Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

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 2023

Commission File Number 001-16429

ABB Ltd

(Translation of registrant’s name into English)

Affolternstrasse 44, CH-8050, Zurich,

Switzerland

(Address of principal executive

office)

Indicate by check mark

whether the registrant files or will file annual reports

under cover of Form 20-F or Form 40-

Form 20-F

☒

Form 40-F

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

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the registrant’s securities are traded, as

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release, is not required to be and

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in connection with Rule

12g3-2(b): 82-

This Form 6-K consists of the following:

Press release issued by ABB Ltd dated October

18, 2023 titled “Q3

2023 results”.

Q3 2023 Financial Information.

The information provided by Item

2 above is hereby incorporated

by reference into the Registration

Statements on Form F-3 of

ABB Ltd and ABB Finance (USA) Inc.

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

and registration statements on

Form S-8

(File Nos. 333-190180, 333-181583, 333-179472,

333-171971 and 333-129271) each

of which was previously filed with the

Securities and Exchange Commission.

—

ZURICH, SWITZERLAND, OCTOBER

18,

2023

Q3 2023 results

Positive book-to-bill,

high margin and strong

cash flow

delivery

●

Orders $8,052 million,

-2%; comparable

+2%

●

Revenues $7,968 million,

+8%; comparable

+11%

●

Income from operations

$1,259 million;

margin 15.8%

●

Operational EBITA

$1,392 million;

margin

17.4%

●

Basic EPS $0.48;

+149%

●

Cash flow from operating

activities

$1,351 million; +71%

Ad hoc Announcement pursuant to Art. 53

Listing Rules of SIX Swiss Exchange

—

Q3 2023

First nine months

Press Release

—

“Q3 2023 was a strong

quarter for ABB including

a positive book-to-bill

ratio, Operational EBITA

margin again above

17% and a strong cash flow

delivery putting

us in a good position to

achieve an annual free cash

flow of about $3

billion.”

Björn Rosengren

, CEO

KEY FIGURES

CHANGE

($ millions, unless otherwise indicated)

Q3 2023

Q3 2022

US$

Comparable

9M 2023

9M 2022

US$

Comparable

Orders

8,052

8,188

-2%

26,169

26,368

-1%

Revenues

7,968

7,406

11%

23,990

21,622

11%

16%

Gross Profit

2,762

2,481

11%

8,366

7,052

19%

as % of revenues

34.7%

33.5%

+1.2 pts

34.9%

32.6%

+2.3 pts

Income from operations

1,259

708

78%

3,755

2,152

74%

Operational EBITA

1,392

1,231

13%

11%

4,094

3,364

22%

as % of operational

revenues

17.4%

16.6%

+0.8 pts

17.0%

15.5%

+1.5 pts

Income from continuing

operations, net of

tax

905

420

115%

2,902

1,469

98%

Net income attributable

to ABB

882

360

145%

2,824

1,343

110%

Basic earnings

per share ($)

0.48

0.19

149%

1.52

0.70

116%

Cash flow from

operating activities

1,351

791

71%

2,393

600

299%

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

definitions” in the attached Q3 2023 Financial

Information.

EPS growth rates are computed using unrounded amounts.

Constant currency (not adjusted for portfolio changes).

Amount represents total for both continuing and discontinued

operations.

ABB INTERIM

REPORT

2023

The third quarter developed

largely as planned,

and I am

pleased about the comparable

order growth of 2%

supporting a

book-to-bill ratio of 1.01.

This means we delivered

on our

quarterly expectation of

book-to-bill in positive

territory, despite

a double-digit comparable

increase in revenues.

We had yet

another quarter with

strong operational

performance across

the

business areas, and

this time coupled with

a very strong cash

flow generation,

setting

us up to achieve

free cash flow of about

$3 billion in 2023.

In total, Operational

EBITA increased by 13% and we

achieved

an Operational EBITA margin of

17.4%, an improvement

of 80

basis points from the

corresponding period

last year.

This was

supported by a strong

price contribution

which outweighed

the

impacts from inflation in labor

costs, with additional

support

from efficient execution

of higher volumes

in production. It was

good to see that our

focus on cash conversion

yielded results

with Cash flow from operating

activities at $1.4

billion, an

increase of $560 million

from last year supported

mainly by

higher earnings

and better Net working

capital management.

As in recent quarters,

the order development

was strong in

the

project-

and systems-related

businesses that is often

linked to

our various medium voltage

offerings. This more

than offset the

impact from a decline in

parts of the short-cycle

businesses.

total, most customer segments

remained overall

stable or

improved, with declines

mainly noted in

the discrete automation

and construction segments.

Order growth was

strongest in

business area Process

Automation,

supported by a

strong

underlying market and

the added contribution

from a large order

amounting to approximately

$285 million.

In contrast, order

intake in Robotics & Discrete

Automation was hampered

customers normalizing

order patterns in a period

of shortening

delivery lead times, with

added pressure

from inventory

adjustments among

robotics-related distribution

channels in

China.

From a geographical

perspective, the Americas

region was the

growth engine for orders,

driven by double-digit

comparable

growth in the United

States and supported

by the timing of

large

orders booked. Also,

Asia, Middle East

and Africa improved

a comparable basis where

India noted yet another

quarter with

strong year-on-year development.

In contrast, orders in China

declined at a low single-digit

comparable growth rate

particularly hampered

by weakness in robotics

and construction

demand.

Outside of these segments

and towards the

end of the

quarter we noted some

indications of the

underlying Chinese

market stabilizing,

although uncertainty

is admittedly

high.

Europe declined

to the tune of a low double-digit

rate, and while

the underlying market

softened,

the rate of decline

was

accentuated by a high

comparable last year

due to timing of

larger orders booked.

Sustainability is embedded

in everything we do,

and I was

pleased to see this

being recognized

by MSCI and the upgrade

of ABB to the highest

ESG rating of AAA,

meaning we score

the top 10%

of the peer universe.

During the quarter, Process Automation

expanded its

partnership with Northvolt,

providing electrification

and

automation technologies

to power the world’s largest

battery

recycling facility, Revolt Ett.

The recycling site will

process

125,000 tons of end-of-life

batteries and battery

production

waste each year – making

it the largest plant

of its kind in

the

world.

We recently took additional

steps to support our

customers on

their journey towards

more sustainable

and flexible production

with Robotics & Discrete

Automation expanding

its robot family

with four models in 22

variants and energy

savings of up

to 20

percent. We have also

announced our plans

to invest $280

million in our Robotics

business in Sweden.

The site will serve

as a European hub, and

further strengthen

our capabilities in

serving our customers in

Europe with locally manufactured

products in a growing

market. This is to

replace the existing

old

robotics facilities at the

site, and the new

Campus is planned

open in late 2026.

mark the completion

of all divisional

portfolio divestments

announced at the end of

2020, we successfully

closed the

divestment of the Power

Conversion division.

Going forward we

will continuously

review the product groups

within all divisions

to optimize the portfolio

as part of the ABB

Way operating

model.

Björn Rosengren

CEO

In the

fourth quarter of 2023

, we anticipate low-

to mid single

digit comparable revenue

growth.

Additionally, we expect the

historical pattern to repeat

with

the Operational EBITA

margin in

Q4 to be sequentially

lower from Q3, and

to be around 16%.

In full-year 2023

, we anticipate comparable

revenue growth

be in the low teens

range and we expect

Operational EBITA

margin to be in the range

of 16.5%

- 17.0%.

Outlook

CEO summary

ABB INTERIM

REPORT

2023

Strong demand for the

project-

and systems-related

businesses,

often linked to the

medium voltage

offerings,

more than offset a decline

in parts of the short-cycle

businesses hampered

by inventory adjustments

among

channel partners and

normalizing order

patterns. In total,

orders

declined by 2% (up comparable

2%) year-on-year to

8,052 million. Comparable

order growth was driven

by the

higher contribution

from large orders, including

the one in the

Process Automation business

area for $285

million, which

will be executed over

a multi-year period.

Timing of booking significant

orders supported

the Americas

growth of 9% (comparable

13%).

Orders in Asia, Middle

East

and Africa declined by 5%

(up comparable 4%) as

the

decline in China

of 10% (comparable 3%) was

more than

offset by strength elsewhere

in the region, including

strong

growth in India. The sharp

order decline

of 11% (comparable

13%) in Europe was

the result of softer markets

including the

impact from customers

normalizing inventory

levels, but also

impacted by last year’s

high comparable

supported by timing

of customers placing large

orders.

Demand in the automotive

segment improved,

supported

by EV-related investments, while

the general industry

and

consumer-related robotics

segments declined.

In transport

& infrastructure, there were

positive developments

marine,

ports and renewables.

The machine builder

segment declined as

customers

normalized order patterns

in the face of

shortening delivery

lead times.

In buildings,

there was weakness

in all three regions

residential-related

demand. In the commercial

construction

segment the United States

stood out with a

continued

robust momentum and

outperformed a

broadly stable

Europe and declining

China.

Demand in the process-related

businesses was

strong

across the board, with particular

strength in the oil

& gas

segment, and it held up

well also for refining,

petrochemicals and the energy-related

low carbon

segments.

Revenues increased

by 8% (11% comparable) to

$7,968 million and

benefitted primarily from

increased

volumes through execution

of the order backlog,

combined

with a strong price contribution.

These benefits

more than

offset a slight adverse impact

from portfolio changes.

Revenues increased

in all business areas,

supported by

comparable growth in

most divisions as

the order backlog

was executed.

Revenues by region

($ in millions,

unless otherwise

indicated)

CHANGE

Q3 2023

Q3 2022

US$

Comparable

Europe

2,810

2,494

13%

10%

The Americas

2,775

2,452

13%

16%

Asia, Middle East

and Africa

2,383

2,460

-3%

ABB Group

7,968

7,406

11%

Orders by region

($ in millions,

unless otherwise

indicated)

CHANGE

Q3 2023

Q3 2022

US$

Comparable

Europe

2,391

2,682

-11%

-13%

The Americas

3,258

2,980

13%

Asia, Middle East

and Africa

2,403

2,526

-5%

ABB Group

8,052

8,188

-2%

Growth

Change year-on-year

Orders

Revenues

Comparable

11%

Portfolio changes

-4%

Total

-2%

Orders and revenues

ABB INTERIM

REPORT

2023

Gross profit

Gross profit increased

strongly by 11% (9% constant

currency) to

$2,762 million, reflecting

a strong gross margin

improvement of

120 basis points to 34.7%.

Gross margin improved

in three out of

four business areas,

with only Process

Automation declining

mainly

due to the absence

of the exited high

margin Turbocharging

division (Accelleron).

Income from operations

amounted to

$1,259 million and

increased

by 78% year-on-year.

The improvement

was driven by operational

performance and contribution

from gains of $71

million from selling

businesses, including

the divestment of the

Power Conversion

division,

but also by last year’s

period being burdened

by the

recording of a provision

of $325 million

relating to the legacy

Kusile

project.

Margin on Income

from operations reached

15.8%, up by

620 basis points year-on-year.

Operational EBITA

Operational EBITA improved by 13%

year-on-year to $1,392

million

and the margin was up

by 80 basis points

to 17.4%. Key drivers

the higher earnings

were the impacts

from robust price activities

and operational

leverage on higher

volumes, which more

than

offset adverse impacts

from inflation in labor

costs and from

divestments. Selling, general

and administrative expenses

declined

in relation to revenues

to 16.7%, from 17.2%

last year, mostly due

to the absence of

costs related to the spin-off

of the Accelleron

business in last year’s

period.

Operational EBITA in Corporate

and

Other amounted to -$109

million, of which

-$39 million related

the E-mobility business

where operational

performance was

hampered by the ongoing

reorganization to ensure

a more focused

portfolio, and some

inventory-related provisions.

Net finance expenses

Net finance expense was

$36 million and

increased slightly from

last year’s $28

million.

Income tax

Income tax expense was

$326 million with

an effective tax rate of

26.5%.

Net income and earnings

per share

Net income attributable

to ABB was $882

million

and more than

doubled from last year

driven by improved

operational performance

and lower non-operational

items.

This resulted in basic

earnings per

share of $0.48, up

from $0.19 last year.

Operational EBITA

($ millions)

Q3 2023

Q3 2022

Corporate and Other

E-mobility

(39)

(4)

Corporate costs, intersegment

eliminations and other

(70)

(52)

Total

(109)

(56)

Majority of which relates to underlying corporate

Earnings

ABB INTERIM

REPORT

2023

Net working capital

Net working capital amounted

to $4,041 million,

increasing

year-on-year from $3,407

million driven mainly

by the

increase in inventories

and receivables. Net

working capital

decreased sequentially

from $4,585 million

driven mainly by

strong trade net working

capital management

and an

increase in accrued

expenses

related to the timing

payments of accruals.

Net working capital

as a percentage

of revenues

was 12.8%, down sequentially

from 14.7%.

Capital expenditures

Purchases of property, plant and equipment

and intangible

assets amounted to $175

million.

Net debt

amounted to $2,872

million at the end

of the quarter

and decreased from $4,117 million

year-on-year,

and

declined sequentially

from $4,165 million.

The sequential

net

decrease was driven by

the strong operational

cash flow in

the quarter, and further supported

by the proceeds

from the

sale of the Power Conversion

business.

Cash flows

Cash flow from operating

activities was $1,351

million,

representing a steep year-on-year

increase from $791

million.

This was driven by strong

improvements in all

business areas

on the back of higher

earnings and a reduction

of net working

capital this quarter versus

a build-up of net

working capital in

the prior year mainly

related to inventories.

Share buyback program

A share buyback program

of up to $1 billion

was launched on

April 3, 2023. During

the third quarter, 5,244,809

shares were

repurchased on the second

trading line for approximately

$200

million. ABB’s total number

of issued shares,

including shares

held in treasury, amounts to 1,882,002,575.

($ millions,

unless otherwise

indicated)

Sep. 30

2023

Sep. 30

2022

Dec. 31

2022

Short term debt and

current

maturities of long

-term debt

2,951

3,068

2,535

Long-term debt

4,899

4,530

5,143

Total debt

7,850

7,598

7,678

Cash & equivalents

3,869

2,365

4,156

Restricted cash

- current

323

Marketable securities

and

short-term investments

1,091

793

725

Restricted cash

- non-current

–

Cash and marketable

securities

4,978

3,481

4,899

Net debt (cash)*

2,872

4,117

2,779

Net debt (cash)*

to EBITDA ratio

0.5

0.7

Net debt (cash)*

to Equity ratio

0.21

0.34

0.21

At Sep. 30, 2023, Sep. 30, 2022 and Dec. 31, 2022,

net debt(cash) excludes net pension

(assets)/liabilities of $(414) million $(114) million and $(276) million,

respectively.

Balance sheet & Cash flow

ABB INTERIM

REPORT

2023

Orders and revenues

Demand linked to the

medium-voltage offerings

noted

strong year-on-year development

and more than offset

market softness in parts

of the short-cycle

business which

was hampered by distributors

normalizing inventory

levels in

the face of shortening

delivery lead times.

Total orders

amounted to $3,693

million and declined

2% (up

comparable 1%) impacted

by the divestment

of the Power

Conversion division

early in the quarter.

●

Demand was particularly

strong in the datacenters

and

chemical, oil & gas segments

with a solid development

noted in rail and green

energy-linked areas

like solar.

However, weakness was noted

in construction with

the

residential segment down

in all three regions

while in

commercial construction

the United States

stood out with

a continued robust

momentum and outperformed

broadly stable Europe

and declining

China.

●

In Asia, Middle East and

Africa orders decreased

by 5%

(up comparable 2%)

including a slight

comparable

improvement in China,

where signs of

sequential

stabilization emerged

towards the latter part

of the quarter

outside of the construction

segment.

The Americas

declined by 2% (up comparable

4%) with United States

down by 2% (up comparable

6%). Europe was stable

(down comparable

3%), including a 6% decline

Germany where weakness

in the residential

construction

market weighed on the

Smart Buildings

division.

●

Revenues amounted

to $3,561 million

and weakness in

the buildings segment

weighed on growth

in Smart

Buildings and Installation

Products, while the remaining

divisions contributed

to revenue growth

of 3%

(comparable 6%) with a

strong contribution

from price as

the key driver.

Profit

Operational EBITA increased by 15%

year-on-year and

amounted to $748 million,

supported by strong

operational

performance which more

than offset the absent

earnings

from portfolio changes.

The Operational EBITA margin

remained sequentially

strong at 20.8%, representing

improvement of 210 basis

points year-on-year.

●

Benefits

from a strong price execution

was the main

driver to the earnings

improvement, with

some additional

support from operational

leverage on slightly

higher

volumes.

●

The positive impact

from lower commodity

costs year-on-

year, was virtually offset by inflation

linked to labor.

CHANGE

($ millions, unless otherwise indicated)

Q3 2023

Q3 2022

US$

Comparable

9M 2023

9M 2022

US$

Comparable

Orders

3,693

3,772

-2%

11,794

11,797

Order backlog

6,994

6,317

11%

16%

6,994

6,317

11%

16%

Revenues

3,561

3,471

10,886

10,121

11%

Operational EBITA

748

651

15%

2,212

1,768

25%

as % of operational

revenues

20.8%

18.7%

+2.1 pts

20.3%

17.4%

+2.9 pts

Cash flow from

operating activities

1,051

715

47%

2,143

1,258

70%

No. of employees (FTE equiv.)

50,500

Growth

Change year-on

-year

Orders

Revenues

Comparable

Portfolio changes

-3%

-4%

Total

-2%

—

Electrification

ABB INTERIM

REPORT

2023

Orders and revenues

Total orders declined due to a high level

of larger bookings

last year’s period. Looking

beyond this impact,

it was a more

stable development

with a strong order

momentum reported

for

the long-cycle businesses,

while weakness was

noted in parts

of the short-cycle businesses.

Order intake amounted

$1,886 million, representing

a decrease of 4% (7%

comparable).

●

Demand improved in

the process-related

segments of

chemicals, oil & gas, pulp

& paper and mining,

however

declined in the more

short-cycle segments including

HVAC

linked to weakness in construction,

food & beverage and

electronics.

