ABBOTT PARK, Ill., Oct. 18, 2017
/PRNewswire/ -- Abbott (NYSE: ABT) today announced
financial results for the third quarter ended Sept. 30, 2017.
- Third-quarter worldwide sales of $6.8
billion increased 28.8 percent on a reported basis and 5.6
percent on a comparable operational* basis.
- Reported diluted EPS from continuing operations under GAAP was
$0.32 in the third quarter. Excluding
specified items, adjusted diluted EPS from continuing operations
was $0.66 in the third quarter, at
the high end of the previous guidance range of $0.64 to $0.66.
- Abbott narrowed its full-year 2017 EPS guidance range, which
continues to reflect double-digit growth. Abbott projects full-year
diluted EPS from continuing operations on a GAAP basis of
$0.97 to $0.99. Projected full-year
adjusted diluted EPS from continuing operations is now $2.48 to $2.50, which represents an increase at
the mid-point of the guidance range.
- In September, Abbott received U.S. FDA approval for its
FreeStyle® Libre glucose monitoring system as a
replacement1 for finger stick blood glucose monitoring.
This revolutionary technology is the only system available that
comes factory-calibrated, thus eliminating the need for daily
finger sticks that are required to calibrate other continuous
glucose monitoring systems.
- During the quarter, Abbott obtained national reimbursement for
FreeStyle Libre in Japan and the
United Kingdom for people with
diabetes, both Type 1 and Type 2, on insulin therapy.
- In September, Abbott received U.S. FDA approval for magnetic
resonance (MR)-conditional labeling for its EllipseTM
implantable cardioverter defibrillator (ICD). This approval follows
U.S. FDA approval for MR-conditional labeling for its Assurity
MRITM pacemaker earlier this year.
- In August, Abbott received U.S. FDA approval for its HeartMate
3TM system, which helps a weak heart pump blood for
patients with advanced heart failure.
- On Oct. 3, 2017, Abbott completed
the acquisition of Alere, Inc., establishing Abbott as the global
leader in the point of care diagnostics market.
"We're very pleased with our performance and the steady cadence
of innovative new product launches that are contributing to
growth," said Miles D. White,
chairman and chief executive officer, Abbott. "We're
well-positioned to achieve the upper end of our initial full-year
EPS guidance range."
* See note on comparable operational growth below.
THIRD-QUARTER BUSINESS OVERVIEW
Note: Management
believes that measuring sales growth rates on a comparable
operational basis is an appropriate way for investors to best
understand the underlying performance of the business.
Comparable operational sales growth excludes
the impact of exchange and for Total Abbott and Medical Devices,
also includes prior year results for St. Jude Medical, which was
acquired on Jan. 4, 2017, and
excludes prior year and current year results for the Abbott Medical
Optics (AMO) and St. Jude Medical vascular closure businesses,
which were divested during the first quarter 2017. Comparable
operational sales growth also reflects a reduction to St. Jude
Medical's historic sales related to administrative
fees paid to conform to Abbott's presentation, as
further described in Form 8-K issued on April 18, 2017.
Following are sales by business segment and commentary for
the third quarter and first nine months of 2017:
Total
Company
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
% Change vs.
3Q16
|
|
|
Sales
3Q17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
*
|
|
2,313
|
|
4,516
|
|
6,829
|
|
40.6
|
|
23.5
|
|
28.8
|
|
2.0
|
|
7.6
|
|
5.6
|
Nutrition
|
|
759
|
|
1,009
|
|
1,768
|
|
0.5
|
|
1.0
|
|
0.8
|
|
0.5
|
|
1.1
|
|
0.8
|
Diagnostics
|
|
369
|
|
910
|
|
1,279
|
|
2.0
|
|
6.9
|
|
5.4
|
|
2.0
|
|
6.6
|
|
5.2
|
Established
Pharmaceuticals
|
|
--
|
|
1,171
|
|
1,171
|
|
n/a
|
|
15.7
|
|
15.7
|
|
n/a
|
|
14.3
|
|
14.3
|
Medical
Devices
|
|
1,177
|
|
1,420
|
|
2,597
|
|
126.8
|
|
79.5
|
|
98.2
|
|
3.1
|
|
7.8
|
|
5.6
|
|
* Total Abbott sales
from continuing operations include Other Sales of $14 million. In
2016, the AMO business, which was divested during the first quarter
2017, was reported as part of the Medical Devices group. Comparable
operational growth rates above exclude results from the AMO
business.
|
|
|
|
|
|
|
|
|
|
% Change vs.
9M16
|
|
|
Sales
9M17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
*
|
|
6,997
|
|
12,804
|
|
19,801
|
|
44.8
|
|
19.8
|
|
27.6
|
|
3.0
|
|
4.5
|
|
3.9
|
Nutrition
|
|
2,262
|
|
2,879
|
|
5,141
|
|
1.7
|
|
(2.2)
|
|
(0.5)
|
|
1.7
|
|
(1.1)
|
|
0.1
|
Diagnostics
|
|
1,125
|
|
2,585
|
|
3,710
|
|
6.0
|
|
3.6
|
|
4.3
|
|
6.0
|
|
4.7
|
|
5.1
|
Established
Pharmaceuticals
|
|
--
|
|
3,142
|
|
3,142
|
|
n/a
|
|
9.1
|
|
9.1
|
|
n/a
|
|
8.0
|
|
8.0
|
Medical
Devices
|
|
3,504
|
|
4,084
|
|
7,588
|
|
130.5
|
|
73.2
|
|
95.6
|
|
2.8
|
|
5.8
|
|
4.4
|
|
* In 2017, total
Abbott sales from continuing operations include Other Sales of $220
million, including sales of $175 million from the AMO business,
which was divested during the first quarter 2017. In 2016, the AMO
business was reported as part of the Medical Devices group.
Comparable operational growth rates above exclude results from the
AMO business.
|
|
n/a = Not
Applicable.
|
|
Note: 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.
|
Third-quarter 2017 worldwide sales of $6.8 billion increased 28.8 percent on a reported
basis. On a comparable operational basis, worldwide sales increased
5.6 percent. Refer to tables titled "Non-GAAP Reconciliation of
Comparable Historical Revenue" for a reconciliation of comparable
historical revenue.
Nutrition
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
% Change vs.
3Q16
|
|
|
Sales
3Q17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
759
|
|
1,009
|
|
1,768
|
|
0.5
|
|
1.0
|
|
0.8
|
|
0.5
|
|
1.1
|
|
0.8
|
Pediatric
|
|
436
|
|
539
|
|
975
|
|
5.2
|
|
(2.4)
|
|
0.8
|
|
5.2
|
|
(2.6)
|
|
0.7
|
Adult
|
|
323
|
|
470
|
|
793
|
|
(5.3)
|
|
5.2
|
|
0.7
|
|
(5.3)
|
|
5.6
|
|
0.9
|
|
|
|
|
|
|
|
|
|
% Change vs.
9M16
|
|
|
Sales
9M17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
2,262
|
|
2,879
|
|
5,141
|
|
1.7
|
|
(2.2)
|
|
(0.5)
|
|
1.7
|
|
(1.1)
|
|
0.1
|
Pediatric
|
|
1,327
|
|
1,562
|
|
2,889
|
|
6.8
|
|
(6.1)
|
|
(0.6)
|
|
6.8
|
|
(5.1)
|
|
-
|
Adult
|
|
935
|
|
1,317
|
|
2,252
|
|
(4.8)
|
|
3.0
|
|
(0.3)
|
|
(4.8)
|
|
4.1
|
|
0.3
|
Worldwide Nutrition sales increased 0.8 percent on a reported
and operational basis in the third quarter.
Worldwide Pediatric Nutrition sales increased 0.8 percent on a
reported basis in the third quarter, including a favorable 0.1
percent effect of foreign exchange, and increased 0.7 percent on an
operational basis. Sales growth in the quarter was led by
above-market growth in the U.S. with continued strong performance
across Abbott's portfolio of infant and pediatric nutrition
products. As expected, sales growth in China improved sequentially versus the prior
quarter, which was offset by continued challenging market
conditions in certain other international countries.
Worldwide Adult Nutrition sales increased 0.7 percent on a
reported basis in the third quarter, including an unfavorable 0.2
percent effect of foreign exchange, and increased 0.9 percent on an
operational basis. International sales growth of 5.2 percent on a
reported basis and 5.6 percent on an operational basis was led by
growth of Ensure®, Abbott's market-leading complete and
balanced nutrition brand, and Glucerna®, Abbott's
market-leading diabetes-specific nutrition brand. As expected, U.S.
sales growth was impacted by competitive and market dynamics.
