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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 20232024
OR
oTRANSITION 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 CorporationI.R.S. Employer Identification No.
36-0698440
100 Abbott Park Road
Abbott Park, Illinois 60064-6400
Telephone: (224) 667-6100
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Shares, Without Par ValueABT
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.
Large Accelerated Filer x
Accelerated Filer o
Non-Accelerated Filer o
Smaller reporting company o
Emerging growth company o
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 March 31, 2023,2024, Abbott Laboratories had 1,738,946,7991,739,633,759 common shares without par value outstanding.


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Abbott Laboratories
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Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Earnings
(Unaudited)
(dollars in millions except per share data; shares in thousands)
Three Months Ended
March 31
20232022
Three Months EndedThree Months Ended
March 31March 31
202420242023
Net salesNet sales$9,747 $11,895 
Cost of products sold, excluding amortization of intangible assets
Cost of products sold, excluding amortization of intangible assets
Cost of products sold, excluding amortization of intangible assetsCost of products sold, excluding amortization of intangible assets4,331 4,987 
Amortization of intangible assetsAmortization of intangible assets491 512 
Research and developmentResearch and development654 697 
Selling, general and administrativeSelling, general and administrative2,762 2,787 
Total operating cost and expensesTotal operating cost and expenses8,238 8,983 
Operating earningsOperating earnings1,509 2,912 
Operating earnings
Operating earnings
Interest expense
Interest expense
Interest expenseInterest expense153 131 
Interest (income)Interest (income)(101)(14)
Net foreign exchange (gain) lossNet foreign exchange (gain) loss(3)
Other (income) expense, netOther (income) expense, net(111)(78)
Earnings before taxesEarnings before taxes1,562 2,876 
Taxes on earningsTaxes on earnings244 429 
Net EarningsNet Earnings$1,318 $2,447 
Basic Earnings Per Common ShareBasic Earnings Per Common Share$0.75 $1.38 
Basic Earnings Per Common Share
Basic Earnings Per Common Share
Diluted Earnings Per Common ShareDiluted Earnings Per Common Share$0.75 $1.37 
Diluted Earnings Per Common Share
Diluted Earnings Per Common Share
Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share
Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share
Average Number of Common Shares Outstanding Used for Basic Earnings Per Common ShareAverage Number of Common Shares Outstanding Used for Basic Earnings Per Common Share1,741,738 1,761,911 
Dilutive Common Stock OptionsDilutive Common Stock Options9,977 12,631 
Average Number of Common Shares Outstanding Plus Dilutive Common Stock OptionsAverage Number of Common Shares Outstanding Plus Dilutive Common Stock Options1,751,715 1,774,542 
Outstanding Common Stock Options Having No Dilutive EffectOutstanding Common Stock Options Having No Dilutive Effect7,332 2,655 
Outstanding Common Stock Options Having No Dilutive Effect
Outstanding Common Stock Options Having No Dilutive Effect
The accompanying notes to the condensed consolidated financial statements are an integral part of this statement.
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Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
(dollars in millions)
Three Months Ended
March 31
20232022
Three Months EndedThree Months Ended
March 31March 31
202420242023
Net EarningsNet Earnings$1,318 $2,447 
Foreign currency translation gain (loss) adjustmentsForeign currency translation gain (loss) adjustments139 (106)
Net actuarial gains (losses) and amortization of net actuarial losses and prior service costs and credits, net of taxes of $— in 2023 and $13 in 202262 
Net gains (losses) for derivative instruments designated as cash flow hedges and other, net of taxes of $(58) in 2023 and $(15) in 2022(129)(56)
Net actuarial gains (losses) and amortization of net actuarial losses and prior service costs and credits, net of taxes of $1 in 2024 and $— in 2023
Net gains (losses) for derivative instruments designated as cash flow hedges and other, net of taxes of $30 in 2024 and $(58) in 2023
Other comprehensive income (loss)Other comprehensive income (loss)12 (100)
Comprehensive IncomeComprehensive Income$1,330 $2,347 
March 31,
2023
December 31,
2022
March 31,
2024
March 31,
2024
December 31,
2023
Supplemental Accumulated Other Comprehensive Income (Loss) Information, net of tax:Supplemental Accumulated Other Comprehensive Income (Loss) Information, net of tax:
Cumulative foreign currency translation (loss) adjustments
Cumulative foreign currency translation (loss) adjustments
Cumulative foreign currency translation (loss) adjustmentsCumulative foreign currency translation (loss) adjustments$(6,594)$(6,733)
Net actuarial (losses) and prior service (costs) and creditsNet actuarial (losses) and prior service (costs) and credits(1,491)(1,493)
Cumulative gains (losses) on derivative instruments designated as cash flow hedgesCumulative gains (losses) on derivative instruments designated as cash flow hedges46 175 
Accumulated Other Comprehensive Income (Loss)Accumulated Other Comprehensive Income (Loss)$(8,039)$(8,051)
The accompanying notes to the condensed consolidated financial statements are an integral part of this statement.
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Abbott Laboratories and Subsidiaries
Condensed Consolidated Balance Sheet
(Unaudited)
(dollars in millions)
March 31,
2023
December 31,
2022
March 31,
2024
March 31,
2024
December 31,
2023
AssetsAssets
Current Assets:Current Assets:
Current Assets:
Current Assets:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalentsCash and cash equivalents$9,161 $9,882 
Short-term investmentsShort-term investments371 288 
Trade receivables, less allowances of $503 in 2023 and $500 in 20226,020 6,218 
Trade receivables, less allowances of $439 in 2024 and $444 in 2023
Inventories:Inventories:
Finished products
Finished products
Finished productsFinished products3,944 3,805 
Work in processWork in process805 680 
MaterialsMaterials1,924 1,688 
Total inventoriesTotal inventories6,673 6,173 
Prepaid expenses and other receivablesPrepaid expenses and other receivables2,152 2,663 
Total Current AssetsTotal Current Assets24,377 25,224 
InvestmentsInvestments776 766 
Property and equipment, at costProperty and equipment, at cost20,605 20,212 
Less: accumulated depreciation and amortizationLess: accumulated depreciation and amortization11,323 11,050 
Net property and equipmentNet property and equipment9,282 9,162 
Intangible assets, net of amortizationIntangible assets, net of amortization10,006 10,454 
GoodwillGoodwill22,927 22,799 
Deferred income taxes and other assetsDeferred income taxes and other assets6,426 6,033 
$73,794 $74,438 
$
Liabilities and Shareholders’ InvestmentLiabilities and Shareholders’ Investment
Current Liabilities:Current Liabilities:
Current Liabilities:
Current Liabilities:
Trade accounts payable
Trade accounts payable
Trade accounts payableTrade accounts payable$4,167 $4,607 
Salaries, wages and commissionsSalaries, wages and commissions1,098 1,556 
Other accrued liabilitiesOther accrued liabilities5,758 5,845 
Dividends payableDividends payable888 887 
Income taxes payableIncome taxes payable334 343 
Current portion of long-term debtCurrent portion of long-term debt2,285 2,251 
Total Current LiabilitiesTotal Current Liabilities14,530 15,489 
Long-term debtLong-term debt14,615 14,522 
Post-employment obligations, deferred income taxes and other long-term liabilitiesPost-employment obligations, deferred income taxes and other long-term liabilities7,417 7,522 
Commitments and ContingenciesCommitments and ContingenciesCommitments and Contingencies
Shareholders’ Investment:Shareholders’ Investment:
Preferred shares, one dollar par value Authorized — 1,000,000 shares, none issuedPreferred shares, one 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: 2023: 1,986,904,170; 2022: 1,986,519,278
24,488 24,709 
Common shares held in treasury, at cost — Shares: 2023: 247,957,371; 2022: 248,724,257(15,307)(15,229)
Preferred shares, one dollar par value Authorized — 1,000,000 shares, none issued
Preferred shares, one 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: 2024: 1,989,789,999; 2023: 1,987,883,852
Common shares held in treasury, at cost — Shares: 2024: 250,155,515; 2023: 253,807,494
Earnings employed in the businessEarnings employed in the business35,868 35,257 
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)(8,039)(8,051)
Total Abbott Shareholders’ InvestmentTotal Abbott Shareholders’ Investment37,010 36,686 
Noncontrolling Interests in SubsidiariesNoncontrolling Interests in Subsidiaries222 219 
Total Shareholders’ InvestmentTotal Shareholders’ Investment37,232 36,905 
$73,794 $74,438 
$
The accompanying notes to the condensed consolidated financial statements are an integral part of this statement.
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Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Shareholders’ Investment
(Unaudited)
(in millions except shares and per share data)
Three Months Ended March 31
20232022
Three Months Ended March 31Three Months Ended March 31
202420242023
Common Shares:Common Shares:
Balance at January 1Balance at January 1
Shares: 2023: 1,986,519,278; 2022: 1,985,273,421$24,709 $24,470 
Balance at January 1
Balance at January 1
Shares: 2024: 1,987,883,852; 2023: 1,986,519,278
Shares: 2024: 1,987,883,852; 2023: 1,986,519,278
Shares: 2024: 1,987,883,852; 2023: 1,986,519,278
Issued under incentive stock programsIssued under incentive stock programs  Issued under incentive stock programs  
Shares: 2023: 384,892; 2022: 251,63216 14 
Shares: 2024: 1,906,147; 2023: 384,892
Share-based compensationShare-based compensation296 324 
Issuance of restricted stock awardsIssuance of restricted stock awards(533)(504)
Balance at March 31Balance at March 31  Balance at March 31  
Shares: 2023: 1,986,904,170; 2022: 1,985,525,053$24,488 $24,304 
Shares: 2024: 1,989,789,999; 2023: 1,986,904,170
Common Shares Held in Treasury:Common Shares Held in Treasury:
Common Shares Held in Treasury:
Common Shares Held in Treasury:
Balance at January 1Balance at January 1
Shares: 2023: 248,724,257; 2022: 221,191,228$(15,229)$(11,822)
Balance at January 1
Balance at January 1
Shares: 2024: 253,807,494; 2023: 248,724,257
Shares: 2024: 253,807,494; 2023: 248,724,257
Shares: 2024: 253,807,494; 2023: 248,724,257
Issued under incentive stock programsIssued under incentive stock programs  Issued under incentive stock programs  
Shares: 2023: 3,933,165; 2022: 4,144,476242 223 
Shares: 2024: 3,838,255; 2023: 3,933,165
PurchasedPurchased  Purchased  
Shares: 2023: 3,166,279; 2022: 17,536,012(320)(2,127)
Shares: 2024: 186,276; 2023: 3,166,279
Balance at March 31Balance at March 31  Balance at March 31  
Shares: 2023: 247,957,371; 2022: 234,582,764$(15,307)$(13,726)
Shares: 2024: 250,155,515; 2023: 247,957,371
Earnings Employed in the Business:Earnings Employed in the Business:
Earnings Employed in the Business:
Earnings Employed in the Business:
Balance at January 1
Balance at January 1
Balance at January 1Balance at January 1$35,257 $31,528 
Net earningsNet earnings1,318 2,447 
Cash dividends declared on common shares (per share — 2023: $0.51; 2022: $0.47)(890)(826)
Cash dividends declared on common shares (per share — 2024: $0.55; 2023: $0.51)
Effect of common and treasury share transactionsEffect of common and treasury share transactions183 146 
Balance at March 31Balance at March 31$35,868 $33,295 
Accumulated Other Comprehensive Income (Loss):Accumulated Other Comprehensive Income (Loss):
Accumulated Other Comprehensive Income (Loss):
Accumulated Other Comprehensive Income (Loss):
Balance at January 1
Balance at January 1
Balance at January 1Balance at January 1$(8,051)$(8,374)
Other comprehensive income (loss)Other comprehensive income (loss)12 (100)
Balance at March 31Balance at March 31$(8,039)$(8,474)
Noncontrolling Interests in Subsidiaries:Noncontrolling Interests in Subsidiaries:
Noncontrolling Interests in Subsidiaries:
Noncontrolling Interests in Subsidiaries:
Balance at January 1
Balance at January 1
Balance at January 1Balance at January 1$219 $222 
Noncontrolling Interests’ share of income, business combinations, net of distributions and share repurchasesNoncontrolling Interests’ share of income, business combinations, net of distributions and share repurchases
Balance at March 31Balance at March 31$222 $230 
The accompanying notes to condensed consolidated financial statements are an integral part of this statement.
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Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(dollars in millions)
Three Months Ended March 31
20232022
Three Months Ended March 31Three Months Ended March 31
202420242023
Cash Flow From (Used in) Operating Activities:Cash Flow From (Used in) Operating Activities:
Net earningsNet earnings$1,318 $2,447 
Net earnings
Net earnings
Adjustments to reconcile net earnings to net cash from operating activities —Adjustments to reconcile net earnings to net cash from operating activities —
Depreciation
Depreciation
DepreciationDepreciation315 311 
Amortization of intangible assetsAmortization of intangible assets491 512 
Share-based compensationShare-based compensation281 305 
Trade receivablesTrade receivables233 (751)
InventoriesInventories(419)(554)
Other, netOther, net(1,076)(205)
Net Cash From Operating ActivitiesNet Cash From Operating Activities1,143 2,065 
Cash Flow From (Used in) Investing Activities:Cash Flow From (Used in) Investing Activities:
Cash Flow From (Used in) Investing Activities:
Cash Flow From (Used in) Investing Activities:
Acquisitions of property and equipment
Acquisitions of property and equipment
Acquisitions of property and equipmentAcquisitions of property and equipment(380)(321)
Sales (purchases) of other investment securities, net
Sales (purchases) of other investment securities, net
Sales (purchases) of other investment securities, netSales (purchases) of other investment securities, net(86)(41)
OtherOther
Net Cash From (Used in) Investing ActivitiesNet Cash From (Used in) Investing Activities(462)(360)
Cash Flow From (Used in) Financing Activities:Cash Flow From (Used in) Financing Activities:
Cash Flow From (Used in) Financing Activities:
Cash Flow From (Used in) Financing Activities:
Net borrowings (repayments) of short-term debt and other
Net borrowings (repayments) of short-term debt and other
Net borrowings (repayments) of short-term debt and otherNet borrowings (repayments) of short-term debt and other(42)
Repayments of long-term debt— (751)
Purchases of common shares
Purchases of common shares
Purchases of common sharesPurchases of common shares(540)(2,307)
Proceeds from stock options exercisedProceeds from stock options exercised62 59 
Dividends paidDividends paid(890)(832)
Net Cash From (Used in) Financing ActivitiesNet Cash From (Used in) Financing Activities(1,410)(3,823)
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents(6)
Effect of exchange rate changes on cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash EquivalentsNet Increase (Decrease) in Cash and Cash Equivalents(721)(2,124)
Cash and Cash Equivalents, Beginning of YearCash and Cash Equivalents, Beginning of Year9,882 9,799 
Cash and Cash Equivalents, End of PeriodCash and Cash Equivalents, End of Period$9,161 $7,675 
The accompanying notes to the condensed consolidated financial statements are an integral part of this statement.
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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 20232024
(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, 2022.2023. The condensed consolidated financial statements include the accounts of the parent company and subsidiaries, after elimination of intercompany transactions.

