UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


⌧ x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2021~~

2022


◻ o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 1-2189

ABBOTT LABORATORIES


An Illinois Corporation		I.R.S. Employer Identification No.
	36-0698440	~~36-0698440~~

100 Abbott Park Road

Abbott Park,, Illinois60064-6400

Telephone: (~~224~~) (224) 667-6100

Securities Registered Pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Shares, Without Par Value	ABT	New York Stock Exchange Chicago Stock Exchange, Inc.

Indicate by check mark whether the registrant: (l) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of l934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧x No ☐o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒x No ☐o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐o No ☒x

As of ~~September~~June 30, ~~2021,~~2022, Abbott Laboratories had ~~1,768,286,969~~1,751,219,743 common shares without par value outstanding.

Table of Contents

Abbott Laboratories

Table of Contents

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

(Unaudited)

(dollars in millions except per share data; shares in thousands)

Three Months Ended

Nine Months Ended

September 30

September 30


2021

2020

2021

2020
Net sales

$
10,928

$
8,853

$
31,607

$
23,907

Cost of products sold, excluding amortization of intangible assets

4,423

3,966

13,771

10,510
Amortization of intangible assets

520

510

1,533

1,624
Research and development

672

580

1,980

1,722
Selling, general and administrative

2,767

2,302

8,276

7,126
Total operating cost and expenses

8,382

7,358

25,560

20,982

Operating earnings

2,546

1,495

6,047

2,925

Interest expense

133

137

402

410
Interest (income)

(10)

(10)

(32)

(37)
Net foreign exchange (gain) loss

4

(7)

7

(3)
Other (income) expense, net

(74)

(46)

(214)

(25)
Earnings from continuing operations before taxes

2,493

1,421

5,884

2,580
Tax expense (benefit) on earnings from continuing operations

393

189

802

267
Earnings from continuing operations

2,100

1,232

5,082

2,313

Earnings from discontinued operations, net of tax

—

—

—

20

Net Earnings

$
2,100

$
1,232

$
5,082

$
2,333

Basic Earnings Per Common Share —

Continuing operations

$
1.18

$
0.69

$
2.85

$
1.30
Discontinued operations

—

—

—

0.01
Net earnings

$
1.18

$
0.69

$
2.85

$
1.31

Diluted Earnings Per Common Share —

Continuing operations

$
1.17

$
0.69

$
2.83

$
1.29
Discontinued operations

—

—

—

0.01
Net earnings

$
1.17

$
0.69

$
2.83

$
1.30

Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share

1,774,516

1,774,475

1,776,870

1,772,166
Dilutive Common Stock Options

14,483

13,378

14,407

12,381
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options

1,788,999

1,787,853

1,791,277

1,784,547

Outstanding Common Stock Options Having No Dilutive Effect

2,740

—

2,694

—


	Three Months Ended				Six Months Ended
	June 30				June 30
	2022		2021		2022		2021
Net sales	$	11,257	$	10,223	$	23,152	$	20,679

Cost of products sold, excluding amortization of intangible assets	4,933		4,947		9,920		9,348
Amortization of intangible assets	507		504		1,019		1,013
Research and development	684		654		1,381		1,308
Selling, general and administrative	2,757		2,726		5,544		5,509
Total operating cost and expenses	8,881		8,831		17,864		17,178

Operating earnings	2,376		1,392		5,288		3,501

Interest expense	132		134		263		269
Interest (income)	(26)		(11)		(40)		(22)
Net foreign exchange (gain) loss	—		—		(3)		3
Other (income) expense, net	(82)		(79)		(160)		(140)
Earnings before taxes	2,352		1,348		5,228		3,391
Taxes on earnings	334		159		763		409
Net Earnings	$	2,018	$	1,189	$	4,465	$	2,982

Basic Earnings Per Common Share	$	1.15	$	0.67	$	2.53	$	1.67

Diluted Earnings Per Common Share	$	1.14	$	0.66	$	2.51	$	1.66

Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share	1,753,865		1,779,203		1,757,858		1,778,049
Dilutive Common Stock Options	11,598		14,076		12,115		14,369
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options	1,765,463		1,793,279		1,769,973		1,792,418

Outstanding Common Stock Options Having No Dilutive Effect	5,419		2,720		2,655		2,694

The accompanying notes to the condensed consolidated financial statements are an integral part of this statement.

Table of Contents

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Comprehensive Income

(Unaudited)

(dollars in millions)

Three Months Ended

Nine Months Ended

September 30

September 30


2021

2020

2021

2020
Net Earnings

$
2,100

$
1,232

$
5,082

$
2,333
Foreign currency translation gain (loss) adjustments

(391)

112

(762)

(677)
Net actuarial gains (losses) and amortization of net actuarial losses and prior service costs and credits, net of taxes of $18 and $54 in 2021 and $14 and $42 in 2020

78

28

211

122
Net gains (losses) for derivative instruments designated as cash flow hedges and other, net of taxes of $50 and $98 in 2021 and $(43) and $(24) in 2020

139

(104)

257

(24)
Other comprehensive income (loss)

(174)

36

(294)

(579)
Comprehensive Income

$
1,926

$
1,268

$
4,788

$
1,754

September 30,

December 31,

2021

2020
Supplemental Accumulated Other Comprehensive Income (Loss) Information, net of tax:

Cumulative foreign currency translation (loss) adjustments

$
(5,621)

$
(4,859)
Net actuarial (losses) and prior service (costs) and credits

(3,660)

(3,871)
Cumulative gains (losses) on derivative instruments designated as cash flow hedges and other

41

(216)
Accumulated other comprehensive income (loss)

$
(9,240)

$
(8,946)


	Three Months Ended				Six Months Ended
	June 30				June 30
	2022		2021		2022		2021
Net Earnings	$	2,018	$	1,189	$	4,465	$	2,982
Foreign currency translation gain (loss) adjustments	(315)		165		(421)		(371)
Net actuarial gains (losses) and amortization of net actuarial losses and prior service costs and credits, net of taxes of $12 and $25 in 2022 and $18 and $36 in 2021	54		48		116		133
Net gains (losses) for derivative instruments designated as cash flow hedges and other, net of taxes of $61 and $46 in 2022 and $2 and $48 in 2021	29		6		(27)		118
Other comprehensive income (loss)	(232)		219		(332)		(120)
Comprehensive Income	$	1,786	$	1,408	$	4,133	$	2,862


	June 30, 2022		December 31, 2021
Supplemental Accumulated Other Comprehensive Income (Loss) Information, net of tax:
Cumulative foreign currency translation (loss) adjustments	$	(6,260)	$	(5,839)
Net actuarial (losses) and prior service (costs) and credits	(2,554)		(2,670)
Cumulative gains (losses) on derivative instruments designated as cash flow hedges and other	108		135
Accumulated other comprehensive income (loss)	$	(8,706)	$	(8,374)

The accompanying notes to the condensed consolidated financial statements are an integral part of this statement.

Table of Contents

Abbott Laboratories and Subsidiaries

Condensed Consolidated Balance Sheet

(Unaudited)

(dollars in millions)

September 30,

December 31,

2021

2020
Assets

Current Assets:

Cash and cash equivalents

$
9,302

$
6,838
Short-term investments

390

310
Trade receivables, less allowances of $507 in 2021 and $460 in 2020

6,405

6,414
Inventories:

Finished products

3,048

3,030
Work in process

710

712
Materials

1,503

1,270
Total inventories

5,261

5,012
Prepaid expenses and other receivables

2,134

1,867
Total Current Assets

23,492

20,441
Investments

812

821
Property and equipment, at cost

19,182

18,793
Less: accumulated depreciation and amortization

10,351

9,764
Net property and equipment

8,831

9,029
Intangible assets, net of amortization

13,312

14,784
Goodwill

23,299

23,744
Deferred income taxes and other assets

4,049

3,729

$
73,795

$
72,548

Liabilities and Shareholders’ Investment

Current Liabilities:

Short-term borrowings

$
197

$
213
Trade accounts payable

4,017

3,946
Salaries, wages and commissions

1,470

1,416
Other accrued liabilities

5,264

5,165
Dividends payable

797

798
Income taxes payable

368

362
Current portion of long-term debt

754

7
Total Current Liabilities

12,867

11,907
Long-term debt

17,446

18,527
Post-employment obligations, deferred income taxes and other long-term liabilities

8,844

9,111
Commitments and Contingencies

Shareholders’ Investment:

Preferred shares, 1 dollar par value Authorized — 1,000,000 shares, NaN issued

—

—
Common shares, without par value Authorized — 2,400,000,000 shares
Issued at stated capital amount — Shares: 2021: 1,983,103,854; 2020: 1,981,156,896

24,285

24,145
Common shares held in treasury, at cost — Shares: 2021: 214,816,885; 2020: 209,926,622

(10,999)

(10,042)
Earnings employed in the business

30,376

27,627
Accumulated other comprehensive income (loss)

(9,240)

(8,946)
Total Abbott Shareholders’ Investment

34,422

32,784
Noncontrolling Interests in Subsidiaries

216

219
Total Shareholders’ Investment

34,638

33,003

$
73,795

$
72,548


	June 30, 2022		December 31, 2021
Assets
Current Assets:
Cash and cash equivalents	$	8,937	$	9,799
Short-term investments	353		450
Trade receivables, less allowances of $572 in 2022 and $519 in 2021	7,199		6,487
Inventories:
Finished products	3,570		3,081
Work in process	710		694
Materials	1,619		1,382
Total inventories	5,899		5,157
Prepaid expenses and other receivables	2,568		2,346
Total Current Assets	24,956		24,239
Investments	734		816
Property and equipment, at cost	19,458		19,364
Less: accumulated depreciation and amortization	10,640		10,405
Net property and equipment	8,818		8,959
Intangible assets, net of amortization	11,592		12,739
Goodwill	22,744		23,231
Deferred income taxes and other assets	5,358		5,212
	$	74,202	$	75,196
Liabilities and Shareholders’ Investment
Current Liabilities:
Trade accounts payable	$	4,493	$	4,408
Salaries, wages and commissions	1,315		1,625
Other accrued liabilities	5,400		5,181
Dividends payable	824		831
Income taxes payable	355		306
Current portion of long-term debt	5		754
Total Current Liabilities	12,392		13,105
Long-term debt	16,755		17,296
Post-employment obligations, deferred income taxes and other long-term liabilities	8,339		8,771
Commitments and Contingencies	0		0
Shareholders’ Investment:
Preferred shares, 1 dollar par value Authorized — 1,000,000 shares, none issued	—		—
Common shares, without par value Authorized — 2,400,000,000 shares Issued at stated capital amount — Shares: 2022: 1,985,676,735; 2021: 1,985,273,421	24,429		24,470
Common shares held in treasury, at cost — Shares: 2022: 234,456,992; 2021: 221,191,228	(13,720)		(11,822)
Earnings employed in the business	34,487		31,528
Accumulated other comprehensive income (loss)	(8,706)		(8,374)
Total Abbott Shareholders’ Investment	36,490		35,802
Noncontrolling Interests in Subsidiaries	226		222
Total Shareholders’ Investment	36,716		36,024
	$	74,202	$	75,196

The accompanying notes to the condensed consolidated financial statements are an integral part of this statement.

Table of Contents

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Shareholders’ Investment

(Unaudited)

(in millions except shares and per share data)

Three Months Ended September 30


2021

2020
Common Shares:

Balance at June 30

Shares: 2021: 1,982,553,488; 2020: 1,979,594,379

$
24,153

$
23,893
Issued under incentive stock programs




Shares: 2021: 550,366; 2020: 1,172,844

26

48
Share-based compensation

113

101
Issuance of restricted stock awards

(7)

(5)
Balance at September 30




Shares: 2021: 1,983,103,854; 2020: 1,980,767,223

$
24,285

$
24,037

Common Shares Held in Treasury:

Balance at June 30

Shares: 2021: 209,736,139; 2020: 209,064,380

$
(10,340)

$
(9,904)
Issued under incentive stock programs




Shares: 2021: 545,860; 2020: 664,727

26

32
Purchased


Shares: 2021: 5,626,606; 2020: 5,989

(685)

(1)
Balance at September 30




Shares: 2021: 214,816,885; 2020: 208,405,642

$
(10,999)

$
(9,873)

Earnings Employed in the Business:

Balance at June 30

$
29,053

$
25,669
Net earnings

2,100

1,232
Cash dividends declared on common shares (per share — 2021: $0.45; 2020: $0.36)

(799)

(641)
Effect of common and treasury share transactions

22

6
Balance at September 30

$
30,376

$
26,266

Accumulated Other Comprehensive Income (Loss):

Balance at June 30

$
(9,066)

$
(9,080)
Other comprehensive income (loss)

(174)

36
Balance at September 30

$
(9,240)

$
(9,044)

Noncontrolling Interests in Subsidiaries:

Balance at June 30

$
229

$
220
Noncontrolling Interests’ share of income, business combinations, net of distributions and share repurchases

(13)

(11)
Balance at September 30

$
216

$
209


	Three Months Ended June 30
	2022		2021
Common Shares:
Balance at March 31
Shares: 2022: 1,985,525,053; 2021: 1,982,205,491	$	24,304	$	24,023
Issued under incentive stock programs
Shares: 2022: 151,682; 2021: 347,997	10		18
Share-based compensation	125		119
Issuance of restricted stock awards	(10)		(7)
Balance at June 30
Shares: 2022: 1,985,676,735; 2021: 1,982,553,488	$	24,429	$	24,153

Common Shares Held in Treasury:
Balance at March 31
Shares: 2022: 234,582,764; 2021: 205,385,343	$	(13,726)	$	(9,845)
Issued under incentive stock programs
Shares: 2022: 135,663; 2021: 159,644	7		8
Purchased
Shares: 2022: 9,891; 2021: 4,510,440	(1)		(503)
Balance at June 30
Shares: 2022: 234,456,992; 2021: 209,736,139	$	(13,720)	$	(10,340)

Earnings Employed in the Business:
Balance at March 31	$	33,295	$	28,669
Net earnings	2,018		1,189
Cash dividends declared on common shares (per share — 2022: $0.47; 2021: $0.45)	(827)		(801)
Effect of common and treasury share transactions	1		(4)
Balance at June 30	$	34,487	$	29,053

Accumulated Other Comprehensive Income (Loss):
Balance at March 31	$	(8,474)	$	(9,285)
Other comprehensive income (loss)	(232)		219
Balance at June 30	$	(8,706)	$	(9,066)

Noncontrolling Interests in Subsidiaries:
Balance at March 31	$	230	$	226
Noncontrolling Interests’ share of income, business combinations, net of distributions and share repurchases	(4)		3
Balance at June 30	$	226	$	229

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

Table of Contents

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Shareholders’ Investment

(Unaudited)

(in millions except shares and per share data)

Nine Months Ended September 30

2021

2020
Common Shares:

Balance at January 1

Shares: 2021: 1,981,156,896; 2020: 1,976,855,085

$
24,145

$
23,853
Issued under incentive stock programs

Shares: 2021: 1,946,958; 2020: 3,912,138

91

167
Share-based compensation

536

451
Issuance of restricted stock awards

(487)

(434)
Balance at September 30

Shares: 2021: 1,983,103,854; 2020: 1,980,767,223

$
24,285

$
24,037

Common Shares Held in Treasury:

Balance at January 1

Shares: 2021: 209,926,622; 2020: 214,351,838

$
(10,042)

$
(10,147)
Issued under incentive stock programs

Shares: 2021: 5,524,291; 2020: 6,211,326

265

295
Purchased

Shares: 2021: 10,414,554; 2020: 265,130

(1,222)

(21)
Balance at September 30

Shares: 2021: 214,816,885; 2020: 208,405,642

$
(10,999)

$
(9,873)

Earnings Employed in the Business:

Balance at January 1

$
27,627

$
25,847
Impact of adoption of new accounting standard

—

(5)
Net earnings

5,082

2,333
Cash dividends declared on common shares (per share — 2021: $1.35; 2020: $1.08)

(2,403)

(1,922)
Effect of common and treasury share transactions

70

13
Balance at September 30

$
30,376

$
26,266

Accumulated Other Comprehensive Income (Loss):

Balance at January 1

$
(8,946)

$
(8,465)
Other comprehensive income (loss)

(294)

(579)
Balance at September 30

$
(9,240)

$
(9,044)

