Note 23—Operating segment and geographic data

The Chief Operating Decision Maker (CODM) is the Company's Executive Committee. The CODM allocates resources to and assesses the performance of each operating segment using the information outlined below. The Company's operating segments consist of Discrete Automation and Motion, Low Voltage Products, Process Automation, Power Products and Power Systems. The remaining operations of the Company are included in Corporate and Other.

A description of the types of products and services provided by each reportable segment is as follows:


	•	Discrete Automation and Motion: manufactures and sells motors, generators, variable speed drives, programmable logic controllers, robots and robotics, solar inverters, wind converters, rectifiers, excitation systems, power quality and protection solutions, electric vehicle fast charging infrastructure, components and subsystems for railways, and related services for a wide range of applications in discrete automation, process industries, transportation and utilities.
	•	Low Voltage Products: manufactures and sells products and systems that provide protection, control and measurement for electrical installations, as well as enclosures, switchboards, electronics and electromechanical devices for industrial machines, plants and related service. In addition the segment manufactures products for wiring and cable management, cable protection systems, power connection and safety. The segment also makes intelligent building control systems for home and building automation.
	•	Process Automation: develops and sells control and plant optimization systems, automation products and solutions, including instrumentation, as well as industry-specific application knowledge and services for the oil, gas and petrochemicals, metals and minerals, marine and turbocharging, pulp and paper, chemical and pharmaceuticals, and power industries.
	•	Power Products: manufactures and sells a wide range of products across voltage levels, including circuit breakers, switchgear, capacitors, instrument transformers, power, distribution and traction transformers for electrical and other infrastructure utilities, as well as industrial and commercial customers.
	•	Power Systems: designs, installs and upgrades high-efficiency transmission and distribution systems and power plant automation and electrification solutions, including monitoring and control products, software and services and incorporating components manufactured by both the Company and by third parties, for power generation, transmission and distribution utilities, other infrastructure utilities, as well as other industrial and commercial enterprises.
	•	Corporate and Other: includes headquarters, central research and development, the Company's real estate activities, Group treasury operations and other minor business activities.

Effective January 1, 2015, the Company changed its primary measure of segment performance from Operational EBITDA to Operational EBITA, which represents income from operations excluding amortization expense on intangibles arising upon acquisitions (acquisition-related amortization), restructuring and restructuring-related expenses, gains and losses on sale of businesses, acquisition-related expenses and certain non-operational items, as well as foreign exchange/commodity timing differences in income from operations consisting of: (i) unrealized gains and losses on derivatives (foreign exchange, commodities, embedded 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/payables (and related assets/liabilities).

The segment performance for 2014 and 2013 has been restated to reflect this change.

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 segment revenues, Operational EBITA, the reconciliations of consolidated Operational EBITA to income from continuing operations before taxes, as well as depreciation and amortization, and capital expenditures for 2015, 2014 and 2013, as well as total assets at December 31, 2015, 2014 and 2013.

	2015
($ in millions)	Third-party revenues		Intersegment revenues			Total revenues
Discrete Automation and Motion		8,492		635			9,127
Low Voltage Products		6,210		337			6,547
Process Automation		6,235		139			6,374
Power Products		8,352		1,198			9,550
Power Systems		6,132		210			6,342
Corporate and Other		60		1,459			1,519
Intersegment elimination		—		(3,978	)		(3,978	)

Consolidated		35,481		—			35,481

	2014
($ in millions)	Third-party revenues		Intersegment revenues			Total revenues
Discrete Automation and Motion		9,296		846			10,142
Low Voltage Products		7,117		415			7,532
Process Automation		7,745		203			7,948
Power Products		8,782		1,551			10,333
Power Systems		6,686		334			7,020
Corporate and Other		204		1,592			1,796
Intersegment elimination		—		(4,941	)		(4,941	)

Consolidated		39,830		—			39,830

	2013
($ in millions)	Third-party revenues		Intersegment revenues			Total revenues
Discrete Automation and Motion		8,909		1,006			9,915
Low Voltage Products		7,338		391			7,729
Process Automation		8,287		210			8,497
Power Products		9,096		1,936			11,032
Power Systems		8,025		350			8,375
Corporate and Other		193		1,583			1,776
Intersegment elimination		—		(5,476	)		(5,476	)