Note 2 — New Accounting Standards

Recent Adopted Accounting Standards Not Yet Adopted

In September 2022,November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2022-04, Disclosure(ASU) 2023-07, Segment Reporting (Topic 280):Improvements to Reportable Segment Disclosures, which expands the breadth and frequency of Supplier Finance Program Obligations,required segment disclosures. The guidance is required to be applied retrospectively to all periods presented in the financial statements. The standard becomes effective for Abbott for full year 2024 reporting and for interim periods beginning in the first quarter of 2025. Abbott is currently evaluating the impact of this new standard on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an entity to reportdisclose annually additional information about its supplier finance program. Abbott adoptedrelated to the company's income tax rate reconciliation and income taxes paid during the period. The guidance should be applied prospectively with the option to apply the standard on January 1, 2023.retrospectively. The standard becomes effective for Abbott for full year 2025 reporting. Abbott is currently evaluating the impact of this new standard did not have an impact on Abbott's condensedits consolidated financial statements.
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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 20232024
(Unaudited)
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 four reportable segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices.

The following tables provide detail by sales category:

Three Months Ended March 31, 2023Three Months Ended March 31, 2022
(in millions)U.S.Int’lTotalU.S.Int’lTotal
Established Pharmaceutical Products —
Key Emerging Markets$— $912 $912 $— $906 $906 
Other— 277 277  241 241 
Total— 1,189 1,189 — 1,147 1,147 
Nutritionals —    
Pediatric Nutritionals459 465 924 338 509 847 
Adult Nutritionals353 690 1,043 339 708 1,047 
Total812 1,155 1,967 677 1,217 1,894 
Diagnostics —    
Core Laboratory289 893 1,182 268 916 1,184 
Molecular47 100 147 172 248 420 
Point of Care93 41 134 91 37 128 
Rapid Diagnostics906 319 1,225 2,181 1,344 3,525 
Total1,335 1,353 2,688 2,712 2,545 5,257 
Medical Devices —    
Rhythm Management260 267 527 248 276 524 
Electrophysiology238 267 505 216 269 485 
Heart Failure218 63 281 196 54 250 
Vascular218 399 617 209 410 619 
Structural Heart210 251 461 190 221 411 
Neuromodulation155 41 196 143 36 179 
Diabetes Care479 834 1,313 343 783 1,126 
Total1,778 2,122 3,900 1,545 2,049 3,594 
Other— — 
Total$3,928 $5,819 $9,747 $4,937 $6,958 $11,895 