Noncontrolling Interests in Subsidiaries:

Balance at January 1

$
219

$
213
Noncontrolling Interests’ share of income, business combinations, net of distributions and share repurchases

(3)

(4)
Balance at September 30

$
216

$
209


	Six Months Ended June 30
	2022		2021
Common Shares:
Balance at January 1
Shares: 2022: 1,985,273,421; 2021: 1,981,156,896	$	24,470	$	24,145
Issued under incentive stock programs
Shares: 2022: 403,314; 2021: 1,396,592	24		65
Share-based compensation	449		423
Issuance of restricted stock awards	(514)		(480)
Balance at June 30
Shares: 2022: 1,985,676,735; 2021: 1,982,553,488	$	24,429	$	24,153

Common Shares Held in Treasury:
Balance at January 1
Shares: 2022: 221,191,228; 2021: 209,926,622	$	(11,822)	$	(10,042)
Issued under incentive stock programs
Shares: 2022: 4,280,139; 2021: 4,978,431	230		239
Purchased
Shares: 2022: 17,545,903; 2021: 4,787,948	(2,128)		(537)
Balance at June 30
Shares: 2022: 234,456,992; 2021: 209,736,139	$	(13,720)	$	(10,340)

Earnings Employed in the Business:
Balance at January 1	$	31,528	$	27,627
Net earnings	4,465		2,982
Cash dividends declared on common shares (per share — 2022: $0.94; 2021: $0.90)	(1,653)		(1,604)
Effect of common and treasury share transactions	147		48
Balance at June 30	$	34,487	$	29,053

Accumulated Other Comprehensive Income (Loss):
Balance at January 1	$	(8,374)	$	(8,946)
Other comprehensive income (loss)	(332)		(120)
Balance at June 30	$	(8,706)	$	(9,066)

Noncontrolling Interests in Subsidiaries:
Balance at January 1	$	222	$	219
Noncontrolling Interests’ share of income, business combinations, net of distributions and share repurchases	4		10
Balance at June 30	$	226	$	229

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

Table of Contents

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Cash Flows

(Unaudited)

(dollars in millions)

Nine Months Ended September 30

2021

2020
Cash Flow From (Used in) Operating Activities:

Net earnings

$
5,082

$
2,333
Adjustments to reconcile net earnings to net cash from operating activities —

Depreciation

1,122

837
Amortization of intangible assets

1,533

1,624
Share-based compensation

534

448
Trade receivables

(194)

(343)
Inventories

(471)

(838)
Other, net

(140)

42
Net Cash From Operating Activities

7,466

4,103

Cash Flow From (Used in) Investing Activities:

Acquisitions of property and equipment

(1,271)

(1,498)
Acquisitions of businesses and technologies, net of cash acquired

(187)

(32)
Proceeds from business dispositions

134

48
Sales (purchases) of other investment securities, net

(27)

(15)
Other

14

13
Net Cash (Used in) Investing Activities

(1,337)

(1,484)

Cash Flow From (Used in) Financing Activities:

Net borrowings (repayments) of short-term debt and other

(7)

3
Proceeds from issuance of long-term debt

—

1,280
Repayments of long-term debt

(45)

(1,332)
Purchases of common shares

(1,325)

(242)
Proceeds from stock options exercised

173

229
Dividends paid

(2,404)

(1,919)
Other

—

(11)
Net Cash (Used in) Financing Activities

(3,608)

(1,992)

Effect of exchange rate changes on cash and cash equivalents

(57)

(7)

Net Increase in Cash and Cash Equivalents

2,464

620
Cash and Cash Equivalents, Beginning of Year

6,838

3,860
Cash and Cash Equivalents, End of Period

$
9,302

$
4,480


	Six Months Ended June 30
	2022		2021
Cash Flow From (Used in) Operating Activities:
Net earnings	$	4,465	$	2,982
Adjustments to reconcile net earnings to net cash from operating activities —
Depreciation	626		795
Amortization of intangible assets	1,019		1,013
Share-based compensation	447		420
Trade receivables	(939)		200
Inventories	(1,030)		(542)
Other, net	(113)		(103)
Net Cash From Operating Activities	4,475		4,765

Cash Flow From (Used in) Investing Activities:
Acquisitions of property and equipment	(700)		(810)
Acquisitions of businesses and technologies, net of cash acquired	—		(15)
Proceeds from business dispositions	48		48
Sales (purchases) of other investment securities, net	18		81
Other	10		10
Net Cash From (Used in) Investing Activities	(624)		(686)

Cash Flow From (Used in) Financing Activities:
Net borrowings (repayments) of short-term debt and other	13		20
Proceeds from issuance of long-term debt	6		—
Repayments of long-term debt	(752)		(5)
Purchases of common shares	(2,312)		(746)
Proceeds from stock options exercised	69		103
Dividends paid	(1,660)		(1,603)
Net Cash From (Used in) Financing Activities	(4,636)		(2,231)

Effect of exchange rate changes on cash and cash equivalents	(77)		(28)

Net Increase (Decrease) in Cash and Cash Equivalents	(862)		1,820
Cash and Cash Equivalents, Beginning of Year	9,799		6,838
Cash and Cash Equivalents, End of Period	$	8,937	$	8,658

The accompanying notes to the condensed consolidated financial statements are an integral part of this statement.

Table of Contents

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

~~September~~

June 30, ~~2021~~

~~(Unaudited)~~

2022

(Unaudited)

Note 1 — Basis of Presentation

The accompanying unaudited, condensed consolidated financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission and, therefore, do not include all information and footnote disclosures normally included in audited financial statements. However, in the opinion of management, all adjustments (which include only normal adjustments) necessary to present fairly the results of operations, financial position and cash flows have been made. It is suggested that these statements be read in conjunction with the financial statements included in Abbott’s Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. The condensed consolidated financial statements include the accounts of the parent company and subsidiaries, after elimination of intercompany transactions.

Note 2 — ~~New Accounting Standards~~

Revenue

~~Recently Adopted Accounting Standards~~

~~In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes~~, which among other things, eliminates certain exceptions in the current rules regarding the approach for intraperiod tax allocations and the methodology for calculating income taxes in an interim period, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. Abbott adopted the standard on January 1, 2021. The new standard did not have an impact on its condensed consolidated financial statements.

~~Note 3 — Revenue~~

Abbott’s revenues are derived primarily from the sale of a broad line of health care products under short-term receivable arrangements. Abbott has 4 reportable segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices.

~~Table of Contents~~

~~Abbott Laboratories and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~September 30, 2021~~

~~(Unaudited)~~

~~Note 3 — Revenue (Continued)~~

The following tables provide detail by sales category:

Three Months Ended September 30, 2021

Three Months Ended September 30, 2020
(in millions)

U.S.

Int’l

Total

U.S.

Int’l

Total
Established Pharmaceutical Products —












Key Emerging Markets

$
—

$
936

$
936

$
—

$
799

$
799
Other

—

329

329

—

300

300
Total

—

1,265

1,265

—

1,099

1,099
Nutritionals —

Pediatric Nutritionals

586

514

1,100

488

518

1,006
Adult Nutritionals

333

675

1,008

330

588

918
Total

919

1,189

2,108

818

1,106

1,924
Diagnostics —

Core Laboratory

291

1,001

1,292

284

892

1,176
Molecular

162

183

345

220

238

458
Point of Care

100

35

135

96

35

131
Rapid Diagnostics

1,394

746

2,140

533

342

875
Total

1,947

1,965

3,912

1,133

1,507

2,640
Medical Devices —

Rhythm Management

266

305

571

242

265

507
Electrophysiology

192

293

485

192

249

441
Heart Failure

170

59

229

144

46

190
Vascular

219

425

644

230

400

630
Structural Heart

177

215

392

159

194

353
Neuromodulation

149

41

190

170

36

206
Diabetes Care

323

798

1,121

226

617

843
Total

1,496

2,136

3,632

1,363

1,807

3,170

Other

6

5

11

15

5

20

Total

$
4,368

$
6,560

$
10,928

$
3,329

$
5,524

$
8,853


	Three Months Ended June 30, 2022						Three Months Ended June 30, 2021
(in millions)	U.S.		Int’l		Total		U.S.		Int’l		Total
Established Pharmaceutical Products —
Key Emerging Markets	$	—	$	931	$	931	$	—	$	915	$	915
Other	—		292		292		—		265		265
Total	—		1,223		1,223		—		1,180		1,180
Nutritionals —
Pediatric Nutritionals	413		512		925		528		565		1,093
Adult Nutritionals	348		680		1,028		345		670		1,015
Total	761		1,192		1,953		873		1,235		2,108
Diagnostics —
Core Laboratory	287		934		1,221		283		1,023		1,306
Molecular	71		141		212		94		196		290
Point of Care	101		38		139		97		40		137
Rapid Diagnostics	2,010		740		2,750		681		833		1,514
Total	2,469		1,853		4,322		1,155		2,092		3,247
Medical Devices —
Rhythm Management	264		284		548		269		298		567
Electrophysiology	226		260		486		209		278		487
Heart Failure	179		62		241		168		59		227
Vascular	228		425		653		246		451		697
Structural Heart	207		233		440		191		231		422
Neuromodulation	157		40		197		166		44		210
Diabetes Care	399		793		1,192		289		767		1,056
Total	1,660		2,097		3,757		1,538		2,128		3,666

Other	2		—		2		15		7		22

Total	$	4,892	$	6,365	$	11,257	$	3,581	$	6,642	$	10,223

Table of Contents

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

~~September~~

June 30, ~~2021~~

~~(Unaudited)~~

2022

(Unaudited)

Note 32 — Revenue (Continued)


	Six Months Ended June 30, 2022						Six Months Ended June 30, 2021
(in millions)	U.S.		Int’l		Total		U.S.		Int’l		Total
Established Pharmaceutical Products —
Key Emerging Markets	$	—	$	1,833	$	1,833	$	—	$	1,736	$	1,736
Other	—		537		537		—		514		514
Total	—		2,370		2,370		—		2,250		2,250
Nutritionals —
Pediatric Nutritionals	751		1,021		1,772		1,036		1,123		2,159
Adult Nutritionals	687		1,388		2,075		673		1,312		1,985
Total	1,438		2,409		3,847		1,709		2,435		4,144
Diagnostics —
Core Laboratory	555		1,850		2,405		554		1,934		2,488
Molecular	243		389		632		269		468		737
Point of Care	192		75		267		189		77		266
Rapid Diagnostics	4,220		2,084		6,304		1,784		1,986		3,770
Total	5,210		4,398		9,608		2,796		4,465		7,261
Medical Devices —
Rhythm Management	512		560		1,072		510		576		1,086
Electrophysiology	442		529		971		388		530		918
Heart Failure	346		116		462		313		108		421
Vascular	437		835		1,272		465		867		1,332
Structural Heart	397		454		851		360		439		799
Neuromodulation	300		76		376		311		83		394
Diabetes Care	742		1,576		2,318		542		1,494		2,036
Total	3,176		4,146		7,322		2,889		4,097		6,986

Other	5		—		5		25		13		38

Total	$	9,829	$	13,323	$	23,152	$	7,419	$	13,260	$	20,679

Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2020
(in millions)

U.S.

Int’l

Total

U.S.

Int’l

Total
Established Pharmaceutical Products —












Key Emerging Markets

$
—

$
2,672

$
2,672

$
—

$
2,376

$
2,376
Other

—

843

843

—

780

780
Total

—

3,515

3,515

—

3,156

3,156
Nutritionals —

Pediatric Nutritionals

1,622

1,637

3,259

1,490

1,629

3,119
Adult Nutritionals

1,006

1,987

2,993

948

1,644

2,592
Total

2,628

3,624

6,252

2,438

3,273

5,711
Diagnostics —

Core Laboratory

845

2,935

3,780

840

2,312

3,152
Molecular

431

651

1,082

429

527

956
Point of Care

289

112

401

278

109

387
Rapid Diagnostics

3,178

2,732

5,910

1,246

719

1,965
Total

4,743

6,430

11,173

2,793

3,667

6,460
Medical Devices —

Rhythm Management

776

881

1,657

655

727

1,382
Electrophysiology

580

823

1,403

476

652

1,128
Heart Failure

483

167

650

411

140

551
Vascular

684

1,292

1,976

628

1,108

1,736
Structural Heart

537

654

1,191

386

508

894
Neuromodulation

460

124

584

392

97

489
Diabetes Care

865

2,292

3,157

614

1,736

2,350
Total

4,385

6,233

10,618

3,562

4,968

8,530

Other

31

18

49

30

20

50

Total

$
11,787

$
19,820

$
31,607

$
8,823

$
15,084

$
23,907

Remaining Performance Obligations

As of ~~September~~June 30, ~~2021,~~2022, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) was approximately $3.9 billion in the Diagnostics segment and approximately ~~$445~~$436 million in the Medical Devices segment. Abbott expects to recognize revenue on approximately 60 percent of these remaining performance obligations over the next 24 months, approximately 16 percent over the subsequent 12 months and the remainder thereafter.

These performance obligations primarily reflect the future sale of reagents/consumables in contracts with minimum purchase obligations, extended warranty or service obligations related to previously sold equipment, and remote monitoring services related to previously implanted devices. Abbott has applied the practical expedient described in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606-10-50-14 and has not included remaining performance obligations related to contracts with original expected durations of one year or less in the amounts above.

Table of Contents

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

~~September~~

June 30, ~~2021~~

~~(Unaudited)~~

2022

(Unaudited)

Note 32 — Revenue (Continued)

Other Contract Assets and Liabilities

Abbott discloses Trade receivables separately in the Condensed Consolidated Balance Sheet at the net amount expected to be collected. Contract assets primarily relate to Abbott’s conditional right to consideration for work completed but not billed at the reporting date. Contract assets at the beginning and end of the period, as well as the changes in the balance, were not significant.

Contract liabilities primarily relate to payments received from customers in advance of performance under the contract. Abbott’s contract liabilities arise primarily in the Medical Devices reportable segment when payment is received upfront for various multi-period extended service arrangements.

Changes in the contract liabilities during the period are as follows:

(in millions)

Contract Liabilities:

Balance at December 31, 2020

$
405
Unearned revenue from cash received during the period

416
Revenue recognized related to contract liability balance

(409)
Balance at September 30, 2021

$
412


(in millions)
Contract Liabilities:
Balance at December 31, 2021	$	520
Unearned revenue from cash received during the period	294
Revenue recognized related to contract liability balance	(324)
Balance at June 30, 2022	$	490

Note 43 — Supplemental Financial Information

Shares of unvested restricted stock that contain non-forfeitable rights to dividends are treated as participating securities and are included in the computation of earnings per share under the two-class method. Under the two-class method, net earnings are allocated between common shares and participating securities. Earnings from Continuing Operations allocated to common shares for the three months ended September 30, 2021 and 2020 were $2.092 billion and $1.226 billion, respectively, and for the nine months ended September 30, 2021 and 2020 were $5.061 billion and $2.302 billion, respectively. Net earnings allocated to common shares for the three months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$2.092~~$2.009 billion and ~~$1.226~~$1.184 billion, respectively, and for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$5.061~~$4.447 billion and ~~$2.322~~$2.969 billion, respectively.

Earnings from discontinued operations, net of tax, in the first nine months of 2020 include the recognition of $20 million of tax benefits as a result of the resolution of various tax positions related to the previous sale of a business that was reported as a discontinued operation.

Other, net in Net cash from operating activities in the Condensed Consolidated Statement of Cash Flows for the first ~~nine~~six months of ~~2021~~2022 includes ~~$366~~$348 million of pension contributions and the payment of cash taxes of approximately ~~$990~~$657 million. The first ~~nine~~six months of ~~2020~~2021 includes ~~$350~~$80 million of pension contributions and the payment of cash taxes of approximately ~~$700~~$715 million.

