14%

-5%

10%

9M 2021 compared to 9M 2020

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%

-6%

-5%

-3%

The Americas

19%

-2%

17%

11%

-1%

10%

of which: United States

17%

Asia, Middle East and Africa

13%

-7%

19%

-7%

12%

of which: China

17%

-8%

29%

-10%

19%

Motion

15%

-5%

10%

-4%

9M 2021 compared to 9M 2020

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

12%

-8%

-2%

-6%

-8%

The Americas

17%

-2%

15%

-2%

of which: United States

21%

-1%

20%

-6%

-1%

-7%

Asia, Middle East and Africa

18%

-6%

12%

15%

-6%

of which: China

25%

-9%

16%

26%

-8%

18%

Process Automation

15%

-5%

10%

-5%

9M 2021 compared to 9M 2020

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

29%

-7%

-1%

21%

13%

-7%

The Americas

32%

-2%

30%

14%

-2%

12%

of which: United States

29%

16%

Asia, Middle East and Africa

21%

-8%

13%

29%

-8%

21%

of which: China

20%

-9%

11%

43%

-11%

32%

Robotics & Discrete Automation

27%

-7%

20%

19%

-7%

12%

Q3 2021

FINANCIAL

INFORMATION

Order backlog growth rate reconciliation

September 30, 2021 compared to September 30, 2020

US$

Foreign

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

Electrification

17%

Motion

11%

Process Automation

17%

-1%

16%

Robotics & Discrete Automation

12%

-1%

11%

ABB Group

15%

Other growth rate reconciliations

Q3 2021 compared to Q3 2020

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

23%

-1%

22%

-1%

Motion

-2%

-1%

Process

Automation

25%

-2%

23%

-2%

Robotics & Discrete Automation

19%

-1%

18%

16%

-1%

15%

ABB Group

20%

-2%

18%

-1%

9M 2021 compared to 9M 2020

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

12%

-4%

-3%

Motion

-4%

-5%

Process

Automation

14%

-5%

-4%

-2%

Robotics & Discrete Automation

28%

-5%

23%

19%

-5%

14%

ABB Group

14%

-5%

Q3 2021

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 impairments

(including impairment of goodwill)

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 ABB

Power Grids Ltd. (Hitachi ABB PG),

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

Nine months ended September 30,

Three months ended September 30,

($ in millions)

2021

2020

2021

2020

Operational EBITA

3,134

2,074

1,062

787

Acquisition-related amortization

(191)

(197)

(62)

(67)

Restructuring, related and implementation costs

(1)

(81)

(190)

(28)

(83)

Changes in obligations related to divested businesses

(16)

(204)

(10)

(203)

Changes in pre-acquisition estimates

(11)

Gains and losses from sale of businesses

(4)

–

Fair value adjustment on assets and liabilities held for sale

–

(33)

–

(14)

Acquisition- and divestment-related expenses and integration costs

(74)

(43)

(44)

(16)

Other income/expense relating to the Power Grids joint venture

(34)

(15)

Certain other non-operational items

(2)

(378)

(17)

(331)

Foreign exchange/commodity timing differences in

income from operations

(68)

(48)

Income from operations

2,743

1,015

852

Interest and dividend income

Interest and other finance expense

(108)

(191)

(17)

(79)

Non-operational pension (cost) credit

130

(272)

(343)

Income from continuing operations before taxes

2,802

591

888

(339)

Income tax expense

(775)

(373)

(201)

(164)

Income from continuing operations, net of

tax

2,027

218

687

(503)

Income (loss) from discontinued operations, net of tax

(45)

5,043

(9)

5,038

Net income

1,982

5,261

678

4,535

(1)

Amounts include implementation costs in relation to the OS program of $47 million and $17 million for the nine and three months ended September 30, 2020, respectively.

(2)

Amounts include goodwill impairment charges of $311 million for the nine and three months ended September 30, 2020

Q3 2021

FINANCIAL

INFORMATION

Reconciliation of Operational EBITA

margin by business

Three months ended September 30, 2021

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

3,196

1,673

1,507

813

(161)

7,028

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

–

(1)

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)

(7)

(1)

(8)

Operational revenues

3,207

1,677

1,516

812

(161)

7,051

Income (loss) from operations

434

244

183

(77)

852

Acquisition-related amortization

–

Restructuring, related and

implementation costs

Changes in obligations related to

divested businesses

–

Changes in pre-acquisition estimates

(14)

–

(14)

Gains and losses from sale of businesses

–

Acquisition- and divestment-related expenses

and integration costs

–

Other income/expense relating to the

Power Grids joint venture

–

Certain other non-operational items

–

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

–

(4)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(1)

–

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

(5)

(1)

–

(1)

(5)

Operational EBITA

511

291

207

(37)

1,062

Operational EBITA margin (%)

15.9%

17.4%

13.7%

11.1%

n.a.