Diagnostics
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
% Change vs.
3Q16
|
|
|
Sales
3Q17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
369
|
|
910
|
|
1,279
|
|
2.0
|
|
6.9
|
|
5.4
|
|
2.0
|
|
6.6
|
|
5.2
|
Core
Laboratory
|
|
230
|
|
803
|
|
1,033
|
|
4.6
|
|
6.0
|
|
5.7
|
|
4.6
|
|
5.9
|
|
5.6
|
Molecular
|
|
37
|
|
78
|
|
115
|
|
(13.8)
|
|
12.7
|
|
2.7
|
|
(13.8)
|
|
10.1
|
|
1.1
|
Point of
Care
|
|
102
|
|
29
|
|
131
|
|
2.9
|
|
17.4
|
|
5.8
|
|
2.9
|
|
16.7
|
|
5.6
|
|
|
|
|
|
|
|
|
|
% Change vs.
9M16
|
|
|
Sales
9M17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
1,125
|
|
2,585
|
|
3,710
|
|
6.0
|
|
3.6
|
|
4.3
|
|
6.0
|
|
4.7
|
|
5.1
|
Core
Laboratory
|
|
678
|
|
2,286
|
|
2,964
|
|
10.1
|
|
2.8
|
|
4.3
|
|
10.1
|
|
4.1
|
|
5.4
|
Molecular
|
|
123
|
|
218
|
|
341
|
|
(12.3)
|
|
9.6
|
|
0.6
|
|
(12.3)
|
|
8.9
|
|
0.1
|
Point of
Care
|
|
324
|
|
81
|
|
405
|
|
6.1
|
|
12.3
|
|
7.3
|
|
6.1
|
|
12.7
|
|
7.4
|
Worldwide Diagnostics sales increased 5.4 percent on a reported
basis in the third quarter, including a favorable 0.2 percent
effect of foreign exchange, and increased 5.2 percent on an
operational basis.
Core Laboratory Diagnostics sales increased 5.7 percent on a
reported basis in the third quarter, including a favorable 0.1
percent effect of foreign exchange, and increased 5.6 percent on an
operational basis. Growth in the quarter was led by continued share
gains globally. Internationally, Abbott continued the early
roll-out of its recently launched Alinity™ systems for
the core laboratory, including "Alinity c" for clinical chemistry,
"Alinity i" for immunoassay diagnostics and "Alinity s" for blood
and plasma screening. Abbott expects to initiate the launch of its
Alinity systems in the U.S. in 2018.
Molecular Diagnostics sales increased 2.7 percent on a reported
basis in the third quarter, including a favorable 1.6 percent
effect of foreign exchange, and increased 1.1 percent on an
operational basis. Continued growth in infectious disease testing,
Abbott's core area of focus in the molecular diagnostics market,
was offset by a planned scale down in other testing areas.
Point of Care Diagnostics sales increased 5.8 percent on a
reported basis in the third quarter, including a favorable 0.2
percent effect of foreign exchange, and increased 5.6 percent on an
operational basis as this business continues to build and expand
its presence in targeted developed and emerging markets.
Established
Pharmaceuticals
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
% Change vs.
3Q16
|
|
|
Sales
3Q17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
--
|
|
1,171
|
|
1,171
|
|
n/a
|
|
15.7
|
|
15.7
|
|
n/a
|
|
14.3
|
|
14.3
|
Key Emerging
Markets
|
|
--
|
|
885
|
|
885
|
|
n/a
|
|
18.5
|
|
18.5
|
|
n/a
|
|
18.0
|
|
18.0
|
Other
|
|
--
|
|
286
|
|
286
|
|
n/a
|
|
7.6
|
|
7.6
|
|
n/a
|
|
4.0
|
|
4.0
|
|
|
|
|
|
|
|
|
|
% Change vs.
9M16
|
|
|
Sales
9M17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
--
|
|
3,142
|
|
3,142
|
|
n/a
|
|
9.1
|
|
9.1
|
|
n/a
|
|
8.0
|
|
8.0
|
Key Emerging
Markets
|
|
--
|
|
2,413
|
|
2,413
|
|
n/a
|
|
13.0
|
|
13.0
|
|
n/a
|
|
11.6
|
|
11.6
|
Other
|
|
--
|
|
729
|
|
729
|
|
n/a
|
|
(2.3)
|
|
(2.3)
|
|
n/a
|
|
(2.5)
|
|
(2.5)
|
Established Pharmaceuticals sales increased 15.7 percent on a
reported basis in the third quarter, including a favorable 1.4
percent effect of foreign exchange, and increased 14.3 percent on
an operational basis.
Key Emerging Markets comprise several countries that represent
the most attractive long-term growth opportunities for Abbott's
branded generics product portfolio. Sales in these key geographies
increased 18.5 percent on a reported basis and 18.0 percent on an
operational basis in the third quarter, led by strong growth across
several countries, including double-digit growth in Brazil, Russia, India
and China.
As expected, sales in India
were positively impacted by purchasing patterns following the
implementation of a new Goods and Services Tax system that lowered
second quarter sales in that country. Total Established
Pharmaceuticals, Key Emerging Markets, and India sales growth increased double-digits
with and without this impact.
Medical
Devices
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
% Change vs.
3Q16
|
|
|
Sales
3Q17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
1,177
|
|
1,420
|
|
2,597
|
|
126.8
|
|
79.5
|
|
98.2
|
|
3.1
|
|
7.8
|
|
5.6
|
Cardiovascular and
Neuromodulation
|
|
1,093
|
|
1,131
|
|
2,224
|
|
258.2
|
|
180.7
|
|
214.1
|
|
4.6
|
|
2.8
|
|
3.6
|
Rhythm
Management
|
|
250
|
|
261
|
|
511
|
|
n/m
|
|
n/m
|
|
n/m
|
|
(15.6)
|
|
(8.4)
|
|
(12.1)
|
Electrophysiology
|
|
147
|
|
195
|
|
342
|
|
n/m
|
|
n/m
|
|
n/m
|
|
7.9
|
|
12.9
|
|
10.7
|
Heart
Failure
|
|
131
|
|
39
|
|
170
|
|
n/m
|
|
n/m
|
|
n/m
|
|
10.7
|
|
27.4
|
|
14.0
|
Vascular
|
|
292
|
|
432
|
|
724
|
|
11.1
|
|
21.5
|
|
17.1
|
|
(0.6)
|
|
0.7
|
|
0.2
|
Structural
Heart
|
|
109
|
|
160
|
|
269
|
|
172.3
|
|
242.5
|
|
210.1
|
|
13.7
|
|
9.1
|
|
11.0
|
Neuromodulation
|
|
164
|
|
44
|
|
208
|
|
n/m
|
|
n/m
|
|
n/m
|
|
55.9
|
|
19.6
|
|
46.8
|
Diabetes
Care
|
|
84
|
|
289
|
|
373
|
|
(13.0)
|
|
37.6
|
|
21.7
|
|
(13.0)
|
|
33.9
|
|
19.1
|
|
|
|
|
|
|
|
|
|
% Change vs.
9M16
|
|
|
Sales
9M17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
3,504
|
|
4,084
|
|
7,588
|
|
130.5
|
|
73.2
|
|
95.6
|
|
2.8
|
|
5.8
|
|
4.4
|
Cardiovascular and
Neuromodulation
|
|
3,264
|
|
3,323
|
|
6,587
|
|
247.1
|
|
169.2
|
|
202.9
|
|
2.9
|
|
1.6
|
|
2.3
|
Rhythm
Management
|
|
783
|
|
791
|
|
1,574
|
|
n/m
|
|
n/m
|
|
n/m
|
|
(15.7)
|
|
(5.7)
|
|
(10.9)
|
Electrophysiology
|
|
446
|
|
555
|
|
1,001
|
|
n/m
|
|
n/m
|
|
n/m
|
|
10.4
|
|
10.7
|
|
10.5
|
Heart
Failure
|
|
363
|
|
108
|
|
471
|
|
n/m
|
|
n/m
|
|
n/m
|
|
0.3
|
|
10.4
|
|
2.5
|
Vascular
|
|
891
|
|
1,267
|
|
2,158
|
|
9.1
|
|
16.4
|
|
13.3
|
|
(2.3)
|
|
(1.9)
|
|
(2.1)
|
Structural
Heart
|
|
320
|
|
473
|
|
793
|
|
177.8
|
|
227.5
|
|
205.5
|
|
14.8
|
|
9.8
|
|
11.7
|
Neuromodulation
|
|
461
|
|
129
|
|
590
|
|
n/m
|
|
n/m
|
|
n/m
|
|
61.0
|
|
17.4
|
|
49.0
|
Diabetes
Care
|
|
240
|
|
761
|
|
1,001
|
|
0.4
|
|
28.2
|
|
20.2
|
|
0.4
|
|
29.2
|
|
21.0
|
|
n/m = Percent change
is not meaningful.
|
Worldwide Medical Devices sales increased 98.2 percent on a
reported basis in the third quarter. On a comparable operational
basis, sales increased 5.6 percent. Refer to tables titled
"Non-GAAP Reconciliation of Comparable Historical Revenue" for a
reconciliation of comparable historical revenue.
