Annual Results Fiscal Year 2001 : 1 April 2000 - 31 March
2001

A Year of Significant Change
and Continuing Progress

• Record order book at
  39.4 billion equivalent to 19 months of sales
• Orders rose by 11% on a
  comparable basis to 25.7 billion
• Sales rose by 15% on a
  comparable basis to 24.6 billion
• Operating income of
  1,151 million
• Operating Margin at 4.7%
  versus 4.5% in fiscal year 2000
• Net income before goodwill of
  564 million
• Net income of 204
  million
  

Commenting on the results
presented to the Board on 14 May 2001, Pierre Bilger, Chairman
and Chief Executive Officer of ALSTOM stated:

"This year has been a year of
significant change and continuing progress towards our
strategic goals. We are now the recognised specialist in energy
and transport infrastructure. Our actions this year have
translated into an excellent order book, a new shareholder base
and a more focused portfolio of activities.

Despite short-term world-wide
economic uncertainties, we continue to benefit from strong
medium to long term infrastructure demand and good market
positions for most of our products and services. Although our
operating income rose, we still feel that we can significantly
improve the profitability of our businesses.

For the coming years, we will be
building the foundations for future profitable growth by
concentrating on operational efficiency, continued focusing of
our activities and growth in higher value added products and
services. The current lack of visibility of the world economy
invites caution. Nevertheless, our performance during fiscal
year 2002 should show again some progress and we see no reason
today not to maintain our 6% operating margin target for fiscal
year 2003."

 Summary Income Statement

 

Other Key Indicators

For basis of presentation, see
Explanatory Notes on pages 16-17-18.

 Overview

Secondary offering

In February 2001, our two founding
shareholders (Alcatel and Marconi) sold the majority of their
remaining shares, through a secondary offering, to new
shareholders, both international institutions and French retail
investors. The placement was slightly more than five times
oversubscribed. Each company now holds 5.7% of the outstanding
shares of the Company. We now have a more balanced geographical
spread of shareholders.

Portfolio management

In a separate press release today,
ALSTOM announced the sale of its Contracting sector. Following
the disposal of Contracting, ALSTOM has further concentrated
its activities on energy and transport infrastructure. During
fiscal year 2001, the Company made a number of acquisitions,
principally 51% of Fiat Ferroviaria, the T&D services
activities of Norweb and Scottish Power in the UK. Since 11 May
2000, Power has been fully consolidated.

Local presence

We now have a more balanced
commercial geographical coverage. In order to take advantage of
our new geographical coverage, we have merged the Sector
country organisations of ALSTOM and Power into one Network
organisation that is resulting in a more effective local
presence.

Annual results

Overall, our performance in fiscal
year 2001 was marked by an historical record for orders and
sales with a slight improvement of our operational
profitability.

• All Sectors showed increases in
  orders on a comparable basis, with the highest growth rates
  in Transport, Power Conversion and Marine.
• Except Power Conversion, all
  Sectors increased their sales, on a comparable basis, with
  the highest growth rates in Power and Marine.
• Operating margin improved to
  4.7%: all Sectors reported improved operating margin, except
  Transmission & Distribution (T&D) and Marine. The
  operating margin of Power, which was severely impacted by the
  gas turbine difficulties, was 3.7%.
• Net income reflects the absence
  in fiscal year 2001 of any significant capital gain, as well
  as higher financial expense and goodwill amortisation. Fiscal
  year 2000 benefited from a net capital gain of
   158 million after tax.

Orders and Sales

Breakdown by Sector

 

During the fiscal year 2001,
ALSTOM received record orders for a total amount of
25,727 million compared to 17,259 million during fiscal
year 2000. This 49% increase was mainly the result of the full
integration of Power, in addition to strong organic growth
across the Sectors.

In addition to this major
strategic initiative, the Company concluded a number of smaller
acquisitions during this period (please see Explanatory Note
1.5). These acquisitions together accounted for 715
million in orders received.

On a comparable basis, including
the 100% consolidation of Power from 1 April 1999 and excluding
the impact of the above-mentioned acquisitions and disposals,
the Company recorded strong organic growth as orders received
increased by 11%. All Sectors contributed to this growth,
notably Transport (+31%).