15.1%

In the three months ended September 30, 2021, Certain other

non-operational items in the table above includes the following:

Three months ended September 30, 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

–

Certain other fair values changes,

including asset impairments

–

(7)

(4)

Business transformation costs

(1)

–

Favorable resolution of an uncertain

purchase price adjustment

(5)

–

(5)

Other non-operational items

–

Total

–

(1)

Amounts

include ABB Way process transformation costs of $19 million for the three months ended September 30, 2021.

Q3 2021

FINANCIAL

INFORMATION

Three months ended September 30, 2020

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

3,031

1,611

1,403

806

(269)

6,582

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

(1)

(4)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(1)

–

(12)

(4)

(16)

Unrealized foreign exchange movements

on receivables (and related assets)

(6)

(2)

(1)

(2)

(7)

Operational revenues

3,023

1,615

1,397

801

(267)

6,569

Income (loss) from operations

387

256

(236)

(411)

Acquisition-related amortization

Restructuring, related and

implementation costs

Changes in obligations related to

divested businesses

–

188

203

Changes in pre-acquisition estimates

–

Gains and losses from sale of businesses

–

(2)

(1)

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

–

291

331

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

(21)

(1)

(2)

(15)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

(11)

(4)

(13)

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

–

(1)

Operational EBITA

493

281

(152)

787

Operational EBITA margin (%)

16.3%

17.4%

6.4%

9.5%

n.a.

12.0%

In the three months ended September 30, 2020, Certain other

non-operational items in the table above includes the following:

Three months ended September 30, 2020

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational items:

Costs for planned divestment of Power Grids

–

Regulatory, compliance and legal costs

–

Certain other fair values changes,

including asset impairments

–

290

298

Business transformation costs

–

Other non-operational items

–

Total

–

291

331

Q3 2021

FINANCIAL

INFORMATION

Nine months ended September 30, 2021

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

9,742

5,190

4,454

2,498

(506)

21,378

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(2)

(1)

(2)

Unrealized foreign exchange movements

on receivables (and related assets)

(16)

(6)

(7)

(6)

(1)

(36)

Operational revenues

9,765

5,202

4,464

2,496

(506)

21,421

Income (loss) from operations

1,423

812

520

224

(236)

2,743

Acquisition-related amortization

191

Restructuring, related and

implementation costs

Changes in obligations related to

divested businesses

–

Changes in pre-acquisition estimates

(6)

–

(6)

Gains and losses from sale of businesses

(1)

(13)

–

(9)

Acquisition- and divestment-related expenses

and integration costs

Other income/expense relating to the

Power Grids joint venture

–

Certain other non-operational items

(13)

–

(49)

(58)

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

(1)

106

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

(1)

(3)

(5)

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

(13)

(6)

(7)

(2)

(5)

(33)

Operational EBITA

1,614

905

554

291

(230)

3,134

Operational EBITA margin (%)

16.5%

17.4%

12.4%

11.7%

n.a.

14.6%

In the nine months ended September 30, 2021, Certain other

non-operational items in the table above includes the following:

Nine months ended September 30, 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

–

Certain other fair values changes,

including asset impairments

(16)

–

(102)

(118)

Business transformation costs

(1)

–

Favorable resolution of an uncertain

purchase price adjustment

(5)

–

(5)

Other non-operational items

–

(2)

Total

(13)

–

(49)

(58)

(1)

Amounts

include ABB Way process transformation costs of $52 million for the nine months ended September 30, 2021.

Q3 2021

FINANCIAL

INFORMATION

Nine months ended September 30, 2020

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

8,568

4,704

4,247

2,106

(673)

18,952

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

(1)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

(5)

(6)

(9)

Unrealized foreign exchange movements

on receivables (and related assets)

(12)

(6)

(8)

(4)

(21)

Operational revenues

8,570

4,701

4,240

2,103

(666)

18,948

Income (loss) from operations

891

731

316

(186)

(737)

1,015

Acquisition-related amortization

197

Restructuring, related and

implementation costs

190

Changes in obligations related to

divested businesses

–

189

204

Changes in pre-acquisition estimates

–

Gains and losses from sale of businesses

–

(2)

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

(5)

293

378

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

(9)

(12)

(2)

(22)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

(5)

(7)

(10)

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

(1)

(3)

(1)

Operational EBITA

1,159

790

348

178

(401)

2,074

Operational EBITA margin (%)

13.5%

16.8%

8.2%

8.5%

n.a.