In Cardiovascular and Neuromodulation, worldwide sales were led
by double-digit growth in Electrophysiology, Structural Heart,
Heart Failure and Neuromodulation. Growth in Structural Heart was
driven by the continued double-digit growth of
MitraClip®, Abbott's market-leading device for the
minimally-invasive treatment of mitral regurgitation. In Heart
Failure, during the third quarter, Abbott received U.S. FDA
approval for its HeartMate 3 system, which helps a weak heart pump
blood through the body for patients with advanced heart failure. In
Neuromodulation, another quarter of strong double-digit growth was
led by several recently launched products for the treatment of
chronic pain and movement disorders. As expected, Rhythm Management
sales in the U.S. were impacted by continued competitive dynamics
in the magnetic resonance (MR)-conditional category of products. In
the quarter, Abbott received FDA approval for MR-conditional
labeling for its Ellipse implantable cardioverter defibrillator
(ICD), which significantly enhances its competitive position in
this category of the market.
Worldwide Diabetes Care sales increased 21.7 percent on a
reported basis in the third quarter, including a favorable 2.6
percent effect of foreign exchange, and increased 19.1 percent on
an operational basis. Strong double-digit international sales
growth was led by FreeStyle Libre, Abbott's revolutionary
sensor-based glucose monitoring system. In September, Abbott
received U.S. FDA approval for FreeStyle Libre as a
replacement1 for finger stick blood glucose monitoring.
This revolutionary technology is the only system available that
comes factory-calibrated, thus eliminating the need for daily
finger sticks that are required to calibrate other systems
currently available. During the quarter, Abbott also obtained
national reimbursement for FreeStyle Libre in Japan and the United
Kingdom for people with diabetes, both Type 1 and Type 2, on
insulin therapy.
ABBOTT NARROWS FULL-YEAR EARNINGS-PER-SHARE GUIDANCE
Abbott is narrowing its full-year 2017 earnings per share
guidance range, which continues to reflect double-digit growth.
Abbott now projects its earning per share from continuing
operations under Generally Accepted Accounting Principles (GAAP) to
be $0.97 to $0.99 for the full year
2017.
Projected diluted earnings per share from continuing operations
on an adjusted basis is now $2.48 to
$2.50 for the full year 2017, which represents an increase
at the mid-point of the guidance range.
Abbott forecasts net specified items for the full year 2017 of
approximately $1.51 per share.
Specified items include acquisition-related expenses, intangible
amortization expense, charges associated with cost reduction
initiatives and other expenses, partially offset by a gain on the
sale of the AMO business.
Abbott is issuing fourth-quarter 2017 guidance for diluted
earnings per share from continuing operations under GAAP of
$0.28 to $0.30. Abbott forecasts
specified items for the fourth quarter 2017 of $0.44 primarily related to intangible
amortization, acquisition-related expenses, cost reduction
initiatives and other expenses. Excluding specified items,
projected adjusted diluted earnings per share from continuing
operations would be $0.72 to $0.74
for the fourth quarter.
ABBOTT DECLARES 375TH QUARTERLY DIVIDEND
On Sept. 14, 2017, the board of
directors of Abbott declared the company's quarterly dividend of
$0.265 per share. Abbott's cash
dividend is payable Nov. 15, 2017, to
shareholders of record at the close of business on Oct. 13, 2017.
Abbott has increased its dividend payout for 45 consecutive
years and is a member of the S&P 500 Dividend Aristocrats
Index, which tracks companies that have annually increased their
dividend for at least 25 consecutive years.
About Abbott:
Abbott is a global healthcare company devoted to improving life
through the development of products and technologies that span the
breadth of healthcare. With a portfolio of leading, science-based
offerings in diagnostics, medical devices, nutritionals and branded
generic pharmaceuticals, Abbott serves people in more than 150
countries and employs approximately 94,000 people.
Visit Abbott at www.abbott.com and connect with us on Twitter at
@AbbottNews.
Abbott will webcast its live third-quarter earnings conference
call through its Investor Relations website at
www.abbottinvestor.com at 8 a.m. Central
time today. An archived edition of the call will be
available later that day.
— Private Securities Litigation Reform
Act of 1995 —
A Caution Concerning Forward-Looking
Statements
Some statements in this news release may be forward-looking
statements for purposes of the Private Securities Litigation Reform
Act of 1995. Abbott cautions that these forward-looking statements
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 operations
are discussed in Item 1A, "Risk Factors'' to our Annual Report on
Securities and Exchange Commission Form 10-K for the year ended
Dec. 31, 2016, and are incorporated
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.
1 Finger sticks are required for treatment decisions
when you see Check Blood Glucose symbol, when symptoms do not match
system readings, when you suspect readings may be inaccurate, or
when you experience symptoms that may be due to high or low blood
glucose.
Abbott Laboratories
and Subsidiaries
|
Condensed
Consolidated Statement of Earnings
|
Third Quarter Ended
September 30, 2017 and 2016
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
3Q17
|
|
3Q16
|
|
%
Change
|
|
Net Sales
|
|
$6,829
|
|
$5,302
|
|
28.8
|
|
|
|
|
|
|
|
|
|
Cost of products
sold, excluding amortization expense
|
|
2,857
|
|
2,285
|
|
25.1
|
|
Amortization of
intangible assets
|
|
501
|
|
140
|
|
n/m
|
|
Research and
development
|
|
562
|
|
352
|
|
59.3
|
|
Selling, general, and
administrative
|
|
2,099
|
|
1,628
|
|
28.9
|
|
Total Operating Cost
and Expenses
|
|
6,019
|
|
4,405
|
|
36.7
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
|
810
|
|
897
|
|
(9.7)
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
182
|
|
95
|
|
90.7
|
|
Net foreign exchange
(gain) loss
|
|
(6)
|
|
9
|
|
n/m
|
|
Other expense,
net
|
|
8
|
|
972
|
|
(99.2)
|
1)
|
Earnings (Loss) from
Continuing Operations before taxes
|
|
626
|
|
(179)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
Tax expense on
Earnings (Loss) from Continuing Operations
|
|
65
|
|
178
|
|
(63.5)
|
2)
|
Earnings (Loss) from
Continuing Operations
|
|
561
|
|
(357)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
Earnings from
Discontinued Operations, net of taxes
|
|
42
|
|
28
|
|
53.1
|
|
Gain on Sale of
Discontinued Operations, net of taxes
|
|
--
|
|
--
|
|
|
|
Net Earnings from
Discontinued Operations, net of taxes
|
|
42
|
|
28
|
|
53.1
|
|
|
|
|
|
|
|
|
|
Net Earnings
(Loss)
|
|
$603
|
|
$(329)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
Earnings from
Continuing Operations, excluding
|
|
|
|
|
|
|
|
Specified Items, as
described below
|
|
$1,158
|
|
$883
|
|
31.1
|
3)
|
|
|
|
|
|
|
|
|
Diluted Earnings
(Loss) per Common Share from:
|
|
|
|
|
|
|
|
Continuing
Operations
|
|
$0.32
|
|
$(0.24)
|
|
n/m
|
|
Discontinued
Operations
|
|
0.02
|
|
0.02
|
|
--
|
|
Total
|
|
$0.34
|
|
$(0.22)
|
|
n/m
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Common Share from Continuing
|
|
|
|
|
|
|
|
Operations, excluding
Specified Items, as described below
|
|
$0.66
|
|
$0.59
|
|
11.9
|
3)
|
|
|
|
|
|
|
|
|
Average Number of
Common Shares Outstanding
|
|
|
|
|
|
|
|
Plus Dilutive Common
Stock Options
|
|
1,754
|
|
1,476
|
|
|
4)
|
|
|
NOTES:
|
|
See tables below for
an explanation of certain non-GAAP financial
information.