Sales for the fiscal year 2001
rose to 24,550 million compared to 16,229
million during the previous year. This 51% increase was
essentially due to the full integration of Power.

On a comparable basis, sales
increased by 15%. This is mainly due to the strong increase in
sales recorded by Power following the high level of orders for
steam products and gas turbines, received by this sector in
previous years.

 Breakdown by Geographic
Region

Our broader geographical presence
is the result of the full integration of Power, which had a
more diversified geographical spread of activities. World-wide,
orders received increased by 49%. On a comparable basis, orders
received increased by 11%.

Europe remained the most important
region in terms of orders received, with 45% of total orders,
versus 50% in fiscal year 2000. Orders received in North
America represented 25% of total orders, versus 22% in fiscal
year 2000.

Currency Effect

Changes in the value of the Euro
against other currencies had a net positive effect on our
results of operations during fiscal year 2001. This currency
effect increased our orders, sales and operating income by
approximately 4%. This positive impact was significantly higher
for the Power sector due to the sector's wider presence outside
of the Euro zone, particularly in the UK and the US.

Operating Income and
Margin

Operating income amounted to
1,151 million in fiscal year 2001 versus 729
million in fiscal year 2000, an increase of 58%, mainly due to
the full integration of Power.

Operating margin rose to 4.7% in
fiscal year 2001, versus 4.5% in fiscal year 2000 essentially
due to rises in Power and Transport.

Net Income

Net income of 204 million
reflected the absence in fiscal year 2001 of any significant
capital gain, as well as higher financial expense and goodwill
amortisation. Fiscal year 2000 benefited from an exceptional
net capital gain of 158 million after tax arising
principally from the sale of the GE heavy duty gas turbines
business, less other exceptional restructuring charges and
provisions for risks.

Financial income
(expense). ALSTOM's financial expense in
fiscal year 2001 was 116 million, versus 62
million in fiscal year 2000. This rise in expense came mainly
from the increase in our net financial debt to 1,216
million. This net debt position is mainly due to the purchase,
in two steps in fiscal year 2001 and fiscal year 2000, of ABB's
power activities.

Other income (expense). We incurred other expenses of
256 million during fiscal year 2001 versus other income
of 72 million for fiscal year 2000. This is largely due
to the absence in fiscal year 2001 of any significant capital
gain and restructuring costs recorded in fiscal year
2000.

Income tax.In fiscal year 2001, our effective
tax rate was 22% and this low level was due to continuing tax
optimisation. The effective tax rate in fiscal year 2000 was 16%
and reflected the untaxed gains and provisions arising from the
disposal of the heavy-duty gas turbine and energy
businesses.

Goodwill amortisation.Goodwill amortisation amounted to
360 million in fiscal year 2001 versus 244
million in fiscal year 2000. This significant increase was mainly
attributable to our acquisition of ABB's 50% shares in ABB ALSTOM
Power and its corresponding purchase accounting (see notes 3 and
20 of the consolidated financial statements).

 

Balance Sheet

Shareholders' Equity.At 31 March 2001, shareholders'
equity amounted to 2,090 million, or 2,193
million including minority interests. The increase from 31 March
2000 was due to the combined effect of the capital increase of
33 million following our second employee share purchase
scheme in August 2000 and the increase from net income. This was
reduced by the dividend for the fiscal year 2000 amounting to
118 million paid on 11 September 2000.

In addition, during fiscal year
2001, we issued undated subordinated notes for a total amount
of 250 million and a subsidiary issued redeemable
preference shares for a total amount of 205
million.

Provisions.For fiscal year 2001, in line with
industry practice, we have changed our presentation of certain
costs previously presented under provisions for risks and
charges. Accrued contract costs, estimates of future costs to be
incurred on contracts less any amounts untraded, are now
presented within the line item accrued contract costs and other
payables and expenses. Accrued employees benefits, other than
pensions, are also presented in this line item. Previous year
figures have been reclassified to reflect this new presentation.
This reclassification amounted to 1,008 million at 31
March 2000 and 1,679 million at 31 March 2001.