10.9%

In the nine months ended September 30, 2020, Certain other

non-operational items in the table above includes the following:

Nine months ended September 30, 2020

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational items:

Costs for planned divestment of Power Grids

–

110

Regulatory, compliance and legal costs

–

Certain other fair values changes,

including asset impairments

–

290

(50)

240

Business transformation costs

–

Favorable resolution of an uncertain

purchase price adjustment

(8)

–

(8)

Other non-operational items

–

Total

(5)

293

378

Q3 2021

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

($ in millions)

September 30, 2021

December 31, 2020

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

2,414

1,293

Long-term debt

4,270

4,828

Total debt (gross debt)

6,684

6,121

Cash and equivalents

3,709

3,278

Restricted cash - current

323

Marketable securities and short-term investments

746

2,108

Restricted cash - non-current

300

Cash and marketable securities

4,786

6,009

Net debt

1,898

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)

September 30, 2021

December 31, 2020

Total stockholders'

equity

14,309

15,999

Net debt (as defined above)

1,898

112

Net debt / Equity ratio

0.13

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 depreciation

and amortization for the same

trailing twelve-month period.

Reconciliation

($ in millions, unless otherwise indicated)

September 30, 2021

September 30, 2020

Income from operations for the three months ended:

September 30, 2021/2020

852

June 30, 2021/2020

1,094

571

March 31, 2021/2020

797

373

December 31, 2020/2019

578

648

Depreciation and Amortization for the three months

ended:

September 30, 2021/2020

220

231

June 30, 2021/2020

230

228

March 31, 2021/2020

227

December 31, 2020/2019

229

246

EBITDA

4,227

2,595

Net debt / (Net Cash) (as defined above)

1,898

(935)

Net debt / (Net Cash)

/ EBITDA ratio

0.5

-0.4

Q3 2021

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, 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 and (e)

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

($ in millions, unless otherwise indicated)

September 30, 2021

September 30, 2020

Net working capital:

Receivables, net

6,728

6,638

Contract assets

1,139

1,100

Inventories, net

4,864

4,642

Prepaid expenses

217

233

Accounts payable, trade

(4,642)

(4,323)

Contract liabilities

(1,940)

(1,828)

Other current liabilities

(1)

(3,514)

(3,226)

Net working capital in assets and liabilities held for sale

–

Net working capital

2,920

3,236

Total revenues for the three months

ended:

September 30, 2021 / 2020

7,028

6,582

June 30, 2021 / 2020

7,449

6,154

March 31, 2021 / 2020

6,901

6,216

December 31, 2020 / 2019

7,182

7,068

Adjustment to annualize/eliminate revenues of certain acquisitions/divestments

(169)

Adjusted revenues for the trailing twelve months

28,600

25,851

Net working capital as a percentage of revenues (%)

10.2%

12.5%

(1)

Amounts exclude $719 million and $1,026 million at September 30, 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.

Q3 2021

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

debt, and (iii) gain on the sale of the Power Grids business

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 for the trailing twelve months

Free cash flow for the trailing twelve months includes free cash flow

recorded by ABB in the twelve months preceding the

relevant balance sheet date.

Net income for the trailing twelve months

Net income for the trailing twelve months includes net income

recorded by ABB (as adjusted) in the twelve months

preceding the relevant balance sheet date.

Free cash flow conversion to net income

Twelve months to

($ in millions, unless otherwise indicated)

September 30, 2021

December 31, 2020

Net cash provided by operating activities – continuing

operations

3,530

1,875

Adjusted for the effects of continuing operations:

Purchases of property, plant and

equipment and intangible assets

(721)

(694)

Proceeds from sale of property, plant and

equipment

114

Free cash flow from continuing operations

2,891

1,295

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

operations

(38)

(182)

Adjusted for the effects of discontinued operations:

Purchases of property, plant and

equipment and intangible assets

(15)

(108)

Proceeds from sale of property, plant and

equipment

–

Free cash flow

2,838

1,006

Adjusted net income attributable to ABB

(1)

2,200

478

Free cash flow conversion to net income

129%

210%

(1)

Adjusted net income attributable to ABB for the year ended December 31, 2020, is adjusted to exclude goodwill impairment charges of $311 million, loss from extinguishment of debt

of $162 million and the gain on the sale of the Power Grids business included in discontinued operations of $5,141 million.