The following summarizes the activity for the first ~~nine~~six months of ~~2021~~2022 related to the allowance for doubtful accounts as of ~~September~~June 30, ~~2021:~~

(in millions)

Allowance for Doubtful Accounts:

Balance at December 31, 2020

$
288
Provisions/charges to income

41
Amounts charged off and other deductions

(18)
Balance at September 30, 2021

$
311

2022:


(in millions)
Allowance for Doubtful Accounts:
Balance at December 31, 2021	$	313
Provisions/charges to income	9
Amounts charged off and other deductions	(34)
Balance at June 30, 2022	$	288

~~Table of Contents~~

~~Abbott Laboratories and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~September 30, 2021~~

~~(Unaudited)~~

~~Note 4 — Supplemental Financial Information (Continued)~~

The allowance for doubtful accounts reflects the current estimate of credit losses expected to be incurred over the life of the accounts receivable. Abbott considers various factors in establishing, monitoring, and adjusting its allowance for doubtful accounts, including the aging of the accounts and aging trends, the historical level of charge-offs, and specific exposures related to particular customers. Abbott also monitors other risk factors and forward-looking information, such as country risk, when determining credit limits for customers and establishing adequate allowances.

Table of Contents

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

June 30, 2022

(Unaudited)

Note 3 — Supplemental Financial Information (Continued)

The components of long-term investments as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 are as follows:

September 30,

December 31,
(in millions)

2021

2020
Long-term Investments:

Equity securities

$
758

$
776
Other

54

45
Total

$
812

$
821


(in millions)	June 30, 2022		December 31, 2021
Long-term Investments:
Equity securities	$	620	$	748
Other	114		68
Total	$	734	$	816

The decrease in Abbott’s long-term investments as of ~~September~~June 30, ~~2021~~2022 versus the balance as of December 31, ~~2020~~2021 primarily relates to a decrease in the ~~sale~~value of aninvestments held in a rabbi trust and the impact of equity method ~~investment.~~

investment losses partially offset by an investment in long-term time deposits.

Abbott’s equity securities as of ~~September~~June 30, ~~2021,~~2022, include ~~$382~~$303 million of investments in mutual funds that are held in a rabbi trust and were acquired as part of the St. Jude Medical, Inc. (St. Jude Medical) business acquisition. These investments, which are specifically designated as available for the purpose of paying benefits under a deferred compensation plan, are not available for general corporate purposes and are subject to creditor claims in the event of insolvency.

Abbott also holds certain investments as of ~~September~~June 30, ~~2021~~2022 with a carrying value of ~~$269~~$227 million that are accounted for under the equity method of accounting and other equity investments with a carrying value of approximately ~~$91~~$82 million that do not have a readily determinable fair value. ~~An approximately $60 million impairment of an investment was recorded in the second quarter of 2020 for which Abbott had previously recorded an unrealized gain of approximately $50 million in 2018.~~

In September 2021, Abbott acquired 100 percent of Walk Vascular, LLC (Walk Vascular), a commercial-stage medical device company with a minimally invasive thrombectomy system designed to remove peripheral blood clots. Walk Vascular’s peripheral thrombectomy system will be incorporated into Abbott’s existing endovascular portfolio. The purchase price, the allocation of acquired assets and liabilities, and the revenue and net income contributed by Walk Vascular since the date of acquisition are not material to Abbott’s condensed consolidated financial statements.

~~Table of Contents~~

~~Abbott Laboratories and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~September 30, 2021~~

~~(Unaudited)~~

Note 54 — Changes inIn Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss), net of income taxes, are as follows:

Three Months Ended September 30

Cumulative Gains (Losses)

Cumulative Foreign

Net Actuarial (Losses) and

on Derivative Instruments

Currency Translation

Prior Service (Costs) and

Designated as Cash Flow

Adjustments

Credits

Hedges
(in millions)

2021

2020

2021

2020

2021

2020
Balance at June 30

$
(5,230)

$
(5,713)

$
(3,738)

$
(3,446)

$
(98)

$
79
Other comprehensive income (loss) before reclassifications

(391)

112

16

(21)

70

(74)
Amounts reclassified from accumulated other comprehensive income

0

0

62

49

69

(30)
Net current period comprehensive income (loss)

(391)

112

78

28

139

(104)
Balance at September 30

$
(5,621)

$
(5,601)

$
(3,660)

$
(3,418)

$
41

$
(25)


	Three Months Ended June 30
	Cumulative Foreign Currency Translation (Loss) Adjustments				Net Actuarial (Losses) and Prior Service (Costs) and Credits				Cumulative Gains (Losses) on Derivative Instruments Designated as Cash Flow Hedges and Other
(in millions)	2022		2021		2022		2021		2022		2021
Balance at March 31	$	(5,945)	$	(5,395)	$	(2,608)	$	(3,786)	$	79	$	(104)
Other comprehensive income (loss) before reclassifications	(315)		165		13		(12)		45		(28)
Amounts reclassified from accumulated other comprehensive income	—		—		41		60		(16)		34
Net current period comprehensive income (loss)	(315)		165		54		48		29		6
Balance at June 30	$	(6,260)	$	(5,230)	$	(2,554)	$	(3,738)	$	108	$	(98)

Table of Contents

Nine Months Ended September 30

Cumulative Gains (Losses)

Cumulative Foreign

Net Actuarial (Losses) and

on Derivative Instruments

Currency Translation

Prior Service (Costs) and

Designated as Cash Flow

Adjustments

Credits

Hedges
(in millions)

2021

2020

2021

2020

2021

2020
Balance at January 1

$
(4,859)

$
(4,924)

$
(3,871)

$
(3,540)

$
(216)

$
(1)
Other comprehensive income (loss) before reclassifications

(762)

(677)

26

(23)

138

35
Amounts reclassified from accumulated other comprehensive income

—

—

185

145

119

(59)
Net current period comprehensive income (loss)

(762)

(677)

211

122

257

(24)
Balance at September 30

$
(5,621)

$
(5,601)

$
(3,660)

$
(3,418)

$
41

$
(25)

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

June 30, 2022

(Unaudited)

Note 4 — Changes In Accumulated Other Comprehensive Income (Loss) (Continued)


	Six Months Ended June 30
	Cumulative Foreign Currency Translation (Loss) Adjustments				Net Actuarial (Losses) and Prior Service (Costs) and Credits				Cumulative Gains (Losses) on Derivative Instruments Designated as Cash Flow Hedges and Other
(in millions)	2022		2021		2022		2021		2022		2021
Balance at January 1	$	(5,839)	$	(4,859)	$	(2,670)	$	(3,871)	$	135	$	(216)
Other comprehensive income (loss) before reclassifications	(421)		(371)		30		10		11		68
Amounts reclassified from accumulated other comprehensive income	—		—		86		123		(38)		50
Net current period comprehensive income (loss)	(421)		(371)		116		133		(27)		118
Balance at June 30	$	(6,260)	$	(5,230)	$	(2,554)	$	(3,738)	$	108	$	(98)

Reclassified amounts for cash flow hedges are recorded as Cost of products sold. Net actuarial losses and prior service cost are included as a component of net periodic benefit costs; see Note 1211 for additional details.

~~Table of Contents~~

~~Abbott Laboratories and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~September 30, 2021~~

~~(Unaudited)~~

Note 65 — Goodwill and Intangible Assets

The total amount of goodwill reported was ~~$23.3~~$22.7 billion at ~~September~~June 30, ~~2021~~2022 and ~~$23.7~~$23.2 billion at December 31, ~~2020.~~2021. Foreign currency translation adjustments decreased goodwill by approximately ~~$444~~$486 million in the first ~~nine~~six months of ~~2021.~~2022. The amount of goodwill related to reportable segments at ~~September~~June 30, ~~2021~~2022 was ~~$2.9~~$2.7 billion for the Established Pharmaceutical Products segment, $286 million for the Nutritional Products segment, ~~$3.8~~$3.6 billion for the Diagnostic Products segment, and ~~$16.4~~$16.1 billion for the Medical Devices segment. There was 0no reduction of goodwill relating to impairments in the first ~~nine~~six months of ~~2021.~~

2022.

The gross amount of amortizable intangible assets, primarily product rights and technology, was $27.3 billion and $27.7 billion as of June 30, 2022 and December 31, 2021, respectively. Accumulated amortization was $16.6 billion and $15.9 billion as of June 30, 2022 and December 31, 2021, respectively. Foreign currency translation adjustments decreased intangible assets by $122 million in the first six months of 2022. Abbott’s estimated annual amortization expense for intangible assets is approximately $2.1 billion in 2022, $2.0 billion in 2023, $1.9 billion in 2024, $1.7 billion in 2025 and $1.6 billion in 2026.

Indefinite-lived intangible assets, which relate to in-process R&D (IPR&D) acquired in a business combination, were approximately ~~$929~~$919 million as of ~~September~~June 30, 2021 and $1.2 billion at December 31, 2020. The decrease is due to IPR&D assets primarily related to the Medical Devices segment that became amortizable in 2021, partially offset by an increase of approximately $90 million related to a recent acquisition.

~~The gross amount of amortizable intangible assets, primarily product rights and technology was $27.8 billion as of September 30, 2021~~2022 and December 31, 2020, and accumulated amortization was $15.4 billion as of September 30, 2021 and $14.2 billion as of December 31, 2020. Amortizable intangible assets increased by approximately $130 million as a result of a recent acquisition and the additional assets are being amortized over 9 years. Foreign currency translation adjustments decreased intangible assets by $152 million in the first nine months of 2021. In the first nine months of 2021, asset impairments related to the Established Pharmaceutical Products segment decreased intangible assets by $13 million. The impairments were recorded in the Cost of products sold, excluding amortization of intangible assets line of Abbott’s Condensed Consolidated Statement of Earnings. Abbott’s estimated annual amortization expense for intangible assets is approximately $2.0 billion in 2021, $2.1 billion in 2022, $2.0 billion in 2023, $1.9 billion in 2024 and $1.8 billion in 2025.

Note 76 — Restructuring Plans

On May 27, 2021, Abbott management approved a restructuring plan related to its Diagnostic Products segment to align its manufacturing network for COVID-19 diagnostic tests with changes in the second quarter in projected testing demand driven by several factors, including significant reductions in cases in the U.S. and other major developed countries, the accelerated rollout of COVID-19 vaccines globally and the U.S. health authority’s updated guidance on testing for fully vaccinated individuals. In the second quarter of 2021, Abbott recorded charges of $499 million under this plan in Cost of products sold. The charge recognized in the second quarter included fixed asset write-downs of $80 million, inventory-related charges of $248 million, and other exit costs, which included contract cancellations and employee-related costs of $171 million.

Table of Contents

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

June 30, 2022

(Unaudited)

Note 6 — Restructuring Plans (Continued)

In the ~~third quarter~~second half of 2021, as the Delta ~~variant~~and Omicron variants of COVID-19 spread and the number of new COVID-19 cases increased significantly, particularly in the U.S., demand for rapid COVID-19 tests increased significantly. As a result, in the ~~third quarter~~second half of 2021, Abbott sold approximately ~~$120~~$181 million of inventory that was previously estimated to have no net realizable value under the second quarter of 2021 restructuring action. In addition, the estimate of other exit costs was reduced by a net ~~$19~~$58 million as Abbott fulfilled its purchase obligations under certain contracts for which a liability was recorded in the second quarter of 2021 or Abbott settled with the counterparty in the ~~third quarter.~~

second half of 2021.

~~Table of Contents~~

~~Abbott Laboratories and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~September 30, 2021~~

~~(Unaudited)~~

~~Note 7 — Restructuring Plans (Continued)~~

The following summarizes the activity ~~for the first nine months of 2021~~ related to this restructuring action and the status of the related accruals as of ~~September~~June 30, ~~2021:~~

2022:

Inventory-

Related

Fixed Asset

Other Exit

(in millions)

Charges

Write-Downs

Costs

Total
Restructuring charges recorded in 2021

$
248

$
80

$
152

$
480
Payments

—

—

(54)

(54)
Other non-cash

(248)

(80)

—

(328)
Accrued balance at September 30, 2021

$
—

$
—

$
98

$
98


(in millions)	Inventory- Related Charges		Fixed Asset Write-Downs		Other Exit Costs		Total
Restructuring charges recorded in 2021	$	248	$	80	$	113	$	441
Payments	—		—		(90)		(90)
Other non-cash	(248)		(80)		—		(328)
Accrued balance at December 31, 2021	—		—		23		23
Payments and other adjustments	—		—		(10)		(10)
Accrued balance at June 30, 2022	$	—	$	—	$	13	$	13

From 2017 to 2021, Abbott management approved restructuring plans as part of the integration of the acquisitions of St. Jude Medical into the Medical Devices segment, and Alere Inc. (Alere) into the Diagnostic Products segment, in order to leverage economies of scale and reduce costs. As of December 31, 2020, the accrued balance associated with these actions was $25 million.

In the first nine months of 2021, charges of $5 million were recognized, of which $1 million is recorded in Cost of products sold and $4 million as Selling, general and administrative expense. As of September 30, 2021, the accrued liabilities remaining in the Condensed Consolidated Balance Sheet related to these actions total $10 million and primarily represent severance obligations.

~~From 2017 to~~ 2021, Abbott management approved plans to streamline operations in order to reduce costs and improve efficiencies in ~~various~~Abbott’s diagnostic, established pharmaceutical, nutritional, and medical device businesses. Abbott ~~businesses including the nutritional, established pharmaceuticals~~recorded employee-related severance and ~~vascular businesses. In the first nine months of 2021,~~other charges of ~~$17~~approximately $68 million ~~were recognized,~~in 2021 of which $1approximately $16 million iswas recorded in Cost of products sold, approximately $4 million was recorded in Research and ~~$16~~development, and approximately $48 million aswas recorded in Selling, general and administrative expense.

The following summarizes the activity for ~~the first nine months of 2021 related to~~ these ~~restructuring actions and the status of the related accrual as of September 30, 2021:~~

restructurings:

(in millions)

Accrued balance at December 31, 2020

$
70
Restructuring charges recorded in 2021

17
Payments and other adjustments

(30)
Accrued balance at September 30, 2021

$
57


(in millions)
Restructuring charges recorded in 2021	$	68
Payments and other adjustments	(7)
Accrued balance at December 31, 2021	61
Payments and other adjustments	(30)
Accrued balance at June 30, 2022	$	31

Note 87 — Incentive Stock Programs

In the first ~~nine~~six months of ~~2021,~~2022, Abbott granted ~~2,865,115~~2,627,843 stock options, ~~497,373~~514,205 restricted stock awards and ~~4,670,845~~5,390,484 restricted stock units under its incentive stock program. At ~~September~~June 30, ~~2021,~~2022, approximately ~~101~~87 million shares were reserved for future grants. Information regarding the number of options outstanding and exercisable at ~~September~~June 30, ~~2021~~2022 is as follows:

Outstanding

Exercisable
Number of shares

29,594,797

22,674,416
Weighted average remaining life (years)

5.8

4.9
Weighted average exercise price

$
63.08

$
51.79
Aggregate intrinsic value (in millions)

$
1,645

$
1,504


	Outstanding		Exercisable
Number of shares	29,318,781		23,516,664
Weighted average remaining life (years)	5.6		4.8
Weighted average exercise price	$	69.99	$	59.40
Aggregate intrinsic value (in millions)	$	1,199	$	1,172

Table of Contents

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

June 30, 2022

(Unaudited)

Note 7 — Incentive Stock Programs (Continued)

The total unrecognized share-based compensation cost at ~~September~~June 30, ~~2021~~2022 amounted to approximately ~~$552~~$713 million which is expected to be recognized over the next three years.

~~Table of Contents~~

~~Abbott Laboratories and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~September 30, 2021~~

~~(Unaudited)~~

Note 98 — Debt and Lines of Credit

On ~~September 28, 2020,~~March 15, 2022, Abbott repaid the ~~€1.140 billion~~$750 million outstanding principal amount of its ~~0.00%~~2.55% Notes ~~due 2020~~ upon maturity. ~~The repayment equated to approximately $1.3 billion.~~

On June 24, 2020, Abbott completed the issuance of $1.3 billion aggregate principal amount of senior notes, consisting of $650 million of its 1.15% Notes due 2028 and $650 million of its 1.40% Notes due 2030.

Note 109 — Financial Instruments, Derivatives and Fair Value Measures

Certain Abbott foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates primarily for anticipated intercompany purchases by those subsidiaries whose functional currencies are not the U.S. dollar. These contracts, with gross notional amounts totaling ~~$8.7~~$8.4 billion at ~~September~~June 30, ~~2021~~2022 and ~~$8.1~~$8.6 billion at December 31, ~~2020~~2021, are designated as cash flow hedges of the variability of the cash flows due to changes in foreign exchange rates and are recorded at fair value. Accumulated gains and losses as of ~~September~~June 30, ~~2021~~2022 will be included in Cost of products sold at the time the products are sold, generally through the next twelve to eighteen months.