Provisions for risks and charges
now include restructuring and provisions for currently known
contract and product related liabilities, warranties, losses,
litigation and other risks.

Under this new presentation,
provisions at year-end 2001 ( 4,591 million) increased
significantly as compared to the situation at year-end 2000
( 3,254 million). This was mainly due to the effect of
the full consolidation of Power (instead of 50% previously) and
of the new provisions related to the GT 24/26 issue.

Goodwill.Total goodwill after amortisation at
31 March 2001 was 6,498 million of which Power was
4,702 million and will be amortised over 20
years.

Working Capital.Working capital requirements
improved to (979) million in fiscal year 2001, versus
(256) million in fiscal year 2000. This improvement in
fiscal year 2001 was the result of optimised asset management
throughout the Company. Working capital requirements are defined
as inventories, work in progress, client accounts, deferred tax
charges and other liabilities.

Net debt.Net financial debt is defined as
financial debt minus short-term investments, cash and cash
equivalents and long-term deposits. We had net financial debt at
31 March 2001 of 1,216 million. Our long-term deposits at
31 March 2001 were 417 million.

 

Liquidity and capital
resource

The following table sets forth
selected financial data concerning the liquidity and capital
resources for the periods set out below.

The main operating cash outflows
incurred during the fiscal year 2001 related to restructuring
costs of 605 million, mainly due to Power's exceptional
restructuring plan which is mostly completed. Transport was the
main cash contributor. We currently expect to spend
considerably less on restructuring plans in fiscal year
2002.

During fiscal year 2001, we
established asset-backed financing programs which generated
additional cash of approximately 531 million during
fiscal year 2001, principally for Marine.

Net cash used in investing
activities was 1,595 million in fiscal year 2001,
1,273 million in fiscal year 2000 and 818
million in fiscal year 1999. This mainly reflected the cash
amount of 1.25 billion paid to acquire ABB's 50% of
shares in ABB ALSTOM Power and 149 million for the
acquisition of 51% of Fiat Ferroviaria SPA.

Net cash provided by financing
activities was 370 million in fiscal year 2001 which
included the undated subordinated notes for a total amount of
250 million and redeemable preference shares for an
amount of 205 million as well as the dividend payment
of 118 million.

Dividend

Although ALSTOM's policy is to pay
out on average one third of its annual consolidated net income
in dividends, the Board of Directors, confident in the future
of the Company, proposes a dividend of 0.55 per share
( 0.825 per share including tax credit) which is
unchanged versus last year and represents 55% of Net Income.
This dividend is subject to approval of shareholders during the
Annual General Meeting on 9 July 2001 and should be paid on 30
July 2001.

Human Resources

As at 31 March 2001, ALSTOM
employed 143,014 people worldwide versus 120,678 people one
year earlier. This increase results primarily from the
inclusion of 100% of ABB ALSTOM Power's total employees.

Board of Directors

Following the resignations of Mr.
Jacques de Larosière, Mr. Serge Tchuruk and Mr. John Mayo,
ALSTOM's Board on 14 May 2001, appointed Mr. Jean-Paul
Béchat to replace Mr. Jacques de Larosière, Mr. Jim
Cronin to replace Mr. John Mayo and Mr. Paolo Scaroni to
replace Mr. Serge Tchuruk, all with effect from 14 May 2001.
The appointments of Messrs. Béchat, Cronin and Scaroni are
subject to ratification at ALSTOM's next shareholders'
meeting.

In addition, ALSTOM's Board on 14
May 2001 resolved to propose to ALSTOM's shareholders the
appointment of Ms. Candace Beinecke and Mr. Patrick Kron as new
board members. The resolutions for the appointment of Ms.
Beinecke and Mr. Kron will be submitted to ALSTOM's
shareholders at the next shareholders' meeting.

 

Outlook

The Company has and continues to be generally favoured by
sustained demand in most of its activities. The medium to long
term outlook in demand for our main sectors remains optimistic
as a result of long term trends in Power and Transport, linked
to urbanisation and the recent economic growth as well as
deregulation/privatisation.