Note: The Acelis Connected Health business was internally transferred from Rapid Diagnostics to Heart Failure on January 1, 2023. As a result, $29 million of sales for the first quarter of 2022 were moved from Rapid Diagnostics to Heart Failure.
Three Months Ended March 31, 2024Three Months Ended March 31, 2023
(in millions)U.S.Int’lTotalU.S.Int’lTotal
Established Pharmaceutical Products —
Key Emerging Markets$— $928 $928 $— $912 $912 
Other— 298 298  277 277 
Total— 1,226 1,226 — 1,189 1,189 
Nutritionals —    
Pediatric Nutritionals514 495 1,009 459 465 924 
Adult Nutritionals364 695 1,059 353 690 1,043 
Total878 1,190 2,068 812 1,155 1,967 
Diagnostics —    
Core Laboratory310 895 1,205 289 893 1,182 
Molecular42 87 129 47 100 147 
Point of Care98 41 139 93 41 134 
Rapid Diagnostics481 260 741 906 319 1,225 
Total931 1,283 2,214 1,335 1,353 2,688 
Medical Devices —    
Rhythm Management271 291 562 260 267 527 
Electrophysiology269 318 587 238 267 505 
Heart Failure237 68 305 218 63 281 
Vascular254 435 689 218 399 617 
Structural Heart233 282 515 210 251 461 
Neuromodulation181 45 226 155 41 196 
Diabetes Care589 980 1,569 479 834 1,313 
Total2,034 2,419 4,453 1,778 2,122 3,900 
Other— — 
Total$3,846 $6,118 $9,964 $3,928 $5,819 $9,747 

Remaining Performance ObligationsProducts sold by the Diagnostics segment include various types of diagnostic tests to detect the COVID-19 coronavirus. In the first three months of 2024 and 2023, Abbott’s COVID-19 testing-related sales totaled $204 million and $730 million, respectively.

As of March 31, 2023, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) was approximately $4.1 billion in the Diagnostics segment and approximately $450 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 17 percent over the subsequent 12 months and the remainder thereafter.
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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 20232024
(Unaudited)
Note 3 — Revenue (Continued)
Remaining Performance Obligations

As of March 31, 2024, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) was approximately $4.5 billion in the Diagnostics segment and approximately $495 million in the Medical Devices segment. Abbott expects to recognize revenue on approximately 59 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 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.

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, 20222023$500545 
Unearned revenue from cash received during the period122120 
Revenue recognized related to contract liability balance(93)(116)
Balance at March 31, 20232024$529549 

Note 4 — 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. Net earnings allocated to common shares for the three months ended March 31, 2024 and 2023 and 2022 were $1.313$1.220 billion and $2.438$1.313 billion, respectively.

Other, net in Net cash from operating activities in the Condensed Consolidated Statement of Cash Flows for the first three months of 2024 includes $280 million of pension contributions and the payment of cash taxes of approximately $225 million. The first three months of 2023 includes $282 million of pension contributions and the payment of cash taxes of approximately $122 million. The first three months of 2022 includes $334 million of pension contributions and the payment of cash taxes of approximately $195 million.

The following summarizes the activity for the first three months of 2023 related to the allowance for doubtful accounts as of March 31, 2023:

(in millions)
Allowance for Doubtful Accounts:
Balance at December 31, 2022$262 
Provisions/charges to income
Amounts charged off and other adjustments
Balance at March 31, 2023$272 

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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 20232024
(Unaudited)
Note 4 — Supplemental Financial Information (Continued)
The following summarizes the activity for the first three months of 2024 related to the allowance for doubtful accounts as of March 31, 2024:

(in millions)
Allowance for Doubtful Accounts:
Balance at December 31, 2023$241 
Provisions/charges to income14 
Amounts charged off and other adjustments(8)
Balance at March 31, 2024$247 

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.

The components of long-term investments as of March 31, 20232024 and December 31, 20222023 are as follows:

(in millions)(in millions)March 31,
2023
December 31,
2022
(in millions)March 31,
2024
December 31,
2023
Long-term Investments:Long-term Investments:
Equity securitiesEquity securities$565 $558 
Equity securities
Equity securities
OtherOther211 208 
TotalTotal$776 $766 

The increase in Abbott’s long-term investments as of March 31, 20232024 versus the balance as of December 31, 20222023 primarily relates to an increase in the value of securities held in a rabbi trustadditional investments and additionalearnings from equity method investments, partially offset by equity method investment losses.the impairment of certain securities.

Abbott’s equity securities as of March 31, 2023,2024, include $305$317 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.trust. 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 March 31, 20232024 with a carrying value of $162$154 million that are accounted for under the equity method of accounting and other equity investments with a carrying value of approximately $88$66 million that do not have a readily determinable fair value.

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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 2024
(Unaudited)
Note 5 — Changes In Accumulated Other Comprehensive Income (Loss)

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

Three Months Ended March 31
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
Three Months Ended March 31Three Months Ended March 31
Cumulative Foreign
Currency Translation
(Loss) Adjustments
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)(in millions)202320222023202220232022(in millions)202420232024202320242023
Balance at January 1Balance at January 1$(6,733)$(5,839)$(1,493)$(2,670)$175 $135 
Other comprehensive income (loss) before reclassificationsOther comprehensive income (loss) before reclassifications139 (106)17 (42)(34)
Amounts reclassified from accumulated other comprehensive incomeAmounts reclassified from accumulated other comprehensive income— — — 45 (87)(22)
Net current period comprehensive income (loss)Net current period comprehensive income (loss)139 (106)62 (129)(56)
Balance at March 31Balance at March 31$(6,594)$(5,945)$(1,491)$(2,608)$46 $79 

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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 2023
(Unaudited)
Note 5 — Changes In Accumulated Other Comprehensive Income (Loss) (Continued)
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 1213 for additional details.