Abbott enters into foreign currency forward exchange contracts to manage currency exposures for foreign currency denominated third-party trade payables and receivables, and for intercompany loans and trade accounts payable where the receivable or payable is denominated in a currency other than the functional currency of the entity. For intercompany loans, the contracts require Abbott to sell or buy foreign currencies, primarily European currencies, in exchange for primarily U.S. dollars and other European currencies. For intercompany and trade payables and receivables, the currency exposures are primarily the U.S. dollar and European currencies. At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, Abbott held the gross notional amounts of ~~$11.4~~$11.3 billion and ~~$11.0~~$12.2 billion, respectively, of such foreign currency forward exchange contracts.

Abbott has designated a yen-denominated, 5-year term loan of approximately ~~$536~~$437 million and ~~$577~~$521 million as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, as a hedge of the net investment in certain foreign subsidiaries. The change in the value of the debt, which is due to changes in foreign exchange rates, is recorded in Accumulated other comprehensive income (loss), net of tax.

Abbott is a party to interest rate hedge contracts totaling approximately $2.9 billion at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 to manage its exposure to changes in the fair value of fixed-rate debt. These contracts are designated as fair value hedges of the variability of the fair value of fixed-rate debt due to changes in the long-term benchmark interest rates. The effect of the hedge is to change a fixed-rate interest obligation to a variable rate for that portion of the debt. Abbott records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount.

Table of Contents

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

~~September~~

June 30, ~~2021~~

~~(Unaudited)~~

2022

(Unaudited)

Note 109 — Financial Instruments, Derivatives and Fair Value Measures (Continued)

The following table summarizes the amounts and location of certain derivative financial instruments as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~

2021:

Fair Value - Assets

Fair Value - Liabilities

Sept. 30,

Dec. 31,

Sept. 30,

Dec. 31,


(in millions)

2021

2020

Balance Sheet Caption

2021

2020

Balance Sheet Caption
Interest rate swaps designated as fair value hedges

$
129

$
210

Deferred income taxes and other assets

$
—

$
—

Post-employment obligations, deferred income taxes and other long-term liabilities
Foreign currency forward exchange contracts:

Hedging instruments

193

30

Prepaid expenses and other receivables

69

433

Other accrued liabilities
Others not designated as hedges

45

60

Prepaid expenses and other receivables

68

65

Other accrued liabilities
Debt designated as a hedge of net investment in a foreign subsidiary

—

—

n/a

536

577

Long-term debt

$
367

$
300

$
673

$
1,075


	Fair Value - Assets					Fair Value - Liabilities
(in millions)	June 30, 2022		Dec. 31, 2021		Balance Sheet Caption	June 30, 2022		Dec. 31, 2021		Balance Sheet Caption
Interest rate swaps designated as fair value hedges	$	—	$	87	Deferred income taxes and other assets	$	81	$	—	Post-employment obligations, deferred income taxes and other long-term liabilities
Foreign currency forward exchange contracts:
Hedging instruments	462		222		Prepaid expenses and other receivables	83		65		Other accrued liabilities
Others not designated as hedges	101		70		Prepaid expenses and other receivables	89		32		Other accrued liabilities
Debt designated as a hedge of net investment in a foreign subsidiary	—		—		n/a	437		521		Long-term debt
	$	563	$	379		$	690	$	618

The following table summarizes the activity for foreign currency forward exchange contracts designated as cash flow hedges and certain other derivative financial instruments, as well as the amounts and location of income (expense) and gain (loss) reclassified into income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~

Gain (loss) Recognized in Other

Income (expense) and Gain (loss)

Comprehensive Income (loss)

Reclassified into Income

Three Months

Nine Months

Three Months

Nine Months

Ended Sept. 30

Ended Sept. 30

Ended Sept. 30

Ended Sept. 30

(in millions)

2021

2020

2021

2020

2021

2020

2021

2020

Income Statement Caption
Foreign currency forward exchange contracts designated as cash flow hedges

$
96

$
(103)

$
142

$
35

$
(92)

$
48

$
(207)

$
90

Cost of products sold
Debt designated as a hedge of net investment in a foreign subsidiary

4

(10)

41

(20)

—

—

—

—

n/a
Interest rate swaps designated as fair value hedges

n/a

n/a

n/a

n/a

(14)

(11)

(81)

184

Interest expense

2021.


	Gain (loss) Recognized in Other Comprehensive Income (loss)								Income (expense) and Gain (loss) Reclassified into Income
	Three Months Ended June 30				Six Months Ended June 30				Three Months Ended June 30				Six Months Ended June 30
(in millions)	2022		2021		2022		2021		2022		2021		2022		2021		Income Statement Caption
Foreign currency forward exchange contracts designated as cash flow hedges	$	141	$	(88)	$	92	$	46	$	43	$	(92)	$	70	$	(115)	Cost of products sold
Debt designated as a hedge of net investment in a foreign subsidiary	54		2		84		37		—		—		—		—		n/a
Interest rate swaps designated as fair value hedges	n/a		n/a		n/a		n/a		(47)		2		(168)		(67)		Interest expense

Table of Contents

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

~~September~~

June 30, ~~2021~~

~~(Unaudited)~~

2022

(Unaudited)

Note 109 — Financial Instruments, Derivatives and Fair Value Measures (Continued)

~~Losses~~

Gains of ~~$18~~$303 million and ~~$100~~losses of $16 million were recognized in the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, related to foreign currency forward exchange contracts not designated as a hedge. Gains of ~~$15~~$252 million and ~~losses of $198~~$33 million were recognized in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively, related to foreign currency forward exchange contracts not designated as a hedge. These amounts are reported in the Condensed Consolidated Statement of Earnings on the Net foreign exchange (gain) loss line.

The carrying values and fair values of certain financial instruments as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 are shown in the following table. The carrying values of all other financial instruments approximate their estimated fair values. The counterparties to financial instruments consist of select major international financial institutions. Abbott does not expect any losses from non-performance by these counterparties.

September 30, 2021

December 31, 2020


Carrying

Fair

Carrying

Fair
(in millions)

Value

Value

Value

Value
Long-term Investment Securities:

Equity securities

$
758

$
758

$
776

$
776
Other

54

54

45

45
Total Long-term Debt

(18,200)

(21,330)

(18,534)

(22,809)
Foreign Currency Forward Exchange Contracts:

Receivable position

238

238

90

90
(Payable) position

(137)

(137)

(498)

(498)
Interest Rate Hedge Contracts:

Receivable position

129

129

210

210


	June 30, 2022				December 31, 2021
(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term Investment Securities:
Equity securities	$	620	$	620	$	748	$	748
Other	114		114		68		68
Total Long-term Debt	(16,760)		(17,033)		(18,050)		(21,152)
Foreign Currency Forward Exchange Contracts:
Receivable position	563		563		292		292
(Payable) position	(172)		(172)		(97)		(97)
Interest Rate Hedge Contracts:
Receivable position	—		—		87		87
(Payable) position	(81)		(81)		—		—

The fair value of the debt was determined based on significant other observable inputs, including current interest rates.

Table of Contents

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

~~September~~

June 30, ~~2021~~

~~(Unaudited)~~

2022

(Unaudited)

Note 109 — Financial Instruments, Derivatives and Fair Value Measures (Continued)

The following table summarizes the bases used to measure certain assets and liabilities at fair value on a recurring basis in the balance sheet:

Basis of Fair Value Measurement

Quoted

Significant

Prices in

Other

Significant

Outstanding

Active

Observable

Unobservable
(in millions)

Balances

Markets

Inputs

Inputs
September 30, 2021:

Equity securities

$
398

$
398

$
—

$
—
Interest rate swap derivative financial instruments

129

—

129

—
Foreign currency forward exchange contracts

238

—

238

—
Total Assets

$
765

$
398

$
367

$
—

Fair value of hedged long-term debt

$
2,967

$
—

$
2,967

$
—
Foreign currency forward exchange contracts

137

—

137

—
Contingent consideration related to business combinations

129

—

—

129
Total Liabilities

$
3,233

$
—

$
3,104

$
129

December 31, 2020:

Equity securities

$
386

$
386

$
—

$
—
Interest rate swap derivative financial instruments

210

—

210

—
Foreign currency forward exchange contracts

90

—

90

—
Total Assets

$
686

$
386

$
300

$
—

Fair value of hedged long-term debt

$
3,049

$
—

$
3,049

$
—
Foreign currency forward exchange contracts

498

—

498

—
Contingent consideration related to business combinations

68

—

—

68
Total Liabilities

$
3,615

$
—

$
3,547

$
68


			Basis of Fair Value Measurement
(in millions)	Outstanding Balances		Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
June 30, 2022:
Equity securities	$	311	$	311	$	—	$	—
Foreign currency forward exchange contracts	563		—		563		—
Total Assets	$	874	$	311	$	563	$	—

Fair value of hedged long-term debt	$	2,759	$	—	$	2,759	$	—
Interest rate swap derivative financial instruments	81		—		81		—
Foreign currency forward exchange contracts	172		—		172		—
Contingent consideration related to business combinations	136		—		—		136
Total Liabilities	$	3,148	$	—	$	3,012	$	136

December 31, 2021:
Equity securities	$	402	$	402	$	—	$	—
Interest rate swap derivative financial instruments	87		—		87		—
Foreign currency forward exchange contracts	292		—		292		—
Total Assets	$	781	$	402	$	379	$	—

Fair value of hedged long-term debt	$	2,926	$	—	$	2,926	$	—
Foreign currency forward exchange contracts	97		—		97		—
Contingent consideration related to business combinations	130		—		—		130
Total Liabilities	$	3,153	$	—	$	3,023	$	130

The fair value of foreign currency forward exchange contracts is determined using a market approach, which utilizes values for comparable derivative instruments. The fair value of debt was determined based on the face value of the debt adjusted for the fair value of the interest rate swaps, which is based on a discounted cash flow analysis using significant other observable inputs.

~~The increase in contingent consideration during the year was a result of a recent acquisition.~~ The fair value of the contingent consideration was determined based on independent appraisals at the time of acquisition, adjusted for the time value of money and other changes in fair value.

~~Table of Contents~~

~~Abbott Laboratories and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~September 30, 2021~~

~~(Unaudited)~~

Note 1110 — Litigation and Environmental Matters

Abbott has been identified as a potentially responsible party for investigation and cleanup costs at a number of locations in the United States and Puerto Rico under federal and state remediation laws and is investigating potential contamination at a number of company-owned locations. Abbott has recorded an estimated cleanup cost for each site for which management believes Abbott has a probable loss exposure. No individual site cleanup exposure is expected to exceed $4 million, and the aggregate cleanup exposure is not expected to exceed $10 million.

Table of Contents

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

June 30, 2022

(Unaudited)

Note 10 — Litigation and Environmental Matters (Continued)

Abbott is involved in various claims and legal proceedings, and Abbott estimates the range of possible loss for its legal proceedings and environmental exposures to be from approximately ~~$25~~$30 million to $45 million. The recorded accrual balance at ~~September~~June 30, ~~2021~~2022 for these proceedings and exposures was approximately ~~$35~~$40 million. This accrual represents management’s best estimate of probable loss, as defined by FASB ASC No. 450, “Contingencies.” Within the next year, legal proceedings may occur that may result in a change in the estimated loss accrued by Abbott. While it is not feasible to predict the outcome of all such proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on Abbott’s financial position, cash flows, or results of operations.

Note 1211 — Post-Employment Benefits

Retirement plans consist of defined benefit, defined contribution, and medical and dental plans. Net periodic benefit costs, other than service costs, are recognized in the Other (income) expense, net line of the Condensed Consolidated Statement of Earnings. Net cost recognized ~~in continuing operations~~ for the three and ~~nine~~six months ended ~~September~~June 30 for Abbott’s major defined benefit plans and post-employment medical and dental benefit plans is as follows:

Defined Benefit Plans

Medical and Dental Plans

Three Months

Nine Months

Three Months

Nine Months

Ended Sept. 30

Ended Sept. 30

Ended Sept. 30

Ended Sept. 30
(in millions)

2021

2020

2021

2020

2021

2020

2021

2020
Service cost - benefits earned during the period

$
98

$
85

$
294

$
251

$
14

$
12

$
42

$
35
Interest cost on projected benefit obligations

62

75

186

224

8

11

25

32
Expected return on plan assets

(211)

(193)

(633)

(576)

(6)

(7)

(20)

(21)
Net amortization of:

Actuarial loss, net

79

64

238

191

7

5

21

15
Prior service cost (credit)

—

—

1

1

(7)

(7)

(21)

(21)
Net cost - continuing operations

$
28

$
31

$
86

$
91

$
16

$
14

$
47

$
40


	Defined Benefit Plans								Medical and Dental Plans
	Three Months Ended June 30				Six Months Ended June 30				Three Months Ended June 30				Six Months Ended June 30
(in millions)	2022		2021		2022		2021		2022		2021		2022		2021
Service cost - benefits earned during the period	$	94	$	96	$	190	$	196	$	12	$	14	$	25	$	28
Interest cost on projected benefit obligations	75		62		151		124		8		9		18		17
Expected return on plan assets	(234)		(211)		(470)		(422)		(8)		(7)		(15)		(14)
Net amortization of:
Actuarial loss, net	57		78		116		159		1		7		6		14
Prior service cost (credit)	1		1		1		1		(6)		(7)		(12)		(14)
Net cost (credit)	$	(7)	$	26	$	(12)	$	58	$	7	$	16	$	22	$	31

Abbott funds its domestic defined benefit plans according to Internal Revenue Service funding limitations. International pension plans are funded according to similar regulations. In the first ~~nine~~six months of 2022 and 2021, ~~and 2020, $366~~$348 million and ~~$350~~$80 million, respectively, were contributed to defined benefit ~~plans and $26~~plans. In the first six months of 2022, $28 million ~~and $11 million, respectively, were~~was contributed to the post-employment medical and dental plans.

No contributions were made to the post-employment medical and dental plans in the first six months of 2021.

~~Table of Contents~~

~~Abbott Laboratories and Subsidiaries~~

~~Notes to the Condensed Consolidated Financial Statements~~

~~September 30, 2021~~

~~(Unaudited)~~

Note 1312 — Taxes on Earnings

Taxes on earnings ~~from continuing operations~~ reflect the estimated annual effective rates and include charges for interest and penalties. In the first ~~nine~~six months of ~~2021~~2022 and ~~2020,~~2021, taxes on earnings ~~from continuing operations~~ include approximately ~~$97~~$32 million and ~~$87~~$90 million, respectively, in excess tax benefits associated with share-based compensation. In the first ~~nine~~six months of ~~2020,~~2022, taxes on earnings ~~from continuing operations~~ also include approximately ~~$81~~$27 million ~~in tax benefits related to the settlement of the former St. Jude Medical consolidated group’s 2014 through 2016 federal income tax returns in the U.S. Earnings from discontinued operations, net~~ of tax inexpense as the ~~first nine months of 2020 reflect the recognition of $20 million of net tax benefits primarily as a~~ result of the resolution of various tax positions related to prior years.

Tax authorities in various jurisdictions regularly review Abbott’s income tax filings. Abbott believes that it is reasonably possible that the recorded amount of gross unrecognized tax benefits may decrease approximately ~~$80~~$90 million to $115 million, including cash adjustments, within the next twelve months as a result of concluding various domestic and international tax matters.

Table of Contents

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

June 30, 2022

(Unaudited)

Note 1413 — Segment Information

Abbott’s principal business is the discovery, development, manufacture and sale of a broad line of health care products. Abbott’s products are generally sold directly to retailers, wholesalers, hospitals, health care facilities, laboratories, physicians’ offices and government agencies throughout the world.

Abbott’s reportable segments are as follows:

Established Pharmaceutical Products — International sales of a broad line of branded generic pharmaceutical products.

Nutritional Products — Worldwide sales of a broad line of adult and pediatric nutritional products.

Diagnostic Products — Worldwide sales of diagnostic systems and tests for blood banks, hospitals, commercial laboratories, physician offices and alternate-care testing sites. For segment reporting purposes, the Core Laboratory Diagnostics, Rapid Diagnostics, Molecular Diagnostics and Point of Care Diagnostics divisions are aggregated and reported as the Diagnostic Products segment.