While demand remains sustained in
Europe, the economic slowdown in the US is affecting most Latin
American and Asian countries and generally, we do not expect
demand to grow further in the near term in these regions. The
short-term global economic uncertainties could impact some of
our businesses with short commercial cycles such as T&D and
Power Conversion.

The operating margin is expected
to improve over the medium term as a result of strengthened
operational efficiency, better contract conditions, the
resolution of our GT24/26 technical difficulties and focusing
on higher value added products and services. The current lack
of visibility of the world economy invites caution.
Nevertheless, our performance during the fiscal year 2002
should show again some progress and we see no reason today not
to maintain our 6% operating margin target for fiscal year
2003.

 

Comments by Sector

Power

Overview.On 11 May 2000, ALSTOM acquired
ABB's 50% share in ABB ALSTOM Power. ALSTOM paid to ABB a cash
amount of 1.25 billion. ABB ALSTOM Power is owned 100% by
ALSTOM and has been re-named Power. In two steps, ALSTOM acquired
the totality of ABB's power generation activities, with the
exception of its nuclear operations and its asbestos liabilities,
for a total amount of approximately 2.65
billion.

On 31 July 2000, we announced that
we had experienced significant technical difficulties in the
introduction of the new GT 24/26 heavy-duty gas turbines. In
response to these technical problems, we continue to design and
progressively implement modifications across the fleet of GT
24/26 turbines and we continue to negotiate settlement
agreements with our customers. In order to account for these
costs, we have recorded an additional provision of 903
million for losses on the GT 24/26 contracts in our
consolidated financial statements for the fiscal year 2001. We
discuss some of the risks associated with the GT 24/26 problem
in greater detail in notes 3 and 20 of the consolidated
financial statements.

The stabilisation and enhancement
actions, which were defined at the time, are progressing
satisfactorily. The commercial settlements are proceeding as
required by customers' relationship and our mitigation plan.
Lastly, sales efforts have been refocused on the GT 8, GT
11,GT13, GTX 100 and Cyclone machines.

Orders. Orders received by Power during
fiscal year 2001 amounted to 11,502 million, versus
5,569 million in fiscal year 2000. This increase was
essentially due to the full integration of Power. On a
comparable basis, the increase in orders received was
2%.

In fiscal year 2001, the growth in
orders received is mainly due to Customer Service.

Lower volume of orders in the Gas
segment during the last quarter of fiscal year 2001 is being
compensated by orders received in other segments. We recorded
increased orders for steam turbines and heat recovery steam
generators ordered in conjunction with gas turbines for
combined-cycle applications. Our Boiler & Environment
segment also recorded increased orders in connection with the
revival of coal-fired projects, as a result of the high gas
prices. We also recorded 1 billion of orders for
Customer Service during the last quarter of fiscal year
2001.

By geography, North America
represented the main region for Power, with 35% of orders
received. The US accounted for 24% of orders received. This is
mainly due to the steam and boiler activities in the US. Europe
is also an important market, with 29% of the total.

Sales.Sales amounted to 12,040
million in fiscal year 2001, versus 4,471 million in
fiscal year 2000.

On a comparable basis, sales
increased by 25%, as a result of a significant order backlog
built up over the past few years translating into sales,
particularly for steam power plants, gas turbines and
boilers.

Operating Income.Operating income amounted to
448 million in fiscal year 2001, versus 117 million in
fiscal year 2000. The operating margin was 3.7% in fiscal year
2001, versus 2.6% in fiscal year 2000.

The 100% integration of ABB ALSTOM
Power into the Company was the major reason for the substantial
increase in operating income for Power.

The low operating margin was
mainly due to the technical difficulties related to the
delivery of GT24/26 gas turbines, the Steam segment
over-capacity and the product launch costs for industrial
turbines. These offset the improvements in services and boilers
and environmental products.

In the heavy duty gas segment, the
technical difficulties encountered with the introduction of the
GT24/26 gas turbines have resulted in the need to set aside
additional accruals for costs to complete and provisions for
contract losses. Contracts with loss provisions are traded at
zero gross margin resulting in non recovery of any non
production overhead costs thus resulting in a negative
operating margin. Large gas turbines represented approximately
17% of Power sales during fiscal year 2001.