Reconciliation of the trailing twelve months to

September 30, 2021

Continuing operations

Discontinued operations

($ in millions)

Net cash

provided by

continuing

operating

activities

Purchases of

property, plant

and equipment

and intangible

assets

Proceeds

from sale of

property, plant

and equipment

Net cash

provided by

(used in)

discontinued

operating

activities

Purchases of

property, plant

and equipment

and intangible

assets

Proceeds

from sale of

property, plant

and equipment

Adjusted net

income

attributable

to ABB

(1)

Q4 2020

1,225

(262)

(43)

(15)

–

262

Q1 2021

523

(142)

–

526

Q2 2021

663

(151)

–

755

Q3 2021

1,119

(166)

(15)

–

657

Total for the trailing

twelve months to

September 30, 2021

3,530

(721)

(38)

(15)

–

2,200

(1)

Adjusted net income attributable to ABB for Q4 2020 is adjusted to exclude the loss from extinguishment of debt of $162 million and a reduction to the gain on the sale of Power Grids

of $179 million. Also in Q1, Q2 and Q3 2021, Adjusted net income attributable to ABB is adjusted to exclude further reductions to the gain on the sale of Power Grids, of $24 million,

$3 million and $5 million, respectively.

Q3 2021

FINANCIAL

INFORMATION

Net finance expenses

Definition

Net finance expenses is calculated as Interest and dividend income

less Interest and other finance expense

and Losses from extinguishment of debt.

Reconciliation

Nine months ended September 30,

Three months ended September 30,

($ in millions)

2021

2020

2021

2020

Interest and dividend income

Interest and other finance expense

(108)

(191)

(17)

(79)

Net finance expenses

(71)

(152)

(6)

(67)

Book-to-bill ratio

Definition

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

Total revenues.

Reconciliation

Nine months ended September 30,

2021

2020

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

Orders

Revenues

Book-to-bill

Orders

Revenues

Book-to-bill

Electrification

10,743

9,742

1.10

8,810

8,568

1.03

Motion

5,773

5,190

1.11

5,022

4,704

1.07

Process Automation

4,881

4,454

1.10

4,226

4,247

1.00

Robotics & Discrete Automation

2,744

2,498

1.10

2,169

2,106

1.03

Corporate and Other

(incl. intersegment eliminations)

(530)

(506)

n.a.

(718)

(673)

n.a.

ABB Group

23,611

21,378

1.10

19,509

18,952

1.03

Three months ended September 30,

2021

2020

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

Orders

Revenues

Book-to-bill

Orders

Revenues

Book-to-bill

Electrification

3,519

3,196

1.10

2,952

3,031

0.97

Motion

1,909

1,673

1.14

1,535

1,611

0.95

Process Automation

1,670

1,507

1.11

1,164

1,403

0.83

Robotics & Discrete Automation

935

813

1.15

720

806

0.89

Corporate and Other

(incl. intersegment eliminations)

(167)

(161)

n.a.

(262)

(269)

n.a.

ABB Group

7,866

7,028

1.12

6,109

6,582

0.93

Q3 2021

FINANCIAL

INFORMATION

—

ABB Ltd

Corporate Communications

P.O. Box

8131

8050

Zurich

Switzerland

Tel:

+41 (0)43

317 71

www.abb.com

July 1 — September 30, 2021

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

Theodor Swedjemark

September 02, 2021

Option

102,000

CHF

2.175

Timo Ihamuotila

August 11, 2021

35,496

CHF

34.26

Peter Voser

August 10, 2021

160,000

CHF

34.12

Key:

* Received instruments were delivered

as part of the ABB Ltd Director’s or

Executive Committee Member’s

compensation 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: October 21, 2021.

By:

/s/ Ann-Sofie Nordh

Name:

Ann-Sofie Nordh

Title:

Group Senior Vice President and

Head of Investor Relations

Date: October 21, 2021.

By:

/s/ Richard A. Brown

Name:

Richard A. Brown

Title:

Group Senior Vice President and

Chief Counsel Corporate & Finance