|
n/m = Percent change
is not meaningful.
|
See footnotes
below.
|
|
|
1)
|
2016 Other expense,
net includes a charge of $947 million related to an adjustment of
Abbott's holdings of Mylan N.V. ordinary shares to reflect the
share price as of Sept. 30, 2016.
|
|
|
2)
|
2016 Tax expense on
Earnings (Loss) from Continuing Operations includes the impact of
the non-deductible Mylan equity investment adjustment and the
recognition of deferred taxes associated with the sale of AMO,
partially offset by a net tax benefit of approximately $105 million
as a result of the resolution of various tax positions from prior
years.
|
|
|
3)
|
2017 Earnings from
Continuing Operations, excluding Specified Items, excludes net
after-tax charges of $597 million, or $0.34 per share, for
intangible amortization expense and expenses primarily associated
with acquisitions, restructuring actions and other
expenses.
|
|
|
|
2016 Earnings from
Continuing Operations, excluding Specified Items, excludes net
after-tax charges of $1.240 billion, or $0.83 per share, for
intangible amortization expense, an adjustment to the equity
investment in Mylan, expenses primarily associated with
acquisitions, including bridge facility fees, charges related to
cost reduction initiatives and other expenses and the recognition
of deferred taxes associated with the sale of AMO, partially offset
by the favorable impact of a net tax benefit as a result of the
resolution of various tax positions from prior years.
|
|
|
4)
|
2016 Average number
of common shares outstanding excludes approximately 6.7 million
shares related to dilutive common stock options, which would be
antidilutive.
|
Abbott Laboratories
and Subsidiaries
|
Condensed
Consolidated Statement of Earnings
|
Nine Months Ended
September 30, 2017 and 2016
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
9M17
|
|
9M16
|
|
%
Change
|
|
Net Sales
|
|
$19,801
|
|
$15,520
|
|
27.6
|
|
|
|
|
|
|
|
|
|
Cost of products
sold, excluding amortization expense
|
|
9,074
|
|
6,712
|
|
35.2
|
|
Amortization of
intangible assets
|
|
1,415
|
|
429
|
|
n/m
|
|
Research and
development
|
|
1,622
|
|
1,079
|
|
50.3
|
|
Selling, general, and
administrative
|
|
6,655
|
|
5,063
|
|
31.5
|
|
Total Operating Cost
and Expenses
|
|
18,766
|
|
13,283
|
|
41.3
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
|
1,035
|
|
2,237
|
|
(53.7)
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
569
|
|
203
|
|
n/m
|
|
Net foreign exchange
(gain) loss
|
|
(34)
|
|
497
|
|
n/m
|
1)
|
Other (income)
expense, net
|
|
(1,157)
|
|
999
|
|
n/m
|
2)
|
Earnings from
Continuing Operations before taxes
|
|
1,657
|
|
538
|
|
n/m
|
|
|
|
|
|
|
|
|
|
Tax expense on
Earnings from Continuing Operations
|
|
440
|
|
240
|
|
83.6
|
3)
|
Earnings from
Continuing Operations
|
|
1,217
|
|
298
|
|
n/m
|
|
|
|
|
|
|
|
|
|
Earnings from
Discontinued Operations, net of taxes
|
|
88
|
|
288
|
|
(69.4)
|
|
Gain on Sale of
Discontinued Operations, net of taxes
|
|
--
|
|
16
|
|
n/m
|
|
Net Earnings from
Discontinued Operations, net of taxes
|
|
88
|
|
304
|
|
(71.0)
|
4)
|
|
|
|
|
|
|
|
|
Net
Earnings
|
|
$1,305
|
|
$602
|
|
n/m
|
|
|
|
|
|
|
|
|
|
Earnings from
Continuing Operations, excluding
|
|
|
|
|
|
|
|
Specified Items, as
described below
|
|
$3,097
|
|
$2,310
|
|
34.1
|
5)
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Common Share from:
|
|
|
|
|
|
|
|
Continuing
Operations
|
|
$0.69
|
|
$0.20
|
|
n/m
|
|
Discontinued
Operations
|
|
0.05
|
|
0.20
|
|
(75.0)
|
4)
|
Total
|
|
$0.74
|
|
$0.40
|
|
85.0
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Common Share from Continuing
|
|
|
|
|
|
|
|
Operations, excluding
Specified Items, as described below
|
|
$1.76
|
|
$1.55
|
|
13.5
|
5)
|
|
|
|
|
|
|
|
|
Average Number of
Common Shares Outstanding
|
|
|
|
|
|
|
|
Plus Dilutive Common
Stock Options
|
|
1,746
|
|
1,483
|
|
|
|
|
|
NOTES:
|
|
See tables below for
an explanation of certain non-GAAP financial
information.
|
n/m = Percent change
is not meaningful.
|
See footnotes
below.
|
|
|
1)
|
2016 Net foreign
exchange (gain) loss includes a loss of $481 million related to the
revaluation of Abbott's net monetary assets in Venezuela using the
Dicom exchange rate, which is the Venezuelan government's official
floating exchange rate.
|
|
|
2)
|
2017 Other (income)
expense, net includes a pretax gain of $1.163 billion from the sale
of the AMO business.
|
|
|
|
2016 Other (income)
expense, net includes a charge of $947 million related to an
adjustment of Abbott's holdings of Mylan N.V. ordinary shares to
reflect the share price as of Sept. 30, 2016.
|
|
|
3)
|
2017 Tax expense on
Earnings from Continuing Operations includes the tax associated
with a $1.163 billion pretax gain on the sale of the AMO
business.
|
|
|
|
2016 Tax expense on
Earnings from Continuing Operations includes the impact of a net
tax benefit of approximately $250 million as a result of the
resolution of various tax positions from prior years, partially
offset by the unfavorable impact of non-deductible foreign exchange
losses related to Venezuela and an adjustment to the equity
investment in Mylan and the recognition of deferred taxes
associated with the sale of the AMO business.
|
|
|
4)
|
2017 Earnings and
Diluted Earnings per Common Share from Discontinued Operations, net
of taxes primarily relates to a net tax benefit as a result of the
resolution of various tax positions from prior years.
|
|
|
|
2016 Earnings and
Diluted Earnings per Common Share from Discontinued Operations, net
of taxes primarily reflect the impact of a net tax benefit of $289
million as a result of the resolution of various tax positions from
prior years.
|
|
|
5)
|
2017 Earnings and
Diluted Earnings per Common Share from Continuing Operations,
excluding Specified Items, excludes net after-tax charges of $1.880
billion, or $1.07 per share, for intangible amortization expense
and other expenses primarily associated with acquisitions and
restructuring actions, partially offset by a gain on the sale of
the AMO business.
|
|
|
|
2016 Earnings and
Diluted Earnings per Common Share from Continuing Operations,
excluding Specified Items, excludes net after-tax charges of $2.012
billion, or $1.35 per share, for intangible amortization expense,
the foreign exchange loss related to Venezuela, an adjustment to
the equity investment in Mylan, expenses associated with
acquisitions, including bridge facility fees, other charges related
to cost reduction initiatives and other expenses and the
recognition of deferred taxes associated with the sale of AMO,
partially offset by the favorable impact of a net tax benefit as a
result of the resolution of various tax positions from prior
years.
|
NON-GAAP RECONCILIATION OF FINANCIAL INFORMATION FROM
CONTINUING OPERATIONS
Abbott Laboratories
and Subsidiaries
|
Non-GAAP
Reconciliation of Financial Information From Continuing
Operations
|
Third Quarter Ended
September 30, 2017 and 2016
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
3Q17
|
|
|
As
Reported
(GAAP)
|
|
Specified
Items
|
|
As
Adjusted
|
|
% to
Sales
|
Intangible
Amortization
|
|
$501
|
|
$(501)
|
|
--
|
|
|
Gross
Margin
|
|
3,471
|
|
580
|
|
$4,051
|
|
59.3%
|
R&D
|
|
562
|
|
(91)
|
|
471
|
|
6.9%
|
SG&A
|
|
2,099
|
|
(90)
|
|
2,009
|
|
29.4%
|
Other expense,
net
|
|
8
|
|
1
|
|
9
|
|
|
Earnings (Loss) from
Continuing Operations before taxes
|
|
626
|
|
760
|
|
1,386
|
|
|
Tax expense on
Earnings (Loss) from Continuing Operations
|
65
|
|
163
|
|
228
|
|
|
Earnings (Loss) from
Continuing Operations
|
|
561
|
|
597
|
|
1,158
|
|
|
Diluted Earnings
(Loss) per Share from Continuing Operations
|
$0.32
|
|
$0.34
|
|
$0.66
|
|
|
Specified items reflect intangible amortization expense of
$501 million and other expenses of
$259 million, primarily associated
with acquisitions, restructuring actions and other expenses. See
tables titled "Details of Specified Items" for additional
details regarding specified items.