●

Order intake increased

by 10% (comparable

15%) in Asia,

Middle East and Africa,

supported by a double-digit

comparable growth in

China. Europe declined

sharply by

22%

(comparable 28%) mainly

due to the Traction-related

high order level last

year. The Americas increased

by 3%

(down comparable

3%) as the acquired

contribution was

more than offset by softness

in demand for the

low voltage

motors.

●

Execution of the order backlog

resulted in high revenues

$1,947

million, representing

an increase of 14%

(comparable

11%) year-on-year. Higher volumes

and earlier implemented

pricing activities both

contributed strongly

to comparable

growth.

Profit

All divisions contributed

to the strong 28%

year-on-year

improvement in Operational

EBITA to $390

million, driving the

Operational EBITA margin up by

200 basis points

to 19.8%.

●

Results were mainly supported

by the benefits from

a strong

price execution which

more than offset cost

inflation related

labor and raw materials.

●

Higher volume output

supported the

fixed cost absorption

production.

●

Strongest profitability improvements

were reported in

the motor

divisions, with Large Motors

& Generators as

the outperformer.

●

Divisional mix was slightly

positive due to strong

deliveries from

the drives and service-related

businesses.

Growth

Change year-on-year

Orders

Revenues

Comparable

-7%

11%

Portfolio changes

Total

-4%

14%

—

Motion

CHANGE

($ millions, unless otherwise indicated)

Q3 2023

Q3 2022

US$

Comparable

9M 2023

9M 2022

US$

Comparable

Orders

1,886

1,966

-4%

-7%

6,285

6,247

Order backlog

5,108

4,613

11%

5,108

4,613

11%

Revenues

1,947

1,702

14%

11%

5,868

4,900

20%

Operational EBITA

390

305

28%

1,157

845

37%

as % of operational

revenues

19.8%

17.8%

+2 pts

19.7%

17.2%

+2.5 pts

Cash flow from

operating activities

466

268

74%

935

507

84%

No. of employees (FTE equiv.)

22,100

20,700

ABB INTERIM

REPORT

2023

Orders and revenues

On a broad robust underlying

activity across the

customer

segments,

with the added

contribution of large

orders, order

intake reached $1,883 million

and increased

by 20%

(comparable 38%) year-on-year.

●

Order intake included

the booking of an order

at a value

of $285 million with fulfillment

due over a

multi-year

period.

●

The Energy Industries division

benefited from

strong

demand in the traditional

oil & gas segment,

but also

seeing high activity levels

in low carbon-related

areas

such as hydrogen,

LNG and carbon capture.

One

example of how Energy

Industries builds

further on its

value creation offer enabling

the clean energy transition,

is that it was contracted

to support the Danish

company

H2 Energy Esbjerg

ApS with electrical engineering

at its

hydrogen production

and distribution hub.

The plant will

convert renewable

electricity from offshore

wind into

about 90,000 tons of green

hydrogen per

year – the

equivalent of 1.9

million barrels of oil, supporting

the

decarbonization

of heavy industry and

road

transportation.

●

All divisions contributed

with a double-digit

growth in

revenues, which amounted

to $1,554 million, up

by 7%

(comparable 23%) year-on-year,

supported mainly by

volumes but also by a

positive price development.

Total

revenue growth was hampered

mainly by the absence

the Accelleron business

which

was spun-off in early

October 2022, meaning

this is the last quarter

of structural

impact.

Profit

The Operational EBITA was largely

stable year-on-year

$226

million, the result of a

strong revenue execution

which

offset the absence of earnings

related to the exited

Accelleron business.

The Operational EBITA margin

amounted to 14.6%,

representing a

decline of 70 basis

points as operational

improvements did

not quite offset the

adverse impact of 190

basis points due

to the portfolio

change.

●

Operational EBITA margin remained

stable or increased

in all divisions except

for a decline in Marine

& Ports,

which was somewhat impacted

by an adverse

mix due to

lower share of revenues

stemming from the arctic

marine

propulsion business.

CHANGE

($ millions, unless otherwise indicated)

Q3 2023

Q3 2022

US$

Comparable

9M 2023

9M 2022

US$

Comparable

Orders

1,883

1,568

20%

38%

5,665

5,079

12%

31%

Order backlog

7,135

6,006

19%

20%

7,135

6,006

19%

20%

Revenues

1,554

1,458

23%

4,543

4,493

19%

Operational EBITA

226

225

670

645

as % of operational

revenues

14.6%

15.3%

-0.7 pts

14.7%

14.2%

+0.5 pts

Cash flow from

operating activities

258

217

19%

558

470

19%

No. of employees (FTE equiv.)

20,900

22,400

-6%

Growth

Change year-on

-year

Orders

Revenues

Comparable

38%

23%

Portfolio changes

-20%

-17%

Total

20%

—

Process Automation

ABB INTERIM

REPORT

2023

Orders and revenues

With both divisions in

negative growth, total

orders declined

by 26% (comparable

27%), weighed

down by normalizing

order patterns and weakening

of the Chinese robotics

market.

Although it is difficult

to exactly assess, we

expect these

pressures to persist also

in the next couple

of quarters.

●

In Machine Automation

order intake was impacted

customers normalizing

order patterns to align

with

shortening delivery

lead times,

and awaiting deliveries

from

the Machine Automation

order backlog which

extends into

the second half of 2024.

●

In the Robotics division, orders

declined at a mid-single

digit rate.

This was driven by

a sequential softening

of the

underlying Chinese

market, with some additional

pressure

from local inventory reductions

among channel

partners

outside of the automotive

segment. Outside of

China

demand was more resilient

with growth in

the United States

and the decline in

Europe limited to a mid-single

digit rate.

●

From a geographical

perspective, orders in

the Americas

declined by 10%

(12%

comparable). The decline

in Europe

was 35% (comparable

38%) triggered

by machine

automation-related customers

normalizing order

patterns. In

Asia, Middle East and

Africa orders

declined by 20%

(comparable 17%), hampered

by China being

down by 32%

(comparable 28%) weighed

down mainly by robotics-related

channel partners adjusting

inventories.

●

Revenues increased

in both divisions as

the order backlog

was executed and amounted

to $929 million,

improvement of 12% (comparable

9%), supported

positive impacts from

both price and volumes.

Profit

Steep improvement of 29%

in Operational

EBITA to

$137 million was supported

by both divisions, and

Operational

EBITA margin was up by 190 basis

points and reached

14.7%.

●

Higher gross margin was

the key contributor

to the strong

earnings improvement,

mainly supported by positive

impacts

from earlier implemented

price increases

and improved

operational execution,

which more than offset

the impacts

from higher labor costs as

well as increased spend

Research & Development.

CHANGE

($ millions, unless otherwise indicated)

Q3 2023

Q3 2022

US$

Comparable

9M 2023

9M 2022

US$

Comparable

Orders

665

901

-26%

-27%

2,516

3,318

-24%

-22%

Order backlog

2,363

2,659

-11%

-14%

2,363

2,659

-11%

-14%

Revenues

929

828

12%

2,788

2,290

22%

23%

Operational EBITA

137

106

29%

418

215

94%

as % of operational

revenues

14.7%

12.8%

+1.9 pts

15.0%

9.4%

+5.6 pts

Cash flow from

operating activities

12%

266

109

144%

No. of employees (FTE equiv.)

11,000

10,700

Growth

Change year-on

-year

Orders

Revenues

Comparable

-27%

Portfolio changes

Total

-26%

12%

—

Robotics & Discrete Automation

ABB INTERIM

REPORT

2023

Quarterly highlights

●

ABB was upgraded

from AA to AAA in

the MSCI ESG

rating. ESG ratings from

MSCI ESG Research

are

designed to measure

a company’s resilience

to financially

material environmental,

societal and governance

(ESG)

risks.

Achieving the highest

possible rating

of AAA, ABB

ranks in the top ten

percent of industry

peers.

●

As part of its commitment

to increase the circularity

of its

low-voltage solutions,

ABB expanded

its portfolio of

electrification products

that are made of sustainable

plastics in the Nordics,

Germany and Spain.

ABB’s Smart

Buildings division

is progressively substituting

about

1,000 tonnes per year

of conventional

fossil-based

plastics with sustainable

alternatives including

mechanically recycled

or bio-based plastics.

●

ABB’s Motion business area

and WindESCo have

signed

a strategic partnership,

where ABB has

acquired a

minority stake in the

company. US-based WindESCo

the leading analytics

software provider for

improving the

performance and reliability

of wind turbines. Leveraging

WindESCo’ solutions,

the investment will strengthen

ABB’s position as a key

enabler of a low

carbon society

and its position in the

renewable power

generation sector.

●

ABB will deliver complete

power, propulsion

and

automation systems

for two newbuild

short-sea container

ships of global logistics

company Samskip

Group. The

vessels will be among

the world’s first of their

kind to use

hydrogen as a fuel.

Both vessels will be

operating between

Oslo Fjord and Rotterdam,

a distance of approximately

700

nautical miles.

●

ABB has expanded

its large robot range

with four new

models and 22 variants

offering more choice,

increased

coverage and greater

performance.

The next generation

models offer customers superior

performance and

up to

20% energy savings thanks

to their lighter robot

design and

use of regenerative braking.

●

In August and September

2023, ABB organized

a range of

courses and trainings

for its employees

to better

understand the differences

between generations,

how to

challenge biases,

and benefit from intergenerational

collaboration. The events

were part of the company’s

commitment to the generations

dimension of its

D&I

strategy that is focused

on ensuring that

all generations are

welcomed and skills

and strengths are utilized

and bridged

across.

Q3 outcome

●

34% reduction year-on-year of CO

₂

e emissions in own

operations mainly driven by shifting

to green electricity in

our operations.

●

9% increase year-on-year in LTIFR

due to a slight

increase in incidents in absolute numbers

●

3%-points increase year-on-year in share

of women in

senior management,

demonstrating steady progress

towards our target.

—

Sustainability

Q3 2023

Q3 2022

CHANGE

12M ROLLING

₂

e own operations

emissions,

Ktons scope 1 and 2

-34%

182

Lost Time Injury

Frequency

Rate (LTIFR),

frequency / 200,000

working hours

0.15

0.14

0.13

Share of females

in senior management

positions, %

20.4

17.4

+3 pts

19.4

₂

equivalent emissions from site, energy use,

₆

and fleet, previous quarter

Current quarter Includes all incidents reported until October

5, 2023

ABB INTERIM

REPORT

2023

During Q3 2023

●

On July 3, ABB announced

the closing of

the divestment

of the Power Conversion

division at around $530

million.

As a result, ABB recorded

a non-operational

book gain of

$53 million in Income

from operations in

the third quarter

of 2023. Net cash impact

was approximately

$500

million. With this transaction,

ABB has completed all

divisional portfolio

divestments announced

at the end of

2020.

The demand for ABB’s offering

was robust in the

first nine

months of 2023.

Weakness in the short-cycle

businesses

from last year's high level

was offset by strong

momentum in

the project-

and systems businesses.

Orders remained stable

or increased in three out

of four business

areas, with a

decline noted only

in Robotics & Discrete

Automation, for a

combined total decrease

of 1% (up 4% comparable)

$26,169 million.

Revenues were supported

by strong

execution of the order backlog

and amounted

$23,990 million, up by 11% (16% comparable),

overall

implying a book-to-bill

of 1.09.

Income from operations

amounted to

$3,755 million, up from

$2,152 million year-on-year.

This increase can be

attributed

mostly to an improved

operational performance.

In addition,

the result in the first

three quarters last

year was hampered

charges of approximately

$195 million due

to the exit of a

legacy project in non-core

business as well

as a provision of

$325 million related

to the legacy Kusile

project.

Operational EBITA increased by 22%

year-on-year to

$4,094 million,

up from $3,364 million

in last year’s period

and the Operational

EBITA margin improved by 150 basis

points to 17.0%. The increase

was driven by higher

margins

across all business areas.

Main drivers of

the margin

expansion were operating

leverage on higher

volumes from

backlog execution

as well as the impacts

from earlier

implemented price increases,

which more

than offset

inflation in labor and

input cost. Corporate and

Other

Operational EBITA amounted to

-$363 million.

Thereof, an

amount of -$134 million

can be attributed to

the E-mobility

business, which was negatively

affected by the ongoing

reorganization to ensure

a more focused

portfolio, and

some inventory-related

provisions.

Net finance expenses increased

by $25 million

$82 million, whereas

non-operational

pension credits

decreased by $79 million

to $23 million in comparison

last year’s period,

reflecting the impact

of higher interest

rates. Income tax expense

was $794 million

reflecting a tax

rate of 21.5%. This includes

a net benefit realized

on a

favorable resolution

of a prior year tax matter

relating to the

Power Grids business

in the current year, as well

as the

impact of non-deductible

regulatory penalties

related to the

Kusile project in the prior

year.

Net income attributable

to ABB was $2,824

million, up from

$1,343

million year-on-year. Basic earnings

per share was

$1.52, representing an

increase of 116% compared

with the

first nine months last year.

Significant events

First nine months 2023

ABB INTERIM

REPORT

2023

Divestments

Company/unit

Closing date

Revenues, $ million

No. of employees

2023

Electrification

Power Conversion

division

3-Jul

~440

1,500

Electrification

Industrial Plugs

& Sockets business

3-Jul

~12

Process Automation

UK technical engineering

consultancy

business

1-May

~20

160

2022

Hitachi Energy JV (Power

Grids, 19.9%

stake)

28-Dec

Acquisitions

Company/unit

Closing date

Revenues, $ million

No. of employees

2023

Electrification

Eve Systems

1-Jun

~20

Motion

Siemens low voltage

NEMA Motors

2-May

~60

600

2022

Motion

PowerTech

Converter business

1-Dec

~60

300

Note: comparable growth calculation includes acquisitions and

divestments with revenues of greater than $50 million.

Represents the estimated revenues for the last

fiscal year prior to the announcement of the

respective acquisition/divestment unless otherwise stated.

ABB Group

Q1 2022

Q2 2022

Q3 2022

Q4 2022

FY 2022

Q1 2023

Q2 2023

Q3 2023

EBITDA, $ in million

1,067

794

906

1,384

4,151

1,389

1,494

1,453

Return on Capital

Employed, %

n.a.

16.50

n.a.

Net debt/Equity

0.20

0.34

0.21

0.30

0.31

0.21

Net debt/ EBITDA 12M

rolling

0.4

0.7

0.9

0.8

0.5

Net working capital,

% of 12M rolling

revenues

12.1%

12.8%

11.7%

11.1%

13.9%

14.7%

12.8%

Earnings per share,

basic, $

0.31

0.20

0.19

0.61

1.30

0.56

0.49

0.48

Earnings per share,

diluted, $

0.31

0.20

0.19

0.60

1.30

0.55

0.48

0.47

Dividend per share,

CHF

n.a.

0.84

n.a.

Share price at the end

of period, CHF

29.12

24.57

24.90

28.06

31.37

35.18

32.80

Share price at the

end of period, $

30.76

25.43

24.41

30.46

34.30

39.32

35.86

Number of employees

(FTE equivalents)

104,720

106,380

106,830

105,130

106,170

108,320

107,430

No. of shares outstanding

at end of period (in

millions)

1,929

1,892

1,875

1,865

1,862

1,860

1,849

Data prior to October 3, 2022, has been adjusted

for the Accelleron spin-off (Source: FactSet).

Additional figures

Additional 2023 guidance

($ in millions,

unless otherwise

stated)

FY 2023

Net finance expenses

~(100)

from ~(130)

Effective tax

rate

~21%

unchanged

Capital Expenditures

~(800)

unchanged

($ in millions, unless

otherwise stated)

FY 2023

Q4 2023

Corporate and Other

Operational EBITA

~(300)

~(75)

unchanged

Non-operating items

Acquisition-related amortization

~(220)

~(55)

unchanged

Restructuring and related

~(180)

~(40)

from ~(150)

ABB Way transformation

~(180)

~(55)

unchanged

Excludes one project estimated to a total of ~$100 million,

that is ongoing in the non-core business. Exact exit timing

is difficult to assess due to legal proceedings etc.

Excludes Operational EBITA from E-mobility business.

Includes restructuring and restructuring-related as well as separation

and integration costs.

Includes net positive tax impact of $206 million linked

to a favorable resolution of certain prior year tax

matters in Q1 2023 but excludes the impact

of acquisitions or divestments or any

significant non-operational items.

Acquisitions and divestments, last twelve months

ABB INTERIM

REPORT

2023

For additional information please contact:

Media Relations

Phone: +41 43 317 71 11

Email:

media.relations@ch.abb.com

Investor Relations

Phone: +41 43 317 71 11

Email:

investor.relations@ch.abb.com

ABB Ltd

Affolternstrasse 44

8050 Zurich

Switzerland

Financial calendar

2023

November 30

Capital Markets Day in

Frosinone, Italy

2024

February 1

Q4 and FY 2023 results

March 21

Annual General Meeting,

Zurich

April 18

Q1 2024 results

July 18

Q2 2024 results

October 17

Q3 2024 results

This press release includes

forward-looking information

and

statements as well as

other statements

concerning the

outlook for our business,

including those

in the sections

this release titled “CEO

summary,” “Outlook,” and

“Sustainability”. These

statements are based

on current

expectations, estimates

and projections about

the factors

that may affect our future

performance, including

global

economic conditions,

the economic conditions

of the

regions and industries

that are major markets

for ABB.

These expectations, estimates

and projections are

generally

identifiable by statements

containing words

such as

“anticipates,” “expects,”

“estimates,” “plans,”

“targets,”

“guidance,”

“likely” or similar

expressions. However,

there

are many risks and uncertainties,

many of which

are beyond

our control, that could

cause our actual results

to differ

materially from the

forward-looking information

and

statements

made in this press release

and which could

affect our ability

to achieve any or all

of our stated targets.

Some important

factors that could cause

such differences

include, among

others, business risks associated

with the volatile global

economic environment

and political conditions,

costs

associated with compliance

activities, market

acceptance of

new products and services,

changes in governmental

regulations and

currency exchange rates

and such other

factors as may be discussed

from time to time in

ABB Ltd’s

filings with the U.S. Securities

and Exchange

Commission,

including its Annual

Reports on 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 2023

results press release

and presentation

slides

are available on

the ABB News Center

www.abb.com/news and on

the Investor Relations

homepage at www.abb.com/investorrelations.