Medical Devices — Worldwide sales of rhythm management, electrophysiology, heart failure, vascular, structural heart, neuromodulation and diabetes care products. For segment reporting purposes, the Cardiac Rhythm Management, Electrophysiology, ~~and~~ Heart Failure, Vascular, Structural Heart, Neuromodulation and Diabetes Care divisions are aggregated and reported as the Medical Devices segment.

Abbott’s underlying accounting records are maintained on a legal entity basis for government and public reporting requirements. Segment disclosures are on a performance basis consistent with internal management reporting. Intersegment transfers of inventory are recorded at standard cost and are not a measure of segment operating earnings. The cost of some corporate functions and the cost of certain employee benefits are charged to segments at predetermined rates that approximate cost. Remaining costs, if any, are not allocated to segments. In addition, intangible asset amortization is not allocated to operating segments, and intangible assets and goodwill are not included in the measure of each segment’s assets.

Table of Contents

Abbott Laboratories and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

~~September~~

June 30, ~~2021~~

~~(Unaudited)~~

2022

(Unaudited)

Note 1413 — Segment Information (Continued)

The following segment information has been prepared in accordance with the internal accounting policies of Abbott, as described above, and is not presented in accordance with generally accepted accounting principles applied to the consolidated financial statements.


	Net Sales to External Customers								Operating Earnings
	Three Months Ended June 30				Six Months Ended June 30				Three Months Ended June 30				Six Months Ended June 30
(in millions)	2022		2021		2022		2021		2022		2021		2022		2021
Established Pharmaceutical Products	$	1,223	$	1,180	$	2,370	$	2,250	$	258	$	220	$	500	$	389
Nutritional Products	1,953		2,108		3,847		4,144		230		490		481		957
Diagnostic Products	4,322		3,247		9,608		7,261		1,710		1,076		4,279		2,777
Medical Devices	3,757		3,666		7,322		6,986		1,155		1,208		2,233		2,215
Total Reportable Segments	11,255		10,201		23,147		20,641		3,353		2,994		7,493		6,338
Other	2		22		5		38
Net sales	$	11,257	$	10,223	$	23,152	$	20,679
Corporate functions and benefit plan costs									(123)		(132)		(237)		(246)
Net interest expense									(106)		(123)		(223)		(247)
Share-based compensation (a)									(142)		(132)		(447)		(420)
Amortization of intangible assets									(507)		(504)		(1,019)		(1,013)
Other, net (b)									(123)		(755)		(339)		(1,021)
Earnings before taxes									$	2,352	$	1,348	$	5,228	$	3,391

Net Sales to External Customers

Operating Earnings

Three Months

Nine Months

Three Months

Nine Months

Ended Sept. 30

Ended Sept. 30

Ended Sept. 30

Ended Sept. 30
(in millions)

2021

2020

2021

2020

2021

2020

2021

2020
Established Pharmaceutical Products

$
1,265

$
1,099

$
3,515

$
3,156

$
293

$
201

$
682

$
588
Nutritional Products

2,108

1,924

6,252

5,711

431

394

1,388

1,327
Diagnostic Products

3,912

2,640

11,173

6,460

1,652

875

4,429

1,802
Medical Devices

3,632

3,170

10,618

8,530

1,160

928

3,375

2,122
Total Reportable Segments

10,917

8,833

31,558

23,857

3,536

2,398

9,874

5,839
Other

11

20

49

50

Net sales

$
10,928

$
8,853

$
31,607

$
23,907

Corporate functions and benefit plan costs

(204)

(129)

(450)

(367)
Net interest expense

(123)

(127)

(370)

(373)
Share-based compensation (a)

(114)

(100)

(534)

(448)
Amortization of intangible assets

(520)

(510)

(1,533)

(1,624)
Other, net (b)

(82)

(111)

(1,103)

(447)
Earnings from continuing operations before taxes

$
2,493

$
1,421

$
5,884

$
2,580

~~(a)~~
(a)			Approximately 5045 percent of the annual net cost of share-based awards will typically be recognized in the first quarter due to the timing of the granting of share-based awards.

~~(b)~~
(b)			Other, net for the three and ~~nine~~six months ended ~~September~~June 30, 2022 includes $42 million and $162 million, respectively, of charges related to a voluntary recall within the Nutritional Products segment. Other, net for the three and six months ended June 30, 2022 and 2021 ~~and 2020~~also includes integration costs associated with the acquisition of ~~St. Jude Medical and~~ Alere and restructuring charges. Restructuring charges in 2021 ~~restructuring charges~~ include Abbott’s restructuring plan for its COVID-19 test manufacturing network. Other, net for the ~~nine~~three and six months ended ~~September~~June 30, 2021 also includes costs related to certain litigation. ~~Other, net for the three and nine months ended September 30, 2020 also includes costs related to asset impairments, partially offset by income from the settlement of litigation.~~

Table of Contents

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Financial Review -— Results of Operations

Abbott’s revenues are derived primarily from the sale of a broad line of health care products under short-term receivable arrangements. Patent protection and licenses, technological and performance features, and inclusion of Abbott’s products under a contract most impact which products are sold; price controls, competition and rebates most impact the net selling prices of products; and foreign currency translation impacts the measurement of net sales and costs. Abbott’s primary products are medical devices, diagnostic testing products, nutritional products and branded generic pharmaceuticals.

The following ~~table details~~tables detail sales by reportable segment for the three and ~~nine~~six months ended ~~September~~June 30. Percent changes are versus the prior year and are based on unrounded numbers.

Net Sales to External Customers


Three Months

Three Months






Ended

Ended

Impact of

Total Change

Sept. 30,

Sept. 30,

Total

Foreign

Excl. Foreign

(in millions)

2021

2020

Change

Exchange

Exchange

Established Pharmaceutical Products

$
1,265

$
1,099

15.1
%
(0.2)
%
15.3
%
Nutritional Products

2,108

1,924

9.6

0.7

8.9

Diagnostic Products

3,912

2,640

48.2

1.4

46.8

Medical Devices

3,632

3,170

14.6

1.5

13.1

Total Reportable Segments

10,917

8,833

23.6

1.1

22.5

Other

11

20

(51.4)

0.9

(52.3)

Net Sales

$
10,928

$
8,853

23.4

1.0

22.4

Total U.S.

$
4,368

$
3,329

31.2

—

31.2

Total International

$
6,560

$
5,524

18.7

1.7

17.0


	Net Sales to External Customers
(in millions)	Three Months Ended June 30, 2022		Three Months Ended June 30, 2021		Total Change		Impact of Foreign Exchange		Total Change Excl. Foreign Exchange

Established Pharmaceutical Products	$	1,223	$	1,180	3.7	%	(5.5)	%	9.2	%
Nutritional Products	1,953		2,108		(7.4)		(2.9)		(4.5)
Diagnostic Products	4,322		3,247		33.1		(3.8)		36.9
Medical Devices	3,757		3,666		2.5		(5.0)		7.5
Total Reportable Segments	11,255		10,201		10.3		(4.3)		14.6
Other	2		22		n/m		n/m		n/m
Net Sales	$	11,257	$	10,223	10.1		(4.2)		14.3

Total U.S.	$	4,892	$	3,581	36.6		—		36.6

Total International	$	6,365	$	6,642	(4.2)		(6.5)		2.3

Net Sales to External Customers

Nine Months

Nine Months

Ended

Ended

Impact of

Total Change

Sept. 30,

Sept. 30,

Total

Foreign

Excl. Foreign

(in millions)

2021

2020

Change

Exchange

Exchange

Established Pharmaceutical Products

$
3,515

$
3,156

11.4
%
(0.6)
%
12.0
%
Nutritional Products

6,252

5,711

9.5

1.2

8.3

Diagnostic Products

11,173

6,460

73.0

3.8

69.2

Medical Devices

10,618

8,530

24.5

3.8

20.7

Total Reportable Segments

31,558

23,857

32.3

2.6

29.7

Other

49

50

(1.3)

2.8

(4.1)

Net Sales

$
31,607

$
23,907

32.2

2.6

29.6

Total U.S.

$
11,787

$
8,823

33.6

—

33.6

Total International

$
19,820

$
15,084

31.4

4.1

27.3


	Net Sales to External Customers
(in millions)	Six Months Ended June 30, 2022		Six Months Ended June 30, 2021		Total Change		Impact of Foreign Exchange		Total Change Excl. Foreign Exchange

Established Pharmaceutical Products	$	2,370	$	2,250	5.3	%	(5.9)	%	11.2	%
Nutritional Products	3,847		4,144		(7.2)		(2.8)		(4.4)
Diagnostic Products	9,608		7,261		32.3		(3.6)		35.9
Medical Devices	7,322		6,986		4.8		(4.6)		9.4
Total Reportable Segments	23,147		20,641		12.1		(4.0)		16.1
Other	5		38		n/m		n/m		n/m
Net Sales	$	23,152	$	20,679	12.0		(3.9)		15.9

Total U.S.	$	9,829	$	7,419	32.5		—		32.5

Total International	$	13,323	$	13,260	0.5		(6.2)		6.7

~~Note:~~

Notes:

In order to compute results excluding the impact of exchange rates, current year U.S. dollar sales are multiplied or divided, as appropriate, by the current year average foreign exchange rates and then those amounts are multiplied or divided, as appropriate, by the prior year average foreign exchange rates.

n/m = Percent change is not meaningful

Table of Contents

The ~~22.4~~14.3 percent increase in total net sales during the ~~third~~second quarter of ~~2021,~~2022, excluding the impact of foreign exchange, reflected demand for Abbott’s rapid diagnostic tests to detect COVID-19 as well as ~~other~~ growth ~~across Abbott’s reportable segments. During~~in the ~~third quarter of 2021,~~Medical Devices and Established Pharmaceutical Products segments partially offset by lower Nutritional Products sales. Abbott’s COVID-19 testing-related sales totaled approximately ~~$1.9~~$2.3 billion ~~led by combined sales of approximately $1.6 billion related to Abbott’s BinaxNOW~~^®~~, Panbio~~^®~~, and ID NOW~~^® ~~rapid testing platforms. During~~during the ~~third~~second quarter of ~~2020, COVID-19 testing-related sales totaled~~2022 and approximately ~~$0.9 billion.~~$1.3 billion during the second quarter of 2021. Excluding the impact of COVID-19 testing-related sales, Abbott’s total net sales ~~increased 13.2~~decreased 0.3 percent. Excluding the impacts of COVID-19 testing-related sales and foreign exchange, Abbott’s total net sales increased ~~12.1~~4.1 percent. Abbott’s net sales were ~~favorably~~unfavorably impacted by changes in foreign exchange rates in the ~~third~~second quarter as the relatively ~~weaker~~stronger U.S. dollar ~~increased~~decreased total international sales by ~~1.7~~6.5 percent and total sales by ~~1.0~~4.2 percent.

The ~~29.6~~15.9 percent increase in total net sales during the first ~~nine~~six months of ~~2021,~~2022, excluding the impact of foreign exchange, reflected demand for Abbott’s rapid diagnostic tests to detect COVID-19 as well as ~~other~~ growth ~~across Abbott’s reportable segments. During~~in the ~~first nine months of 2021,~~Medical Devices and Established Pharmaceutical Products segments partially offset by lower Nutritional Products sales. Abbott’s COVID-19 testing-related sales totaled approximately ~~$5.4~~$5.6 billion ~~led by combined sales of approximately $4.5 billion related to Abbott’s BinaxNOW, Panbio, and ID NOW rapid testing platforms. During~~during the first ~~nine~~six months of ~~2020, COVID-19 testing-related sales totaled~~2022 and approximately ~~$1.5 billion.~~$3.5 billion during the first six months of 2021. Excluding the impact of COVID-19 testing-related sales, Abbott’s total net sales increased ~~17.3~~1.7 percent. Excluding the impacts of COVID-19 testing-related sales and foreign exchange, Abbott’s total net sales increased ~~14.9~~5.9 percent. Abbott’s net sales were ~~favorably~~unfavorably impacted by changes in foreign exchange rates in the first ~~nine~~six months as the relatively ~~weaker~~stronger U.S. dollar ~~increased~~decreased total international sales by ~~4.1~~6.2 percent and total sales by ~~2.6~~3.9 percent.

Due to the unpredictability of the duration and impact of the current COVID-19 pandemic, the future extent to which the COVID-19 pandemic will have a material effect on Abbott’s business, financial condition or results of operations is uncertain.

The table below provides detail by sales category for the ~~nine~~six months ended ~~September~~June 30. Percent changes are versus the prior year and are based on unrounded numbers.

Impact of

Total Change

Sept. 30,

Sept. 30,

Total

Foreign

Excl. Foreign

(in millions)

2021

2020

Change

Exchange

Exchange

Established Pharmaceutical Products —











Key Emerging Markets

$
2,672

$
2,376

12.4
%
(1.8)
%
14.2
%
Other Emerging Markets

843

780

8.1

2.7

5.4

Nutritionals —

International Pediatric Nutritionals

1,637

1,629

0.5

2.2

(1.7)

U.S. Pediatric Nutritionals

1,622

1,490

8.9

—

8.9

International Adult Nutritionals

1,987

1,644

20.9

2.0

18.9

U.S. Adult Nutritionals

1,006

948

6.0

—

6.0

Diagnostics —

Core Laboratory

3,780

3,152

19.9

3.5

16.4

Molecular

1,082

956

13.2

3.3

9.9

Point of Care

401

387

3.6

1.0

2.6

Rapid Diagnostics

5,910

1,965

200.7

4.9

195.8

Medical Devices —

Rhythm Management
��

1,657

1,382

19.9

3.3

16.6

Electrophysiology

1,403

1,128

24.4

3.1

21.3

Heart Failure

650

551

17.8

1.6

16.2

Vascular

1,976

1,736

13.9

3.5

10.4

Structural Heart

1,191

894

33.2

3.7

29.5

Neuromodulation

584

489

19.6

1.5

18.1

Diabetes Care

3,157

2,350

34.3

5.6

28.7


(in millions)	June 30, 2022		June 30, 2021		Total Change		Impact of Foreign Exchange		Total Change Excl. Foreign Exchange
Established Pharmaceutical Products —
Key Emerging Markets	$	1,833	$	1,736	5.6	%	(6.2)	%	11.8	%
Other Emerging Markets	537		514		4.5		(4.7)		9.2

Nutritionals —
International Pediatric Nutritionals	1,021		1,123		(9.1)		(3.5)		(5.6)
U.S. Pediatric Nutritionals	751		1,036		(27.5)		—		(27.5)
International Adult Nutritionals	1,388		1,312		5.8		(5.7)		11.5
U.S. Adult Nutritionals	687		673		2.1		—		2.1

Diagnostics —
Core Laboratory	2,405		2,488		(3.4)		(4.7)		1.3
Molecular	632		737		(14.2)		(2.9)		(11.3)
Point of Care	267		266		0.4		(1.0)		1.4
Rapid Diagnostics	6,304		3,770		67.2		(3.2)		70.4

Medical Devices —
Rhythm Management	1,072		1,086		(1.3)		(3.8)		2.5
Electrophysiology	971		918		5.8		(4.7)		10.5
Heart Failure	462		421		9.7		(2.2)		11.9
Vascular	1,272		1,332		(4.5)		(4.1)		(0.4)
Structural Heart	851		799		6.5		(5.2)		11.7
Neuromodulation	376		394		(4.6)		(1.7)		(2.9)
Diabetes Care	2,318		2,036		13.8		(6.0)		19.8

Table of Contents

Key Emerging Markets for the Established Pharmaceutical Products business include India, Russia, Brazil and China, along with several other markets that represent the most attractive long-term growth opportunities for Abbott’s branded generics product portfolio. Excluding the unfavorable effect of foreign exchange, sales in the Key Emerging Markets for Established Pharmaceutical Products increased ~~14.2~~11.8 percent ~~compared to~~in the first ~~nine~~six months of ~~2020~~2022, led by double-digit growth ~~across~~in several ~~geographies,~~countries and therapeutic areas, including ~~India, China~~gastroenterology, central nervous system/pain management, and ~~Brazil.~~respiratory products. Other Emerging Markets, excluding the effect of foreign exchange, increased by ~~5.4~~9.2 percent in the first ~~nine~~six months of ~~2021.~~

2022.