|
|
3Q16
|
|
|
As
Reported
(GAAP)
|
|
Specified
Items
|
|
As
Adjusted
|
|
% to
Sales
|
Intangible
Amortization
|
|
$140
|
|
$(140)
|
|
--
|
|
|
Gross
Margin
|
|
2,877
|
|
158
|
|
$3,035
|
|
57.3%
|
R&D
|
|
352
|
|
(22)
|
|
330
|
|
6.2%
|
SG&A
|
|
1,628
|
|
(53)
|
|
1,575
|
|
29.7%
|
Interest expense,
net
|
|
95
|
|
(70)
|
|
25
|
|
|
Net foreign exchange
(gain) loss
|
|
9
|
|
(4)
|
|
5
|
|
|
Other expense,
net
|
|
972
|
|
(957)
|
|
15
|
|
|
Earnings (Loss) from
Continuing Operations before taxes
|
|
(179)
|
|
1,264
|
|
1,085
|
|
|
Tax expense on
Earnings (Loss) from Continuing Operations
|
|
178
|
|
24
|
|
202
|
|
|
Earnings (Loss) from
Continuing Operations
|
|
(357)
|
|
1,240
|
|
883
|
|
|
Diluted Earnings
(Loss) per Share from Continuing Operations
|
$(0.24)
|
|
$0.83
|
|
$0.59
|
|
|
Specified items reflect intangible amortization expense of
$140 million, an adjustment to the
equity investment in Mylan of $947
million, and other expenses of $177
million, primarily associated with acquisitions, including
bridge facility fees, charges related to cost reduction initiatives
and other expenses and the recognition of approximately
$130 million of deferred taxes
associated with the sale of AMO, partially offset by a net tax
benefit of approximately $105 million
as a result of the resolution of various tax positions from prior
years. See tables titled "Details of Specified Items" for
additional details regarding specified items.
Abbott Laboratories
and Subsidiaries
|
Non-GAAP
Reconciliation of Financial Information From Continuing
Operations
|
Nine Months Ended
September 30, 2017 and 2016
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
9M17
|
|
|
As
Reported
(GAAP)
|
|
Specified
Items
|
|
As
Adjusted
|
|
% to
Sales
|
Intangible
Amortization
|
|
$1,415
|
|
$(1,415)
|
|
--
|
|
|
Gross
Margin
|
|
9,312
|
|
2,459
|
|
$11,771
|
|
59.5%
|
R&D
|
|
1,622
|
|
(146)
|
|
1,476
|
|
7.5%
|
SG&A
|
|
6,655
|
|
(595)
|
|
6,060
|
|
30.6%
|
Interest expense,
net
|
|
569
|
|
(19)
|
|
550
|
|
|
Other (income)
expense, net
|
|
(1,157)
|
|
1,167
|
|
10
|
|
|
Earnings from
Continuing Operations before taxes
|
|
1,657
|
|
2,052
|
|
3,709
|
|
|
Tax expense on
Earnings from Continuing Operations
|
|
440
|
|
172
|
|
612
|
|
|
Earnings from
Continuing Operations
|
|
1,217
|
|
1,880
|
|
3,097
|
|
|
Diluted Earnings per
Share from Continuing Operations
|
|
$0.69
|
|
$1.07
|
|
$1.76
|
|
|
Specified items reflect intangible amortization expense of
$1.415 billion and other expenses of
$1.800 billion, primarily associated
with acquisitions, including approximately $840 million of inventory step-up amortization
related to St. Jude Medical, charges related to restructuring
actions and other expenses, partially offset by a gain of
$1.163 billion from the sale of the
AMO business. See tables titled "Details of Specified Items" for
additional details regarding specified items.
|
|
9M16
|
|
|
As
Reported
(GAAP)
|
|
Specified
Items
|
|
As
Adjusted
|
|
% to
Sales
|
Intangible
Amortization
|
|
$429
|
|
$(429)
|
|
--
|
|
|
Gross
Margin
|
|
8,379
|
|
500
|
|
$8,879
|
|
57.2%
|
R&D
|
|
1,079
|
|
(68)
|
|
1,011
|
|
6.5%
|
SG&A
|
|
5,063
|
|
(150)
|
|
4,913
|
|
31.7%
|
Interest expense,
net
|
|
203
|
|
(139)
|
|
64
|
|
|
Net foreign exchange
(gain) loss
|
|
497
|
|
(481)
|
|
16
|
|
|
Other (income)
expense, net
|
|
999
|
|
(962)
|
|
37
|
|
|
Earnings from
Continuing Operations before taxes
|
|
538
|
|
2,300
|
|
2,838
|
|
|
Tax expense on
Earnings from Continuing Operations
|
|
240
|
|
288
|
|
528
|
|
|
Earnings from
Continuing Operations
|
|
298
|
|
2,012
|
|
2,310
|
|
|
Diluted Earnings per
Share from Continuing Operations
|
|
$0.20
|
|
$1.35
|
|
$1.55
|
|
|
Specified items reflect intangible amortization expense of
$429 million, an adjustment to the
equity investment in Mylan of $947
million, the impact of the foreign exchange loss in
Venezuela of $481 million, and other expenses of $443 million, primarily associated with
acquisitions, including bridge facility fees, and charges related
to cost reduction initiatives and other expenses and the
recognition of approximately $130
million of deferred taxes associated with the sale of AMO,
partially offset by a net tax benefit of approximately $250 million as a result of the resolution of
various tax positions from prior years. See tables titled "Details
of Specified Items" for additional details regarding specified
items.
RECONCILIATION OF TAX RATE FOR CONTINUING OPERATIONS
A
reconciliation of the third-quarter tax rates for continuing
operations for 2017 and 2016 is shown below:
|
|
|
3Q17
|
|
($ in
millions)
|
|
Pre-Tax
Income
|
|
Taxes on
Earnings
|
|
Tax
Rate
|
|
As reported
(GAAP)
|
|
$626
|
|
$65
|
|
10.4%
|
1)
|
Specified
items
|
|
760
|
|
163
|
|
|
|
Excluding
specified items
|
|
$1,386
|
|
$228
|
|
16.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3Q16
|
|
($ in
millions)
|
|
Pre-Tax
Income
|
|
Taxes on
Earnings
|
|
Tax
Rate
|
|
As reported
(GAAP)
|
|
$(179)
|
|
$178
|
|
(99.5%)
|
|
Specified
items
|
|
1,264
|
|
24
|
|
|
|
Excluding
specified items
|
|
$1,085
|
|
$202
|
|
18.6%
|
|
|
|
1)
|
Reported tax rate on
a GAAP basis for the third quarter of 2017 includes the impact of
approximately $30 million in excess tax benefits associated with
share-based compensation.
|
A reconciliation of the year-to-date tax rates for continuing
operations for 2017 and 2016 is shown below:
|
|
|
9M17
|
|
($ in
millions)
|
|
Pre-Tax
Income
|
|
Taxes on
Earnings
|
|
Tax
Rate
|
|
As reported
(GAAP)
|
|
$1,657
|
|
$440
|
|
26.6%
|
2)
|
Specified
items
|
|
2,052
|
|
172
|
|
|
|
Excluding
specified items
|
|
$3,709
|
|
$612
|
|
16.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9M16
|
|
($ in
millions)
|
|
Pre-Tax
Income
|
|
Taxes on
Earnings
|
|
Tax
Rate
|
|
As reported
(GAAP)
|
|
$538
|
|
$240
|
|
44.5%
|
|
Specified
items
|
|
2,300
|
|
288
|
|
|
|
Excluding
specified items
|
|
$2,838
|
|
$528
|
|
18.6%
|
|
|
|
2)
|
Reported tax rate on
a GAAP basis for 2017 includes the impact of taxes associated with
a $1.163 billion pre-tax gain on the sale of the AMO business and
the impact of approximately $90 million in excess tax benefits
associated with share-based compensation.
|
Abbott Laboratories
and Subsidiaries
|
Non-GAAP
Reconciliation of Comparable Historical Revenue
|
Third Quarter Ended
September 30, 2017 and 2016
|
($ in millions)
(unaudited)
|
|
|
|
3Q17
|
|
3Q16
|
|
% Change vs.