A conference call and

webcast for analysts

and investors is

scheduled to begin

at 10:00 a.m. CET.

pre-register for the conference

call or to join the

webcast, please refer

to the ABB website:

www.abb.com/investorrelations.

The recorded session will

be available after

the event on

ABB’s website.

Important notice about forward-looking information

Q3 results presentation on October 18, 2023

ABB

(ABBN: SIX Swiss Ex)

is a technology leader

in electrification

and automation,

enabling a more

sustainable and

resource-

efficient future. The company’s

solutions connect

engineering

know-how and software

to optimize how

things are manufactured,

moved, powered and

operated. Building

on more than 130

years of excellence,

ABB’s ~105,000 employees

are committed to driving

innovations

that accelerate industrial

transformation.

Q3 2023 FINANCIAL INFORMATION

October 18,

2023

Q3 2023

Financial information

Q3 2023 FINANCIAL INFORMATION

—

Financial

Information

Contents

─ 07

Key Figures

08 ─

Consolidated

Financial

Information

(unaudited)

34 ─

Supplemental Reconciliations

and Definitions

Q3 2023 FINANCIAL INFORMATION

—

Key Figures

CHANGE

($ in millions, unless otherwise indicated)

Q3 2023

Q3 2022

US$

Comparable

(1)

Orders

8,052

8,188

-2%

Order backlog (end

September)

21,445

19,393

11%

Revenues

7,968

7,406

11%

Gross Profit

2,762

2,481

11%

as % of revenues

34.7%

33.5%

+1.2 pts

Income from operations

1,259

708

78%

Operational EBITA

(1)

1,392

1,231

13%

11%

(2)

as % of operational

revenues

(1)

17.4%

16.6%

+0.8 pts

Income from continuing

operations, net of

tax

905

420

115%

Net income attributable

to ABB

882

360

145%

Basic earnings

per share ($)

0.48

0.19

149%

(3)

Cash flow from

operating activities

(4)

1,351

791

71%

Cash flow from

operating activities

in continuing operations

1,361

793

72%

CHANGE

($ in millions, unless otherwise indicated)

9M 2023

9M 2022

US$

Comparable

(1)

Orders

26,169

26,368

-1%

Revenues

23,990

21,622

11%

16%

Gross Profit

8,366

7,052

19%

as % of revenues

34.9%

32.6%

+2.3 pts

Income from operations

3,755

2,152

74%

Operational EBITA

(1)

4,094

3,364

22%

(2)

as % of operational

revenues

(1)

17.0%

15.5%

+1.5 pts

Income from continuing

operations, net of

tax

2,902

1,469

98%

Net income attributable

to ABB

2,824

1,343

110%

Basic earnings

per share ($)

1.52

0.70

116%

(3)

Cash flow from

operating activities

(4)

2,393

600

299%

Cash flow from

operating activities

in continuing operations

2,404

614

n.a.

(1)

For a reconciliation of non-GAAP

measures see “

Supplemental Reconciliations

and Definitions

” on page 34.

(2)

Constant currency (not adjusted

for portfolio changes).

(3)

EPS growth rates are computed

using unrounded amounts.

(4)

Cash flow from operating activit

ies includes both continuing

and discontinued operations.

Q3 2023 FINANCIAL INFORMATION

CHANGE

($ in millions, unless otherwise indicated)

Q3 2023

Q3 2022

US$

Local

Comparable

Orders

ABB Group

8,052

8,188

-2%

Electrification

3,693

3,772

-2%

Motion

1,886

1,966

-4%

-5%

-7%

Process Automation

1,883

1,568

20%

18%

38%

Robotics & Discrete

Automation

665

901

-26%

-27%

Corporate and Other

135

147

Intersegment eliminations

(210)

(166)

Order backlog

(end September)

ABB Group

21,445

19,393

11%

Electrification

6,994

6,317

11%

16%

Motion

5,108

4,613

11%

Process Automation

7,135

6,006

19%

16%

20%

Robotics & Discrete

Automation

2,363

2,659

-11%

-14%

Corporate and Other

(incl. intersegment eliminations)

(155)

(202)

Revenues

ABB Group

7,968

7,406

11%

Electrification

3,561

3,471

Motion

1,947

1,702

14%

13%

11%

Process Automation

1,554

1,458

23%

Robotics & Discrete

Automation

929

828

12%

Corporate and Other

194

141

Intersegment eliminations

(217)

(194)

Income from operations

ABB Group

1,259

708

Electrification

762

616

Motion

365

291

Process Automation

218

154

Robotics & Discrete

Automation

113

Corporate and Other

(incl. intersegment eliminations)

(199)

(434)

Income from operations

ABB Group

15.8%

9.6%

Electrification

21.4%

17.7%

Motion

18.7%

17.1%

Process Automation

14.0%

10.6%

Robotics & Discrete

Automation

12.2%

9.8%

Operational EBITA

ABB Group

1,392

1,231

13%

11%

Electrification

748

651

15%

14%

Motion

390

305

28%

25%

Process Automation

226

225

Robotics & Discrete

Automation

137

106

29%

27%

Corporate and Other

(1)

(incl. intersegment eliminations)

(109)

(56)

Operational EBITA

ABB Group

17.4%

16.6%

Electrification

20.8%

18.7%

Motion

19.8%

17.8%

Process Automation

14.6%

15.3%

Robotics & Discrete

Automation

14.7%

12.8%

Cash flow from operating

activities

ABB Group

1,351

791

Electrification

1,051

715

Motion

466

268

Process Automation

258

217

Robotics & Discrete

Automation

Corporate and Other

(incl. intersegment eliminations)

(506)

(489)

Discontinued

operations

(10)

(2)

(1)

Corporate and Other at Q3

2023 and Q3

2022 includes losses of $39

million and $4 million,

respectively, relating to E-mobility.

Q3 2023 FINANCIAL INFORMATION

CHANGE

($ in millions, unless otherwise indicated)

9M 2023

9M 2022

US$

Local

Comparable

Orders

ABB Group

26,169

26,368

-1%

Electrification

11,794

11,797

Motion

6,285

6,247

Process Automation

5,665

5,079

12%

14%

31%

Robotics & Discrete

Automation

2,516

3,318

-24%

-22%

Corporate and Other

595

530

Intersegment eliminations

(686)

(603)

Order backlog

(end September)

ABB Group

21,445

19,393

11%

Electrification

6,994

6,317

11%

16%

Motion

5,108

4,613

11%

Process Automation

7,135

6,006

19%

16%

20%

Robotics & Discrete

Automation

2,363

2,659

-11%

-14%

Corporate and Other

(incl. intersegment eliminations)

(155)

(202)

Revenues

ABB Group

23,990

21,622

11%

13%

16%

Electrification

10,886

10,121

10%

11%

Motion

5,868

4,900

20%

22%

20%

Process Automation

4,543

4,493

19%

Robotics & Discrete

Automation

2,788

2,290

22%

23%

Corporate and Other

540

395

Intersegment eliminations

(635)

(577)

Income from operations

ABB Group

3,755

2,152

Electrification

2,130

1,571

Motion

1,098

776

Process Automation

688

480

Robotics & Discrete

Automation

347

146

Corporate and Other

(incl. intersegment eliminations)

(508)

(821)

Income from operations

ABB Group

15.7%

10.0%

Electrification

19.6%

15.5%

Motion

18.7%

15.8%

Process Automation

15.1%

10.7%

Robotics & Discrete

Automation

12.4%

6.4%

Operational EBITA

ABB Group

4,094

3,364

22%

Electrification

2,212

1,768

25%

27%

Motion

1,157

845

37%

38%

Process Automation

670

645

Robotics & Discrete

Automation

418

215

94%

98%

Corporate and Other

(1)

(incl. intersegment eliminations)

(363)

(109)

Operational EBITA

ABB Group

17.0%

15.5%

Electrification

20.3%

17.4%

Motion

19.7%

17.2%

Process Automation

14.7%

14.2%

Robotics & Discrete

Automation

15.0%

9.4%

Cash flow from operating

activities

ABB Group

2,393

600

Electrification

2,143

1,258

Motion

935

507

Process Automation

558

470

Robotics & Discrete

Automation

266

109

Corporate and Other

(incl. intersegment eliminations)

(1,498)

(1,730)

Discontinued

operations

(11)

(14)

(1)

Corporate and Other at 9M

2023 and 9M

2022 includes losses of $134

million and $12

million, respectively, relating to E-mobility.

Q3 2023 FINANCIAL INFORMATION

Operational EBITA

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions, unless

otherwise indicated)

Q3 23

Q3 22

Q3 23

Q3 22

Q3 23

Q3 22

Q3 23

Q3 22

Q3 23

Q3 22

Revenues

7,968

7,406

3,561

3,471

1,947

1,702

1,554

1,458

929

828

Foreign exchange/commodity

timing

differences

in total revenues

(7)

(1)

Operational revenues

8,019

7,429

3,593

3,474

1,970

1,711

1,547

1,472

931

827

Income from operations

1,259

708

762

616

365

291

218

154

113

Acquisition-related amortization

Restructuring, related

and

implementation costs

(1)

–

Changes in obligations

related to

divested businesses

–

Gains and losses

from sale of businesses

(71)

–

(71)

(1)

–

Acquisition-

and divestment

-related

expenses and

integration costs

(4)

Certain other non-operational

items

381

–

Foreign exchange/commodity

timing

differences

in income from operations

(6)

(2)

–

(2)

Operational EBITA

1,392

1,231

748

651

390

305

226

225

137

106

Operational EBITA

margin (%)

17.4%

16.6%

20.8%

18.7%

19.8%

17.8%

14.6%

15.3%

14.7%

12.8%

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions, unless

otherwise indicated)

9M 23

9M 22

9M 23

9M 22

9M 23

9M 22

9M 23

9M 22

9M 23

9M 22

Revenues

23,990

21,622

10,886

10,121

5,868

4,900

4,543

4,493

2,788

2,290

Foreign exchange/commodity

timing

differences

in total revenues

Operational revenues

24,015

21,712

10,898

10,132

5,880

4,908

4,546

4,538

2,790

2,295

Income from operations

3,755

2,152

2,130

1,571

1,098

776

688

480

347

146

Acquisition-related amortization

164

174

Restructuring, related

and

implementation costs

(1)

300

–

Changes in obligations

related to

divested businesses

(5)

(17)

–

Gains and losses

from sale of businesses

(97)

(71)

(1)

–

(26)

–

Acquisition-

and divestment

-related

expenses and

integration costs

171

(3)

122

Certain other non-operational

items

480

–

Foreign exchange/commodity

timing

differences

in income from operations

100

–

(3)

Operational EBITA

4,094

3,364

2,212

1,768

1,157

845

670

645

418

215

Operational EBITA

margin (%)

17.0%

15.5%

20.3%

17.4%

19.7%

17.2%

14.7%

14.2%

15.0%

9.4%

(1)

Includes impairment of certain

assets.

Q3 2023 FINANCIAL INFORMATION

Depreciation and Amortization

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions)

Q3 23

Q3 22

Q3 23

Q3 22

Q3 23

Q3 22

Q3 23

Q3 22

Q3 23

Q3 22

Depreciation

130

129

Amortization

including total acquisition-related

amortization of:

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions)

9M 23

9M 22

9M 23

9M 22

9M 23

9M 22

9M 23

9M 22

9M 23

9M 22

Depreciation

384

401

190

191

Amortization

197

214

including total acquisition-related

amortization of:

164

174

Orders received and

revenues by

region

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

Com-

Q3 23

Q3 22

US$

Local

parable

Q3 23

Q3 22

US$

Local

parable

Europe

2,391

2,682

-11%

-16%

-13%

2,810

2,494

13%

10%

The Americas

3,258

2,980

13%

2,775

2,452

13%

12%

16%

of which United

States

2,479

2,294

13%

2,067

1,796

15%

19%

Asia, Middle East

and Africa

2,403

2,526

-5%

2,383

2,460

-3%

of which China

1,044

1,166

-10%

-5%

-3%

1,075

1,300

-17%

-13%

-10%

ABB Group

8,052

8,188

-2%

7,968

7,406

11%

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

Com-

9M 23

9M 22

US$

Local

parable

9M 23

9M 22

US$

Local

parable

Europe

8,904

9,174

-3%

8,617

7,520

15%

14%

17%

The Americas

9,452

8,927

8,243

7,018

17%

20%

of which United

States

6,928

6,753

6,143

5,124

20%

23%

Asia, Middle East

and Africa

7,813

8,267

-5%

7,130

7,084

12%

of which China

3,593

4,114

-13%

-7%

-5%

3,404

3,563

-4%

ABB Group

26,169

26,368

-1%

23,990

21,622

11%

13%

16%

Q3 2023 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, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Sales of products

20,210

17,946

6,680

6,184

Sales of services

and other

3,780

3,676

1,288

1,222

Total revenues

23,990

21,622

7,968

7,406

Cost of sales

of products

(13,393)

(12,439)

(4,447)

(4,217)

Cost of services

and other

(2,231)

(2,131)

(759)

(708)

Total cost of

sales

(15,624)

(14,570)

(5,206)

(4,925)

Gross profit

8,366

7,052

2,762

2,481

Selling, general and administrative

expenses

(4,058)

(3,833)

(1,331)

(1,277)

Non-order related research

and development

expenses

(951)

(844)

(314)

(272)

Other income (expense),

net

398

(223)

142

(224)

Income from operations

3,755

2,152

1,259

708

Interest and dividend

income

115

Interest and other

finance expense

(197)

(107)

(73)

(45)

Non-operational pension

(cost) credit

102

Income from continuing

operations before

taxes

3,696

2,197

1,231

714

Income tax expense

(794)

(728)

(326)

(294)

Income from continuing

operations, net

of tax

2,902

1,469

905

420

Loss from discontinued

operations, net of

tax

(16)

(36)

(7)

(16)

Net income

2,886

1,433

898

404

Net income attributable

to noncontrolling

interests and

redeemable noncontrolling

interests

(62)

(90)

(16)

(44)

Net income attributable

to ABB

2,824

1,343

882

360

Amounts attributable

to ABB shareholders:

Income from continuing

operations, net of

tax

2,840

1,379

889

376

Loss from discontinued

operations, net of

tax

(16)

(36)

(7)

(16)

Net income

2,824

1,343

882

360

Basic earnings per share

attributable to

ABB shareholders:

Income from continuing

operations, net of

tax

1.53

0.72

0.48

0.20

Loss from discontinued

operations, net of

tax

(0.01)

(0.02)

0.00

(0.01)

Net income

1.52

0.70

0.48

0.19

Diluted earnings

per share attributable

to ABB shareholders:

Income from continuing

operations, net of

tax

1.52

0.72

0.48

0.20

Loss from discontinued

operations, net of

tax

(0.01)

(0.02)

0.00

(0.01)

Net income

1.51

0.70

0.47

0.19

Weighted-average

number of shares

outstanding

(in millions)

used to compute:

Basic earnings

per share attributable

to ABB shareholders

1,859

1,909

1,854

1,882

Diluted earnings per share

attributable to

ABB shareholders

1,871

1,920

1,865

1,889

Due to rounding, numbers

presented may not add

to the totals provided.

See Notes to the Consolidated

Financial Information

Q3 2023 FINANCIAL INFORMATION

—

ABB Ltd Condensed Consolidated

Statements of Comprehensive

Income (unaudited)

Nine months ended

Three months ended

($ in millions)

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Total comprehensive

income, net of

tax

2,729

775

815

Total comprehensive

income attributable

to noncontrolling

interests and

redeemable noncontrolling

interests, net of

tax

(54)

(58)

(11)

(32)

Total comprehensive

income attributable

to ABB shareholders,

net of tax

2,675

717

804

Due to rounding, numbers

presented may not add

to the totals provided.

See Notes to the Consolidated

Financial Information

Q3 2023 FINANCIAL INFORMATION

—

ABB Ltd Consolidated

Balance Sheets (unaudited)

($ in millions)

Sep. 30, 2023

Dec. 31, 2022

Cash and equivalents

3,869

4,156

Restricted cash

Marketable securities

and short-term investments

1,091

725

Receivables,

net

7,586

6,858

Contract assets

1,073

954

Inventories, net

6,332

6,028

Prepaid expenses

280

230

Other current assets

527

505

Current assets held

for sale and in

discontinued

operations

Total current

assets

20,836

19,570

Property, plant

and equipment, net

3,891

3,911

Operating lease right

-of-use assets

850

841

Investments in equity

-accounted companies

186

130

Prepaid pension

and other employee

benefits

969

916

Intangible assets,

net

1,181

1,406

Goodwill

10,356

10,511

Deferred taxes

1,366

1,396

Other non-current assets

464

467

Total assets

40,099

39,148

Accounts payable,

trade

4,777

4,904

Contract liabilities

2,610

2,216

Short-term debt and

current maturities

of long-term debt

2,951

2,535

Current operating

leases

234

220

Provisions for warranties

1,108

1,028

Other provisions

1,114

1,171

Other current liabilities

4,597

4,323

Current liabilities held

for sale and

in discontinued

operations

132

Total current

liabilities

17,470

16,529

Long-term debt

4,899

5,143

Non-current operating

leases

643

651

Pension and

other employee

benefits

642

719

Deferred taxes

675

729

Other non-current liabilities

1,908

2,085

Non-current liabilities

held for sale and

in discontinued

operations

Total liabilities

26,256

25,876

Commitments and contingencies

Redeemable

noncontrolling interest

Stockholders’ equity:

Common stock, CHF

0.12 par value

(1,882 million and 1,965

million shares issued

at September

30, 2023, and December

31, 2022, respectively)

163

171

Additional paid-in capital

141

Retained earnings

18,840

20,082

Accumulated

other comprehensive

loss

(4,705)

(4,556)

Treasury stock, at

cost

(33 million and 100

million shares at

September 30, 2023,

and December

31, 2022, respectively)

(1,111)

(3,061)

Total ABB stockholders’ equity

13,206

12,777

Noncontrolling interests

548

410

Total stockholders’

equity

13,754

13,187

Total liabilities

and stockholders’

equity

40,099

39,148

Due to rounding, numbers

presented may not add

to the totals provided.