Given its broad product and
service base, we believe Power is positioned for medium to
long-term growth.

Transmission & Distribution

Overview. The new market characteristics
also particularly impacted our Transmission & Distribution
sector (T&D). On the one hand, we have experienced more
global competition and downward pressure on prices,
particularly in the field of high-voltage systems while, on the
other hand, this transformation has provided us access to new,
higher value-added business opportunities.

In this context, we launched a new
organisation that will be customer-focused, concentrating all
interfaces through one team. We believe this organisation will
allow us to better address new opportunities, particularly in
the field of support for plant and equipment operations,
network planning and management, and energy management
markets.

At the beginning of fiscal year
2001, ALSTOM acquired the transmission and distribution
activities of Norweb Contracting from United Utilities and the
Contracting Services Division of Scottish Power.

In March 2001, ALSTOM acquired a
Brazilian company Ansaldo Coemsa SA from the Italian group
Ansaldo/Finmeccanica, renamed ALSTOM Elec SA, specialised in
transformers, alternators and hydraulic turbo-generators. This
acquisition will allow ALSTOM to become a leader in the
transmission and distribution of electrical energy in
Brazil.

Orders. Orders received by Transmission
& Distribution amounted to 2,882 million, an
increase by 14%, versus the orders received in fiscal year
2000, which amounted to 2,532 million. On a comparable
basis, the increase was 12% versus fiscal year 2000. The
double-digit increase in orders was the result of both an
increased market penetration, notably in the US, and improved
market conditions, in the second and third quarters of fiscal
year 2001, while in the fourth quarter orders slowed.

Growth was particularly strong in
Systems activity, in Energy Management & Markets and in
Operations & Maintenance. Energy Management grew its orders
received by more than 75% to 220 million. A number of
major orders for energy management systems and software were
received from independent system operators (ISOs) in the
US.

Orders received in Europe
increased by 7% versus fiscal year 2000. The French and German
markets declined, due principally to the reduction of
investments from the major utilities. Increased spending on
transmission equipment in the UK more than offset this decline.
The US showed the largest increase of orders and represented 9%
of T&D total orders in fiscal year 2001, against 6% in
fiscal year 2000. North America increased by 13%. Orders
received in South America continued to increase. Recovery in
Asia began with an increase in orders received of 31%.

Sales. T&D's sales amounted to
2,792 million in fiscal year 2001, an increase by 5%
versus 2,649 million in fiscal year 2000. Fiscal year
2001 figures included the recently acquired service activities
and on a comparable basis, T&D's sales increase was 4%
versus last year.

In fiscal year 2001, the increase
in orders received on a comparable basis (+12%) had a positive
effect on sales (+4%) due to the short lead-time of the
business.

Major deliveries invoiced in
fiscal year 2001 included important parts of the energy
management systems ordered in the US by Midwest Independent
System Operator, Ercot Independent System Operator and Florida
Power & Light, a Gas Insulated Switchgear substation
contract in Dubai (Jebel Ali contract), 345 kV Transformers in
Brazil as part of the Gisel II contract with Eletropaulo, Gas
Insulated Switchgear Substations in Singapore.

Operating Income. Operating income amounted to
235 million in fiscal year 2001 versus 233
million in fiscal year 2000. The operating margin dipped to
8.4% from 8.8%.

This evolution was due to a slight
rise in sales with continued price pressure. Focus on high
margin activities such as Protection & Control and Energy
Management & Markets contributed positively to the
operating income as well as the continuous productivity
increases owing to our improvement programmes (Quality Focus)
and reinforced cost streamlining.

Transport

Overview. In Transport, the onset of
deregulation and privatisation of our customer base led to
renewed investment in rail infrastructure and growth in demand
for passenger rolling stock, particularly in the field of urban
transportation. In parallel, the trend towards increased
outsourcing continues and we are exploiting these new business
opportunities through our dedicated customer service business
world-wide. With safety concerns becoming a top priority of
governments, rail operators and rail travellers in much of the
industrialised world, we also benefited from increased
investment in signalling and train control systems.