3Q16
|
|
|
Abbott
Reported
|
|
Divested
Businesses
|
|
Comparable
Revenue
|
|
Abbott
Reported
|
|
Acquired
St. Jude
Businessa)
|
|
AMO
|
|
Comparable
Revenue
|
|
|
|
Comparable
|
|
|
|
|
|
|
|
|
|
Reported
|
|
Reported
|
|
Operationalb)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
6,829
|
|
--
|
|
6,829
|
|
5,302
|
|
1,425
|
|
(296)
|
|
6,431
|
|
28.8
|
|
6.2
|
|
5.6
|
U.S.
|
|
2,313
|
|
--
|
|
2,313
|
|
1,645
|
|
742
|
|
(118)
|
|
2,269
|
|
40.6
|
|
2.0
|
|
2.0
|
Int'l
|
|
4,516
|
|
--
|
|
4,516
|
|
3,657
|
|
683
|
|
(178)
|
|
4,162
|
|
23.5
|
|
8.5
|
|
7.6
|
Total Medical
Devices
|
|
2,597
|
|
--
|
|
2,597
|
|
1,310
|
|
1,425
|
|
(296)
|
|
2,439
|
|
98.2
|
|
6.5
|
|
5.6
|
U.S.
|
|
1,177
|
|
--
|
|
1,177
|
|
519
|
|
742
|
|
(118)
|
|
1,143
|
|
126.8
|
|
3.1
|
|
3.1
|
Int'l
|
|
1,420
|
|
--
|
|
1,420
|
|
791
|
|
683
|
|
(178)
|
|
1,296
|
|
79.5
|
|
9.5
|
|
7.8
|
Cardiovascular and
Neuromodulation
|
2,224
|
|
--
|
|
2,224
|
|
708
|
|
1,425
|
|
--
|
|
2,133
|
|
214.1
|
|
4.3
|
|
3.6
|
U.S.
|
|
1,093
|
|
--
|
|
1,093
|
|
305
|
|
742
|
|
--
|
|
1,047
|
|
258.2
|
|
4.6
|
|
4.6
|
Int'l
|
|
1,131
|
|
--
|
|
1,131
|
|
403
|
|
683
|
|
--
|
|
1,086
|
|
180.7
|
|
4.0
|
|
2.8
|
Rhythm
Management
|
|
511
|
|
--
|
|
511
|
|
--
|
|
577
|
|
--
|
|
577
|
|
n/m
|
|
(11.4)
|
|
(12.1)
|
U.S.
|
|
250
|
|
--
|
|
250
|
|
--
|
|
297
|
|
--
|
|
297
|
|
n/m
|
|
(15.6)
|
|
(15.6)
|
Int'l
|
|
261
|
|
--
|
|
261
|
|
--
|
|
280
|
|
--
|
|
280
|
|
n/m
|
|
(7.1)
|
|
(8.4)
|
Electrophysiology
|
|
342
|
|
--
|
|
342
|
|
3
|
|
306
|
|
--
|
|
309
|
|
n/m
|
|
10.6
|
|
10.7
|
U.S.
|
|
147
|
|
--
|
|
147
|
|
3
|
|
133
|
|
--
|
|
136
|
|
n/m
|
|
7.9
|
|
7.9
|
Int'l
|
|
195
|
|
--
|
|
195
|
|
--
|
|
173
|
|
--
|
|
173
|
|
n/m
|
|
12.7
|
|
12.9
|
Heart
Failure
|
|
170
|
|
--
|
|
170
|
|
--
|
|
148
|
|
--
|
|
148
|
|
n/m
|
|
14.8
|
|
14.0
|
U.S.
|
|
131
|
|
--
|
|
131
|
|
--
|
|
118
|
|
--
|
|
118
|
|
n/m
|
|
10.7
|
|
10.7
|
Int'l
|
|
39
|
|
--
|
|
39
|
|
--
|
|
30
|
|
--
|
|
30
|
|
n/m
|
|
31.2
|
|
27.4
|
Vascular
|
|
724
|
|
--
|
|
724
|
|
618
|
|
101
|
|
--
|
|
719
|
|
17.1
|
|
0.8
|
|
0.2
|
U.S.
|
|
292
|
|
--
|
|
292
|
|
262
|
|
32
|
|
--
|
|
294
|
|
11.1
|
|
(0.6)
|
|
(0.6)
|
Int'l
|
|
432
|
|
--
|
|
432
|
|
356
|
|
69
|
|
--
|
|
425
|
|
21.5
|
|
1.8
|
|
0.7
|
Structural
Heart
|
|
269
|
|
--
|
|
269
|
|
87
|
|
152
|
|
--
|
|
239
|
|
210.1
|
|
12.4
|
|
11.0
|
U.S.
|
|
109
|
|
--
|
|
109
|
|
40
|
|
56
|
|
--
|
|
96
|
|
172.3
|
|
13.7
|
|
13.7
|
Int'l
|
|
160
|
|
--
|
|
160
|
|
47
|
|
96
|
|
--
|
|
143
|
|
242.5
|
|
11.6
|
|
9.1
|
Neuromodulation
|
|
208
|
|
--
|
|
208
|
|
--
|
|
141
|
|
--
|
|
141
|
|
n/m
|
|
47.7
|
|
46.8
|
U.S.
|
|
164
|
|
--
|
|
164
|
|
--
|
|
106
|
|
--
|
|
106
|
|
n/m
|
|
55.9
|
|
55.9
|
Int'l
|
|
44
|
|
--
|
|
44
|
|
--
|
|
35
|
|
--
|
|
35
|
|
n/m
|
|
23.0
|
|
19.6
|
|
a) Reflects reported
actuals for St. Jude Medical, excluding results from the vascular
closure business, as well as a reduction to St. Jude Medical sales
related to the reclassification of fees paid to group purchasing
organizations from the Selling, general, and administrative
line.
|
b) 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.
|
Abbott Laboratories
and Subsidiaries
|
Non-GAAP
Reconciliation of Comparable Historical Revenue
|
Nine Months Ended
September 30, 2017 and 2016
|
($ in millions)
(unaudited)
|
|
|
|
9M17
|
|
9M16
|
|
% Change vs.
9M16
|
|
|
Abbott
Reported
|
|
Divested
Businessesa)
|
|
Comparable
Revenue
|
|
Abbott
Reported
|
|
Acquired
St. Jude
Businessb)
|
|
AMO
|
|
Comparable
Revenue
|
|
|
|
Comparable
|
|
|
|
|
|
|
|
|
|
Reported
|
|
Reported
|
|
Operationalc)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
19,801
|
|
(187)
|
|
19,614
|
|
15,520
|
|
4,282
|
|
(872)
|
|
18,930
|
|
27.6
|
|
3.6
|
|
3.9
|
U.S.
|
|
6,997
|
|
(84)
|
|
6,913
|
|
4,831
|
|
2,227
|
|
(342)
|
|
6,716
|
|
44.8
|
|
3.0
|
|
3.0
|
Int'l
|
|
12,804
|
|
(103)
|
|
12,701
|
|
10,689
|
|
2,055
|
|
(530)
|
|
12,214
|
|
19.8
|
|
4.0
|
|
4.5
|
Total Medical
Devices
|
|
7,588
|
|
(12)
|
|
7,576
|
|
3,879
|
|
4,282
|
|
(872)
|
|
7,289
|
|
95.6
|
|
3.9
|
|
4.4
|
U.S.
|
|
3,504
|
|
(6)
|
|
3,498
|
|
1,520
|
|
2,227
|
|
(342)
|
|
3,405
|
|
130.5
|
|
2.8
|
|
2.8
|
Int'l
|
|
4,084
|
|
(6)
|
|
4,078
|
|
2,359
|
|
2,055
|
|
(530)
|
|
3,884
|
|
73.2
|
|
5.0
|
|
5.8
|
Cardiovascular and
Neuromodulation
|
6,587
|
|
(12)
|
|
6,575
|
|
2,175
|
|
4,282
|
|
--
|
|
6,457
|
|
202.9
|
|
1.8
|
|
2.3
|
U.S.