See Notes to the Consolidated

Financial Information

Q3 2023 FINANCIAL INFORMATION

—

ABB Ltd Consolidated

Statements of Cash

Flows (unaudited)

Nine months ended

Three months ended

($ in millions)

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

Operating activities:

Net income

2,886

1,433

898

404

Loss from discontinued

operations, net of

tax

Adjustments to reconcile

net income (loss)

net cash provided

by operating activities:

Depreciation and

amortization

581

615

194

198

Changes in fair

values of investments

(28)

(39)

(4)

(24)

Pension and

other employee benefits

(67)

(107)

(55)

(24)

Deferred taxes

(42)

(183)

(79)

(35)

Loss from equity

-accounted companies

100

Net loss (gain) from

derivatives

and foreign exchange

(44)

(33)

Net gain from sale of

property,

plant and equipment

(39)

(64)

(6)

(9)

Net loss (gain) from

sale of businesses

(97)

(71)

–

Other

115

(2)

Changes in operating

assets and

liabilities:

Trade receivables,

net

(819)

(657)

(152)

(36)

Contract assets and

liabilities

243

353

164

101

Inventories, net

(438)

(1,667)

(584)

Accounts payable,

trade

(37)

390

(35)

177

Accrued liabilities

140

342

307

Provisions, net

106

312

186

Income taxes payable

and receivable

(9)

Other assets and

liabilities, net

(74)

(88)

(18)

Net cash provided

by operating activities

– continuing

operations

2,404

614

1,361

793

Net cash used

in operating activities

– discontinued

operations

(11)

(14)

(10)

(2)

Net cash provided

by operating activities

2,393

600

1,351

791

Investing activities:

Purchases

of investments

(1,103)

(271)

(343)

(15)

Purchases

of property, plant

and equipment

and intangible assets

(506)

(503)

(175)

(165)

Acquisition of businesses

(net of cash acquired)

and increases

in cost- and equity-accounted

companies

(160)

(226)

(25)

(47)

Proceeds from

sales of investments

598

654

422

148

Proceeds from

maturity of investments

138

–

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

552

(8)

509

Net cash from settlement

of foreign currency

derivatives

(76)

(154)

(58)

(210)

Changes in loans

receivable, net

Other investing activities

(10)

–

Net cash provided

by (used in)

investing activities

– continuing

operations

(473)

(422)

347

(256)

Net cash provided

by (used in)

investing activities

– discontinued

operations

(22)

(91)

(1)

–

Net cash provided

by (used in)

investing activities

(495)

(513)

346

(256)

Financing activities:

Net changes

in debt with original

maturities of 90

days or less

(997)

1,475

(962)

284

Increase in debt

2,584

3,554

936

373

Repayment of

debt

(1,437)

(2,025)

(309)

(542)

Delivery of shares

118

389

Purchase of

treasury stock

(909)

(3,251)

(433)

(590)

Dividends paid

(1,713)

(1,698)

–

Dividends paid

to noncontrolling shareholders

(89)

(83)

(6)

(7)

Proceeds from

issuance of subsidiary

328

–

Other financing

activities

(58)

(5)

Net cash used

in financing activities

– continuing

operations

(2,111)

(1,697)

(748)

(468)

Net cash provided

by financing

activities –

discontinued operations

–

Net cash used

in financing activities

(2,111)

(1,697)

(748)

(468)

Effects of

exchange rate changes

on cash and equivalents

and restricted cash

(74)

(191)

(32)

(115)

Adjustment for the net

change in cash

and equivalents

and restricted cash

in Assets held for

sale

–

Net change in cash

and equivalents

and restricted

cash

(287)

(1,801)

945

(48)

Cash and equivalents

and restricted cash,

beginning of

period

4,174

4,489

2,942

2,736

Cash and equivalents

and restricted

cash, end of

period

3,887

2,688

3,887

2,688

Supplementary disclosure

of cash flow

information:

Interest paid

151

Income taxes paid

865

907

338

269

Due to rounding, numbers

presented may not add

to the totals provided.

See Notes to the Consolidated

Financial Information

Q3 2023 FINANCIAL INFORMATION

—

ABB Ltd Consolidated

Statements of Changes

in Stockholders’

Equity (unaudited)

($ in millions)

Common

stock

Additional

paid-in

capital

Retained

earnings

Accumulated

other

comprehensive

loss

Treasury

stock

Total ABB

stockholders’

equity

Non-

controlling

interests

Total

stockholders’

equity

Balance at January

1, 2022

178

22,477

(4,088)

(3,010)

15,579

378

15,957

Net income

(1)

1,343

1,436

Foreign currency

translation

adjustments, net of

tax of $1

(774)

(32)

(806)

Effect of change

in fair value of

available-for-sale securities,

net of tax of $(6)

(24)

Unrecognized income

(expense)

related to pensions

and other

postretirement plans,

net of tax of $57

172

Change in derivative

instruments

and hedges, net of tax of $3

–

Changes in noncontrolling

interests

(3)

(22)

(25)

Dividends to

noncontrolling shareholders

–

(81)

Dividends to shareholders

(1,700)

Cancellation of

treasury shares

(8)

(4)

(2,864)

2,876

–

Share-based payment

arrangements

Purchase of

treasury stock

(3,201)

Delivery of shares

(46)

(130)

565

389

Other

Balance at September

30, 2022

171

19,127

(4,715)

(2,770)

11,822

336

12,158

Balance at January

1, 2023

171

141

20,082

(4,556)

(3,061)

12,777

410

13,187

Net income

(1)

2,824

2,889

Foreign currency

translation

adjustments, net of

tax of $0

(177)

(8)

(185)

Effect of change

in fair value of

available-for-sale securities,

net of tax of $1

Unrecognized income

(expense)

related to pensions

and other

postretirement plans,

net of tax of $8

Change in derivative

instruments

and hedges, net of tax of $0

Issuance of subsidiary

170

168

338

Other changes

noncontrolling interests

(7)

(2)

Dividends to

noncontrolling shareholders

–

(93)

Dividends to shareholders

(1,706)

Cancellation of

treasury shares

(7)

(201)

(2,359)

2,567

–

Share-based payment

arrangements

Purchase of

treasury stock

(898)

Delivery of shares

(163)

281

118

Other

(4)

Balance at September

30, 2023

163

18,840

(4,705)

(1,111)

13,206

548

13,754

(1)

Amounts attributable to noncontrolling

interests for the nine months

ended September

30, 2023 and 2022,

exclude net losses of $3 million

and $3 million, respectively, related to

redeemable noncontrolling

interests, which

are reported in the mezzanine

equity section on the Consolidated

Balance Sheets. See

Note 4 for details.

Due to rounding, numbers

presented may not add

to the totals provided.

See Notes to the Consolidated

Financial Information

Q3 2023 FINANCIAL INFORMATION

—

Notes to the Consolidated

Financial Information (unaudited)

─

Note 1

The Company and basis

of presentation

ABB Ltd and its subsidiaries

(collectively,

the Company)

together form a

technology

leader in electrification

and automation,

enabling a more

sustainable and

resource-efficient

future. The Company’s

solutions connect

engineering know

-how and software

to optimize how

things are manufactured,

moved, powered

and

operated.

The Company’s

Consolidated

Financial Information

is prepared in accordance

with United States

of America generally

accepted accounting

principles (U.S.

GAAP) for interim

financial reporting.

As such, the Consolidated

Financial Information

does not include

all the information

and notes

required under U.S.

GAAP for

annual consolidated

financial statements. Therefore,

such financial

information should

be read in conjunction

with the audited

consolidated

financial statements

the Company’s

Annual Report for

the year ended

December 31, 2022.

The preparation of

financial information

in conformity with

U.S. GAAP requires

management

to make assumptions

and estimates that

directly affect

the amounts

reported in the Consolidated

Financial Information.

These accounting

assumptions

and estimates include:

●

estimates to determine

valuation allowances

for deferred tax

assets and

amounts recorded

for unrecognized

tax benefits,

●

estimates related

to credit losses

expected to occur

over the remaining

life of financial

assets such

as trade and other rece

ivables, loans and

other

instruments,

●

estimates used

to record expected

costs for employee

severance

in connection with restructuring

programs,

●

estimates of loss

contingencies

associated with litigation

or threatened litigation

and other claims

and inquiries, environmental

damages, product

warranties, self-insurance

reserves, regulatory

and other proceedings,

●

assumptions

and projections, principally

related to future material,

labor and project-related

overhead costs,

used in determining

the percentage

-of-

completion on projects

where revenue

is recognized over

time,

as well as the amount

of variable consideration

the Company expects

to be entitled to,

●

assumptions

used in the calculation

of pension

and postretirement benefits

and the fair value

of pension

plan assets,

●

assumptions

used in determining

inventory obsolescence

and net realizable value,

●

growth rates, discount

rates and other

assumptions

used to determine

impairment of long

-lived assets and

in testing goodwill for

impairment,

●

estimates and assumptions

used in determining the fair

values of assets

and liabilities assumed

in business combinations,

and

●

estimates and ass

umptions used

in determining the initial

fair value of

retained noncontrolling

interests

and certain obligations

in connection with

divestments.

The actual results and

outcomes may

differ from the

Company’s

estimates and assumptions.

A portion of the Company’s

activities (primarily

long-term construction

activities) has an

operating cycle

that exceeds

one year. For classification

of current assets

and liabilities related

to such activities,

the Company elected

to use the duration

of the individual contracts

as its operating

cycle. Accordingly,

there are accounts

receivable, contract

assets, inventories

and provisions

related to these

contracts which

will not be realized

within one year

that have been

classified as

current.

Basis of presentation

In the opinion of management,

the unaudited Consolidated

Financial Information

contains all necessary

adjustments to present

fairly the financial

position, results

of operations

and cash flows

for the reported periods.

Management

considers

all such adjustments

to be of a normal

recurring nature. The

Consolidated

Financial

Information is presented

in United States

dollars ($) unless

otherwise stated.

Due to rounding,

numbers presented

in the Consolidated

Financial Information

may

not add to the totals

provided.

Certain amounts

reported in the Consolidated

Financial Information

for prior periods have

been reclassified

to conform to the

current year’s presentation.

These

changes

relate primarily to the reorganization

of the Company’s

operating segments

(see Note 17 for

details).

Q3 2023 FINANCIAL INFORMATION

─

Note 2

Recent accounting pronouncements

Applicable for current

periods

Disclosure about supplier

finance program

obligations

In January 202

3, the Company adopted

an accounting

standard update

which requires entities to

disclose information

related to supplier finance

programs. Under

the update, the Company

is required to

disclose annually

(i) the key terms of

the program, (ii) the

amount of

the supplier finance

obligations outstanding

and where

those obligations

are presented in

the balance sheet

at the reporting date,

and (iii) a

rollforward of the supplier

finance obligation

program within

the reporting

period. The Company

adopted this update

retrospectively

for all in-scope

transactions, with

the exception of

the rollforward disclosures,

which will be adopted

prospectively

for annual periods

beginning January

1, 2024. Apart from the additional

disclosure requirements,

this update does

not have a significant

impact on

the Company’s

consolidated

financial statements.

The total outstanding

supplier finance

obligation included

in “Accounts payable,

trade” in the Consolidated

Balance Sheets

at September 30,

2023 and

December 31, 2022,

amounted to $448

million and $477

million,

respectively.

The Company’s

payment terms

related to suppliers’

finance programs

are not

impacted by the suppliers’

decisions to sell

amounts under

the arrangements

and are typically

consistent with

local market practices.

Facilitation of the effects

of reference

rate reform on

financial reporting

In January 202

3, the Company adopted

an accounting

standard update

which provides

temporary optional expedients

and exceptions

to the current guidance

contract modifications

and hedge

accounting to ease

the financial reporting

burdens related

to the expected

market transition

from the London

Interbank Offered

Rate (LIBOR) and other

interbank offered

rates to alternative

reference rates.

The Company

is applying this standard

update as

relevant contract and

hedge

accounting

relationship modifications

are made during

the course of

the transition period

ending December

31, 2024. This

update does

not have a significant

impact on the Company’s

consolidated

financial statements.

─

Note 3

Discontinued operations

and assets held for

sale

Divestment of the

Power Grids business

In 2020, the Company

completed the divestment

of its Power Grids

business to Hitachi

Ltd (Hitachi)

Upon closing

of the sale, the Company

entered into various

transition services agreements

(TSAs),

some of which

continue to have

services performed

Pursuant to these

TSAs, the

Company and

Hitachi Energy provide

each other, on

a transitional basis,

various services.

The services

provided by the

Company primarily

include finance,

information technology,

human resources

and certain other administrative

services. The

TSAs were

to be performed for

up to 3 years

with the possibility

to agree on extensions

on an exceptional

basis for

business-critical services

which are reasonably

necessary

to avoid a material adverse

impact on the business.

The TSA for

information technology

services was

extended until mid-2025.

In the nine and

three months ended

September 30,

2023, the Company

has recognized

within its continuing

operations, general

and

administrative expenses

incurred to perform

the TSAs, offset

by $114

million and $38 million

in TSA-related

income for such

services that is reported

in Other

income (expense),

net.

In the nine and

three months ended

September 30, 2022,

the Company has

recognized within

its continuing

operations, general

and

administrative expenses

incurred to perform

the TSAs, offset

by $115

million and $39 million

in TSA-related

income for such

services that is reported

in Other

income (expense),

net.

Discontinued op

erations

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 a

strategic shift that

would have

a major effect

on the Company’s

operations and

financial results, the

results of operations

for this business

are presented as

discontinued

operations and

the assets and

liabilities are presented

as held for sale

and in discontinued

operations.

Certain of the business

contracts in the

Power

Grids business

continue to be executed

by subsidiaries

of the Company

for the benefit/risk of Hitachi

Energy.

Assets and

liabilities relating to,

as well as the net

financial results

of,

these contracts

will continue to

be included in discontinued

operations until

they have been

completed or otherwise

transferred to Hitachi

Energy.

The remaining busin

ess activities of

the Power Grids

business being

executed by the Company

are not significant.

In addition, the Company

also has retained

obligations

(primarily for environmental

and taxes)

related to other

businesses disposed

or otherwise exited that

qualified as discontinued

operations at the time

of their disposal

Changes to these

retained obligations

are also included

in Loss from discontinued

operations, net

of tax.

At September 30,

2023, the balances

reported as held for

sale and

in discontinued

operations pertaining

to the activities

of the Power Grids

business

and other

obligations will remain

with the Company

until such time as

the obligations

are settled or

the activities are

fully wound down

These balanc

es amounted

$60 million of current

assets, $79 million

of current liabilities

and $19 million

of non-current

liabilities.

Q3 2023 FINANCIAL INFORMATION

─

Note 4

Acquisitions and equity

-accounted companies

Acquisition of controlling

interests

Acquisitions of

controlling interests

were as follows:

Nine months ended

September 30,

Three months ended September 30,

($ in millions, except

number of acquired

businesses)

2023

2022

2023

2022

Purchase price

for acquisitions

(net of cash acquired)

(1)

115

150

Aggregate excess

of purchase price

over

fair value of net

assets acquired

(2)

205

Number of acquired

businesses

(1)

Excluding changes in cost-

and equity-accounted companies.

(2)

Recorded as goodwill.

In the table above,

the “Purchase

price for acquisitions”

and “Aggregate excess

of purchase

price over fair value

of net assets

acquired” amounts

in the nine

months ended

September 30, 2022

relate primarily

to the acquisition

of InCharge Energy,

Inc. (In-Charge).

Acquisitions of

controlling interests

have been

accounted for under

the acquisition method

and have been

included in the

Company’s consolidated

financial

statements since

the date of acquisi

tion.

On January 26,

2022, the Company

increased its ownership

in In-Charge to a 60

percent controlling

interest through a

stock purchase

agreement. In-Charge is

headquartered

in Santa Monica, USA,

and is a provider

of turn-key commercial

electric vehicle

charging hardware

and software

solutions. The resulting

cash

outflows for the

Company amounted

to $134

million (net of cash

acquired of $4

million). The acquisition

expands

the market presence

of the E-mobility operating

segment, particularly

in the North American

market. In connection

with the acquisition,

the Company’s

pre-existing 13.2

percent ownership

of In-Charge was

revalued to fair value

and a gain of

$32 million was

recorded in “Other

income (expense)

net” in the nine

months ended

September 30, 2022.

The Company

entered into an agreement

with the remaining

noncontrolling shareholders

allowing either

party to put or call

the remaining 40

percent of the shares

until 2027. The

amount for which

either party can exercise

their option is dependent

on a formula based

on revenues

and thus, the amount

is subject to change.

As a result of

this

agreement, the noncontrolling

interest is classified

as Redeemable

noncontrolling interest

(i.e. mezzanine

equity) in the

Consolidated

Balance Sheets

and was

initially recognized at

fair value.

While the Company

uses its best

estimates and assumptions

as part of the purchase

price allocation

process to value

assets acquired

and liabilities assumed

the acquisition date,

the purchase

price allocation for acquisitions

is preliminary for up

to 12 months after

the acquisition

date and is subject

to refinement

as more

detailed analyses

are completed and

additional information

about the fair

values of the

assets and

liabilities becomes

available.

Business divestments

In the nine and three

months ended

September 30, 2023,

the Company received

proceeds (net of

transaction costs

and cash disposed)

of $552 million and

$509 million,

respectively,

relating to divestments

of consolidated

businesses and

recorded gains

of $97 million and

$71 million, respectively,

in “Other income

(expense), net” on

the sale of such

businesses. These

are primarily due the

divestment of the

Company’s

Power Conversion

Division to AcBel

Polytech Inc.,

which

prior to its sale was

part of the Company’s

Electrification operating

segment. Certain

amounts

included in the net gain

for the sale of

Power Conversion

Division

are estimated or otherwise

subject to change

in value and, as a

result, the Company

may record additional

adjustments

to the gain in future

periods which are

not

expected to have

a material impact on the

consolidated

financial statements.

Investments in equity

-accounted companies

In connection with the

divestment

of its Power Grids

business to Hitachi

in 2020 (see Note 3),

the Company

initially retained

a 19.9 percent interest

in the business

until December 2022,

when the retained

investment

was sold to Hitachi.