Consolidated		41,848		—			41,848

($ in millions)	2015			2014			2013
Operational EBITA:
Discrete Automation and Motion		1,271			1,589			1,622
Low Voltage Products		1,096			1,241			1,265
Process Automation		755			958			1,022
Power Products		1,178			1,319			1,435
Power Systems		274			(96	)		326
Corporate and Other and Intersegment elimination		(405	)		(536	)		(523	)

Consolidated Operational EBITA		4,169			4,475			5,147
Acquisition-related amortization		(310	)		(380	)		(390	)
Restructuring and restructuring-related expenses(1)		(674	)		(235	)		(252	)
Gains and losses on sale of businesses, acquisition-related expenses and certain non-operational items		(120	)		482			(181	)
Foreign exchange/commodity timing differences in income from operations:
Unrealized gains and losses on derivatives where the underlying hedged transaction has not yet been realized		67			(223	)		60
Realized gains and losses on derivatives where the underlying hedged transaction has not yet been realized		(68	)		(42	)		14
Unrealized foreign exchange movements on receivables/payables (and related assets/liabilities)		(15	)		101			(11	)

Income from operations		3,049			4,178			4,387
Interest and dividend income		77			80			69
Interest and other finance expense		(286	)		(362	)		(390	)

Income from continuing operations before taxes		2,840			3,896			4,066


(1)	Amounts also include the incremental implementation costs in relation to the White Collar Productivity program.

	Depreciation and amortization						Capital expenditure(1)						Total assets(1) at December 31,
($ in millions)	2015		2014		2013		2015		2014		2013		2015		2014		2013
Discrete Automation and Motion		295		309		285		145		192		214		9,452		10,123		10,931
Low Voltage Products		271		301		323		166		184		204		7,481		7,978		9,389
Process Automation		75		88		87		52		49		68		3,851		4,268		4,537
Power Products		191		217		223		164		220		252		6,869		7,396		7,669
Power Systems		138		175		183		75		92		101		6,120		6,855		7,905
Corporate and Other		190		215		217		274		289		267		7,583		8,232		7,601

Consolidated		1,160		1,305		1,318		876		1,026		1,106		41,356		44,852		48,032


(1)	Capital expenditure and Total assets are after intersegment eliminations and therefore reflect third-party activities only.

Geographic information

Effective January 1, 2015, the Company streamlined its regional organization, reducing the number of regions to three. The geographic information for revenues in 2014 and 2013, and for long-lived assets at December 31, 2014, has been restated to reflect this change.

Geographic information for revenues and long-lived assets was as follows:

	Revenues						Long-lived assets at December 31,
($ in millions)	2015		2014		2013		2015		2014
Europe		11,602		13,745		14,450		3,253		3,460
The Americas		10,554		11,490		12,133		1,113		1,215
Asia, Middle East and Africa		13,325		14,595		15,265		910		977

Total		35,481		39,830		41,848		5,276		5,652

Revenues by geography reflect the location of the customer. Approximately 20 percent, 19 percent and 18 percent of the Company's total revenues in 2015, 2014, and 2013, respectively, came from customers in the United States. Approximately 13 percent, 13 percent, and 12 percent of the Company's total revenues in 2015, 2014, and 2013, respectively, were generated from customers in China. In 2015, 2014 and 2013, more than 98 percent of the Company's total revenues were generated from customers outside Switzerland.

Long-lived assets represent "Property, plant and equipment, net" and are shown by location of the assets. At December 31, 2015, approximately 16 percent of the Company's long-lived assets were located in each of Switzerland, the United States and Sweden. At December 31, 2014, approximately 16 percent of the long-lived assets were located in each of Switzerland and the United States while approximately 15% were located in Sweden.

The Company does not segregate revenues derived from transactions with external customers for each type or group of products and services. Accordingly, it is not practicable for the Company to present revenues from external customers by product and service type.

2016 Realignment of segments

On September 9, 2015, the Company announced a reorganization of its operating segments aimed at delivering more customer value in a better, more focused way from its combined power and automation offering. Effective January 1, 2016, ABB commenced operating with four segments, namely Discrete Automation and Motion, Electrification Products, Process Automation and Power Grids.

There were no significant changes in the Discrete Automation and Motion segment.

The new Electrification Products segment includes the combined businesses of the previous Low Voltage Products segment and the Medium Voltage Products business, previously included in the former Power Products segment.

The scope of businesses in the Process Automation segment has been expanded to include the Distributed Control Systems business from the former Power Systems segment.

The new Power Grids segment includes the remaining businesses of the former Power Products and Power Systems segments, excluding the businesses transferred to other segments as described above.