International Pediatric Nutritional sales, excluding the effect of foreign exchange, decreased ~~1.7~~5.6 percent in the first ~~nine~~six months of ~~2021~~2022 versus the comparable ~~2020~~2021 period and the decrease reflects lower sales due to challenging market dynamics in ~~China,~~ the ~~Middle East and Canada~~infant category in Greater China partially offset by higher volumes sold in various countries in Southeast Asia, Latin America and ~~Europe. U.S. Pediatric Nutritional sales increased 8.9 percent primarily due to increased demand for Pedialyte~~^®~~, Abbott’s oral rehydration brand, and Similac~~^®~~, Abbott’s infant brand.~~the Middle East. International Adult Nutritional sales, excluding the effect of foreign exchange, increased ~~18.9~~11.5 percent, reflecting double digit growth of the Ensure®and Glucerna® brands in several countries in Southeast Asia and China. In the first six months of 2022, U.S. Adult Nutritional sales increased ~~6.0~~2.1 percent.

In U.S. Pediatric Nutritionals, Abbott initiated a voluntary recall in February 2022 of certain infant powder formula products manufactured at its facility in Sturgis, Michigan and stopped production at the facility. The 27.5 percent ~~reflecting continued growth~~decrease in U.S. Pediatric Nutritional sales in the first six months of 2022 reflects the impact of the ~~Ensure~~^®recall and ~~Glucerna~~^{production stoppage partially offset by increased demand for Abbott’s Pedialyte}® ~~brands~~ products. U.S. sales of certain infant powder formulas associated with the recall were $175 million in ~~several countries including~~the first six months of 2022 and $568 million in the first six months of 2021.

On May 16, 2022, Abbott entered into a consent decree with the U.S.

Food and Drug Administration (FDA) on the steps necessary to resume production and maintain the Sturgis facility and operations. On July 1, Abbott restarted partial production at the facility starting with its specialty formula EleCare®

and metabolic formulas. Subsequently, Abbott restarted Similac® production. The ~~69.2~~consent decree does not affect any other Abbott plant or operation.

Abbott has taken various actions to mitigate the impact of the recall on the supply of formula in the U.S. These actions have included the shipment of infant formula powder into the U.S. from Abbott's FDA-registered facility in Ireland, prioritization of infant formula production at its Columbus, Ohio facility, conversion of other liquid manufacturing lines into manufacturing Similac liquid ready-to-feed product, and increased production of powder infant formula at its Casa Grande, Arizona manufacturing site.

The 35.9 percent increase in Diagnostic Products sales in the first six months of 2022, excluding the impact of foreign exchange, was driven by demand for Abbott’s portfolio of COVID-19 tests ~~as described above as well as~~in Rapid Diagnostics and growth in ~~the base Core Laboratory and~~routine diagnostic testing in Molecular ~~businesses.~~Diagnostics. In Core Laboratory Diagnostics, sales increased ~~16.4~~1.3 percent in the first six months of 2022, excluding the effect of foreign exchange, due to the ~~increased~~higher volume of routine diagnostic testing ~~performed in hospitals~~from the continued roll-out of the Alinity® platform and ~~other laboratories,~~an expanded menu of tests. These increases were partially offset by lower sales of Abbott’s laboratory-based tests for the detection of ~~the~~COVID-19 IgG and IgM antibodies, which determine if someone was previously infected with the COVID-19 ~~virus. In March 2021, Abbott received an Emergency Use Authorization (EUA)~~virus, as well as market disruptions in ~~the U.S. for its AdviseDX SARS-CoV-2 IgG II test for the semi-quantitative detection of IgG antibodies~~China due to COVID-19 ~~on its ARCHITECT~~^® ~~and Alinity~~^® ~~i platforms.~~quarantine restrictions in various cities during the second quarter of 2022. In the first ~~nine~~six months of ~~2021~~2022 and ~~2020,~~2021, Core Laboratory Diagnostics IgG and IgM antibody testing-related sales on Abbott’s ARCHITECT and Alinity i platforms were ~~$159~~$40 million and ~~$212~~$112 million, respectively. In the first ~~nine~~six months of ~~2021,~~2022, Core Laboratory Diagnostics sales ~~increased 23.1~~decreased 0.5 percent, excluding COVID-19 testing-related sales, and increased ~~19.3~~4.3 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.

The ~~9.9~~11.3 percent ~~increase~~decrease in Molecular Diagnostics sales in the first six months of 2022, excluding the effect of foreign exchange, was driven by ~~growth in the base business from the continued roll-out of the Alinity~~^® ~~m platform as well as higher~~lower demand ~~in the first half of 2021~~ for Abbott’s laboratory-based molecular tests for COVID-19 ~~on its m2000~~^®partially offset by growth in the base business from increased routine molecular testing and ~~Alinity m platforms.~~an expanded menu of tests. In the first ~~nine~~six months of ~~2021~~2022 and ~~2020,~~2021, Molecular Diagnostics COVID-19 testing-related sales were ~~$699~~$321 million and ~~$664~~$480 million, respectively. In March 2021, Abbott received an EUA in the U.S. for its multiplex molecular test on its Alinity m system to detect COVID-19, influenza A, influenza B, and respiratory syncytial virus (RSV) in one test. In the first ~~nine~~six months of ~~2021,~~2022, Molecular Diagnostics sales increased ~~31.3~~21.7 percent, excluding COVID-19 testing-related sales, and increased ~~28.1~~26.0 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.

In Rapid Diagnostics, sales increased ~~195.8~~70.4 percent in the first six months of 2022, excluding the effect of foreign exchange, due to the demand for Abbott’s COVID-19 tests on its rapid testing platforms, including the Panbio® system, the ID NOW® platform, and the BinaxNOW® COVID-19 Ag Card test. In the first ~~nine~~six months of ~~2021~~2022 and ~~2020,~~2021, Rapid Diagnostics COVID-19 testing-related sales were ~~$4.5~~$5.3 billion and ~~$0.65~~$2.8 billion, respectively. In January 2021, Abbott received CE Mark for two new uses of its Panbio rapid antigen test: asymptomatic testing and self-swabbing under the supervision of a healthcare worker. On March 31, 2021, Abbott announced that it had received an EUA in the U.S. for its over-the-counter, non-prescription BinaxNOW COVID-19 Ag Self Test for individuals with or without symptoms. In the first ~~quarter~~six months of ~~2021, Abbott also received EUAs that allow~~2022, Rapid Diagnostics sales increased 14.0 percent, excluding COVID-19 testing-related sales, and increased 16.1 percent, excluding the ~~non-prescription use~~impact of ~~the BinaxNOW~~foreign exchange and COVID-19 ~~Ag Card Home Test~~testing-related sales.These increases reflect higher sales of ID NOW tests for flu, strep, and ~~the BinaxNOW COVID-19 Ag Card test for professional use for individuals with or without symptoms. In June 2021, Abbott announced that it had received CE Mark~~respiratory syncytial virus (RSV) as well as growth in ~~Europe for its over-the-counter Panbio COVID-19 Antigen Self-Test for individuals with or without symptoms.~~

various other Rapid Diagnostics products.

Table of Contents

Excluding the effect of foreign exchange, total Medical Devices sales grew ~~20.7~~9.4 percent in the first six months of 2022, driven by double-digit growth ~~across all divisions, led by~~in Diabetes Care, Electrophysiology, Structural Heart and ~~Electrophysiology.~~Heart Failure. Growth in Diabetes Care sales was driven by continued growth of FreeStyle Libre®, Abbott’s continuous glucose monitoring system, ~~internationally and~~ in the U.S. and internationally. FreeStyle Libre ~~and Libre Sense~~^™sales totaled ~~$2.7~~$2.1 billion in the first ~~nine~~six months of ~~2021,~~2022, which reflected a ~~37.2~~25.9 percent increase, excluding the effect of foreign exchange, over the first ~~nine~~six months of ~~2020~~2021 when FreeStyle Libre sales totaled ~~$1.9~~$1.7 billion. In May 2022, Abbott announced FDA clearance of its Freestyle Libre ~~Sense,~~3 system, which ~~received CE Mark in Europe~~automatically delivers up-to-the-minute glucose readings and 14-day accuracy in the ~~third quarter~~world's smallest and thinnest wearable sensor.

During the first six months of ~~2020, is Abbott’s glucose sport biosensor specifically designed for athletes.~~

~~Table of Contents~~

~~While~~2022, procedure volumes across Abbott’s cardiovascular and neuromodulation businesses were negatively impacted ~~early in 2021~~ by elevated COVID-19 case rates early in certain countries, including the U.S., overall volumes improved over the course of the first nine months of 2021 across various businesses. The year-over-year increases in the various businesses reflect a recovery from the 2020 levels when the pandemic reduced procedure volumes2022 as well as ~~sales~~new surges of COVID-19 in several geographies, healthcare staffing challenges, and quarantine restrictions in China during the second quarter. Despite such challenges, overall volume trends improved in several businesses versus the first six months of 2021. In Electrophysiology, the 10.5 percent growth, ~~from pre-pandemic levels in Structural Heart, Electrophysiology, and Heart Failure,~~ excluding the effect of foreign ~~exchange.~~exchange, reflects the increase in procedure volumes and the U.S. roll‑out of Abbott’s EnSite™ X EP System with Ensite Omnipolar Technology (OT), a new cardiac mapping platform available in the U.S., Japan and across Europe. In January ~~2021,~~2022, Abbott announced FDA clearance for the ~~U.S. Centers for Medicare & Medicaid Services expanded reimbursement coverage eligibility for~~EnSite X EP System with EnSite OT. The system leverages the Advisor™ HD Grid Catheter to provide a 360‑degree view of the heart without regard to the orientation of the catheter in the heart.

Growth in Structural Heart during the first six months of 2022, excluding the effect of foreign exchange, was 11.7 percent, driven by growth across several areas of the business, including Amplatzer® Amulet® Left Atrial Appendage Occluder, which offers immediate closure of the left atrial appendage, an area in the heart where blood clots can form and MitraClip®, ~~Abbott’s~~Abbott's market-leading device for the minimally invasive treatment of mitral regurgitation, ~~(MR),~~ a leaky heart valve. ~~The growth~~In Vascular, the 0.4 percent decrease in ~~Structural Heart~~sales, excluding the impact of foreign exchange, during the first ~~nine~~six months of ~~2021 was broad-based across several areas~~2022 reflects the negative effect of lower average pricing for drug-eluting stents (DES) in the ~~business, including MitraClip~~U.S. and ~~TriClip~~^®,a lag in the ~~world’s first minimally invasive, clip-based device for repair~~recovery of ~~a leaky tricuspid heart valve which was launched in Europe in May 2020.~~

percutaneous coronary intervention case rates compared to many other cardiovascular procedures partially offset by higher endovascular sales.

In the first ~~nine~~six months of ~~2021,~~2022, Medical Devices received various other product ~~approvals~~approvals. In February 2022, Abbott received FDA approval for an expanded indication for its CardioMEMS™ HF system, a small implantable sensor and remote monitoring system that can detect early warning signs of worsening heart failure. In April 2022, Abbott announced FDA approval for its Aveir™ single-chamber leadless pacemaker for the treatment of patients in the ~~Medical Devices segment included:~~

U.S. with slow heart rhythms.

●

In May 2021, CE Mark in Europe for Navitor™, Abbott’s latest-generation transcatheter aortic valve implantation (TAVI) system for patients with severe aortic stenosis who are at high or extreme surgical risk,

●

~~In August 2021, U.S. Food and Drug Administration (FDA) approval of the Amplatzer~~^® ~~Amulet~~^® ~~Left Atrial Appendage Occluder, which offers immediate closure of the left atrial appendage, an area in the heart where blood clots can form,~~

●

~~In September 2021, FDA approval of the Portico~~^® ~~with FlexNav~~^® ~~TAVI system to treat people with symptomatic, severe aortic stenosis who are at high or extreme risk for open heart surgery, and~~

●

~~In September 2021, FDA approval of the Amplatzer~~^™ ~~Talisman~~^™ ~~PFO Occlusion System to treat people with a patent foramen ovale – a small opening between the upper chambers of the heart – who are at risk of recurrent ischemic stroke.~~

The gross profit margin percentage was ~~54.8~~51.7 percent for the ~~third~~second quarter of 2022 compared to 46.7 percent for the second quarter of 2021 compared to 49.4 percent for the third quarter of 2020. The increase in the quarter reflects the effects of higher sales volume in various businesses, higher utilization at various manufacturing sites, a change in estimate to the restructuring actions recognized in the second quarter related to Abbott’s manufacturing network for COVID-19 diagnostic tests and ~~the nonrecurrence of the 2020 impairment of an intangible asset. The gross profit margin percentage was 51.6~~52.8 percent for the first ~~nine~~six months of ~~2021~~2022 compared to ~~49.2~~49.9 percent for the first ~~nine~~six months of ~~2020.~~2021. The ~~increase primarily reflects~~increases in the ~~effects~~quarter and the first six months of 2022 reflect the nonrecurrence of $499 million of 2021 restructuring charges. The increases in the quarter and the first six months of 2022 also reflect higher sales volume ~~higher manufacturing utilization,~~of COVID-19 rapid tests and various other products, the impact of gross margin improvement initiatives, and the ~~nonrecurrence~~favorable impact of ~~the 2020 intangible asset impairment,~~foreign exchange on costs. These increases were partially offset by the impact of ~~higher restructuring charges~~the voluntary product recall in the ~~first nine months of 2021.~~

Nutritional business, higher manufacturing and supply chain costs, including inflation, commodities and distribution expenses, and lower COVID-19 testing-related sales in Core Laboratory and Molecular Diagnostics.

Research and development (R&D) expenses increased ~~$92~~$30 million, or ~~16.1~~4.8 percent, in the ~~third~~second quarter of ~~2021~~2022 and increased ~~$258~~$73 million, or ~~15.0~~5.6 percent, in the first ~~nine~~six months of ~~2021~~2022 compared to the prior year. The increases in R&D expenses in the ~~third~~second quarter and the first ~~nine~~six months of ~~2021~~2022 were primarily driven by higher spending on various projects to advance products in ~~development.~~

development partially offset by the favorable impact of foreign exchange.

Selling, general and administrative ~~(SG&A)~~ expenses ~~for~~increased $31 million, or 1.1 percent, in the ~~third~~second quarter of ~~2021~~2022, and increased ~~$465~~$35 million, or ~~20.2~~0.6 percent, ~~and increased $1.15 billion, or 16.1 percent, for~~in the first ~~nine~~six months of ~~2021,~~2022, due primarily to higher selling and marketing spending to drive growth across various businesses ~~and~~partially offset by the nonrecurrence of ~~$100~~certain 2021 litigation costs and the favorable impact of foreign exchange.

Other (Income) Expense, net

Other income, net increased from $79 million of income in ~~2020 from a litigation settlement. The increase in the first nine months of 2021 also includes charges related to certain litigation.~~

~~Restructuring Plans~~

On May 27, 2021, Abbott management approved a restructuring plan related to its Diagnostic Products segment to align its manufacturing network for COVID-19 diagnostic tests with changes in the second quarter in projected testing demand driven by several factors, including significant reductions in cases in the U.S. and other major developed countries, the accelerated rollout of COVID-19 vaccines globally and the U.S. health authority’s updated guidance on testing for fully vaccinated individuals. In the second quarter of 2021 Abbott recorded charges of $499 million under this plan in Cost of products sold. The charge recognized in the second quarter included fixed asset write-downs of $80 million, inventory-related charges of $248 million, and other exit costs, which included contract cancellations and employee-related costs of $171 million.

In the third quarter of 2021, as the Delta variant of COVID-19 spread and the number of new COVID-19 cases increased significantly particularly in the U.S., demand for rapid COVID-19 tests increased significantly. As a result, in the third quarter Abbott sold approximately $120 million of inventory that was previously estimated to have no net realizable value under the second quarter restructuring action. In addition, the estimate of other exit costs was reduced by a net $19 million as Abbott fulfilled its purchase obligations under certain contracts for which a liability was recorded in the second quarter or Abbott settled with the counterparty in the third quarter.