During the

Company’s

period of ownership

of the retained 19.9

percent interest,

based on

its continuing involvement

with the Power

Grids business,

including the membership

in its governing

board of directors,

the Company concluded

that it had

significant influence

over Hitachi Energy.

As a result, the

investment was

accounted

for using the equity

method through

to the date of its sale.

In the nine and three

months ended

September 30, 2023

and 2022, the

Company recorded

its share of

the earnings of

investees accounted

for under the equity

method of accounting

in Other income (expense),

net, as follows:

Nine months ended

September 30,

Three months ended September 30,

($ in millions)

2023

2022

2023

2022

Loss from equity

-accounted companies,

net of taxes

(11)

(34)

(4)

(24)

Basis difference

amortization (net of

deferred income

tax benefit)

–

(66)

–

(14)

Loss from equity

-accounted companies

(11)

(100)

(4)

(38)

Q3 2023 FINANCIAL INFORMATION

─

Note 5

Cash and equivalents

marketable securities

and short-term investments

Cash and equivalents,

marketable securities

and short-term

investments consisted

of the following:

September 30, 2023

Cash and

Marketable

Gross

equivalents

securities

unrealized

and restricted

and short-term

($ in millions)

Cost basis

gains

losses

Fair value

cash

investments

Changes in fair

value

recorded in net income

Cash

1,425

Time deposits

2,709

2,462

247

Equity securities

620

644

4,754

–

4,778

3,887

891

Changes in fair

value recorded

in other comprehensive

income

Debt securities available

-for-sale:

U.S. government obligations

200

(13)

188

European government

obligations

212

(13)

200

–

200

Total

4,966

(13)

4,978

3,887

1,091

Of which:

Restricted cash, current

December 31, 2022

Cash and

Marketable

Gross

equivalents

securities

unrealized

and restricted

and short-term

($ in millions)

Cost basis

gains

losses

Fair value

cash

investments

Changes in fair

value

recorded in net income

Cash

1,715

Time deposits

2,459

Equity securities

345

355

4,519

–

4,529

4,174

355

Changes in fair

value recorded

in other comprehensive

income

Debt securities available

-for-sale:

U.S. government obligations

269

(15)

255

Other government obligations

Corporate

(7)

391

(22)

370

–

370

Total

4,910

(22)

4,899

4,174

725

Of which:

Restricted cash, current

Q3 2023 FINANCIAL INFORMATION

─

Note 6

Derivative financial instruments

The Company

is exposed to certain currency,

commodity,

interest rate and equity

risks arising from

its global operating,

financing

and investing activities.

The

Company uses

derivative instruments

to reduce and

manage the economic

impact of these

exposures.

Currency risk

Due to the global nature

of the Company’s

operations, many

of its subsidiaries

are exposed

to currency risk

in their operating

activities from entering

into

transactions in currencies

other than their

functional currency.

To manage

such currency

risks, the Company’s

policies require

its subsidiaries

to hedge their

foreign currency

exposures from

binding sales

and purchase

contracts denominated

in foreign currencies.

For forecasted

foreign currency

denominated

sales of

standard products

and the related foreign

currency denominated

purchases,

the Company’s

policy is to hedge

up to a maximum

of 100 percent

of the forecasted

foreign currency

denominated

exposures, depending

on the length of the

forecasted

exposures. Forecasted

exposures greater than

12 months are not

hedged.

Forward foreign exchange

contracts are the main

instrument used

to protect the

Company against

the volatility of future

cash flows

(caused by changes

exchange rates) of

contracted and

forecasted

sales and purchases

denominated

in foreign currencies.

In addition, within

its treasury operations,

the Company

primarily uses foreign

exchange swaps

and forward foreign

exchange

contracts to manage the

currency and

timing mismatches

arising in its liquidity

management

activities.

Commodity risk

Various commodity

products are used

in the Company’s

manufacturing

activities. Consequently

it is exposed

to volatility in future

cash flows

arising from changes

in commodity prices.

To manage

the price risk of

commodities,

the Company’s

policies require

that its subsidiaries

hedge the commodity

price risk exposures

from

binding contracts,

as well as at least

50 percent (up

to a maximum of

100 percent) of

the forecasted

commodity exposure

over the next 12

months or longer

(up to

a maximum of 18

months). Primarily

swap contracts

are used to manage

the associated

price risks of

commodities.

Interest rate risk

The Company

has issued bonds

at fixed rates. Interest

rate swaps and

cross-currency interest

rate swaps

are used to manage

the interest rate and

foreign

currency risk associated

with certain debt and

generally such

swaps are designated

as fair value hedges.

In addition, from time

to time, the Company

uses

instruments such

as interest rate swaps,

interest rate futures,

bond futures

or forward rate agreements

to manage

interest rate risk arising

from the Company’s

balance sheet

structure but does not

designate such

instruments as hedges.

Equity risk

The Company

is exposed to fluctuations

in the fair value

of its warrant appreciation

rights (WARs)

issued under

its managemen

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 at

($ in millions)

September 30, 2023

December 31, 2022

September 30, 2022

Foreign exchange

contracts

13,090

13,509

15,501

Embedded

foreign exchange

derivatives

1,291

933

864

Cross-currency interest

rate swaps

849

855

781

Interest rate contracts

1,751

2,830

2,598

Derivative commodity

contracts

The Company

uses derivatives

to hedge its direct or indirect

exposure to the

movement in the prices

of commodities

which are

primarily copper,

silver, steel and

aluminum.

The following table

shows the notional

amounts of outstanding

derivatives (whether

designated as

hedges or not), on a net

basis, to reflect

the

Company’s

requirements for these

commodities:

Type of derivat

ive

Unit

Total notional amounts at

September 30, 2023

December 31, 2022

September 30, 2022

Copper swaps

metric tonnes

32,223

29,281

36,264

Silver swaps

ounces

1,702,359

2,012,213

2,787,909

Steel swaps

metric tonnes

11,476

–

Aluminum swaps

metric tonnes

5,800

6,825

6,925

Equity derivatives

At September 30,

2023, December

31, 2022, and September

30, 2022, the

Company held

3 million, 8 million

and 8 million

cash-settled call options

indexed to ABB

Ltd shares (conversion

ratio 5:1) with a

total fair value of

$9 million, $15 million

and $11

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

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,

2023 and 2022,

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 2023 FINANCIAL INFORMATION

The effect of

derivative instruments, designated

and qualifying

as fair value hedges,

on the Consolidated

Income Statements

was as follows:

Nine months ended

September 30,

Three months ended September 30,

($ in millions)

2023

2022

2023

2022

Gains (losses)

recognized in Interest

and other finance

expense:

Interest rate contracts

Designated as

fair value hedges

(83)

(28)

Hedged item

(31)

(13)

Cross-currency interest

rate swaps

Designated as

fair value hedges

(13)

(125)

(3)

(31)

Hedged item

119

Derivatives not designated

in hedge relationships

Derivative instruments

that are not designated

as hedges

or do not qualify as

either cash

flow or fair value hedges

are economic

hedges used

for risk management

purposes. Gains

and losses

from changes in the

fair values of

such derivatives

are recognized in

the same line in the

income statement

as the economically

hedged transaction.

Furthermore, under

certain circumstances,

the Company is

required to split and

account separately

for foreign currency

derivatives that are

embedded

within

certain binding sales

or purchase contracts

denominated

in a currency

other than the functional

currency of the

subsidiary

and the counterparty.

The gains (losses)

recognized in the

Consolidated

Income Statements

on derivatives

not designated

in hedging relationships

were as follows:

Type of derivative

not

Gains (losses)

recognized in income

designated as

a hedge

Nine months ended

September 30,

Three months ended September 30,

($ in millions)

Location

2023

2022

2023

2022

Foreign exchange

contracts

Total revenues

(13)

(201)

(18)

(82)

Total cost

of sales

(20)

(8)

SG&A expenses

(1)

Non-order related research

(4)

and development

(3)

Interest and other

finance expense

(16)

(139)

(85)

Embedded

foreign exchange

Total revenues

(6)

contracts

Total cost

of sales

–

(12)

(10)

Commodity contracts

Total cost

of sales

(7)

(72)

(21)

Other

Interest and other

finance expense

–

Total

(314)

(154)

(1)

SG&A expenses represent “Selling, general and administrative expenses”.

The fair values

of derivatives

included in the Consolidated

Balance Sheets

were as follows:

September 30, 2023

Derivative assets

Derivative liabilities

Current in

Non-current in

Current in

Non-current in

“Other current

“Other non-current

“Other current

“Other non-current

($ in millions)

assets”

liabilities”

Derivatives designated

as hedging

instruments:

Foreign exchange

contracts

–

Interest rate contracts

–

Cross-currency interest

rate swaps

–

304

Cash-settled call options

–

Total

–

305

Derivatives not designated

as hedging instruments:

Foreign exchange

contracts

179

Commodity contracts

–

Interest rate contracts

–

Other equity contracts

–

Embedded

foreign exchange

derivatives

Total

218

125

Total fair

value

227

161

325

Q3 2023 FINANCIAL INFORMATION

December 31, 2022

Derivative assets

Derivative liabilities

Current in

Non-current in

Current in

Non-current in

“Other current

“Other non-current

“Other current

“Other non-current

($ in millions)

assets”

liabilities”

Derivatives designated

as hedging

instruments:

Foreign exchange

contracts

–

Interest rate contracts

–

Cross-currency interest

rate swaps

–

288

Cash-settled call options

–

Total

–

349

Derivatives not designated

as hedging instruments:

Foreign exchange

contracts

140

Commodity contracts

–

Interest rate contracts

–

Embedded

foreign exchange

derivatives

Total

169

112

Total fair

value

184

121

367

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

31,

2022, information

related to these offsett

ing arrangements

was as follows:

($ in millions)

September 30, 2023

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement

of recognized

eligible for set-off

collateral

Net asset

similar arrangement

assets

in case of default

received

exposure

Derivatives

218

(70)

–

148

Total

218

(70)

–

148

($ in millions)

September 30, 2023

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement

of recognized

eligible for set-off

collateral

Net liability

similar arrangement

liabilities

in case of default

pledged

exposure

Derivatives

460

(70)

–

390

Total

460

(70)

–

390

($ in millions)

December 31, 2022

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement

of recognized

eligible for set-off

collateral

Net asset

similar arrangement

assets

in case of default

received

exposure

Derivatives

194

(96)

–

Total

194

(96)

–

($ in millions)

December 31, 2022

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement

of recognized

eligible for set-off

collateral

Net liability

similar arrangement

liabilities

in case of default

pledged

exposure

Derivatives

458

(96)

–

362

Total

458

(96)

–

362

Q3 2023 FINANCIAL INFORMATION

─

Note 7

Fair values

The Company

uses fair value measurement

principles to record

certain financial

assets and

liabilities on a recurring

basis and,

when necessary,

to record certain

non-financial assets

at fair value on a non

-recurring basis, as

well as to determine

fair value disclosures

for certain financial

instruments carried

at amortized cost

in the financial statements.

Financial assets

and liabilities

recorded at fair value

on a recurring basis

include foreign

currency,

commodity and

interest rate

derivatives, as well

as 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 finan

cial assets and

liabilities and non

-financial assets

measured at fair value

within this hierarchy

based on

whether the inputs

to the valuation

technique are observable

or unobservable.

An observable

input is based on

market data obtained

from independent

sources,

while an unobservable

input reflects the Company’s

assumptions

about market data.

The levels of

the fair value hierarchy

are as follows:

Level 1:

Valuation

inputs consist of

quoted prices in an

active market for

identical assets

or liabilities (observable

quoted prices). Assets

and liabilities

valued

using Level 1 inputs

include exchange

‑

traded equity securities,

listed derivatives

which are actively

traded such

as commodity futures,

interest rate

futures and certain

actively

traded debt securities

Level 2:

Valuation

inputs consist of

observable inputs

(other than Level

1 inputs) such

as actively quoted

prices for similar assets,

quoted prices in inactive

markets and inputs

other than quoted

prices such as

interest rate yield

curves, credit spreads,

or inputs derived

from other observable

data by

interpolation, correlation,

regression or other

means. The adjustments

applied to quoted

prices or the inputs

used in valuati

on models may

be both

observable and

unobservable. In these

cases, the fair value

measurement is classified

as Level 2 unless

the unobservable

portion of the adjustment

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

determining the fair

value of cash

-settled call options serving

as hedges

of the Company’s

management

incentive plan, bid prices

are used.

When determining fair

values based

on quoted prices

in an active market,

the Company considers

if the level of transaction

activity for the financial

instrument has

significantly decreased

or would not be considered

orderly. In such

cases, the resulting

changes

in valuation techniques

would

be disclosed.

If the market is

considered disorderly

or if quoted prices are

not available, the

Company is

required to use another

valuation technique,

such as

an income approach.

Recurring fair

value measures

The fair values

of financial assets

and liabilities measured

at fair value on a

recurring basis

were as follows:

September 30, 2023

($ in millions)

Level 1

Level 2

Level 3

Total fair

value

Assets

Securities in “Marketable

securities and

short-term investments”:

Equity securities

–

644

–

644

Debt securities—U.S. government

obligations

188

–

188

Debt securities—European

government obligations

–

Derivative assets

—current in “Other current

assets”

–

227

–

227

Derivative assets

—non-current in “Other

non-current assets”

–

Total

200

898

–

1,098

Liabilities

Derivative liabilities

—current in “Other

current liabilities”

–

161

–

161

Derivative liabilities

—non-current in

“Other non-current

liabilities”

–

325

–

325

Total

–

486

–

486

Q3 2023 FINANCIAL INFORMATION

December 31, 2022

($ in millions)

Level 1

Level 2

Level 3

Total fair

value

Assets

Securities in “Marketable

securities and

short-term investments”:

Equity securities

–

355

–

355

Debt securities—U.S. government

obligations

255

–

255

Debt securities—European

government obligations

–

Debt securities—Corporate

–

Derivative assets

—current in “Other current

assets”

–

184

–

184

Derivative assets

—non-current in “Other

non-current assets”

–

Total

255

681

–

936

Liabilities

Derivative liabilities

—current in “Other

current liabilities”

–

121

–

121

Derivative liabilities

—non-current in

“Other non-current

liabilities”

–

367

–

367

Total

–

488

–

488

The Company

uses the following

methods and

assumptions in estimating

fair values

of financial

assets and

liabilities measured

at fair value on a recurring

basis:

●

Securities in “Marketable

securities and

short-term investments”:

If quoted market

prices in active

markets for identical

assets are available,

these are

considered Level

1 inputs; however,

when markets are not

active, these

inputs are considered

Level 2. If

such quoted

market prices are

not available,

fair value is determined

using market prices

for similar assets

or present value

techniques, applying

an appropriate

risk-free interest

rate adjusted for

non-performance

risk. The inputs used

in present value techniques

are observable

and fall into the

Level 2 category.

●

Derivatives

: The fair values of

derivative instruments

are determined

using quoted

prices of identical

instruments from

an active market,

if available

(Level 1 inputs). If quoted

prices are not available,

price quotes for similar

instruments, appropriately

adjusted, or present

value techniques,

based on

available market data,

or option pricing

models are used.

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

There were no significant

non-recurring fair value

measurements

during the nine

and three months

ended September

30, 2023 and

2022.

Disclosure about

financial instruments

carried on a

cost basis

The fair values

of financial instruments

carried on a cost

basis were

as follows:

September 30, 2023

($ in millions)

Carrying value

Level 1

Level 2

Level 3

Total fair

value

Assets

Cash and equivalents

(excluding securities with

original

maturities up to 3

months):

Cash

1,407

–

1,407

Time deposits

2,462

–

2,462

–

2,462

Restricted cash

–

Marketable securities

and short-term investments

(excluding securities):

Time deposits

247

–

247

–

247

Liabilities

Short-term debt and

current maturities

of long-term debt

(excluding finance

lease obligations)

2,923

2,380

543

–

2,923

Long-term debt

(excluding finance

lease obligations)

4,768

4,618

–

4,631

December 31, 2022

($ in millions)

Carrying value

Level 1

Level 2

Level 3

Total fair

value

Assets

Cash and equivalents

(excluding securities with

original

maturities up to 3

months):

Cash

1,697

–

1,697

Time deposits

2,459

–

2,459

–

2,459

Restricted cash

–

Liabilities

Short-term debt and

current maturities

of long-term debt

(excluding finance

lease obligations)

2,500

1,068

1,432

–

2,500

Long-term debt

(excluding finance

lease obligations)

4,976

4,813

–

4,843

Q3 2023 FINANCIAL INFORMATION

The Company

uses the following

methods and

assumptions in estimating

fair values

of financial

instruments carried on

a cost basis:

●

Cash and equivalents

(excluding securities with

original maturities

up to 3 months),

Restricted cash, and

Marketable securities

and short-term

investments (excluding

securities):

The carrying amounts

approximate

the fair values as

the items are short

-term in nature

or, for cash

held in banks,

are equal to the deposit

amount.

●

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, 2023

December 31, 2022

September 30, 2022

Contract assets

1,073

954

955

Contract liabilities

2,610

2,216

2,115

Contract assets primarily

relate to the Company’s

right to receive consideration

for work completed

but for which no

invoice has been

issued at the reporting date.

Contract assets are

transferred

to receivables when

rights to receive

payment become

unconditional. Management

expects that the majority

of the amounts

will be

collected within one

year of the

respective balance

sheet date.

Contract liabilities

primarily relate

to up-front advances

received on orders

from customers

as well as amounts

invoiced to customers

in excess

of revenues

recognized predominantly

on long-term projects.

Contract

liabilities are reduced

as work is performed

and as revenues

are recognized.

The significant

changes in the Contract

assets and

Contract liabilities

balances were

as follows:

Nine months ended

September 30,

2023

2022

Contract

($ in millions)

assets

liabilities

assets

liabilities

Revenue recognized,

which was included

in the Contract liabilities

balance at Jan

1, 2023/2022

(1,230)

(923)

Additions to Contract

liabilities - excluding

amounts recognized

as revenue during

the period

1,602

1,320

Receivables

recognized that were

included in the Contract

assets balance

at Jan 1, 2023/2022

(553)

(501)

The Company

considers its order backlog

to represent its unsatisfied

performance

obligations. At

September 30, 2023,

the Company had

unsatisfied

performance

obligations totaling $21,445

million and, of

this amount, the Company

expects to fulfill

approximately

30% percent of

the obligations

in 2023, approximately

49%

percent of the obligations

in 2024

and the balance

thereafter.