Note 6 — Business Acquisitions

On September 22, 2023, Abbott completed the acquisition of Bigfoot Biomedical, Inc. (Bigfoot), which will further Abbott's efforts to develop connected solutions for making diabetes management more personal and precise. The purchase price, the preliminary allocation of acquired assets and liabilities, and the revenue and net income contributed by Bigfoot since the date of acquisition are not material to Abbott's condensed consolidated financial statements.

On April 27, 2023, Abbott completed the acquisition of Cardiovascular Systems, Inc. (CSI) for $20 per common share, which equated to a purchase price of $851 million. The transaction was funded with cash on hand and accounted for as a business combination. CSI's atherectomy system, which is used in treating peripheral and coronary artery disease, adds complementary technologies to Abbott's portfolio of vascular device offerings.

The final allocation of the purchase price of the CSI acquisition resulted in the recording of two non-deductible developed technology intangible assets totaling $305 million; non-deductible in-process research and development asset of $15 million, which will be accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation; non-deductible goodwill of $369 million; net deferred tax assets of $46 million and other net assets of $116 million. The goodwill is identifiable to the Medical Devices reportable segment and is attributable to expected synergies from combining operations, as well as intangible assets that do not qualify for separate recognition. Revenues and earnings of CSI included in Abbott's condensed consolidated financial statements since the acquisition date are not material to Abbott's consolidated revenue and earnings.

Note 7 — Goodwill and Intangible Assets

The total amount of goodwill reported was $22.9$23.4 billion at March 31, 20232024 and $22.8$23.7 billion at December 31, 2022.2023. Foreign currency translation adjustments increaseddecreased goodwill by approximately $128$294 million in the first three months of 2023.2024. The amount of goodwill related to reportable segments at March 31, 20232024 was $2.7 billion for the Established Pharmaceutical Products segment, $286$285 million for the Nutritional Products segment, $3.5 billion for the Diagnostic Products segment, and $16.4$16.9 billion for the Medical Devices segment. There was no reduction of goodwill relating to impairments in the first three months of 2023.2024.
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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 2024
(Unaudited)
Note 7 — Goodwill and Intangible Assets (Continued)
The gross amount of amortizable intangible assets, primarily product rights and technology, was $27.4$27.5 billion and $27.2$27.7 billion as of March 31, 20232024 and December 31, 2022,2023, respectively. Accumulated amortization was $18.2$20.0 billion and $17.6$19.7 billion as of March 31, 20232024 and December 31, 2022,2023, respectively. Foreign currency translation adjustments increased intangible assets by $43 million inIn the first three months of 2023.2024, intangible assets decreased $38 million due to foreign currency translation and $8 million due to an impairment charge. Abbott’s estimated annual amortization expense for intangible assets is approximately $2.0 billion in 2023, $1.9 billion in 2024, $1.7 billion in 2025, $1.5$1.6 billion in 2026, and $1.2$1.3 billion in 2027.2027 and $0.7 billion in 2028.

Indefinite-lived intangible assets, which relate to in-process R&D (IPR&D) acquired in a business combination, were approximately $807$787 million as of March 31, 20232024 and as of December 31, 2022.2023.

Note 78 — Restructuring Plans

In 2022 and 2023,2024, Abbott management approved various plans to streamline operations in order to reduce costs and improve efficiencies in its nutritional business, including the discontinuation of its ZonePerfect® product line, and in its medical devices nutritional, diagnostic, and established pharmaceutical businesses.segment. In the first three months of 2023,2024, Abbott recorded employee related severance and other charges of approximately $17 million, of which approximately $6$11 million was recorded in Cost of products sold, approximately $1 million was recorded in Research and development and approximately $11$5 millionwas recorded in Selling, general and administrative expenses. Payments related to these actions totaled $3 million in the first three months of 2024 and the remaining liabilities totaled $14 million at March 31, 2024. In addition, Abbott recognized asset impairment charges of approximately $30 million related to these restructuring plans.

In 2023 and 2022, Abbott management approved plans to restructure or streamline various operations in order to reduce costs in its medical devices, diagnostic, nutritional and established pharmaceutical businesses. The following summarizes the 2024 activity related to these restructuring actions and the status of the related accruals as of March 31, 2023:2024:

(in millions)
Accrued balance at December 31, 20222023$228137 
Restructuring charges in 202317 
Payments and other adjustments(61)(41)
Accrued balance at March 31, 20232024$18496 

Note 9 — Incentive Stock Programs

In the first three months of 2024, Abbott granted 1,666,566 stock options, 404,597 restricted stock awards and 5,189,560 restricted stock units under its incentive stock program. At March 31, 2024, approximately 60 million shares were reserved for future grants. Information regarding the number of options outstanding and exercisable at March 31, 2024 is as follows:

OutstandingExercisable
Number of shares28,281,501 24,296,425 
Weighted average remaining life (years)
5.14.4
Weighted average exercise price$78.71 $73.05 
Aggregate intrinsic value (in millions)
$1,031 $1,020 

The total unrecognized share-based compensation cost at March 31, 2024 amounted to approximately $787 million, which is expected to be recognized over the next three years.

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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 20232024
(Unaudited)
Note 8 — Incentive Stock Programs

In the first three months of 2023, Abbott granted 1,887,093 stock options, 445,278 restricted stock awards and 4,761,433 restricted stock units under its incentive stock program. At March 31, 2023, approximately 74 million shares were reserved for future grants. Information regarding the number of options outstanding and exercisable at March 31, 2023 is as follows:

OutstandingExercisable
Number of shares29,760,644 25,107,006 
Weighted average remaining life (years)
5.44.7
Weighted average exercise price$73.33 $65.76 
Aggregate intrinsic value (in millions)
$947 $946 

The total unrecognized share-based compensation cost at March 31, 2023 amounted to approximately $760 million, which is expected to be recognized over the next three years.

