Financial position

Balance sheets

(XLS:)

Current assets

 

 

December 31, ($ in millions)

2011

2010

Cash and equivalents

4,819

5,897

Marketable securities and short-term investments

948

2,713

Receivables, net

10,773

9,970

Inventories, net

5,737

4,878

Prepaid expenses

227

193

Deferred taxes

932

896

Other current assets

351

801

Total current assets

23,787

25,348

For a discussion on cash and equivalents and marketable securities and short-term investments, see “Liquidity and capital resources – Principal sources of funding” for further details.

Receivables, net, at the end of 2011, increased from the end of 2010 by approximately 8.0 percent (11.6 percent in local currencies). The increase was primarily driven by the acquisitions of Baldor and Mincom. Higher revenues further drove the increase, however this was partially offset by improved collections of receivables, thus reducing the overall days of sales outstanding ratio for receivables from 115 days at the end of 2010 to 104 days at the end of 2011.

Inventories, net, increased 17.6 percent compared to the level at the end of 2010 (21.6 percent in local currencies). This increase was across almost all divisions, driven by the increasing order volumes as well as the acquisitions of Baldor and Mincom.

For a discussion on deferred taxes see “Note 16 Taxes” to our Consolidated Financial Statements.

Other current assets include derivative assets and income tax receivables. The decrease primarily reflects lower derivative market values.

(XLS:)

Current liabilities

 

 

December 31, ($ in millions)

2011

2010

Accounts payable, trade

4,789

4,555

Billings in excess of sales

1,819

1,730

Employee and other payables

1,361

1,526

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

765

1,043

Advances from customers

1,757

1,764

Deferred taxes

305

357

Provisions for warranties

1,324

1,393

Provisions and other current liabilities

2,619

2,726

Accrued expenses

1,822

1,644

Total current liabilities

16,561

16,738

Total current liabilities at December 31, 2011, decreased primarily due to a reduction in current maturities of long-term debt due to bond repayments of $865 million, partially offset by the net issuance of short-term commercial paper in the amount of $435 million. Partially offsetting the reduction in total current liabilities are increases in accounts payable and accruals arising from acquisitions. Accounts payable increased 5.1 percent (8.3 percent in local currencies) compared to the prior year mostly due to increased business volume. Likewise, the increase in Billings in excess of sales of 5.1 percent (8.4 percent in local currencies) was also driven by increased business volumes. Employee and other payables decreased from the prior year by 10.8 percent (7.9 percent in local currencies) mostly due to lower value-added tax payables compared to the prior year.

(XLS:)

Non-current assets

 

 

December 31, ($ in millions)

2011

2010

Property, plant and equipment, net

4,922

4,356

Goodwill

7,269

4,085

Other intangible assets, net

2,253

701

Prepaid pension and other employee benefits

139

173

Investments in equity-accounted companies

156

19

Deferred taxes

318

846

Other non-current assets

804

767

Total non-current assets

15,861

10,947

Property, plant and equipment, net, increased 13.0 percent (16.5 percent in local currencies) between December 31, 2010 and December 31, 2011, primarily due to the acquisition of Baldor ($413 million), with the remaining increase due to investments across most divisions, including investments in manufacturing plants in Sweden, China, Switzerland and Brazil.

The increase in goodwill and other intangible assets, net, was mainly due to the Baldor and Mincom acquisitions (see “Note 3 Acquisitions, increases in controlling interests and divestments” and “Note 11 Goodwill and other intangible assets” to our Consolidated Financial Statements). The decrease in prepaid pension and other employee benefits reflects the change in the funded status of our overfunded pension plans. See “Note 17 Employee benefits” to our Consolidated Financial Statements.

For an explanation of the reduction in Deferred taxes, refer to “Note 16 Taxes” to our Consolidated Financial Statements.

Other non-current assets mainly include restricted cash, derivative assets, including embedded derivatives, and shares and participations.

(XLS:)

Non-current liabilities

 

 

December 31, ($ in millions)

2011

2010

Long-term debt

3,231

1,139

Pension and other employee benefits

1,487

831

Deferred taxes

537

411

Other non-current liabilities

1,496

1,718

Total non-current liabilities

6,751

4,099

The increase in our long-term debt was largely due to new bond issuances which represented $2,149 million of the December 31, 2011, balance. See “Liquidity and Capital Resources – Debt and interest rates.”

The increase in pension and other employee benefits substantially reflects the remeasurement (relating to our defined benefit pension plans) of benefit obligations for updated assumptions and of plan assets to fair value, partly offset by employer contributions. See “Note 17 Employee benefits” to our Consolidated Financial Statements.

Other non-current liabilities decreased primarily due to a reduction in uncertain tax positions, refer to “Note 16 Taxes” to our Consolidated Financial Statements.

Financial review

© Copyright 2012 ABB.