Financial position

Balance sheets

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Current assets

 

 

December 31, ($ in millions)

2013

2012

Cash and equivalents

6,021

6,875

Marketable securities and short-term investments

464

1,606

Receivables, net

12,146

11,575

Inventories, net

6,004

6,182

Prepaid expenses

252

311

Deferred taxes

832

869

Other current assets

706

584

Total current assets

26,425

28,002

For a discussion on cash and equivalents, see “Liquidity and capital resources – Principal sources of funding” for further details.

Marketable securities and short-term investments decreased as investments were sold during 2013 to provide cash required to fund investing and financing activities (see “Cash flows – Net cash used in investing activities”).

Receivables increased 4.9 percent (7.2 percent in local currencies) compared to 2012, primarily due to an increase in unbilled receivables, net (see “Note 7 Receivables, net”), as several large projects experienced execution delays, thus delaying the timing of invoicing and collection. Ongoing working capital improvement projects resulted in a reduction of 5 days sales outstanding in trade receivables but this was more than offset by the increase resulting from acquisitions and higher revenues. Working capital improvement programs also resulted in a reduction in inventories of 2.9 percent (3.8 percent in local currencies) compared to 2012, despite the increases due to acquisitions and higher revenues.

For a summary of the components of deferred tax assets and liabilities, see “Note 16 Taxes” to our Consolidated Financial Statements.

The increase in “Other current assets” primarily reflects higher income tax receivables and higher fair values for foreign currency derivatives.

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Current liabilities

 

 

December 31, ($ in millions)

2013

2012

Accounts payable, trade

5,112

4,992

Billings in excess of sales

1,714

2,035

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

453

2,537

Advances from customers

1,726

1,937

Deferred taxes

259

270

Provisions for warranties

1,362

1,291

Other provisions

1,807

1,575

Other current liabilities

4,242

4,337

Total current liabilities

16,675

18,974

Total current liabilities at December 31, 2013, decreased primarily due to the repayment on maturity of bonds, and a reduction in outstanding commercial paper and other short-term debt (see “Note 12 Debt” to our Consolidated Financial Statements).

Accounts payable increased 2.4 percent (3.3 percent in local currencies) compared to 2012, mainly due to acquisitions. Billings in excess of sales decreased 15.8 percent (13.7 percent in local currencies) compared to 2012 due to the timing of billings and collections for contracts under the percentage-of-completion or completed-contract method. Advances from customers declined 10.9 percent (7.6 percent in local currencies) compared to 2012, due to the timing of cash receipts for advances on large projects with the largest decreases in the Power Systems and Process Automation divisions. Provisions for warranties increased 5.5 percent (5.4 percent in local currencies) compared to 2012, primarily due to acquisitions. Other provisions increased 14.7 percent (15.1 percent in local currencies), largely due to increased provisions for certain projects and increases in certain litigation- and compliance-related provisions. Other current liabilities decreased 2.2 percent (1.4 percent in local currencies) primarily due to a reduction in non-trade payables and a reduction of other tax liabilities.

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Non-current assets

 

 

December 31, ($ in millions)

2013

2012

Property, plant and equipment, net

6,254

5,947

Goodwill

10,670

10,226

Other intangible assets, net

3,297

3,501

Prepaid pension and other employee benefits

93

71

Investments in equity-accounted companies

197

213

Deferred taxes

370

334

Other non-current assets

758

776

Total non-current assets

21,639

21,068

Property, plant and equipment increased 5.2 percent (4.9 percent in local currencies), primarily due to acquisitions, and high levels of investment across all divisions and most regions. The investments in new manufacturing facilities and upgrades to existing facilities help to secure our technological competitiveness in the growth markets we serve and increase our capacity to meet our customers’ requirements.

The increase in goodwill was mainly due to the acquisition of Power-One. Other intangible assets, net decreased 5.8 percent (5.1 percent in local currencies). See “Note 11 Goodwill and other intangible assets” to our Consolidated Financial Statements.

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Non-current liabilities

 

 

December 31, ($ in millions)

2013

2012

Long-term debt

7,570

7,534

Pension and other employee benefits

1,639

2,290

Deferred taxes

1,265

1,260

Other non-current liabilities

1,707

1,566

Total non-current liabilities

12,181

12,650

Pension and other employee benefits decreased 28.4 percent (28.9 percent in local currencies) due to decreases in the underfunded status of our defined benefit pension plans, primarily as a result of changes in actuarial assumptions affecting estimated projected benefit obligations (see “Note 17 Employee benefits” to our Consolidated Financial Statements). For a breakdown of other non-current liabilities, see “Note 13 Other provisions, other current liabilities and other non-current liabilities” to our Consolidated Financial Statements. For further explanation regarding deferred taxes, refer to “Note 16 Taxes” to our Consolidated Financial Statements.