Q3 2023 FINANCIAL INFORMATION

─

Note 9

Debt

The Company’s

total debt at September

30, 2023, and

December 31, 2022,

amounted to $7,850

million and

$7,678 million,

respectively.

Short-term debt and

current maturities

of long-term debt

The Company’s

“Short-term debt and cu

rrent maturities

of long-term debt”

consisted of

the following:

($ in millions)

September 30, 2023

December 31, 2022

Short-term debt

568

1,448

Current maturities of

long-term debt

2,383

1,087

Total

2,951

2,535

Short-term debt primarily

represented issued

commercial paper and

short-term bank borrowings

from various banks.

At September 30,

2023,

and December

31,

2022, $486 million and

$1,383 million,

respectively,

was outstanding

under the $2

billion Euro-commercial

paper program.

No amount was outstanding

under the

$2 billion commercial

paper program

in the United States

at September

30, 2023, or at

December 31, 2022

In September 2023,

the Company repaid

at maturity its

CHF 275 million 0%

Bonds, equivalent

to $302 million

on date of

repayment.

In May 2023, the

Company

repaid at maturity

its EUR 700 million

0.625% Instruments,

equivalent to

$772 million on

date of repayment.

Long-term debt

The Company’s

long-term debt at September

30, 2023, and

December 31, 2022,

amounted

to $4,899 million and

$5,143 million,

respectively.

Outstanding bonds

(including maturities within

the next 12 months)

were as follows:

September 30, 2023

December 31, 2022

(in millions)

Nominal outstanding

Carrying value

(1)

Nominal outstanding

Carrying value

(1)

Bonds:

0.625% EUR Instruments,

due 2023

EUR

700

742

0% CHF Bonds, due 2023

CHF

275

298

0.625% EUR Instruments,

due 2024

EUR

700

729

EUR

700

720

Floating Rate EUR

Instruments, due

2024

EUR

500

531

EUR

500

536

0.75% EUR Instruments,

due 2024

EUR

750

777

EUR

750

769

0.3% CHF Bonds, due

2024

CHF

280

307

CHF

280

303

2.1% CHF Bonds, due

2025

CHF

150

164

CHF

150

162

1.965% CHF Bonds, due 2026

CHF

325

356

3.25% EUR Instruments,

due 2027

EUR

500

527

0.75% CHF Bonds,

due 2027

CHF

425

466

CHF

425

460

3.8% USD Notes, due 2028

(2)

USD

383

382

USD

383

381

1.9775% CHF Bonds, due 2028

CHF

150

165

1.0% CHF Bonds, due

2029

CHF

170

186

CHF

170

184

0% EUR Instruments,

due 2030

EUR

800

670

EUR

800

677

2.375% CHF Bonds, due 2030

CHF

150

164

CHF

150

162

3.375% EUR Instruments,

due 2031

EUR

750

783

2.1125% CHF Bonds, due 2033

CHF

275

301

4.375% USD Notes, due

2042

(2)

USD

609

590

USD

609

590

Total

7,098

5,984

(1)

USD carrying values include

unamortized debt

issuance costs, bond

discounts or premiums,

as well as adjustments

for fair value hedge accounting,

where appropriate.

(2)

Prior to completing a cash

tender offer in November

2020,

the original principal

amount outstanding,

on each of the 3.8%

USD Notes,

due 2028,

and the 4.375% USD

Notes,

due

2042, was USD 750

million.

In January 2023,

the Company issued

the following EUR Instruments:

(i) EUR 500 million

of 3.25 percent

Instruments,

due 2027, and

(ii) EUR 750 million

3.375 percent Instruments

due 2031, both

paying interest

annually in arrears.

The aggregate

net proceeds

of these EUR Instruments,

after discount and

fees,

amounted to EUR

1,235 million

(equivalent to approximately

$1,338 million on

date of issuance).

In September 2023,

the Company issued

the following CHF

Bonds: (i) CHF

325 million of

1.965 percent Bond

s, due 2026, (ii) CHF

150 million of

1.9775 percent

Bonds, due 2028

and (iii) CHF 275 million

of 2.1125

percent Bonds, due

2033,

all paying interest

annually in arrears.

The aggregate

net proceeds

of these CHF

Bonds, after fees,

amounted to CHF

748 million (equivalent

to approximately

$825 million on

date of issuance).

Q3 2023 FINANCIAL INFORMATION

─

Note 10

Commitments and

contingencies

Contingencies—Regulatory,

Compliance

and Legal

Regulatory

Based on findings

during an internal investigation,

the Company self

-reported to the SEC and

the DoJ, in the United

States, to the Special

Investigating Unit

(SIU)

and the National Prosecuting

Authority (NPA)

in South Africa as

well as to various

authorities in other

countries potential

suspect payments

and other compliance

concerns in connection

with some of the Company’s

dealings with Eskom and

related persons. Many

of those parties

have expressed

an interest in, or

commenced

an investigation into, these

matters and the Company

is cooperating fully

with them. The

Company paid

$104

million to Eskom in December

2020 as

part of a full and final

settlement with

Eskom and the

Special Investigating

Unit relating to

improper payments

and other compliance

issues associated

with the

Controls and Instrumentation

Contract, and its

Variation

Orders for Units

1 and 2 at Kusile.

The Company

made a provision

of approximately

$325 million which

was recorded in Other

income (expense),

net, during

the third quarter of

2022. In December

2022, the Company

settled with the

SEC and DOJ as

well as the

authorities in South

Africa and Switzerland.

The matter

is still pending with

the authorities

in Germany,

but the Company

does

not believe that it will need

to record

any additional provisions

for this matter.

General

The Company

is aware of proceedings,

or the threat of proceedings,

against it and others

in respect of

private claims by

customers and

other third parties

with

regard to certain actual

or alleged anticompetitive

practices. Also,

the Company is subject

to other claims

and legal proceedings,

as well as investigations

carried

out by various law enforcement

authorities. With

respect to the above

-mentioned claims,

regulatory matters,

and any

related proceedings,

the Company will

bear

the related costs,

including costs

necessary

to resolve them.

Liabilities recognized

At September 30,

2023, and December

31, 2022, the

Company had

aggregate liabilities

of $94 million

and $86 million,

respectively,

included in “Other provisions”

and “Other non

‑

current liabilities”,

for the above

regulatory,

compliance and

legal contingencies,

and none of

the individual liabilities

recognized was significant.

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 manage

ment, to estimate

the maximum potential

liability on other matters,

there could be adverse

outcomes beyond

the amounts accrue

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, 2023

December 31, 2022

Performance

guarantees

3,358

4,300

Financial guarantees

Total

(1)

3,450

4,396

(1)

Maximum potential payments

include amounts in both

continuing and discontinued

operations.

The carrying amount

of liabilities

recorded in the Consolidated

Balance Sheets

reflects the Company’s

best estimate of

future payments,

which it may incur

as part

of fulfilling its guarantee

obligations. In

respect of the above

guarantees, the carrying

amounts of liabilities

at September

30, 2023, and December

31, 2022, were

not significant

The Company

is party to various

guarantees providing

financial or performance

assurances

to certain third parties. These

guarantees,

which have various

maturities up to 2032,

mainly consist of

performance

guarantees whereby

(i) the Company

guarantees the

performance

of a third party’s product

or service

according to the terms

of a contract and

(ii) as member

of a consortium/joint

-venture that includes

third parties,

the Company

guarantees not

only its own

performance

but also the work of

third parties. Such

guarantees may

include guarantees

that a project will be

completed

within a specified

time. If the third party

does not fulfill the

obligation, the Company

will compensate

the guaranteed

party in cash

or in kind. The

original maturity

dates for the majority

of these

performance

guarantees range

from one to ten years

In conjunction with

the divestment of

the high-voltage

cable and cables

accessories businesses,

the Company has

entered into various

performance

guarantees

with other parties

with respect to certain

liabilities of

the divested business.

At September 30,

2023, and December

31, 2022, the

maximum potential

payable under

these guarantees

amounts to $830

million and $843 million,

respectively,

and these guarantees

have various

original maturities

ranging from five

to ten years.

The Company

retained obligations

for financial, performance

and indemnification

guarantees related

to the sale of

the Power Grids business

(see Note 3 for

details). The performance

and financial

guarantees have

been indemnified

by Hitachi Ltd. These

guarantees, which

have various

maturities up to 2032, primarily

consist of bank

guarantees, standby

letters of credit,

business performance

guarantees and

other trade-related guarantees,

the majority of which

have original

maturity dates ranging

from one to

ten years. The maximum

amount payable

under these guarantees

at September 30,

2023, and December

31, 2022, is

approximately $2.2

billion and $3.0

billion, respectively

Commercial commitments

In addition, in the normal

course of bidding

for and executing

certain projects, the

Company has

entered into

standby letters of

credit, bid/performance

bonds and

surety bonds

(collectively “performance

bonds”) with various

financial institutions.

Customers

can draw on such

performance

bonds in the

event that the Company

does not fulfill its contractual

obligations. The

Company would

then have an

obligation to

reimburse the financial

institution for

amounts paid under

the performance

bonds. At September

30, 2023, and

December 31, 2022,

respectively,

the total outstandin

performance

bonds aggregated

to $3.0 billion and

$2.9 billion.

There

have been

no significant amounts

reimbursed to financial

institutions

under these types

of arrangements

in the nine and

three months ended

September 30, 2023

and 2022.

Q3 2023 FINANCIAL INFORMATION

Product and order

-related contingencies

The Company

calculates its provision

for product warranties

based on historical

claims experience

and specific

review of certain contracts.

The reconciliation

of the

“Provisions for warranties

”, including guarantees

of product performance,

was as follows:

($ in millions)

2023

2022

Balance at January

1,028

1,005

Claims paid in cash

or in kind

(132)

(122)

Net increase in provision

for changes

in estimates, warranties

issued and

warranties expired

228

173

Exchange rate differences

(16)

(94)

Balance at September

30,

1,108

962

─

Note 11

Income taxes

In calculating income

tax expense,

the Company uses

an estimate of the annual

effective

tax rate based upon

the facts and circumstances

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 21.5 percent

in the

nine months ended

September

30, 2023, was

lower than the effective

tax rate of 33.1

percent in the nine

months

ended September

30, 2022, primarily due

to a net benefit

realized on a favorable

resolution of an

uncertain tax position

in the nine months

ended September

30,

2023, as well as the

impact of non-deductible

regulatory penalties

in connection with

the Kusile project

in the nine months

ended September

30, 2022.

In February 2023,

on completion of

a tax audit, the

Company obtained

resolution of the uncertain

tax position for which

an amount was

recorded within

Other non-

current liabilities as

of December

31, 2022. In the nine

months ended

September 30,

2023, the Company

released the

provision of $206

million, due to the

resolution of this matter

which resulted

in an increase of

$0.11 in earnings

per share (basic

and diluted) for

the nine months

ended September

30, 2023.

─

Note 12

Employee benefits

The Company

operates defined

benefit pension

plans, defined

contribution pension

plans, and termination

indemnity plans,

in accordance

with local regulations

and practices. At September

30, 2023, the Company’s

most significant

defined benefit

pension plans

are in Switzerland

as well as in Germany,

the United

Kingdom, and the

United States. These

plans cover a large

portion of the

Company’s

employees

and provide benefits

to employees in the

event of death,

disability,

retirement, or termination

of employment.

Certain of these

plans are multi-employer

plans. The Company

also operates

Other postretirement

Switzerland

International

benefits

Nine months ended

September 30,

2023

2022

2023

2022

2023

2022

Operational pension

cost:

Service cost

–

Operational pension

cost

–

Non-operational pension

cost (credit):

Interest cost

122

Expected return on

plan assets

(94)

(87)

(116)

(113)

–

Amortization of prior service

cost (credit)

(6)

(5)

(2)

(1)

Amortization of net actuarial

loss

–

(3)

(2)

Curtailments, settlements

and special termination

benefits

–

(16)

–

Non-operational pension

cost (credit)

(65)

(90)

(10)

(19)

(2)

Net periodic benefit

cost (credit)

(36)

(50)

(19)

(2)

($ in millions)

Defined pension

benefits

Other postretirement

Switzerland

International

benefits

Three months ended September 30,

2023

2022

2023

2022

2023

2022

Operational pension

cost:

Service cost

–

Operational pension

cost

–

Non-operational pension

cost (credit):

Interest cost

–

Expected return on

plan assets

(31)

(29)

(42)

(36)

–

Amortization of prior service

cost (credit)

(2)

(1)

–

Amortization of net actuarial

loss

–

(1)

–

Curtailments, settlements

and special termination

benefits

–

(16)

–

Non-operational pension

cost (credit)

(22)

(29)

(5)

(17)

–

Net periodic benefit

cost (credit)

(12)

(16)

(17)

–

Q3 2023 FINANCIAL INFORMATION

The components

of net periodic benefit

cost other than

the service cost component

are included in

the line “Non-operational

pension cost

(credit)” in the income

statement.

Employer contributions

were as follows:

($ in millions)

Defined pension

benefits

Other postretirement

Switzerland

International

benefits

Nine months ended

September 30,

2023

2022

2023

2022

2023

2022

Total con

tributions to defined

benefit pension

and

Other postretirement

Switzerland

International

benefits

Three months ended September 30,

2023

2022

2023

2022

2023

2022

Total con

tributions to defined

benefit pension

and

other postretirement plan

adjustments:

Amortization of prior service

cost (credit)

Non-operational pension

(cost) credit

(9)

(8)

(3)

(2)

Amortization of net actuarial

loss

Non-operational pension

(cost) credit

Net gain (loss) from

settlements and

curtailments

Non-operational pension

(cost) credit

–

Total before

tax

Tax

Income tax expense

(1)

(10)

(3)

Amounts reclassified

from OCI

The amounts

in respect of Unrealized

gains (losses)

on available-for-sale

securities and

Derivative instruments

and hedges

were not significant

for the nine and

three months ended

September 30, 2023

and 2022.

Q3 2023 FINANCIAL INFORMATION

─

Note 16

Restructuring and related

expenses

Other restructuring-related

activities

In the nine and three

months ended

September 30, 2023

and 2022, the Company

executed various

other restructuring-related

activities and

incurred the following

expenses:

Nine months ended

September 30,

Three months ended September 30,

($ in millions)

2023

2022

2023

2022

Employee severance

costs

Estimated contract settlement,

loss order and

other costs

205

Inventory and long

-lived asset impairments

–

Total

274

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)

2023

2022

2023

2022

Total cost

of sales

Selling, general and administrative

expenses

Non-order related research

and development

expenses

–

Other income (expense),

net

220

Total

274

During the second

quarter of 2022, the

Company completed

a plan to fully

exit its full train

retrofit business

by transferring

the remaining contracts

to a third party.

The Company

recorded $195

million of restructuring

expenses

in connection with this

business exit

primarily for contract

settlement costs.

Prior to exiting

this

business, the business

was reported as part of

the Company’s

non-core business

activities within Corporate

and Other.

At September 30,

2023, and December

31, 2022, $179

million and $198

million, respectively,

was recorded

for other restructuring

-related liabilities

and is included

primarily in Other provisions.

─

Note 17

Operating segment data

The Chief Operating

Decision Maker

(CODM) is the Chief

Executive Officer.

The CODM allocates

resources to and

assesses

the performance of

each operating

segment using

the information outlined

below. The

Company is organized

into the following

segments, based

on products and

services: Electrification,

Motion,

Process Automation

and Robotics

& Discrete Automation.

The remaining

operations

of the Company

are included in Corporate

and

Other.

Effective January

1, 2023, the E-mobility Division

is no longer managed

within the Electrification

segment and

has become

a separate operating

segment. This

new segment

does not currently meet

any of the size

thresholds to be considered

a reportable segment

and as such

is presented within Corporate

and Other.

The

segment information

for the nine and

three months

ended September

30, 2023 and

2022, and at December

31, 2022,

has been recast

to reflect this change.

A description of the

types of products

and services

provided by each

reportable segment

is as follows:

●

Electrification:

manufactures

and sells electrical products

and solutions which

are designed to provide

safe, smart and

sustainable electrical

flow from

the substation to the socket.

The portfolio of

increasingly digital

and connected

solutions includes

renewable power

solutions, modular substation

packages, distribution

automation products,

switchboard

and panelboards,

switchgear, UPS

solutions, circuit

breakers, measuring

and sensing

devices,

control products, wiring

accessories,

enclosures

and cabling systems

and intelligent home and

building solutions,

designed to integrate

and automate

lighting, heating, ventilation,

security and

data communication

networks.

The products

and services

are delivered through

six operating Divisions:

Distribution Solutions,

Smart Power,

Smart Buildings,

Installation Products

and Service, as

well as, prior

to its sale in July

2023, the Power Conversion

Division.

●

Motion:

designs, manufactures,

and sells drives,

motors, generators

and traction converters

that are driving

the low-carbon

future for industries,

cities,

infrastructure and

transportation. These

products, digital

technology

and related services

enable industrial customers

to increase

energy efficiency,

improve safety

and reliability,

and achieve

precise control of

their processes.

Building on over 130

years of cumulative

experience

in electric

powertrains, Motion

combines domain

expertise and technology

to deliver the optimum

solution for

a wide range

of applications in all

industrial

segments. In addition,

Motion,

along with its

partners, has

a leading global service

presence. These

products and

services are delivered

through seven

operating Divisions:

Large Motors

and Generators,

IEC LV

Motors, NEMA

Motors, Drive Products,

System Drives,

Service

and Traction.

Q3 2023 FINANCIAL INFORMATION

●

Process Automation:

offers a broad

range of industry

-specific, integrated

automation, electrification

and digital solutions,

as well as lifecycle

services for

the process,

hybrid and marine

industries. The product

portfolio includes

control technologies,

industrial software,

advanced

analytics, sensing

and

measurement technology,

and marine propulsion

systems. In addition

Process

Automation offers

a comprehensive

range of services,

from repair to

advanced digital capabilities

such as remote

monitoring, preventive

maintenance, asset

performance

management, emission

monitoring and

cybersecurity.