|
|
3,264
|
|
(6)
|
|
3,258
|
|
940
|
|
2,227
|
|
--
|
|
3,167
|
|
247.1
|
|
2.9
|
|
2.9
|
Int'l
|
|
3,323
|
|
(6)
|
|
3,317
|
|
1,235
|
|
2,055
|
|
--
|
|
3,290
|
|
169.2
|
|
0.8
|
|
1.6
|
Rhythm
Management
|
|
1,574
|
|
--
|
|
1,574
|
|
--
|
|
1,773
|
|
--
|
|
1,773
|
|
n/m
|
|
(11.3)
|
|
(10.9)
|
U.S.
|
|
783
|
|
--
|
|
783
|
|
--
|
|
929
|
|
--
|
|
929
|
|
n/m
|
|
(15.7)
|
|
(15.7)
|
Int'l
|
|
791
|
|
--
|
|
791
|
|
--
|
|
844
|
|
--
|
|
844
|
|
n/m
|
|
(6.5)
|
|
(5.7)
|
Electrophysiology
|
|
1,001
|
|
--
|
|
1,001
|
|
10
|
|
900
|
|
--
|
|
910
|
|
n/m
|
|
10.0
|
|
10.5
|
U.S.
|
|
446
|
|
--
|
|
446
|
|
10
|
|
395
|
|
--
|
|
405
|
|
n/m
|
|
10.4
|
|
10.4
|
Int'l
|
|
555
|
|
--
|
|
555
|
|
--
|
|
505
|
|
--
|
|
505
|
|
n/m
|
|
9.7
|
|
10.7
|
Heart
Failure
|
|
471
|
|
--
|
|
471
|
|
--
|
|
461
|
|
--
|
|
461
|
|
n/m
|
|
2.3
|
|
2.5
|
U.S.
|
|
363
|
|
--
|
|
363
|
|
--
|
|
361
|
|
--
|
|
361
|
|
n/m
|
|
0.3
|
|
0.3
|
Int'l
|
|
108
|
|
--
|
|
108
|
|
--
|
|
100
|
|
--
|
|
100
|
|
n/m
|
|
9.8
|
|
10.4
|
Vascular
|
|
2,158
|
|
(12)
|
|
2,146
|
|
1,905
|
|
299
|
|
--
|
|
2,204
|
|
13.3
|
|
(2.5)
|
|
(2.1)
|
U.S.
|
|
891
|
|
(6)
|
|
885
|
|
815
|
|
91
|
|
--
|
|
906
|
|
9.1
|
|
(2.3)
|
|
(2.3)
|
Int'l
|
|
1,267
|
|
(6)
|
|
1,261
|
|
1,090
|
|
208
|
|
--
|
|
1,298
|
|
16.4
|
|
(2.7)
|
|
(1.9)
|
Structural
Heart
|
|
793
|
|
--
|
|
793
|
|
260
|
|
452
|
|
--
|
|
712
|
|
205.5
|
|
11.3
|
|
11.7
|
U.S.
|
|
320
|
|
--
|
|
320
|
|
115
|
|
164
|
|
--
|
|
279
|
|
177.8
|
|
14.8
|
|
14.8
|
Int'l
|
|
473
|
|
--
|
|
473
|
|
145
|
|
288
|
|
--
|
|
433
|
|
227.5
|
|
9.0
|
|
9.8
|
Neuromodulation
|
|
590
|
|
--
|
|
590
|
|
--
|
|
397
|
|
--
|
|
397
|
|
n/m
|
|
48.8
|
|
49.0
|
U.S.
|
|
461
|
|
--
|
|
461
|
|
--
|
|
287
|
|
--
|
|
287
|
|
n/m
|
|
61.0
|
|
61.0
|
Int'l
|
|
129
|
|
--
|
|
129
|
|
--
|
|
110
|
|
--
|
|
110
|
|
n/m
|
|
16.8
|
|
17.4
|
|
a) Reflects sales
related to the AMO and St. Jude Medical vascular closure businesses
prior to divesting in the first quarter 2017.
|
b) Reflects reported
actuals for St. Jude Medical, excluding results from the vascular
closure business, as well as a reduction to St. Jude Medical sales
related to the reclassification of fees paid to group purchasing
organizations from the Selling, general, and administrative
line.
|
c) 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.
|
Abbott Laboratories
and Subsidiaries
|
Details of Specified
Items
|
Third Quarter Ended
September 30, 2017
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
Acquisition or
Divestiture-
related (a)
|
|
Restructuring
and Cost
Reduction
Initiatives (b)
|
|
Intangible
Amortization
|
|
Other (c)
|
|
Total
Specifieds
|
Gross
Margin
|
|
$
26
|
|
$
53
|
|
$
501
|
|
$
-
|
|
$
580
|
R&D
|
|
(11)
|
|
(74)
|
|
--
|
|
(6)
|
|
(91)
|
SG&A
|
|
(84)
|
|
(7)
|
|
--
|
|
1
|
|
(90)
|
Other (income)
expense, net
|
|
16
|
|
--
|
|
--
|
|
(15)
|
|
1
|
Earnings from
Continuing Operations before taxes
|
|
$
105
|
|
$
134
|
|
$
501
|
|
$
20
|
|
760
|
Tax expense on
Earnings from Continuing Operations (d)
|
|
|
|
|
|
|
|
|
|
163
|
Earnings from
Continuing Operations
|
|
|
|
|
|
|
|
|
|
$
597
|
Diluted Earnings per
Share from Continuing Operations
|
|
|
|
|
|
|
|
|
|
$
0.34
|
|
|
The table above
provides additional details regarding the specified items described
on tables titled "Non-GAAP Reconciliation of Financial Information
From Continuing Operations".
|
|
|
a)
|
Acquisition-related
expenses include costs for legal, accounting, tax, and other
services related to business acquisitions, integration costs which
represent incremental costs directly related to integrating the
acquired businesses and include expenditures for consulting,
retention, severance, and the integration of systems, processes and
business activities, fair value adjustments to contingent
consideration related to a business acquisition, and inventory
step-up amortization. The specified items in interest expense
include amortization expense associated with acquisition-related
bridge facility fees. Divestiture-related expenses include
incremental costs to separate the divested businesses as well as
bankers' fees and costs for legal, accounting, tax, and other
services related to the divestitures.
|
b)
|
Restructuring and
cost reduction initiative expenses include severance, outplacement,
inventory write-downs, asset impairments, accelerated depreciation,
and other direct costs associated with specific restructuring plans
and cost reduction initiatives. Restructuring and cost reduction
plans consist of distinct initiatives to streamline operations
including the consolidation and rationalization of business
activities and facilities, workforce reductions, the transfer of
product lines between manufacturing facilities, and the transfer of
other business activities between sites. Any gains related to the
divestiture of a facility as part of a restructuring program are
also included in this category.
|
c)
|
Other expense
primarily relates to the impairment of a financial instrument and
the acquisition of an R&D asset.
|
d)
|
Reflects the net tax
benefit associated with the specified items and excess tax benefits
associated with share-based compensation.
|
Abbott Laboratories
and Subsidiaries
|
Details of Specified
Items
|
Third Quarter Ended
September 30, 2016
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
Acquisition or
Divestiture-
related (a)
|
|
Restructuring
and Cost
Reduction
Initiatives (b)
|
|
Mylan Equity
Investment
Adjustment
(c)
|
|
Venezuela
Devaluation
|
|
Intangible
Amortization
|
|
Other
(d)
|
|
Total
Specifieds
|
Gross
Margin
|
|
$
3
|
|
$
15
|
|
$
--
|
|
$
--
|
|
$
140
|
|
$
--
|
|
$
158
|
R&D
|
|
(5)
|
|
2
|
|
--
|
|
--
|
|
--
|
|
(19)
|
|
(22)
|
SG&A
|
|
(38)
|
|
(14)
|
|
--
|
|
(1)
|
|
--
|
|
--
|
|
(53)
|
Interest expense,
net
|
|
(70)
|
|
--
|
|
--
|
|
--
|
|
--
|
|
--
|
|
(70)
|
Net foreign exchange
(gain) loss
|
|
--
|
|
--
|
|
--
|
|
(4)
|
|
--
|
|
--
|
|
(4)
|
Other (income)
expense, net
|
|
(11)
|
|
--
|
|
(947)
|
|
1
|
|
--
|
|
--
|
|
(957)
|
Earnings from
Continuing Operations before taxes
|
|
$
127
|
|
$
27
|
|
$
947
|
|
$
4
|
|
$
140
|
|
$ 19
|
|
1,264
|
Tax expense on
Earnings from Continuing Operations (e)
|
|
|
|
|
|
|
|
|
|
|
|
|
24
|
Earnings from
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
$
1,240
|
Diluted Earnings per
Share from Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
$
0.83
|
|
|
The table above
provides additional details regarding the specified items described
tables titled "Non-GAAP Reconciliation of Financial Information
From Continuing Operations".
