ABB Asbestos Cases Rise in March to 94,000 ------------------------------------------ Published September 27, 2002 ABB Ltd. reports that, during the first quarter of 2002, 14,300 new claims were filed against Combustion Engineering Inc., a subsidiary that formerly conducted part of its divested power generation business and which now owns commercial real estate that it leases to third parties. The figures for the quarter are five percent lesser than the fourth quarter of 2001. About 13,500 claims were settled during the period, of which more than 50 percent were settled without payment. Settlement costs prior to reimbursement were approximately $51 million, up from $37 million in the first quarter of 2001. At March 31, 2002, there were about 94,0000 pending claims against Combustion Engineering, the company says. Plaintiffs claim damages for personal injury arising from exposure to or use of equipment, which contained asbestos that Combustion Engineering supplied, primarily during the 1970s and before. During 2001, Combustion Engineering experienced a significant increase in the level of new claims and higher total and per-claim settlement costs as compared to recent years. This resulted in an increase in the reserves for potential asbestos liabilities by $470 million. Cash payments to resolve asbestos claims were $136 million, $125 million and $67 million in 2001, 2000 and 1999, respectively. As of December 31, 2001 and 2000, reserves of $940 million and $590 million, respectively, were recorded in respect of asbestos claims and related defense costs. The reserves do not reflect probable insurance recoveries on those claims. ABB also recorded assets of about $150 million and $160 million at December 31, 2001 and 2000, respectively, for probable insurance recoveries, which were established with respect to the claims reserved against. Other ABB Group entities are also named as defendants in asbestos claims. These claims, however, are insignificant compared to the Combustion Engineering claims and have not had, and are not expected to have, a material impact on ABB's consolidated financial position or consolidated results of operations. In 2001, the average payment per claim in which a payment was made was $6,069, representing a 26 percent increase in the average payment per claim of $4,833 in 2000. Approximately $12.8 million, $10.5 million and $8.2 million in administration and defense costs were incurred in 2001, 2000 and 1999, respectively. COMPANY SNAPSHOT ABB Ltd. (NYSE: ABB) Affolternstrasse 44 CH-8050 Zurich, Switzerland Phone: +41-43-317-7111 Fax: +41-43-317-7958 Web site: http://www.abb.com Employees : 156,865 Revenue : $23,726,000,000 Net Income (Loss) : ($130,000,000) Assets : $32,344,000,000 Liabilities : $30,115,000,000 No. of Asbestos Claims : 94,000,000* Estimated Asbestos Liabilities : $940,000,000 Insurance Recoveries : $150,000,000 (For the year ended December 31, 2001) (*As of March 31, 2002) Description: Organized in Switzerland, ABB Ltd. is a global provider of products and systems incorporating advanced technologies and innovative applications of those products and systems, specializing in automation and power technologies for a broad range of industrial and commercial customers. The company works with customers to engineer and install networks, facilities and plants with particular emphasis on enhancing efficiency and productivity for customers that source, refine, transmit and distribute energy. ABB provides comprehensive market and product support services, as well as creative financing and risk management options to enable its customers to buy and use its products and services. ----------------------------------------------------------- LitigationDataSource.com