The products, systems

and services

are currently delivered

through four operating

Divisions: Energy

Industries, Process

Industries,

Marine & Ports and

Measurement &

Analytics as

well as, prior to

its spin-off

in October 2022, the Turbocharging

Division (Accelleron).

●

Robotics & Discrete

Automation:

delivers its products

solutions and

services through

two operating

Divisions: Robotics

and Machine

Automation.

Robotics includes

industrial robots, autonomous

mobile robotics,

software, robotic

solutions, field services,

spare parts, and

digital services.

Machine

Automation specializes

in solutions based

on its programmable

logic controllers

(PLC), industrial PCs

(IPC), servo motion,

transport systems

and

machine vision

Both Divisions offer

engineering and

simulation software

as well as a comprehensive

range of digital solutions.

Corporate and Other:

includes headquarter

costs,

the Company’s

corporate real estate

activities, Corporate

Treasury

Operations, the E-mobility

operating

segment, historical operating

activities of certain

divested businesses

and other non-core operati

ng activities.

The primary measure

of profitability

on which the

operating segments

are evaluated

is Operational EBITA,

which represents

income from operations

excluding:

●

amortization expense

on intangibles arising

upon acquisition

(acquisition-related

amortization),

●

restructuring, related

and implementation

costs,

●

changes

in the amount recorded

for obligations related

to divested businesses

occurring after the divestment

date (changes

in obligations related

divested businesses),

●

gains and losses

from sale of businesses

(including fair value

adjustment on assets

and liabilities

held for sale,

if any),

●

acquisition-

and divestment

-related expenses

and integration costs,

●

certain other non-operational

items, as well as

●

foreign exchange/commodity

timing differences

in income from operations

consisting of:

(a) unrealized gains

and losses

on derivatives (foreign

exchange, commodities,

embedded

derivatives), (b)

realized gains and

losses on derivatives

where the underlying

hedged transaction

has not yet been

realized, and (c) unrealized

foreign exchange

movements on

receivables/payables

(and related assets/liabilities).

Certain other non-operational

items generally

includes certain regulatory,

compliance and

legal costs, other

income/expense

relating to the Power Grids

joint

venture, certain asset

write downs/impairments

and certain other

fair value changes,

changes

in estimates relating to opening

balance sheets

of acquired

businesses (changes

in pre-acquisition estimates),

as well as other

items which are determined

by management

on a case-by-case

basis.

The CODM primarily

reviews the results

of each segment

on a basis that is before

the elimination

of profits made

on inventory

sales between

segments. Segment

results below are presented

before these

eliminations, with a

total deduction

for intersegment profits

to arrive at the Company’s

consolidated

Operational EBITA.

Intersegment sales

and transfers

are accounted

for as if the sales

and transfers

were to third parties,

at current market

prices.

The following tables

present disaggregated

segment revenues

from contracts with customers

Operational EBITA,

and the reconciliations

of consolidated

Operational EBITA

to Income from

continuing operations

before taxes

for the nine and three

months ended

September 30, 2023

and 2022, as

well as total assets

at September 30, 2023, and December 31, 2022.

Nine months ended

September 30,

2023

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

3,411

1,858

1,663

1,456

229

8,617

The Americas

4,393

1,924

1,279

431

216

8,243

of which: United States

3,292

1,602

798

269

182

6,143

Asia, Middle East

and Africa

2,912

1,699

1,580

886

7,130

of which: China

1,356

866

502

657

3,404

10,716

5,481

4,522

2,773

498

23,990

Product type

Products

10,050

4,695

2,667

2,353

445

20,210

Services and

other

666

786

1,855

420

3,780

10,716

5,481

4,522

2,773

498

23,990

Third-party revenues

10,716

5,481

4,522

2,773

498

23,990

Intersegment revenues

170

387

(593)

–

Total revenues

(1)

10,886

5,868

4,543

2,788

(95)

23,990

Q3 2023 FINANCIAL INFORMATION

Nine months ended

September 30,

2022

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

3,125

1,430

1,726

1,070

169

7,520

The Americas

3,799

1,574

1,135

377

133

7,018

of which: United States

2,777

1,307

681

267

5,124

Asia, Middle East

and Africa

3,020

1,564

1,607

838

7,084

of which: China

1,506

888

498

646

3,563

9,944

4,568

4,468

2,285

357

21,622

Product type

Products

9,328

3,931

2,420

1,935

332

17,946

Services and

other

616

637

2,048

350

3,676

9,944

4,568

4,468

2,285

357

21,622

Third-party revenues

9,944

4,568

4,468

2,285

357

21,622

Intersegment revenues

177

332

(539)

–

Total revenues

(1)

10,121

4,900

4,493

2,290

(182)

21,622

Three months ended September 30, 2023

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

1,083

569

582

500

2,810

The Americas

1,461

657

411

159

2,775

of which: United States

1,113

541

248

2,067

Asia, Middle East

and Africa

964

582

553

263

2,383

of which: China

439

285

163

182

1,075

3,508

1,808

1,546

922

184

7,968

Product type

Products

3,288

1,526

924

777

165

6,680

Services and

other

220

282

622

145

1,288

3,508

1,808

1,546

922

184

7,968

Third-party revenues

3,508

1,808

1,546

922

184

7,968

Intersegment revenues

139

(207)

–

Total revenues

(1)

3,561

1,947

1,554

929

(23)

7,968

Three months ended September 30, 2022

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

1,005

477

595

358

2,494

The Americas

1,354

545

368

139

2,452

of which: United States

988

454

221

101

1,796

Asia, Middle East

and Africa

1,053

569

488

329

2,460

of which: China

514

323

189

264

1,300

3,412

1,591

1,451

826

126

7,406

Product type

Products

3,204

1,379

778

705

118

6,184

Services and

other

208

212

673

121

1,222

3,412

1,591

1,451

826

126

7,406

Third-party revenues

3,412

1,591

1,451

826

126

7,406

Intersegment revenues

111

(179)

–

Total revenues

(1)

3,471

1,702

1,458

828

(53)

7,406

(1)

Due to rounding, numbers presented

may not add to the totals

provided.

Q3 2023 FINANCIAL INFORMATION

Nine months ended

Three months ended

September 30,

($ in millions)

2023

2022

2023

2022

Operational EBITA:

Electrification

2,212

1,768

748

651

Motion

1,157

845

390

305

Process Automation

670

645

226

225

Robotics & Discrete

Automation

418

215

137

106

Corporate and Other

‒

E-mobility

(134)

(12)

(39)

(4)

‒ Corporate costs,

Intersegment elimination

and other

(229)

(97)

(70)

(52)

Total

4,094

3,364

1,392

1,231

Acquisition-related amortization

(164)

(174)

(55)

Restructuring, related

and implementation

costs

(1)

(92)

(300)

(51)

(20)

Changes in obligations

related to divested

businesses

–

Gains and losses

from sale of businesses

(4)

–

Acquisition-

and divestment

-related expenses

and integration costs

(55)

(171)

(10)

(62)

Foreign exchange/commodity

timing differences

in income from operations:

Unrealized gains and

losses on derivatives

(foreign exchange,

commodities, embedded

derivatives)

(58)

(107)

(48)

(7)

Realized gains and

losses on derivatives

where the underlying

hedged

transaction has

not yet been realized

(8)

(48)

(2)

(13)

Unrealized foreign exchange

movements on

receivables/payables

(and

related assets/liabilities)

Certain other non-operational

items:

Other income/expense

relating to the Power

Grids joint venture

(67)

(30)

Regulatory,

compliance and

legal costs

–

(333)

–

(329)

Business transformation

costs

(2)

(139)

(114)

(57)

(48)

Changes in pre-acquisition

estimates

(4)

–

(1)

Certain other fair value

changes, including

asset impairments

(3)

Other non-operational

items

(24)

Income from operations

3,755

2,152

1,259

708

Interest and dividend

income

115

Interest and other

finance expense

(197)

(107)

(73)

(45)

Non-operational pension

(cost) credit

102

Income from continuing

operations before

taxes

3,696

2,197

1,231

714

(1)

Includes impairment of certain

assets.

(2)

Amount includes ABB Way process

transformation costs of $122

million and $98 million

for nine months ended

September 30, 2023 and

2022, respectively,

and $51 million

and $34 million for the three

months ended September

30, 2023 and 2022,

respectively.

Total assets

(1)

($ in millions)

September 30, 2023

December 31, 2022

Electrification

12,699

12,500

Motion

7,013

6,565

Process Automation

4,900

4,598

Robotics & Discrete

Automation

4,893

4,901

Corporate and Other

(2)

10,594

10,584

Consolidated

40,099

39,148

(1)

Total assets

are after intersegment

eliminations and therefore reflect

third-party assets

only.

(2)

At September 30, 2023, and December

31, 2022,

respectively,

Corporate and Other includes $60

million and $96 million

of assets in the Power

Grids business which is

reported as discontinued

operations (see Note 3).

Q3 2023 FINANCIAL INFORMATION

—

Supplemental Reconciliations and Definitions

The following

reconciliations

and

definitions

include

measures

which

ABB uses

to supplement

its Consolidated

Financial

Information

(unaudited)

which

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

the U.S.

Securities

and

Exchange

Commission

(SEC).

While

ABB’s

management

believes

that

the non

-GAAP financial

measures

herein

are

useful

in evaluating

ABB’s

operating

results,

this

information

should

be considered

as supplemental

in nature

and

not as

a substitute

for

the related

financial

information

prepared

in accordance

with

U.S.

GAAP.

Therefore

these

measures

should

not be

viewed

in isolation

but considered

together

with

the Consolidated

Financial

Information

(unaudited)

prepared

in accordance

with

U.S.

GAAP

as of

and for

the nine

and

three

months

ended

September

30, 2023.

Comparable growth rates

Growth rates for certain

key figures may be

presented and

discussed

on a “comparable” basis.

The comparable

growth rate measures

growth on a constant

currency basis.

Since we are a global

company,

the comparability of

our operating

results reported in U.S.

dollars is affected

by foreign currency

exchange rate

fluctuations. We

calculate the

impacts from

foreign currency

fluctuations by

translating the current

-year periods’ reported

key figures into U.S.

dollar amounts

using

the exchange

rates in effect for the

comparable periods

in the previous

year.

Comparable growth

rates are also adjusted

for changes

in our business

portfolio. Adjustments

to our business

portfolio occur

due to acquisitions,

divestments,

by exiting specific

business activities or

customer markets.

The adjustment

for portfolio changes

is calculated as

follows: where the

results of any business

acquired or divested

have not been

consolidated

and reported for the

entire duration

of both the current

and comparable

periods, the

reported key figures

of such

business are adjusted

to exclude the relevant

key figures of any

corresponding

quarters which are not

comparable when

computing the

comparable growth

rate.

Certain portfolio changes

which do not qualify

as divestments

under U.S. GAAP

have been

treated in a similar

manner to divestments.

Changes in our

portfolio

where we have

exited certain business

activities or customer

markets are adjusted

as if the relevant

business was

divested in the

period when

the decision to

cease business

activities was taken. We

do not adjust

for portfolio changes

where the relevant business

has annualized

revenues of

less than $50 million.

The following tables

provide reconciliations

of reported growth

rates of certain

key figures to their

respective comparable

growth rate.

Comparable growth

rate reconciliation

by Business

Area

Q3 2023 compared

to Q3 2022

Order growth rate

Revenue growth

rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Electrification

-2%

-1%

Motion

-4%

-1%

-2%

-7%

14%

-1%

-2%

11%

Process

Automation

20%

-2%

20%

38%

-1%

17%

23%

Robotics & Discrete

Automation

-26%

-1%

-27%

12%

-3%

ABB Group

-2%

-1%

11%

9M 2023 compared to 9M 2022

Order growth rate

Revenue growth

rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Electrification

11%

Motion

-1%

20%

-2%

20%

Process

Automation

12%

17%

31%

16%

19%

Robotics & Discrete

Automation

-24%

-22%

22%

23%

ABB Group

-1%

11%

16%

Q3 2023 FINANCIAL INFORMATION

Regional comparable

growth rate

reconciliation

Regional comparable

growth rate

reconciliation

for ABB Group -

Quarter

Q3 2023 compared

to Q3 2022

Order growth rate

Revenue growth

rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-11%

-5%

-13%

13%

-7%

10%

The Americas

-1%

13%

-1%

16%

of which: United States

-1%

13%

15%

19%

Asia, Middle East

and Africa

-5%

-3%

of which: China

-10%

-3%

-17%

-10%

ABB Group

-2%

-1%

11%

Regional comparable

growth rate

reconciliation by

Business Area

- Quarter

Q3 2023 compared to Q3 2022

Order growth rate

Revenue growth

rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-6%

-3%

-7%

The Americas

-2%

-1%

13%

of which: United States

-2%

13%

19%

Asia, Middle East

and Africa

-5%

-8%

of which: China

-6%

-15%

-7%

Electrification

-2%

-1%

Q3 2023 compared

to Q3 2022

Order growth rate

Revenue growth

rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-22%

-5%

-1%

-28%

21%

-9%

-1%

11%

The Americas

-2%

-4%

-3%

21%

-1%

-5%

15%

of which: United States

-3%

-4%

-7%

19%

-5%

14%

Asia, Middle East

and Africa

10%

15%

of which: China

11%

-12%

-7%

Motion

-4%

-1%

-2%

-7%

14%

-1%

-2%

11%

Q3 2023 compared

to Q3 2022

Order growth rate

Revenue growth

rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

18%

-3%

22%

37%

-2%

-3%

13%

The Americas

63%

-5%

22%

80%

12%

-2%

15%

25%

of which: United States

75%

-6%

27%

96%

13%

-1%

19%

31%

Asia, Middle East

and Africa

-11%

14%

13%

22%

39%

of which: China

-22%

17%

-1%

-14%

15%

Process Automation

20%

-2%

20%

38%

-1%

17%

23%

Q3 2023 compared

to Q3 2022

Order growth rate

Revenue growth

rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-35%

-3%

-38%

40%

-9%

31%

The Americas

-10%

-2%

-12%

14%

-3%

11%

of which: United States

-9%

-6%

Asia, Middle East

and Africa

-20%

-17%

-19%

-16%

of which: China

-32%

-28%

-31%

-27%

Robotics & Discrete

Automation

-26%

-1%

-27%

12%

-3%

Q3 2023 FINANCIAL INFORMATION

Regional comparable

growth rate

reconciliation

for ABB Group –

Year to date

9M 2023 compared to 9M 2022

Order growth rate

Revenue growth

rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-3%

15%

-1%

17%

The Americas

-1%

17%

20%

of which: United States

-1%

20%

23%

Asia, Middle East

and Africa

-5%

12%

of which: China

-13%

-5%

-4%

ABB Group

-1%

11%

16%

Regional comparable

growth rate

reconciliation by

Business Area

– Year to date

9M 2023 compared to 9M 2022

Order growth rate

Revenue growth

rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-1%

The Americas

16%

18%

of which: United States

-1%

19%

21%

Asia, Middle East

and Africa

-1%

-3%

of which: China

-9%

-3%

-10%

-4%

Electrification

11%

9M 2023 compared to 9M 2022

Order growth rate

Revenue growth

rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-3%

-1%

-5%

28%

-2%

-1%

25%

The Americas

-2%

23%

-3%

20%

of which: United States

-1%

-2%

-3%

23%

-3%

20%

Asia, Middle East

and Africa

16%

of which: China

-3%

-1%

Motion

-1%

20%

-2%

20%

9M 2023 compared to 9M 2022

Order growth rate

Revenue growth

rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

18%

21%

43%

-4%

15%

12%

The Americas

26%

-1%

14%

39%

13%

26%

of which: United States

24%

-3%

17%

38%

17%

18%

35%

Asia, Middle East

and Africa

-5%

17%

16%

-2%

17%

20%

of which: China

-2%

20%

23%

19%

25%

Process Automation

12%

17%

31%

16%

19%

9M 2023 compared to 9M 2022

Order growth rate

Revenue growth

rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-26%

36%

-1%

35%

The Americas

-8%

-2%

-10%

15%

-1%

14%

of which: United States

-17%

Asia, Middle East

and Africa

-28%

-24%

12%

of which: China

-34%

-30%

Robotics & Discrete

Automation

-24%

-22%

22%

23%

Q3 2023 FINANCIAL INFORMATION

Order backlog growth

rate reconciliation

September 30, 2023

compared

to September 30,

2022

US$

Foreign

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

Electrification

11%

-2%

16%

Motion

11%

-5%

-1%

Process Automation

19%

-3%

20%

Robotics & Discrete

Automation

-11%

-3%

-14%

ABB Group

11%

-3%

11%

Other growth rate

reconciliations

Q3 2023 compared

to Q3 2022

Service orders growth

rate

Services revenues

growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Electrification

12%

-2%

Motion

-2%

33%

-1%

32%

Process

Automation

30%

-3%

37%

64%

-8%

-1%

25%

16%

Robotics & Discrete

Automation

10%

-3%

19%

-4%

15%

ABB Group

22%

-3%

17%

36%

-1%

14%

18%

9M 2023 compared to 9M 2022

Service orders growth

rate

Services revenues

growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Electrification

10%

Motion

10%

23%

26%

Process

Automation

-2%

26%

25%

-9%

25%

17%

Robotics & Discrete

Automation

11%

20%

ABB Group

14%

18%

14%

19%

Q3 2023 FINANCIAL INFORMATION

Operational EBITA

as % of operational

revenues (Operational

EBITA

margin)

Definition

Operational EBITA

margin

Operational EBITA margin is Operational EBITA as a percentage of operational revenues.