Note 910 — Debt and Lines of Credit

Abbott has readily available financial resources, including unused lines of credit that support commercial paper borrowing arrangements and provide Abbott with the ability to borrow up to $5 billion on an unsecured basis. On March 15, 2022,January 29, 2024, Abbott repaidterminated its 2020 Five Year Credit Agreement (2020 Agreement) and entered into a new Five Year Credit Agreement (Revolving Credit Agreement). There were no outstanding borrowings under the $750 million outstanding principal amount2020 Agreement at the time of its 2.55% Notes upon maturity.termination. Any borrowings under the Revolving Credit Agreement will mature and be payable on January 29, 2029 and will bear interest, at Abbott’s option, based on either a base rate or Secured Overnight Financing Rate (SOFR), plus an applicable margin based on Abbott’s credit ratings.

Note 1011 — 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 $7.1$7.3 billion at March 31, 20232024 and $7.7 billion at December 31, 2022,2023, 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 March 31, 20232024 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 March 31, 20232024 and December 31, 2022,2023, Abbott held the gross notional amounts of $11.4$14.5 billion and $12.0$13.8 billion, respectively, of such foreign currency forward exchange contracts.

Abbott has designated a yen-denominated, 5-year term loan, scheduled to mature in November 2024, of approximately $451$395 million and $446$419 million as of March 31, 20232024 and December 31, 2022,2023, 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 with a notional amount totaling approximately $2.9$2.2 billion at March 31, 20232024 and December 31, 20222023 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.

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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 20232024
(Unaudited)
Note 1011 — Financial Instruments, Derivatives and Fair Value Measures (Continued)
The following table summarizes the amounts and location of certain derivative financial instruments as of March 31, 20232024 and December 31, 2022:2023:

Fair Value - AssetsFair Value - Liabilities
Fair Value - AssetsFair Value - AssetsFair Value - Liabilities
(in millions)(in millions)March 31,
2023
December 31,
2022
Balance Sheet CaptionMarch 31,
2023
December 31,
2022
Balance Sheet Caption(in millions)March 31,
2024
December 31,
2023
Balance Sheet CaptionMarch 31,
2024
December 31,
2023
Balance Sheet Caption
Interest rate swaps designated as fair value hedges:Interest rate swaps designated as fair value hedges:
Non-current
Non-current
Non-currentNon-current$— $— Deferred income taxes and other assets$126 $136 Post-employment obligations, deferred income taxes and other long-term liabilities$— $$— Deferred income taxes and other assetsDeferred income taxes and other assets$88 $$95 Post-employment obligations, deferred income taxes and other long-term liabilitiesPost-employment obligations, deferred income taxes and other long-term liabilities
CurrentCurrent— — Prepaid expenses and other receivables21 20 Other accrued liabilitiesCurrent— — — Prepaid expenses and other receivablesPrepaid expenses and other receivables31 — — Other accrued liabilitiesOther accrued liabilities
Foreign currency forward exchange contracts:Foreign currency forward exchange contracts:
Hedging instrumentsHedging instruments76 304 Prepaid expenses and other receivables139 96 Other accrued liabilities
Hedging instruments
Hedging instruments118 88 Prepaid expenses and other receivables61 134 Other accrued liabilities
Others not designated as hedgesOthers not designated as hedges78 108 Prepaid expenses and other receivables96 130 Other accrued liabilitiesOthers not designated as hedges52 81 81 Prepaid expenses and other receivablesPrepaid expenses and other receivables39 97 97 Other accrued liabilitiesOther accrued liabilities
Debt designated as a hedge of net investment in a foreign subsidiaryDebt designated as a hedge of net investment in a foreign subsidiary— — n/a451 446 Long-term debtDebt designated as a hedge of net investment in a foreign subsidiary— — — n/an/a395 419 419 Current portion of long-term debtCurrent portion of long-term debt
$154 $412 $833 $828 
$

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 months ended March 31, 20232024 and 2022.2023.

Gain (loss) Recognized in Other Comprehensive Income (loss)Income (expense) and
 Gain (loss) Reclassified into Income
Three Months
Ended March 31
Three Months
Ended March 31
Gain (loss) Recognized in Other Comprehensive Income (loss)
Three Months
Ended March 31
Three Months
Ended March 31
Three Months
Ended March 31
(in millions)
(in millions)
(in millions)(in millions)2023202220232022Income Statement Caption2024202320242023Income Statement Caption
Foreign currency forward exchange contracts designated as cash flow hedgesForeign currency forward exchange contracts designated as cash flow hedges$(63)$(49)$126 $27 Cost of products soldForeign currency forward exchange contracts designated as cash flow hedges$127 $$(63)$$18 $$126 Cost of products soldCost of products sold
Debt designated as a hedge of net investment in a foreign subsidiaryDebt designated as a hedge of net investment in a foreign subsidiary(5)30 — — n/aDebt designated as a hedge of net investment in a foreign subsidiary24 (5)(5)— — — — n/an/a
Interest rate swaps designated as fair value hedgesInterest rate swaps designated as fair value hedgesn/an/a(121)Interest expenseInterest rate swaps designated as fair value hedgesn/a(24)Interest expenseInterest expense

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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 20232024
(Unaudited)
Note 1011 — Financial Instruments, Derivatives and Fair Value Measures (Continued)
LossesGains of $103$92 million and $51losses of $103 million were recognized in the three months ended March 31, 20232024 and 2022,2023, 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 March 31, 20232024 and December 31, 20222023 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.