In October 2000, ALSTOM acquired
51% stake in Fiat Ferroviaria. This gives the Company a solid
position in the Italian rail market and propels ALSTOM to the
rank of world leader in tilting technology, an optimal solution
to fulfil network operators' new inter-city rolling stock
requirements. During fiscal year 2001, ALSTOM also acquired the
Dutch traction equipment company, Traxis.

Transport had a continuing growth
in customer services activities. These markets offer new
opportunities and higher potential margins.

The new European organisation by
product line in rolling stock activities launched in fiscal
year 2001 represents a major step towards
internationalisation.

Orders. Orders received by Transport in
fiscal year 2001 amounted to 5,558 million, an increase
of 42% versus fiscal year 2000. On a comparable basis,
Transport recorded order growth of 31%. This excluded the
impact of acquisitions (Fiat Ferroviaria and Traxis) in fiscal
year 2001, which accounted for 444 million of orders
received.

Transport continued to benefit
from strong market conditions. This positive trend was mainly
the result of renewed investment by major European railway
operators.

Sales. Sales in Transport amounted to
4,400 million in fiscal year 2001, an increase of 8%
versus fiscal year 2000. On a comparable basis, sales in
Transport increased by 2%, to 4,164 million from
4,092 million. This slight increase was due to the
exceptionally high level of deliveries completed during fiscal
year 2000, in particular deliveries for the Korean High Speed
Link.

Europe represented the largest
market increasing to 68% of Transport's sales, the Americas
representing 21% and Asia/Pacific 9%. The increased percentage
of sales in Europe was due principally to the increase in major
equipment deliveries and our growing maintenance activities in
the United Kingdom.

Operating Income. Transport's operating income
amounted to 266 million in fiscal year 2001, an
increase of 15% versus 231 million in fiscal year 2000.
The operating margin improved at 6.1 % versus the 5.6 % margin
recorded in fiscal year 2000.

Overall Transport was able to
confirm its profitable growth while pursuing its product
enhancements and process improvements programs. In fiscal year
2001 the delivery of certain contracts at higher margins and
higher-margin Service and Signaling businesses contributed to
the improvement.

 

Marine

Orders. Orders received in fiscal year
2001 amounted to 1,835 million, versus 1,623
million in fiscal year 2000, an increase of 13%, mainly due to
the active cruise-ships markets. In October 2000, Marine won
the exceptional order of the Queen Mary 2, a 2,800-passenger
transatlantic cruise-liner for Carnival/Cunard. The Marine
order book has reached the record level of 3.7 billion
and comprises ten cruise-ships, two high-speed ferries, two
surveillance frigates and one naval research vessel "BHO".

.

Sales. Sales amounted to 1,841 million in fiscal year
2001 versus 1,318 million in fiscal year 2000. The 40 %
increase over last year was a result of the previous year's
order-book and was also due to improvements in shipbuilding
organisation and productivity, leading to shorter construction
time and increased deliveries. Marine delivered six
cruise-ships in fiscal year 2001. The target of the CAP 21
strategic plan, launched in 1997 to double the level of sales,
was more than exceeded.

Operating Income. Operating income amounted to
80 million in fiscal year 2001 against 71
million in fiscal year 2000. The operating income almost
tripled in two years, while sales more than doubled. This
significant growth has been due to a rise in cruise-ship orders
received. Marine operating margin dropped to 4.3% from 5.4% in
the previous fiscal year due to minor delivery difficulties
encountered, as a result of a significant volume increase and
ship complexity.

 

Power Conversion

Orders. Orders received in fiscal year
2001 amounted to 737 million, an increase of 33% versus
last year, on a comparable basis. This favourable trend was due
to the Marine business, as a result of the introduction of new
electrical propulsion technology and vessel positioning
equipment.

Sales. Sales amounted to 617
million during fiscal year 2001, versus 663 million in
fiscal year 2000 on a comparable basis. The decrease in sales
was largely attributable to the lower orders received in the
previous fiscal year and at the beginning of this fiscal
year.