Operational EBITA

Operational earnings

before interest,

taxes and acquisition

-related amortization

(Operational EBITA)

represents Income

from operations excluding:

●

acquisition-related amortization

(as defined below),

●

restructuring, related

and implementation

costs,

●

changes

in the amount recorded

for obligations related

to divested businesses

occurring after the divestment

date (changes

in obligations related

divested businesses),

●

gains and losses

from sale of businesses

(including fair value

adjustment on assets

and liabilities

held for sale,

if any),

●

acquisition-

and divestment

-related expenses

and integration costs,

●

certain other non-operational

items, as well as

●

foreign exchange/commodity

timing differences

in income from operations

consisting of:

(a) unrealized

gains and losses

on derivatives (foreign

exchange, commodities,

embedded

derivatives), (b)

realized gains and

losses on derivatives

where the underlying

hedged transaction

has not yet been

realized, and (c) unrealized

foreign exchange

movements on

receivables/payables

(and related assets/liabilities).

Certain other non-operational

items generally

includes certain regulatory,

compliance and

legal costs, other

income/expense

relating to the Power

Grids joint

venture, certain asse

write downs/impairments

and certain other

fair value changes,

changes

in estimates relating to opening

balance sheets

of acquired

businesses (changes

in pre-acquisition estimates),

as well as other

items which are determined

by management

on a case-by-case

basis.

Operational EBITA

is our measure

of segment profit

but is also used

by management

to evaluate the profitability

of the Compan

as a whole.

Acquisition-related amortization

Amortization expense

on intangibles arising

upon acquisitions.

Restructuring,

related and implementation

costs

Restructuring, related

and implementation

costs consists

of restructuring

and other related

expenses,

as well as internal

and external costs

relating to the

implementation of group

-wide restructuring

programs.

Operational revenues

The Company

presents operational

revenues solely

for the purpose

of allowing the computation

of Operational EBITA

margin. Operational

revenues are

Total

revenues adjusted

for foreign exchange/commodity

timing differences

in total revenues of:

(i) unrealized gains

and losses

on derivatives, (ii)

realized gains and

losses on derivatives

where the underlying

hedged transaction

has not yet been

realized, and

(iii) unrealized foreign

exchange

movements on

receivables (and

related assets). Operational

revenues are

not intended to be an

alternative measure

to Total

revenues, which

represent our revenues

measured in accordance

with U.S. GAAP.

Reconciliation

The following tables

provide reconciliations

of consolidated

Operational EBITA

to Net Income and

Operational EBITA

Margin by business.

Reconciliation of consolidated

Operational

EBITA

to Net Income

Nine months ended September 30,

Three months ended September 30,

($ in millions)

2023

2022

2023

2022

Operational EBITA

4,094

3,364

1,392

1,231

Acquisition-related amortization

(164)

(174)

(55)

Restructuring, related

and implementation

costs

(1)

(92)

(300)

(51)

(20)

Changes in obligations

related to divested

businesses

–

Gains and losses

from sale of businesses

(4)

–

Acquisition-

and divestment

-related expenses

and integration costs

(55)

(171)

(10)

(62)

Certain other non-operational

items

(89)

(480)

(49)

(381)

Foreign exchange/commodity

timing differences

in income from operations

(41)

(100)

(39)

(5)

Income from operations

3,755

2,152

1,259

708

Interest and dividend

income

115

Interest and other

finance expense

(197)

(107)

(73)

(45)

Non-operational pension

(cost) credit

102

Income from continuing

operations before

taxes

3,696

2,197

1,231

714

Income tax expense

(794)

(728)

(326)

(294)

Income from continuing

operations, net

of tax

2,902

1,469

905

420

Loss from discontinued

operations, net of

tax

(16)

(36)

(7)

(16)

Net income

2,886

1,433

898

404

(1)

Includes impairment of certain

assets.

Q3 2023 FINANCIAL INFORMATION

Reconciliation of Operational

EBITA

margin by business

Three months ended

September 30,

2023

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

3,561

1,947

1,554

929

(23)

7,968

Foreign exchange/commodity

timing

differences

in total revenues:

Unrealized gains and

losses

on derivatives

(13)

(4)

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)

(13)

(2)

Operational revenues

3,593

1,970

1,547

931

(22)

8,019

Income (loss) from

operations

762

365

218

113

(199)

1,259

Acquisition-related amortization

Restructuring, related

and

implementation costs

(1)

–

Changes in obligations

related to

divested businesses

–

Gains and losses

from sale of businesses

(71)

–

(71)

Acquisition-

and divestment

-related expenses

and integration costs

(4)

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)

(5)

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)

(12)

–

(1)

(11)

Operational EBITA

748

390

226

137

(109)

1,392

Operational EBITA

margin (%)

20.8%

19.8%

14.6%

14.7%

n.a.

17.4%

(1)

Includes impairment of certain

assets.

In the three months

ended September

30, 2023, Certain

other non-operational

items in the table

above includes

the following:

Three months ended September 30, 2023

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational

items:

Other income/expense

relating to the

Power Grids joint venture

–

(7)

Business transformation

costs

(1)

–

Changes in pre-acquisition

estimates

–

Certain other fair values

changes,

including asset

impairments

–

Other non-operational

items

(1)

–

(2)

(4)

Total

–

(1)

Amounts include ABB Way

process transformation costs

of $51 million for the three

months ended September

30, 2023.

Q3 2023 FINANCIAL INFORMATION

Three months ended September 30, 2022

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

3,471

1,702

1,458

828

(53)

7,406

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

–

(1)

Unrealized foreign exchange

movements

on receivables

(and related assets)

(9)

(5)

(9)

(4)

(7)

(34)

Operational revenues

3,474

1,711

1,472

827

(55)

7,429

Income (loss) from

operations

616

291

154

(434)

708

Acquisition-related amortization

Restructuring, related

and

implementation costs

(1)

Changes in obligations

related to

divested businesses

–

Gains and losses

from sale of businesses

(1)

–

Acquisition-

and divestment

-related expenses

and integration costs

Certain other non-operational

items

–

373

381

Foreign exchange/commodity

timing

differences

in income from operations:

Unrealized gains and

losses on derivatives

(foreign exchange,

commodities,

embedded

derivatives)

(3)

–

(1)

Realized gains and

losses on derivatives

where the underlying

hedged

transaction has

not yet been realized

–

Unrealized foreign exchange

movements

on receivables/payables

(and related assets/liabilities)

(6)

(2)

–

(2)

(5)

(15)

Operational EBITA

651

305

225

106

(56)

1,231

Operational EBITA

margin (%)

18.7%

17.8%

15.3%

12.8%

n.a.

16.6%

(1)

Includes impairment of certain

assets.

In the three months

ended September

30, 2022, Certain

other non-operational

items in the table

above includes

the following:

Three months ended September 30, 2022

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational

items:

Other income/expense

relating to the

Power Grids joint venture

–

Regulatory,

compliance and

legal costs

–

329

Business transformation

costs

(1)

–

Changes in pre-acquisition

estimates

–

Certain other fair values

changes,

including asset

impairments

(3)

–

(21)

(24)

Other non-operational

items

(4)

–

(3)

Total

–

373

381

(1)

Amounts include ABB Way process

transformation costs of $34 million

for the three months

ended September 30,

2022.

Q3 2023 FINANCIAL INFORMATION

Nine months ended

September 30,

2023

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

10,886

5,868

4,543

2,788

(95)

23,990

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

(5)

(1)

Unrealized foreign exchange

movements

on receivables

(and related assets)

(20)

(2)

(8)

(3)

(11)

(44)

Operational revenues

10,898

5,880

4,546

2,790

(99)

24,015

Income (loss) from operations

2,130

1,098

688

347

(508)

3,755

Acquisition-related amortization

164

Restructuring, related

and

implementation costs

(1)

–

Changes in obligations

related to

divested businesses

–

(6)

(5)

Gains and losses

from sale of businesses

(71)

–

(26)

–

(97)

Acquisition-

and divestment

-related expenses

and integration costs

(3)

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)

(1)

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)

(15)

(5)

(6)

(2)

(25)

Operational EBITA

2,212

1,157

670

418

(363)

4,094

Operational EBITA

margin (%)

20.3%

19.7%

14.7%

15.0%

n.a.

17.0%

(1)

Includes impairment of certain

assets.

In the nine months ended

September 30,

2023, Certain other

non-operational

items in the table

above includes

the following:

Nine months ended

September 30,

2023

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational

items:

Other income/expense

relating to the

Power Grids joint venture

–

(27)

Business transformation

costs

(1)

–

123

139

Changes in pre-acquisition

estimates

–

Certain other fair values

changes,

including asset

impairments

–

(7)

(3)

Other non-operational

items

(3)

–

(22)

(24)

Total

–

(1)

Amounts include ABB Way process

transformation costs of $122

million for the nine months

ended September 30,

2023.

Q3 2023 FINANCIAL INFORMATION

Nine months ended

September 30,

2022

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

10,121

4,900

4,493

2,290

(182)

21,622

Foreign exchange/commodity

timing

differences

in total revenues:

Unrealized gains and

losses

on derivatives

122

Realized gains and

losses on derivatives

where the underlying

hedged

transaction has

not yet been realized

–

Unrealized foreign exchange

movements

on receivables

(and related assets)

(27)

(11)

(16)

(9)

(22)

(85)

Operational revenues

10,132

4,908

4,538

2,295

(161)

21,712

Income (loss) from operations

1,571

776

480

146

(821)

2,152

Acquisition-related amortization

174

Restructuring, related

and

implementation costs

(1)

256

300

Changes in obligations

related to

divested businesses

–

(17)

Gains and losses

from sale of businesses

(1)

–

Acquisition-

and divestment

-related expenses

and integration costs

122

171

Certain other non-operational

items

–

450

480

Foreign exchange/commodity

timing

differences

in income from operations:

Unrealized gains and

losses on derivatives

(foreign exchange,

commodities,

embedded

derivatives)

107

Realized gains and

losses on derivatives

where the underlying

hedged

transaction has

not yet been realized

–

Unrealized foreign exchange

movements

on receivables/payables

(and related assets/liabilities)

(20)

(5)

(4)

(6)

(20)

(55)

Operational EBITA

1,768

845

645

215

(109)

3,364

Operational EBITA

margin (%)

17.4%

17.2%

14.2%

9.4%

n.a.

15.5%

(1)

Includes impairment of certain

assets.

In the nine months ended

September 30,

2022, certain

other non-operational

items in the table

above includes

the following:

Nine months ended

September 30,

2022

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational

items:

Other income/expense

related to the

Power Grids joint venture

–

Regulatory,

compliance and

legal costs

–

333

Business transformation

costs

–

114

Changes in pre-acquisition

estimates

–

(2)

–

Certain other fair values

changes,

including asset

impairments

(3)

–

(55)

(58)

Other non-operational

items

–

Total

–

450

480

(1)

Amounts include ABB Way process

transformation costs of $98 million

for the nine months

ended September 30, 2022.

Q3 2023 FINANCIAL INFORMATION

Net debt

Definition

Net debt

Net debt is defined

as Total

debt less Cash

and marketable securities.

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, 2023

December 31, 2022

Short-term debt and

current maturities

of long-term debt

2,951

2,535

Long-term debt

4,899

5,143

Total debt

7,850

7,678

Cash and equivalents

3,869

4,156

Restricted cash

- current

Marketable securities

and short-term investments

1,091

725

Cash and marketable

securities

4,978

4,899

Net debt

2,872

2,779

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, 2023

December 31, 2022

Total stockholders'

equity

13,754

13,187

Net debt (as defined

above)

2,872

2,779

Net debt / Equity

ratio

0.21

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, 2023

September 30, 2022

Income from operations

for the three

months ended:

December 31, 2022

/ 2021

1,185

2,975

March 31, 2023 / 2022

1,198

857

June 30, 2023 / 2022

1,298

587

September 30, 2023

/ 2022

1,259

708

Depreciation and Amortization

for the three months

ended:

December 31, 2022

/ 2021

199

216

March 31, 2023 / 2022

191

210

June 30, 2023 / 2022

196

207

September 30, 2023

/ 2022

194

198

EBITDA

5,720

5,958

Net debt (as defined

above)

2,872

4,117

Net debt / EBITDA

0.5

0.7

Q3 2023 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

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,

(e) liabilities related

to certain other

restructuring-related

activities and

(f) liabilities related

to the

divestment of the

Power Grids business

); and including the amounts

related to these accounts

which have been

presented as either assets

or liabilities held

for

sale but excluding

any amounts

included in discontinued

operations.

Adjusted revenues

for the trailing

twelve months

Adjusted revenues

for the trailing twelve months

includes total

revenues recorded

by ABB in the twelve

months preceding

the relevant balance

sheet date adjusted

to eliminate revenues

of divested

businesses and

the estimated impact of

annualizing revenues

of certain acquisitions

which were completed

in the same trailing

twelve-month period.

Reconciliation

($ in millions, unless otherwise indicated)

September 30, 2023

September 30, 2022

Net working capital:

Receivables,

net

7,586

6,695

Contract assets

1,073

955

Inventories, net

6,332

5,849

Prepaid expenses

280

261

Accounts payable,

trade

(4,777)

(4,769)

Contract liabilities

(2,610)

(2,178)

Other current liabilities

(1)

(3,843)

(3,406)

Net working capital

4,041

3,407

Total revenues

for the three

months ended:

December 31, 2022

/ 2021

7,824

7,567

March 31, 2023 / 2022

7,859

6,965

June 30, 2023 / 2022

8,163

7,251

September 30, 2023

/ 2022

7,968

7,406

Adjustment to annualize/eliminate

revenues of

certain acquisitions/divestments

(267)

(55)

Adjusted revenues

for the trailing

twelve months

31,547

29,134

Net working capital

as a percentage

of revenues

(%)

12.8%

11.7%

(1)

Amounts exclude $754 million

and $795 million at September

30, 2023 and 2022, respectively,

related primarily to (a)

income taxes payable, (b) current

derivative liabilities,

benefits, (d) payables

under the share buyback

program, (e) liabilities

related to certain restructuring

-related activities

and (f) liabilities

to the divestment of the Power

Grids business.

Q3 2023 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) gains

arising on the sale

of the Power Conversion

Division, the Hitachi

Energy Joint

Venture and

the Power Grids

business, the latter

being included

in discontinued

operations.

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

($ in millions, unless otherwise indicated)

September 30, 2023

December 31, 2022

Net cash provided

by operating activities

– continuing

operations

3,123

1,334

Adjusted for the effects

of continuing operations:

Purchases

of property, plant

and equipment

and intangible assets

(765)

(762)

Proceeds from

sale of property,

plant and equipment

109

127

Free cash flow from

continuing operations

2,467

699

Net cash used

in operating activities

– discontinued

operations

(43)

(47)

Free cash flow

2,424

652

Adjusted net income

attributable to

ABB

(1)

3,859

2,442

Free cash flow conversion

to net income

63%

27%

(1)

Adjusted net income attributable

to ABB for the year ended

December 31, 2022, is

adjusted to exclude the gain

on the sale of Hitachi

Energy Joint Venture

of $43 million and

reductions to the gain on the sale

of Power Grids of

$10 million.

Reconciliation of the

trailing twelve

months to September

30, 2023

Continuing operations

Discontinued

operations

($ in millions)

Net cash provided

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

Adjusted net income

attributable to ABB

(1)

Q4 2022

720

(259)

(33)

1,088

Q1 2023

283

(151)

(1)

1,036

Q2 2023

759

(180)

906

Q3 2023

1,361

(175)

(10)

829

Total for

the trailing twelve

months to September 30, 2023

3,123

(765)

109

(43)

3,859

(1)

Adjusted net income attributable

to ABB for Q3 2023, is

adjusted to exclude

the gain on sale of the

Power Conversion Division

of $53 million,

while Q4 2022,

is adjusted to

exclude reductions

to the gain on the

sale of Power Grids

of $(1) million.

In addition, Q4 2022

is also adjusted to

exclude the gain on the sale

of Hitachi Energy

Joint Venture of

$43 million.

Q3 2023 FINANCIAL INFORMATION

Net finance expenses

Definition

Net finance expenses

is calculated as

Interest and dividend

income less Interest

and other finance

expense.

Reconciliation

Nine months ended

September 30,

Three months ended September 30,

($ in millions)

2023

2022

2023

2022

Interest and dividend

income

115

Interest and other

finance expense

(197)

(107)

(73)

(45)

Net finance expenses

(82)

(57)

(36)

(28)

Book-to-bill ratio

Definition

Book-to-bill ratio

is calculated as

Orders received

divided by Total

revenues.

Reconciliation

Nine months ended

September 30,

2023

2022

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

Orders

Revenues

Book-to-bill

Orders

Revenues

Book-to-bill

Electrification

11,794

10,886

1.08

11,797

10,121

1.17

Motion

6,285

5,868

1.07

6,247

4,900

1.27

Process Automation

5,665

4,543

1.25

5,079

4,493

1.13

Robotics & Discrete

Automation

2,516

2,788

0.90

3,318

2,290

1.45

Corporate and Other

(incl. intersegment

eliminations)

(91)

(95)

n.a.

(73)

(182)

n.a.

ABB Group

26,169

23,990

1.09

26,368

21,622

1.22

Three months ended September 30,

2023

2022

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

Orders

Revenues

Book-to-bill

Orders

Revenues

Book-to-bill

Electrification

3,693

3,561

1.04

3,772

3,471

1.09

Motion

1,886

1,947

0.97

1,966

1,702

1.16

Process Automation

1,883

1,554

1.21

1,568

1,458

1.08

Robotics & Discrete

Automation

665

929

0.72

901

828

1.09

Corporate and Other

(incl. intersegment

eliminations)

(75)

(23)

n.a.

(19)

(53)

n.a.

ABB Group

8,052

7,968

1.01

8,188

7,406

1.11

Q3 2023 FINANCIAL INFORMATION

—

ABB Ltd

Corporate Communications

P.O.

Box 8131

8050 Zurich

Switzerland

Tel:

+41 (0)43

317 71

www.abb.com

SIGNATURES

Pursuant to the requirements of the Securities

Exchange Act of 1934, the registrant

has duly caused this report to be

signed on

its behalf by the undersigned, thereunto

duly authorized.

ABB LTD

Date: October 18, 2023.

By:

/s/ Ann-Sofie Nordh

Name:

Ann-Sofie Nordh

Title:

Group Senior Vice President and

Head of Investor Relations

Date: October 18, 2023.

By:

/s/ Richard A. Brown

Name:

Richard A. Brown

Title:

Group Senior Vice President and

Chief Counsel Corporate & Finance

ABB (NYSE:ABB)
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