~~Table of Contents~~

~~Other (Income) Expense, net~~

~~Other income, net increased from $46~~$82 million of income in the ~~third~~second quarter of ~~2020 to $74 million of income in the third quarter of 2021~~2022 and from ~~$25~~$140 million of income in the first ~~nine~~six months of ~~2020~~2021 to ~~$214~~$160 million of income in the first ~~nine~~six months of ~~2021.~~2022. The ~~increase~~increases in the ~~third~~second quarter ~~was~~and the first six months of 2022 were primarily due to higher income in ~~2021~~2022 related to the non-service cost components of net pension and post-retirement medical benefit ~~costs. The increase in the first nine months~~costs

Table of ~~2021 was primarily due to a $100 million change related to~~Contents

partially offset by the nonrecurrence of ~~2020 equity investment impairments,~~ a gain on the sale of an equity method investment that occurred in ~~2021 and higher income in 2021 related to~~ the ~~non-service cost components~~second quarter of ~~net pension and post-retirement medical benefit costs.~~

2021.

Interest Expense, net

Interest expense, net ~~was virtually unchanged versus the prior year, decreasing $4~~declined $17 million in the ~~third~~second quarter of ~~2021~~2022 and ~~decreasing $3~~$24 million in the first ~~nine~~six months of 2022 versus 2021 due to the ~~reduction in interest expense driven by lower~~impact of higher interest rates ~~in 2021. The effect of higher~~and cash and short-term investment balances ~~mostly offset the impact of lower interest rates~~ on interest income and the repayment of debt in the first ~~nine months~~quarter of ~~2021.~~

2022.

Taxes on Earnings ~~from Continuing Operations~~

Liquidity and Capital Resources ~~September~~June 30, ~~2021~~2022 Compared with December 31, ~~2020~~2021

The ~~increase~~decrease in cash and cash equivalents from ~~$6.8~~$9.8 billion at December 31, ~~2020~~2021 to ~~$9.3~~$8.9 billion at ~~September~~June 30, ~~2021~~2022 primarily reflects share repurchases, the payment of dividends, the repayment of debt and capital expenditures partially offset by the cash generated from operations in the first ~~nine~~six months of ~~2021, partially offset by the payment of dividends, capital expenditures and share repurchases.~~2022. Working capital was ~~$10.6~~$12.6 billion at ~~September~~June 30, ~~2021~~2022 and ~~$8.5~~$11.1 billion at December 31, ~~2020.~~2021. The increase in working capital in ~~2021~~2022 primarily reflects ~~the increase~~increases in ~~cash~~accounts receivable and ~~cash equivalents partially offset by an increase~~inventory and a decrease in the current portion of long-term ~~debt.~~

debt partially offset by a decrease in cash and cash equivalents.

In the Condensed Consolidated Statement of Cash Flows, Net cash from operating activities for the first ~~nine~~six months of ~~2021~~2022 totaled ~~$7.5~~approximately $4.5 billion, ~~an increase~~a decrease of ~~$3.4 billion over~~$290 million from the prior year primarily due to an increased investment in working capital and the timing of pension and postretirement benefit plan contributions partially offset by higher operating earnings and ~~improved working capital management, partially offset by higher~~a reduction in cash taxes paid. ~~Cash taxes paid in 2021 totaled approximately $990 million versus $700 million in 2020. Other, net in~~ Net cash from operating activities ~~was a use~~includes $348 million of ~~$140~~pension contributions and the payment of cash taxes of approximately $657 million ~~for the first nine months of 2021 and a source of $42 million for the first nine months of 2020. The year-over-year change~~ in ~~Other, net in~~2022. Net cash from operating activities ~~reflects~~includes $80 million of pension contributions and the ~~nonrecurrence~~payment of ~~2020 non-cash impairment charges related to intangible assets and equity investments.~~

cash taxes of approximately $715 million in 2021.

On March 15, 2022, Abbott repaid the $750 million outstanding principal amount of its 2.55% Notes upon maturity.

In September 2019, the board of directors authorized the early redemption of up to $5 billion of outstanding long-term notes.As of ~~September~~June 30, ~~2021,~~2022, $2.15 billion of the $5 billion authorization remains available.

At ~~September~~June 30, ~~2021,~~2022, Abbott’s long-term debt rating was A+AA- by Standard & Poor’s Corporation and A2A1 by Moody’s Investors Service. Abbott expects to maintain an investment grade rating. Abbott has readily available financial resources, including lines of credit of $5.0 billion which expire in 2025.

~~Table of Contents~~

In ~~October 2019,~~December 2021, the board of directors authorized the repurchase of up to $3$5 billion of Abbott’s common shares from time to time. The ~~2019~~new authorization was in addition to the ~~approximately $100 million~~$1.081 billion portion of the share repurchase program authorized in ~~2014~~2019 that ~~remained~~was unused as of December 31, ~~2020.~~ 2021.In the first ~~nine months~~quarter of ~~2021,~~2022, Abbott repurchased ~~10.1~~17.3 million of its common shares for ~~$1.187~~$2.1 billion which fully utilized the authorization remaining under the ~~2014~~2019 share repurchase program and a portion of the ~~2019~~2021 authorization.As of ~~September~~June 30, ~~2021, $1.910~~2022, $3.981 billion remains available for repurchase under the ~~2019 share~~2021 repurchase program.

On April 27, 2016, the board of directors authorized the issuance and sale for general corporate purposes of up to 75 million common shares that would result in proceeds of up to $3 billion. No shares have been issued under this authorization.

In each of the first ~~three~~two quarters of ~~2021,~~2022, Abbott declared a quarterly dividend of ~~$0.45~~$0.47 per share on its common shares, which represents an increase of 254.4 percent over the ~~$0.36~~$0.45 per share dividend declared in each of the first ~~three~~two quarters of ~~2020.~~

2021.

~~Recently Adopted Accounting Standards~~

~~In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update ASU 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes~~, which among other things, eliminates certain exceptions in the current rules regarding the approach for intraperiod tax allocations and the methodology for calculating income taxes in an interim period, and clarifies the accounting for transactions that result in a step-up in the tax basisTable of ~~goodwill. Abbott adopted the standard on January 1, 2021. The new standard did not have an impact on its condensed consolidated financial statements.~~

Contents

Legislative Issues

Abbott’s primary markets are highly competitive and subject to substantial government regulations throughout the world. Abbott expects debate to continue over the availability, method of delivery, and payment for health care products and services. It is not possible to predict the extent to which Abbott or the health care industry in general might be adversely affected by these factors in the future. A more complete discussion of these factors is contained in Item 1, Business, and Item 1A, Risk Factors, in the ~~2020~~2021 Annual Report on Form 10-K.

Private Securities Litigation Reform Act of 1995 — A Caution Concerning Forward-Looking Statements

Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Abbott cautions that any forward-looking statements made by Abbott are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect ~~Abbott’s~~Abbott's operations are discussed in Item 1A, ~~“Risk Factors”~~"Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, and are incorporated herein by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 4.Controls and Procedures

~~(a)~~

~~Evaluation of disclosure controls and procedures.~~ The President and Chief Executive Officer, Robert B. Ford, and Chief Financial Officer, Robert E. Funck, Jr., evaluated the effectiveness of Abbott Laboratories’ disclosure controls and procedures as of the end of the period covered by this report, and concluded that Abbott Laboratories’ disclosure controls and procedures were effective to ensure that information Abbott is required to disclose in the reports that it files or submits with the Securities and Exchange Commission (the “Commission”) under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and to ensure that information required to be disclosed by Abbott in the reports that it files or submits under the Exchange Act is accumulated and communicated to Abbott’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(a)

~~(b)~~

~~Changes in internal control over financial reporting.~~ During the quarter ended September 30, 2021, there were no changes in Abbott’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, Abbott’s internal control over financial reporting.

Evaluation of disclosure controls and procedures.

The Chief Executive Officer, Robert B. Ford, and Chief Financial Officer, Robert E. Funck, Jr., evaluated the effectiveness of Abbott Laboratories’ disclosure controls and procedures as of the end of the period covered by this report, and concluded that Abbott Laboratories’ disclosure controls and procedures were effective to ensure that information Abbott is required to disclose in the reports that it files or submits with the Securities and Exchange Commission (the “Commission”) under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and to ensure that information required to be disclosed by Abbott in the reports that it files or submits under the Exchange Act is accumulated and communicated to Abbott’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b)Changes in internal control over financial reporting. During the quarter ended June 30, 2022, there were no changes in Abbott’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, Abbott’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.Legal Proceedings

Abbott is involved in various claims, legal proceedings and investigations as described in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~

2021 and our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

(c)Issuer Purchases of Equity Securities


Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
April 1, 2022 - April 30, 2022	0	(1)	$	0	0	$	3,981,169,070	(2)
May 1, 2022 - May 31, 2022	0	(1)	0		0	3,981,169,070		(2)
June 1, 2022 - June 30, 2022	0	(1)	0		0	3,981,169,070		(2)
Total	0	(1)	$	0	0	$	3,981,169,070	(2)

~~(c)~~

~~Issuer Purchases of Equity Securities~~

(d) Maximum

Number (or

(c) Total Number

Approximate

of Shares (or

Dollar Value) of

(a) Total

Units) Purchased

Shares (or Units)

Number of

(b) Average

as Part of

that May Yet Be

Shares (or

Price Paid per

Publicly

Purchased Under

Units)

Share (or

Announced Plans

the Plans or

Period

Purchased

Unit)

or Programs

Programs

July 1, 2021 – July 31, 2021

450,000
⁽¹⁾
$
120.849

450,000

$
2,540,924,508
⁽²⁾
August 1, 2021 – August 31, 2021

2,175,000
⁽¹⁾

123.265

2,175,000

2,272,822,841
⁽²⁾
September 1, 2021 – September 30, 2021

3,002,035
⁽¹⁾

120.814

3,000,000

1,910,394,012
⁽²⁾
Total

5,627,035
⁽¹⁾
$
121.764

5,625,000

$
1,910,394,012
⁽²⁾

1.	~~These shares include the shares deemed surrendered to Abbott to pay the exercise price in connection with the exercise of employee stock options – 0 in July, 0 in August, 2,035 in September; and~~

These shares do not include the shares surrendered to Abbott to satisfy tax withholding obligations in connection with the vesting of restricted stock or restricted stock units.

2.	~~On October 11, 2019, the board of directors authorized the repurchase of up to $3 billion of Abbott common shares, from time to time.~~

2.On December 10, 2021, the board of directors authorized the repurchase of up to $5 billion of Abbott common shares, from time to time.

Table of Contents

Item 6.Exhibits


Exhibit No.		Exhibit

~~3.1~~ 31.1		~~By-Laws of Abbott Laboratories, as amended and restated effective August 30, 2021, filed as Exhibit 3.1 to the Abbott Laboratories Current Report on Form 8-K filed on September 1, 2021.~~

~~31.1~~	Certification of Chief Executive Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).

31.2		Certification of Chief Financial Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).

Exhibits 32.1 and 32.2 are furnished herewith and should not be deemed to be “filed” under the Securities Exchange Act of 1934.

32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following financial statements and notes from the Abbott Laboratories Quarterly Report on Form 10-Q for the quarter and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, formatted in Inline XBRL: (i) Condensed Consolidated Statement of Earnings; (ii) Condensed Consolidated Statement of Comprehensive Income; (iii) Condensed Consolidated Balance Sheet; (iv) Condensed Consolidated Statement of Shareholders’ Investment; (v) Condensed Consolidated Statement of Cash Flows; and (vi) Notes to the Condensed Consolidated Financial Statements.

104		Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document and included in Exhibit 101).

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~ABBOTT LABORATORIES~~
ABBOTT LABORATORIES
~~By:~~
By:			/s/ Robert E. Funck, Jr.
			Robert E. Funck, Jr.
			Executive Vice President, Finance and Chief Financial Officer

			Date: ~~November 3, 2021~~ August 2, 2022


Part I - Financial Information
			Page
Item 1. Financial Statements and Supplementary Data

Condensed Consolidated Statement of Earnings			3
Condensed Consolidated Statement of Comprehensive Income			4
Condensed Consolidated Balance Sheet			5
Condensed Consolidated Statement of Shareholders’ Investment			6
Condensed Consolidated Statement of Cash Flows			8
Notes to the Condensed Consolidated Financial Statements			9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2422

Item 4. Controls and Procedures			3028

Part II - Other Information			28

Item 1. Legal Proceedings			3028

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			3028

Item 6. Exhibits			3129

Signature			3230


	Three Months Ended				Nine Months Ended
	September 30				September 30
	2021		2020		2021		2020
Net sales	$	10,928	$	8,853	$	31,607	$	23,907

Cost of products sold, excluding amortization of intangible assets		4,423		3,966		13,771		10,510
Amortization of intangible assets		520		510		1,533		1,624
Research and development		672		580		1,980		1,722
Selling, general and administrative		2,767		2,302		8,276		7,126
Total operating cost and expenses		8,382		7,358		25,560		20,982

Operating earnings		2,546		1,495		6,047		2,925

Interest expense		133		137		402		410
Interest (income)		(10)		(10)		(32)		(37)
Net foreign exchange (gain) loss		4		(7)		7		(3)
Other (income) expense, net		(74)		(46)		(214)		(25)
Earnings from continuing operations before taxes		2,493		1,421		5,884		2,580
Tax expense (benefit) on earnings from continuing operations		393		189		802		267
Earnings from continuing operations		2,100		1,232		5,082		2,313

Earnings from discontinued operations, net of tax		—		—		—		20

Net Earnings	$	2,100	$	1,232	$	5,082	$	2,333

Basic Earnings Per Common Share —
Continuing operations	$	1.18	$	0.69	$	2.85	$	1.30
Discontinued operations		—		—		—		0.01
Net earnings	$	1.18	$	0.69	$	2.85	$	1.31

Diluted Earnings Per Common Share —
Continuing operations	$	1.17	$	0.69	$	2.83	$	1.29
Discontinued operations		—		—		—		0.01
Net earnings	$	1.17	$	0.69	$	2.83	$	1.30

Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share		1,774,516		1,774,475		1,776,870		1,772,166
Dilutive Common Stock Options		14,483		13,378		14,407		12,381
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options		1,788,999		1,787,853		1,791,277		1,784,547

Outstanding Common Stock Options Having No Dilutive Effect		2,740		—		2,694		—


	September 30,		December 31,
	2021		2020
Assets
Current Assets:
Cash and cash equivalents	$	9,302	$	6,838
Short-term investments		390		310
Trade receivables, less allowances of $507 in 2021 and $460 in 2020		6,405		6,414
Inventories:
Finished products		3,048		3,030
Work in process		710		712
Materials		1,503		1,270
Total inventories		5,261		5,012
Prepaid expenses and other receivables		2,134		1,867
Total Current Assets		23,492		20,441
Investments		812		821
Property and equipment, at cost		19,182		18,793
Less: accumulated depreciation and amortization		10,351		9,764
Net property and equipment		8,831		9,029
Intangible assets, net of amortization		13,312		14,784
Goodwill		23,299		23,744
Deferred income taxes and other assets		4,049		3,729
	$	73,795	$	72,548


Liabilities and Shareholders’ Investment
Current Liabilities:
Short-term borrowings	$	197	$	213
Trade accounts payable		4,017		3,946
Salaries, wages and commissions		1,470		1,416
Other accrued liabilities		5,264		5,165
Dividends payable		797		798
Income taxes payable		368		362
Current portion of long-term debt		754		7
Total Current Liabilities		12,867		11,907
Long-term debt		17,446		18,527
Post-employment obligations, deferred income taxes and other long-term liabilities		8,844		9,111
Commitments and Contingencies
Shareholders’ Investment:
Preferred shares, 1 dollar par value Authorized — 1,000,000 shares, NaN issued		—		—
Common shares, without par value Authorized — 2,400,000,000 shares Issued at stated capital amount — Shares: 2021: 1,983,103,854; 2020: 1,981,156,896		24,285		24,145
Common shares held in treasury, at cost — Shares: 2021: 214,816,885; 2020: 209,926,622		(10,999)		(10,042)
Earnings employed in the business		30,376		27,627
Accumulated other comprehensive income (loss)		(9,240)		(8,946)
Total Abbott Shareholders’ Investment		34,422		32,784
Noncontrolling Interests in Subsidiaries		216		219
Total Shareholders’ Investment		34,638		33,003
	$	73,795	$	72,548