Operating Income. Operating income doubled to
40 million in fiscal year 2001 versus 18
million in fiscal year 2000.

The rise in operating income was
mainly due to the positive management of specific difficult
contracts reducing our risk exposure. However, these
improvements were partially offset by competitive pressure in
the Process Industries and General Drives Businesses.

 

Contracting

Overview. In a separate statement dated 15
May 2001, the Company announced that it has agreed to sell the
Contracting Sector for 770 million. For more details,
please see the press release today.

Orders. Orders received by Contracting
increased by 24% to 2,840 million in fiscal year 2001
from 2,283 million in fiscal year 2000. On a comparable
basis, the growth of orders received was 14%. The newly
consolidated activities of Sunvic Contracting and Missenard
Quint accounted for total orders received of 113
million. Contracting activities of Norweb and Scottish Power
accounted for an additional 116 million.

Contracting continued to benefit
from favourable economic conditions in Western Europe. The
Sector has been awarded a number of large systems contracts, as
well as orders in the field of hi-tech services.

Sales. Sales in fiscal year 2001 amounted to 2,485
million, an increase of 9%, versus fiscal year 2000. On a
comparable basis, sales remained flat.

Operating Income. Operating income amounted to
123 million in fiscal year 2001, versus 91
million in fiscal year 2000.

*

* *

Press enquiries:

G. Tourvieille / S. Gagneraud

(Tel. +33 1 47 55 23 15 or 1 47 55 25 87)

gilles.tourvieille@chq.alstom.com

severine.gagneraud@chq.alstom.com

Investor relations:

R. Shaw (Tel. +33 1 47 55 25 78)

investor.relations@chq.alstom.com

Internet :
http://www.wcm.alstom.com

*

* *

Explanatory Notes

1. Analysis of orders received
and sales on a comparable basis

The tables below set forth, on a
consolidated basis, some of our key financial and operating
data by sector. All comments however are based on comparable
figures in order to better analyse the evolution by sector.

Some adjustments have been made to evaluate orders received and
sales on a comparable basis. We consolidated 100% orders
received and sales contributed by Power from 1 April 1999. We
re-treated orders received and sales contributed by Power
Conversion. Orders received and sales contributed by
discontinued businesses of the former Industry sector have been
excluded, as if all of the disposals had occurred on 31 March
1999 and we also excluded orders received and sales contributed
by activities acquired during fiscal year 2001.

1.1. Power figures

As a result of the complete
strategic repositioning of the former Energy sector, the
reported figures for Power in fiscal years 2000 and 2001 are
not directly comparable. The data concerning Power for the year
ended 31 March 2000, include the figures of the former Energy
sector of ALSTOM for the period 1 April to 30 June 1999 (3
months), and 50% of the figures of ABB ALSTOM Power for the
period 1 July 1999 to 31 March 2000 (9 months). For fiscal year
2001, the figures reflect the 50% consolidation of ABB ALSTOM
Power from 1 April 2000 - 10 May 2000 and the 100%
consolidation of Power from 11 May 2000 - 31 March 2001.

Comparable figures have been calculated to illustrate the
estimated effects of the integration of 100% of Power as if it
had occurred on 1 April 1999.

1.2. Power Conversion
figures

Power Conversion was created on 1
July 1999 from the merger of our existing Drives and Controls,
Motors and Generators and several smaller related businesses
previously part of our former Industry sector. Power Conversion
replaces Industry within our reporting structure from 1 April
2000. In fiscal year 2000, Power Conversion figures reflect the
orders received and sales contributed by this sector as if the
sector had been created from 1 April 1999.

1.3. Industry figures

When you read the data concerning
Industry for fiscal year 2000, you should note that we have
transferred to other sectors or disposed of the following
activities:

• we transferred the former
  Cegelec Overseas and the industrial systems and services
  businesses to Contracting. In fiscal year 2000, these
  businesses had orders of 394 million, net sales of
   369 million, and operating income of
   9 million;
  
• we transferred the various
  businesses in Australia, New Zealand, South Africa and India,
  which we had previously included in the overseas activities
  of the Industry sector, to the sectors to which the
  activities correspond. In fiscal year 2000, these businesses
  had total orders of 597 million, net sales of
  514 million and operating income of 32 million;
  
• we disposed of a number of
  activities in the fields of industrial valves, gears, nuclear
  valves, automated assembly systems and painting systems. In
  fiscal year 2000, these businesses had orders of 260
  million and net sales of 281 million.