March 31, 2023December 31, 2022
March 31, 2024March 31, 2024December 31, 2023
(in millions)(in millions)Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
(in millions)Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Long-term Investment Securities:Long-term Investment Securities:
Equity securities
Equity securities
Equity securitiesEquity securities$565 $565 $558 $558 
OtherOther211 211 208 208 
Total Long-term DebtTotal Long-term Debt(16,900)(16,927)(16,773)(16,313)
Foreign Currency Forward Exchange Contracts:Foreign Currency Forward Exchange Contracts:   
Receivable positionReceivable position154 154 412 412 
Receivable position
Receivable position
(Payable) position(Payable) position(235)(235)(226)(226)
Interest Rate Hedge Contracts:Interest Rate Hedge Contracts:    Interest Rate Hedge Contracts:  
(Payable) position(Payable) position(147)(147)(156)(156)
(Payable) position
(Payable) position

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

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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 20232024
(Unaudited)
Note 1011 — 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
Basis of Fair Value MeasurementBasis of Fair Value Measurement
(in millions)(in millions)Outstanding
Balances
Quoted
Prices in
Active
Markets
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
(in millions)Outstanding
Balances
Quoted
Prices in
Active
Markets
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
March 31, 2023:
March 31, 2024:
Equity securities
Equity securities
Equity securitiesEquity securities$315 $315 $— $— 
Foreign currency forward exchange contractsForeign currency forward exchange contracts154 — 154 — 
Total AssetsTotal Assets$469 $315 $154 $— 
Fair value of hedged long-term debt
Fair value of hedged long-term debt
Fair value of hedged long-term debtFair value of hedged long-term debt$2,720 $— $2,720 $— 
Interest rate swap derivative financial instrumentsInterest rate swap derivative financial instruments147 — 147 — 
Foreign currency forward exchange contractsForeign currency forward exchange contracts235 — 235 — 
Contingent consideration related to business combinationsContingent consideration related to business combinations133 — — 133 
Total LiabilitiesTotal Liabilities$3,235 $— $3,102 $133 
December 31, 2022:
December 31, 2023:
December 31, 2023:
December 31, 2023:
Equity securities
Equity securities
Equity securitiesEquity securities$307 $307 $— $— 
Foreign currency forward exchange contractsForeign currency forward exchange contracts412 — 412 — 
Foreign currency forward exchange contracts
Foreign currency forward exchange contracts
Total AssetsTotal Assets$719 $307 $412 $— 
Fair value of hedged long-term debt
Fair value of hedged long-term debt
Fair value of hedged long-term debtFair value of hedged long-term debt$2,691 $— $2,691 $— 
Interest rate swap derivative financial instrumentsInterest rate swap derivative financial instruments156 — 156 — 
Foreign currency forward exchange contractsForeign currency forward exchange contracts226 — 226 — 
Contingent consideration related to business combinationsContingent consideration related to business combinations130 — — 130 
Total LiabilitiesTotal Liabilities$3,203 $— $3,073 $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 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. The decrease in the amount of contingent consideration from December 31, 2023 reflects a payment of $40 million and a $13 million change in the fair value of the remaining contingent consideration.

The maximum amount for certain contingent consideration is not determinable as it is based on a percent of certain sales. Excluding such contingent consideration, the maximum amount that may be due under the other contingent consideration arrangements was estimated at March 31, 2024 to be approximately $135 million, which is dependent upon attaining certain sales thresholds or upon the occurrence of certain events, such as regulatory approvals.

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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 2024
(Unaudited)

Note 1112 — 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.

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Table of Contents
Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 2023
(Unaudited)
Note 11 — 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$45 million to $35$60 million. The recorded accrual balance at March 31, 20232024 for these proceedings and exposures was approximately $30$55 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 1213 — 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 for the three months ended March 31 for Abbott’s major defined benefit plans and post-employment medical and dental benefit plans is as follows:

Defined Benefit PlansMedical and Dental Plans
Three Months
Ended March 31
Three Months
Ended March 31
Defined Benefit PlansDefined Benefit PlansMedical and Dental Plans
Three Months
Ended March 31
Three Months
Ended March 31
Three Months
Ended March 31
(in millions)(in millions)2023202220232022(in millions)2024202320242023
Service cost - benefits earned during the periodService cost - benefits earned during the period$60 $96 $$13 
Interest cost on projected benefit obligationsInterest cost on projected benefit obligations114 76 14 10 
Expected return on plan assetsExpected return on plan assets(242)(236)(6)(7)
Net amortization of:Net amortization of:
Actuarial loss, netActuarial loss, net59 — 
Actuarial loss, net
Actuarial loss, net
Prior service cost (credit)Prior service cost (credit)— — (3)(6)
Net cost (credit)Net cost (credit)$(65)$(5)$14 $15 

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 three months of 2024 and 2023, and 2022, $282$280 million and $334$282 million, respectively, were contributed to defined benefit plans. In the first three months of 20232024 and 2022,2023, $28 million was contributed in each year to the post-employment medical and dental plans.

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Table of Contents
Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 2024
(Unaudited)
Note 1314 — Taxes on Earnings

Taxes on earnings reflect the estimated annual effective rates and include charges for interest and penalties. In the first three months of 20232024 and 2022,2023, taxes on earnings include approximately $3$25 million and $30$3 million, respectively, in excess tax benefits associated with share-based compensation. In the first three months of 20232024 and 2022,2023, taxes on earnings also include approximately $22$10 million and $30$22 million, respectively, of tax expense as the 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 $75$82 million to $80 million,$1.34 billion, including cash adjustments, within the next twelve months as a result of concluding various domestic and international tax matters.

In September 2023, Abbott received a Statutory Notice of Deficiency (SNOD) from the U.S. Internal Revenue Service (IRS) for the 2019 Federal tax year in the amount of $417 million. The primary adjustments proposed in the SNOD relate to the reallocation of income between Abbott’s U.S. entities and its foreign affiliates. Abbott believes that the income reallocation adjustments proposed in the SNOD are without merit, in part because certain adjustments contradict methods that were agreed to with the IRS in prior audit periods. The SNOD also contains other proposed adjustments that Abbott believes are erroneous and unsupported. Abbott filed a petition with the U.S. Tax Court contesting the SNOD in December 2023.