	Three Months Ended September 30
	2021		2020
Common Shares:
Balance at June 30
Shares: 2021: 1,982,553,488; 2020: 1,979,594,379	$	24,153	$	23,893
Issued under incentive stock programs
Shares: 2021: 550,366; 2020: 1,172,844		26		48
Share-based compensation		113		101
Issuance of restricted stock awards		(7)		(5)
Balance at September 30
Shares: 2021: 1,983,103,854; 2020: 1,980,767,223	$	24,285	$	24,037

Common Shares Held in Treasury:
Balance at June 30
Shares: 2021: 209,736,139; 2020: 209,064,380	$	(10,340)	$	(9,904)
Issued under incentive stock programs
Shares: 2021: 545,860; 2020: 664,727		26		32
Purchased
Shares: 2021: 5,626,606; 2020: 5,989		(685)		(1)
Balance at September 30
Shares: 2021: 214,816,885; 2020: 208,405,642	$	(10,999)	$	(9,873)

Earnings Employed in the Business:
Balance at June 30	$	29,053	$	25,669
Net earnings		2,100		1,232
Cash dividends declared on common shares (per share — 2021: $0.45; 2020: $0.36)		(799)		(641)
Effect of common and treasury share transactions		22		6
Balance at September 30	$	30,376	$	26,266

Accumulated Other Comprehensive Income (Loss):
Balance at June 30	$	(9,066)	$	(9,080)
Other comprehensive income (loss)		(174)		36
Balance at September 30	$	(9,240)	$	(9,044)

Noncontrolling Interests in Subsidiaries:
Balance at June 30	$	229	$	220
Noncontrolling Interests’ share of income, business combinations, net of distributions and share repurchases		(13)		(11)
Balance at September 30	$	216	$	209


	Nine Months Ended September 30
	2021		2020
Common Shares:
Balance at January 1
Shares: 2021: 1,981,156,896; 2020: 1,976,855,085	$	24,145	$	23,853
Issued under incentive stock programs
Shares: 2021: 1,946,958; 2020: 3,912,138		91		167
Share-based compensation		536		451
Issuance of restricted stock awards		(487)		(434)
Balance at September 30
Shares: 2021: 1,983,103,854; 2020: 1,980,767,223	$	24,285	$	24,037

Common Shares Held in Treasury:
Balance at January 1
Shares: 2021: 209,926,622; 2020: 214,351,838	$	(10,042)	$	(10,147)
Issued under incentive stock programs
Shares: 2021: 5,524,291; 2020: 6,211,326		265		295
Purchased
Shares: 2021: 10,414,554; 2020: 265,130		(1,222)		(21)
Balance at September 30
Shares: 2021: 214,816,885; 2020: 208,405,642	$	(10,999)	$	(9,873)

Earnings Employed in the Business:
Balance at January 1	$	27,627	$	25,847
Impact of adoption of new accounting standard		—		(5)
Net earnings		5,082		2,333
Cash dividends declared on common shares (per share — 2021: $1.35; 2020: $1.08)		(2,403)		(1,922)
Effect of common and treasury share transactions		70		13
Balance at September 30	$	30,376	$	26,266

Accumulated Other Comprehensive Income (Loss):
Balance at January 1	$	(8,946)	$	(8,465)
Other comprehensive income (loss)		(294)		(579)
Balance at September 30	$	(9,240)	$	(9,044)

Noncontrolling Interests in Subsidiaries:
Balance at January 1	$	219	$	213
Noncontrolling Interests’ share of income, business combinations, net of distributions and share repurchases		(3)		(4)
Balance at September 30	$	216	$	209


	Three Months Ended September 30, 2021						Three Months Ended September 30, 2020
(in millions)	U.S.		Int’l		Total		U.S.		Int’l		Total
Established Pharmaceutical Products —
Key Emerging Markets	$	—	$	936	$	936	$	—	$	799	$	799
Other		—		329		329		—		300		300
Total		—		1,265		1,265		—		1,099		1,099
Nutritionals —
Pediatric Nutritionals		586		514		1,100		488		518		1,006
Adult Nutritionals		333		675		1,008		330		588		918
Total		919		1,189		2,108		818		1,106		1,924
Diagnostics —
Core Laboratory		291		1,001		1,292		284		892		1,176
Molecular		162		183		345		220		238		458
Point of Care		100		35		135		96		35		131
Rapid Diagnostics		1,394		746		2,140		533		342		875
Total		1,947		1,965		3,912		1,133		1,507		2,640
Medical Devices —
Rhythm Management		266		305		571		242		265		507
Electrophysiology		192		293		485		192		249		441
Heart Failure		170		59		229		144		46		190
Vascular		219		425		644		230		400		630
Structural Heart		177		215		392		159		194		353
Neuromodulation		149		41		190		170		36		206
Diabetes Care		323		798		1,121		226		617		843
Total		1,496		2,136		3,632		1,363		1,807		3,170

Other		6		5		11		15		5		20

Total	$	4,368	$	6,560	$	10,928	$	3,329	$	5,524	$	8,853


	Nine Months Ended September 30, 2021						Nine Months Ended September 30, 2020
(in millions)	U.S.		Int’l		Total		U.S.		Int’l		Total
Established Pharmaceutical Products —
Key Emerging Markets	$	—	$	2,672	$	2,672	$	—	$	2,376	$	2,376
Other		—		843		843		—		780		780
Total		—		3,515		3,515		—		3,156		3,156
Nutritionals —
Pediatric Nutritionals		1,622		1,637		3,259		1,490		1,629		3,119
Adult Nutritionals		1,006		1,987		2,993		948		1,644		2,592
Total		2,628		3,624		6,252		2,438		3,273		5,711
Diagnostics —
Core Laboratory		845		2,935		3,780		840		2,312		3,152
Molecular		431		651		1,082		429		527		956
Point of Care		289		112		401		278		109		387
Rapid Diagnostics		3,178		2,732		5,910		1,246		719		1,965
Total		4,743		6,430		11,173		2,793		3,667		6,460
Medical Devices —
Rhythm Management		776		881		1,657		655		727		1,382
Electrophysiology		580		823		1,403		476		652		1,128
Heart Failure		483		167		650		411		140		551
Vascular		684		1,292		1,976		628		1,108		1,736
Structural Heart		537		654		1,191		386		508		894
Neuromodulation		460		124		584		392		97		489
Diabetes Care		865		2,292		3,157		614		1,736		2,350
Total		4,385		6,233		10,618		3,562		4,968		8,530

Other		31		18		49		30		20		50

Total	$	11,787	$	19,820	$	31,607	$	8,823	$	15,084	$	23,907


(in millions)
Contract Liabilities:
Balance at December 31, 2020	$	405
Unearned revenue from cash received during the period		416
Revenue recognized related to contract liability balance		(409)
Balance at September 30, 2021	$	412


	Three Months Ended September 30
									Cumulative Gains (Losses)
	Cumulative Foreign				Net Actuarial (Losses) and				on Derivative Instruments
	Currency Translation				Prior Service (Costs) and				Designated as Cash Flow
	Adjustments				Credits				Hedges
(in millions)	2021		2020		2021		2020		2021		2020
Balance at June 30	$	(5,230)	$	(5,713)	$	(3,738)	$	(3,446)	$	(98)	$	79
Other comprehensive income (loss) before reclassifications		(391)		112		16		(21)		70		(74)
Amounts reclassified from accumulated other comprehensive income		0		0		62		49		69		(30)
Net current period comprehensive income (loss)		(391)		112		78		28		139		(104)
Balance at September 30	$	(5,621)	$	(5,601)	$	(3,660)	$	(3,418)	$	41	$	(25)


	Inventory-
	Related		Fixed Asset		Other Exit
(in millions)	Charges		Write-Downs		Costs		Total
Restructuring charges recorded in 2021	$	248	$	80	$	152	$	480
Payments		—		—		(54)		(54)
Other non-cash		(248)		(80)		—		(328)
Accrued balance at September 30, 2021	$	—	$	—	$	98	$	98


(in millions)
Accrued balance at December 31, 2020	$	70
Restructuring charges recorded in 2021		17
Payments and other adjustments		(30)
Accrued balance at September 30, 2021	$	57


	Outstanding		Exercisable
Number of shares		29,594,797		22,674,416
Weighted average remaining life (years)		5.8		4.9
Weighted average exercise price	$	63.08	$	51.79
Aggregate intrinsic value (in millions)	$	1,645	$	1,504


	Fair Value - Assets					Fair Value - Liabilities
	Sept. 30,		Dec. 31,			Sept. 30,		Dec. 31,
(in millions)	2021		2020		Balance Sheet Caption	2021		2020		Balance Sheet Caption
Interest rate swaps designated as fair value hedges	$	129	$	210	Deferred income taxes and other assets	$	—	$	—	Post-employment obligations, deferred income taxes and other long-term liabilities
Foreign currency forward exchange contracts:
Hedging instruments		193		30	Prepaid expenses and other receivables		69		433	Other accrued liabilities
Others not designated as hedges		45		60	Prepaid expenses and other receivables		68		65	Other accrued liabilities
Debt designated as a hedge of net investment in a foreign subsidiary		—		—	n/a		536		577	Long-term debt
	$	367	$	300		$	673	$	1,075


	Gain (loss) Recognized in Other								Income (expense) and Gain (loss)
	Comprehensive Income (loss)								Reclassified into Income
	Three Months				Nine Months				Three Months				Nine Months
	Ended Sept. 30				Ended Sept. 30				Ended Sept. 30				Ended Sept. 30
(in millions)	2021		2020		2021		2020		2021		2020		2021		2020		Income Statement Caption
Foreign currency forward exchange contracts designated as cash flow hedges	$	96	$	(103)	$	142	$	35	$	(92)	$	48	$	(207)	$	90	Cost of products sold
Debt designated as a hedge of net investment in a foreign subsidiary		4		(10)		41		(20)		—		—		—		—	n/a
Interest rate swaps designated as fair value hedges		n/a		n/a		n/a		n/a		(14)		(11)		(81)		184	Interest expense


	September 30, 2021				December 31, 2020
	Carrying		Fair		Carrying		Fair
(in millions)	Value		Value		Value		Value
Long-term Investment Securities:
Equity securities	$	758	$	758	$	776	$	776
Other		54		54		45		45
Total Long-term Debt		(18,200)		(21,330)		(18,534)		(22,809)
Foreign Currency Forward Exchange Contracts:
Receivable position		238		238		90		90
(Payable) position		(137)		(137)		(498)		(498)
Interest Rate Hedge Contracts:
Receivable position		129		129		210		210


			Basis of Fair Value Measurement
			Quoted		Significant
			Prices in		Other		Significant
	Outstanding		Active		Observable		Unobservable
(in millions)	Balances		Markets		Inputs		Inputs
September 30, 2021:
Equity securities	$	398	$	398	$	—	$	—
Interest rate swap derivative financial instruments		129		—		129		—
Foreign currency forward exchange contracts		238		—		238		—
Total Assets	$	765	$	398	$	367	$	—

Fair value of hedged long-term debt	$	2,967	$	—	$	2,967	$	—
Foreign currency forward exchange contracts		137		—		137		—
Contingent consideration related to business combinations		129		—		—		129
Total Liabilities	$	3,233	$	—	$	3,104	$	129

December 31, 2020:
Equity securities	$	386	$	386	$	—	$	—
Interest rate swap derivative financial instruments		210		—		210		—
Foreign currency forward exchange contracts		90		—		90		—
Total Assets	$	686	$	386	$	300	$	—

Fair value of hedged long-term debt	$	3,049	$	—	$	3,049	$	—
Foreign currency forward exchange contracts		498		—		498		—
Contingent consideration related to business combinations		68		—		—		68
Total Liabilities	$	3,615	$	—	$	3,547	$	68


	Defined Benefit Plans								Medical and Dental Plans
	Three Months				Nine Months				Three Months				Nine Months
	Ended Sept. 30				Ended Sept. 30				Ended Sept. 30				Ended Sept. 30
(in millions)	2021		2020		2021		2020		2021		2020		2021		2020
Service cost - benefits earned during the period	$	98	$	85	$	294	$	251	$	14	$	12	$	42	$	35
Interest cost on projected benefit obligations		62		75		186		224		8		11		25		32
Expected return on plan assets		(211)		(193)		(633)		(576)		(6)		(7)		(20)		(21)
Net amortization of:
Actuarial loss, net		79		64		238		191		7		5		21		15
Prior service cost (credit)		—		—		1		1		(7)		(7)		(21)		(21)
Net cost - continuing operations	$	28	$	31	$	86	$	91	$	16	$	14	$	47	$	40


	Net Sales to External Customers								Operating Earnings
	Three Months				Nine Months				Three Months				Nine Months
	Ended Sept. 30				Ended Sept. 30				Ended Sept. 30				Ended Sept. 30
(in millions)	2021		2020		2021		2020		2021		2020		2021		2020
Established Pharmaceutical Products	$	1,265	$	1,099	$	3,515	$	3,156	$	293	$	201	$	682	$	588
Nutritional Products		2,108		1,924		6,252		5,711		431		394		1,388		1,327
Diagnostic Products		3,912		2,640		11,173		6,460		1,652		875		4,429		1,802
Medical Devices		3,632		3,170		10,618		8,530		1,160		928		3,375		2,122
Total Reportable Segments		10,917		8,833		31,558		23,857		3,536		2,398		9,874		5,839
Other		11		20		49		50
Net sales	$	10,928	$	8,853	$	31,607	$	23,907
Corporate functions and benefit plan costs										(204)		(129)		(450)		(367)
Net interest expense										(123)		(127)		(370)		(373)
Share-based compensation (a)										(114)		(100)		(534)		(448)
Amortization of intangible assets										(520)		(510)		(1,533)		(1,624)
Other, net (b)										(82)		(111)		(1,103)		(447)
Earnings from continuing operations before taxes									$	2,493	$	1,421	$	5,884	$	2,580


								Impact of		Total Change
		Sept. 30,		Sept. 30,		Total		Foreign		Excl. Foreign
(in millions)		2021		2020		Change		Exchange		Exchange
Established Pharmaceutical Products —
Key Emerging Markets		$	2,672	$	2,376	12.4	%	(1.8)	%	14.2	%
Other Emerging Markets			843		780	8.1		2.7		5.4

Nutritionals —
International Pediatric Nutritionals			1,637		1,629	0.5		2.2		(1.7)
U.S. Pediatric Nutritionals			1,622		1,490	8.9		—		8.9
International Adult Nutritionals			1,987		1,644	20.9		2.0		18.9
U.S. Adult Nutritionals			1,006		948	6.0		—		6.0

Diagnostics —
Core Laboratory			3,780		3,152	19.9		3.5		16.4
Molecular			1,082		956	13.2		3.3		9.9
Point of Care			401		387	3.6		1.0		2.6
Rapid Diagnostics			5,910		1,965	200.7		4.9		195.8

Medical Devices —
Rhythm Management	��		1,657		1,382	19.9		3.3		16.6
Electrophysiology			1,403		1,128	24.4		3.1		21.3
Heart Failure			650		551	17.8		1.6		16.2
Vascular			1,976		1,736	13.9		3.5		10.4
Structural Heart			1,191		894	33.2		3.7		29.5
Neuromodulation			584		489	19.6		1.5		18.1
Diabetes Care			3,157		2,350	34.3		5.6		28.7


						(d) Maximum
						Number (or
					(c) Total Number	Approximate
					of Shares (or	Dollar Value) of
	(a) Total				Units) Purchased	Shares (or Units)
	Number of		(b) Average		as Part of	that May Yet Be
	Shares (or		Price Paid per		Publicly	Purchased Under
	Units)		Share (or		Announced Plans	the Plans or
Period	Purchased		Unit)		or Programs	Programs
July 1, 2021 – July 31, 2021	450,000	⁽¹⁾	$	120.849	450,000	$	2,540,924,508	⁽²⁾
August 1, 2021 – August 31, 2021	2,175,000	⁽¹⁾		123.265	2,175,000		2,272,822,841	⁽²⁾
September 1, 2021 – September 30, 2021	3,002,035	⁽¹⁾		120.814	3,000,000		1,910,394,012	⁽²⁾
Total	5,627,035	⁽¹⁾	$	121.764	5,625,000	$	1,910,394,012	⁽²⁾

Large Accelerated Filer ☒x

Accelerated Filer ☐o

Non-Accelerated Filer ☐o

Smaller reporting company ☐o

Emerging growth company ☐o