|
|
|
a)
|
Acquisition-related
expenses include costs for legal, accounting, tax, and other
services related to business acquisitions and integration costs
which represent incremental costs directly related to integrating
the acquired businesses and include expenditures for consulting,
severance, and the integration of processes and business
activities. The specified items in interest expense include
amortization expense associated with acquisition-related bridge
facility fees. Divestiture-related expenses include incremental
costs to separate the divested businesses.
|
b)
|
Restructuring and
cost reduction initiative expenses include severance, outplacement,
inventory write-downs, asset impairments, accelerated depreciation,
and other direct costs associated with specific restructuring plans
and cost reduction initiatives. Restructuring and cost reduction
plans consist of distinct initiatives to streamline operations
including the consolidation and rationalization of business
activities and facilities, workforce reductions, the transfer of
product lines between manufacturing facilities, and the transfer of
other business activities between sites.
|
c)
|
Mylan equity
investment adjustment expense reflects the adjustment of Abbott's
holding of Mylan N.V. ordinary shares due to a decline in the fair
value of the securities which was considered by Abbott to be other
than temporary.
|
d)
|
Other expense relates
to the impairment of an R&D asset.
|
e)
|
Reflects the net tax
benefit associated with the specified items and a net tax benefit
of approximately $105 million primarily as a result of the
resolution of various tax positions from prior years, partially
offset by the recognition of approximately $130 million of deferred
taxes associated with the sale of AMO.
|
Abbott Laboratories
and Subsidiaries
|
Details of Specified
Items
|
Nine Months Ended
September 30, 2017
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
Acquisition or
Divestiture-
related (a)
|
|
Restructuring
and Cost
Reduction
Initiatives (b)
|
|
Intangible
Amortization
|
|
Other (c)
|
|
Total
Specifieds
|
Gross
Margin
|
|
$
870
|
|
$
174
|
|
$
1,415
|
|
$
-
|
|
$
2,459
|
R&D
|
|
(37)
|
|
(103)
|
|
--
|
|
(6)
|
|
(146)
|
SG&A
|
|
(570)
|
|
(26)
|
|
--
|
|
1
|
|
(595)
|
Interest expense,
net
|
|
(19)
|
|
--
|
|
--
|
|
--
|
|
(19)
|
Other (income)
expense, net
|
|
1,216
|
|
(34)
|
|
--
|
|
(15)
|
|
1,167
|
Earnings from
Continuing Operations before taxes
|
|
$
280
|
|
$
337
|
|
$
1,415
|
|
$
20
|
|
2,052
|
Tax expense on
Earnings from Continuing Operations (d)
|
|
|
|
|
|
|
|
|
172
|
Earnings from
Continuing Operations
|
|
|
|
|
|
|
|
|
$
1,880
|
Diluted Earnings per
Share from Continuing Operations
|
|
|
|
|
|
|
|
|
$
1.07
|
|
|
The table above
provides additional details regarding the specified items described
on tables titled "Non-GAAP Reconciliation of Financial Information
From Continuing Operations".
|
|
|
a)
|
Acquisition-related
expenses include bankers' fees and costs for legal, accounting,
tax, and other services related to business acquisitions,
integration costs which represent incremental costs directly
related to integrating the acquired businesses and include
expenditures for consulting, retention, severance, and the
integration of systems, processes and business activities, fair
value adjustments to contingent consideration related to a business
acquisition, and inventory step-up amortization. The specified
items in interest expense include amortization expense associated
with acquisition-related bridge facility fees. Other (income)
expense, net includes the gain on the sale of the AMO business.
Divestiture-related expenses include incremental costs to separate
the divested businesses as well as bankers' fees and costs for
legal, accounting, tax, and other services related to the
divestitures.
|
b)
|
Restructuring and
cost reduction initiative expenses include severance, outplacement,
inventory write-downs, asset impairments, accelerated depreciation,
and other direct costs associated with specific restructuring plans
and cost reduction initiatives. Restructuring and cost reduction
plans consist of distinct initiatives to streamline operations
including the consolidation and rationalization of business
activities and facilities, workforce reductions, the transfer of
product lines between manufacturing facilities, and the transfer of
other business activities between sites. Any gains related to the
divestiture of a facility as part of a restructuring program are
also included in this category.
|
c)
|
Other expense
primarily relates to the impairment of a financial instrument and
the acquisition of an R&D asset.
|
d)
|
Reflects the net tax
benefit associated with the specified items and excess tax benefits
associated with share-based compensation.
|
Abbott Laboratories
and Subsidiaries
|
Details of Specified
Items
|
Nine Months Ended
September 30, 2016
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
Acquisition or
Divestiture-
related (a)
|
|
Restructuring
and Cost
Reduction
Initiatives (b)
|
|
Mylan Equity
Investment
Adjustment
(c)
|
|
Venezuela
Devaluation
(d)
|
|
Intangible
Amortization
|
|
Other
(e)
|
|
Total
Specifieds
|
Gross
Margin
|
|
$
13
|
|
$
43
|
|
$
--
|
|
$
15
|
|
$
429
|
|
$
--
|
|
$
500
|
R&D
|
|
(7)
|
|
1
|
|
--
|
|
--
|
|
--
|
|
(62)
|
|
(68)
|
SG&A
|
|
(79)
|
|
(61)
|
|
--
|
|
(10)
|
|
--
|
|
--
|
|
(150)
|
Interest expense,
net
|
|
(139)
|
|
--
|
|
--
|
|
--
|
|
--
|
|
--
|
|
(139)
|
Net foreign exchange
(gain) loss
|
|
--
|
|
--
|
|
--
|
|
(481)
|
|
--
|
|
--
|
|
(481)
|
Other (income)
expense, net
|
|
(14)
|
|
--
|
|
(947)
|
|
(1)
|
|
--
|
|
--
|
|
(962)
|
Earnings from
Continuing Operations before taxes
|
|
$
252
|
|
$
103
|
|
$
947
|
|
$
507
|
|
$
429
|
|
$ 62
|
|
2,300
|
Tax expense on
Earnings from Continuing Operations (f)
|
|
|
|
|
|
|
|
|
|
|
|
|
288
|
Earnings from
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
$
2,012
|
Diluted Earnings per
Share from Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
$
1.35
|
|
The table above
provides additional details regarding the specified items described
on tables titled "Non-GAAP Reconciliation of Financial Information
From Continuing Operations".
|
|
|
a)
|
Acquisition-related
expenses include costs for legal, accounting, tax, and other
services related to business acquisitions and integration costs
which represent incremental costs directly related to integrating
the acquired businesses and include expenditures for consulting,
severance, and the integration of processes and business
activities. The specified items in interest expense include
amortization expense associated with acquisition-related bridge
facility fees. Divestiture-related expenses include incremental
costs to separate the divested businesses.
|
b)
|
Restructuring and
cost reduction initiative expenses include severance, outplacement,
inventory write-downs, asset impairments, accelerated depreciation,
and other direct costs associated with specific restructuring plans
and cost reduction initiatives. Restructuring and cost reduction
plans consist of distinct initiatives to streamline operations
including the consolidation and rationalization of business
activities and facilities, workforce reductions, the transfer of
product lines between manufacturing facilities, and the transfer of
other business activities between sites. Any gains related to the
divestiture of a facility as part of a restructuring program are
also included in this category.
|
c)
|
Mylan equity
investment adjustment expense reflects the adjustment of Abbott's
holding of Mylan N.V. ordinary shares due to a decline in the fair
value of the securities which was considered by Abbott to be other
than temporary.
|
d)
|
Venezuela devaluation
expenses include the foreign exchange loss of $480 million related
to the revaluation of Abbott's net monetary assets in Venezuela
using the Dicom exchange rate as well as inventory and other asset
impairments in Venezuela related to the move to the Dicom exchange
rate. The Dicom rate is the Venezuelan government's official
floating exchange rate.
|
e)
|
Other expense relates
to the impairment of an R&D asset.
|
f)
|
Reflects the net tax
benefit associated with the specified items and a net tax benefit
of approximately $250 million primarily as a result of the
resolution of various tax positions from prior years, partially
offset by the recognition of approximately $130 million of deferred
taxes associated with the sale of AMO.
|
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SOURCE Abbott