1.4. Others / Discontinued
businesses

In fiscal year 2000, the reported
figures for "Others" include the orders received and sales of
units of the former Industry sector which have since been
disposed of, the orders and sales of our Country Network as
well as overseas activities not allocated to a specific sector.
In fiscal year 2001, the reported figures for "Others" include
mainly the orders and sales of our Country Network as well as
overseas activities not allocated to a specific sector.

For the purposes of comparison,
the table below sets out "Others" in fiscal year 2000 excluding
the orders received and sales contributed by the discontinued
businesses as if all of the disposals occurred on 31 March
1999.

1.5. Acquisitions

The table below sets out orders
received and sales contributed to Transmission and
Distribution, Transport and Contracting by activities acquired
during fiscal year 2001.

1.6. Comparable basis
figures

 

2. Overseas

As of 1 April 2000, we allocated
our overseas activities in Australia, New Zealand, South Africa
and India to our corresponding sectors. The published figures
for fiscal year 2000 have been restated to include the impact
of this allocation.

 

3. Major Orders by Sector

Power

 

Transmission &
Distribution

 

Transport

 

Marine

 

Contracting

 

Forward-Looking
Statements

This press release contains, and
other written or oral reports and communications of ALSTOM may
from time to time contain, forward-looking statements, within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such
statements appear, without limitation, in the section entitled
Outlook, Drivers for Progress, Financials and Sectors. Examples
of such forward-looking statements include, but are not limited
to (i) projections or expectations of sales, income, operating
margins, dividends or other financial items or ratios, (ii)
statements of plans, objectives or goals of the Company or its
management, (iii) statements of future product or economic
performance and (iv) statements of assumptions underlying such
statements. Words such as "believes," "anticipates," "expects,"
"intends," "aims," "plans" and "will" and similar expressions
are intended to identify forward-looking statements but are not
the exclusive means of identifying such statements.

By their very nature,
forward-looking statements involve inherent risks and
uncertainties that the forecasts, projections and other
forward-looking statements will not be achieved. Such
statements are based on managements current plans and
expectations and are subject to a number of important factors
that could cause actual results to differ materially from the
plans, objectives and expectations expressed in such
forward-looking statements. These factors include: (i) the
inherent difficulty of forecasting future market conditions,
interest rates and exchange rates; (ii) the effects of, and
changes in, laws, regulations, governmental policy, taxation or
accounting standards or practices; (iii) the effects of
competition in the product markets and geographic areas in
which ALSTOM operates; (iv) the ability to increase market
share, control costs and enhance cash generation while
maintaining high quality products and services; (v) the timely
development of new products and services; (vi) the inherent
technical complexity of many of the Companys products
and the ability to resolve effectively and at reasonable cost
technical problems that inevitably arise; (vii) risks inherent
in large contracts that comprise a substantial portion of the
Companys business; (viii) the effects of acquisitions
and disposals; (ix) the ability to invest in successfully, and
compete at the leading edge of, technology developments across
all of the Companys Sectors; (x) the availability of
adequate cash flow to achieve managements objectives or
goals; and (xi) ALSTOMs success at adjusting to and
managing the risks of the foregoing. ALSTOM cautions that the
foregoing list of important factors is not exhaustive; when
relying on forward-looking statements to make decisions with
respect to the Company, investors and others should carefully
consider the foregoing factors and other uncertainties and
events, as well as other factors described in other documents
ALSTOM files from time to time with the Securities and Exchange
Commission, including reports on Form 6-K. Such forward-looking
statements speak only as of the date on which they are made,
and ALSTOM undertakes no obligation to update or revise any of
them, whether as a result of new information, future events or
otherwise