Abbott’s 2017 and 2018 Federal tax years are also currently under examination by the IRS with respect to income reallocation issues similar to those included in the 2019 Federal tax year. Abbott intends to vigorously defend its filing positions through ongoing discussions with the IRS, the IRS independent appeals process and/or through litigation as necessary.

Abbott reserves for uncertain tax positions related to unresolved matters with the IRS and other taxing authorities. Abbott continues to believe that its reserves for uncertain tax positions are appropriate.

The Organization for Economic Cooperation & Development (OECD) has proposed a two-pillared plan for a revised international tax system. Pillar 1 proposes to reallocate taxing rights among the jurisdictions in which in-scope multinational corporations operate. Abbott is continuing to analyze the Pillar 1 proposal. Pillar 2 proposes to assess a 15 percent minimum tax on the earnings of in-scope multinational corporations on a country-by-country basis. Numerous countries have enacted legislation to adopt the Pillar 2 model rules. A subset of the rules became effective January 1, 2024, and the remaining rules become effective January 1, 2025 or later.Abbott continues to analyze the Pillar 2 model rules. The full implementation of the model rules may have a material impact on Abbott’s condensed consolidated financial statements in the future.
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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 20232024
(Unaudited)
Note 1415 — 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 and alternate-care testing sites. For segment reporting purposes, the Core LaboratoriesLaboratory Diagnostics, Rapid Diagnostics, Molecular Diagnostics and Point of Care Diagnostics divisionsbusinesses 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, 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.

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Abbott Laboratories and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 20232024
(Unaudited)
Note 1415 — 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 condensed consolidated financial statements.

Net Sales to External CustomersOperating Earnings Net Sales to External CustomersOperating Earnings
Three Months
Ended March 31
Three Months
Ended March 31
Three Months
Ended March 31
Three Months
Ended March 31
Three Months
Ended March 31
(in millions)(in millions)202320222023 2022(in millions)202420232024 2023
Established Pharmaceutical ProductsEstablished Pharmaceutical Products$1,189 $1,147 $300 $242 
Nutritional ProductsNutritional Products1,967 1,894 380 251 
Diagnostic ProductsDiagnostic Products2,688 5,257 651 2,564 
Medical DevicesMedical Devices3,900 3,594 1,078 1,083 
Total Reportable SegmentsTotal Reportable Segments9,744 11,892 2,409 4,140 
OtherOther
Net salesNet sales$9,747 $11,895 
Net sales
Net sales
Corporate functions and benefit plan costs
Corporate functions and benefit plan costs
Corporate functions and benefit plan costsCorporate functions and benefit plan costs(77)(114)
Net interest expenseNet interest expense(52)(117)
Share-based compensation (a)Share-based compensation (a)(281)(305)
Amortization of intangible assetsAmortization of intangible assets(491)(512)
Other, net (b)Other, net (b)54 (216)
Earnings before taxesEarnings before taxes$1,562 $2,876 

Notes:2022 Sales and Operating Earnings for the Diagnostic Products and Medical Devices reportable segments have been updated to reflect the internal transfer of the Acelis Connected Health business from Diagnostic Products to Medical Devices on January 1, 2023.
(a)Approximately 45 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)Other, net for the three months ended March 31, 20222024 and March 31, 2023 includes $120 million of charges related to a voluntary recall withinrestructuring actions. Other, net for the Nutritional Products segment.three months ended March 31, 2024 also includes integration costs associated with the acquisition of CSI and $38 million related to various investment impairments.

Note 15 — Subsequent Event

On April 27, 2023, Abbott completed the acquisition of Cardiovascular Systems, Inc. (CSI) for $20 per common share, which equated to a purchase price of approximately $850 million. The acquisition was funded with cash on hand. CSI sells an atherectomy system used in treating peripheral and coronary artery disease. The acquisition adds complementary technologies to Abbott’s portfolio of vascular device offerings. The transaction will be accounted for as a business combination. Abbott has begun the process of measuring, as of the acquisition date, the acquired assets and assumed liabilities. Preliminary purchase price allocation estimates will be disclosed in Abbott’s Form 10-Q for the period ending June 30, 2023.
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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 tables detail sales by reportable segment for the three months ended March 31. Percent changes are versus the prior year and are based on unrounded numbers.

Net Sales to External Customers
Net Sales to External CustomersNet Sales to External Customers
(in millions)(in millions)Three Months Ended
March 31, 2023
Three Months Ended
March 31, 2022
Total
Change
Impact of
Foreign
Exchange
Total Change
Excl. Foreign
Exchange
(in millions)Three Months Ended
March 31, 2024
Three Months Ended
March 31, 2023
Total
Change
Impact of
Foreign
Exchange
Total Change
Excl. Foreign
Exchange
Established Pharmaceutical Products
Established Pharmaceutical Products
Established Pharmaceutical ProductsEstablished Pharmaceutical Products$1,189 $1,147 3.7 %(7.4)%11.1 %$1,226 $$1,189 3.1 3.1 %(10.6)%13.7 %
Nutritional ProductsNutritional Products1,967 1,894 3.8 (3.9)7.7 
Diagnostic ProductsDiagnostic Products2,688 5,257 (48.9)(1.8)(47.1)
Medical DevicesMedical Devices3,900 3,594 8.5 (3.9)12.4 
Total Reportable SegmentsTotal Reportable Segments9,744 11,892 (18.1)(3.3)(14.8)
OtherOthern/mn/mn/mOther
Net SalesNet Sales$9,747 $11,895 (18.1)(3.3)(14.8)
Total U.S.Total U.S.$3,928 $4,937 (20.4)— (20.4)
Total U.S.
Total U.S.
Total InternationalTotal International$5,819 $6,958 (16.4)(5.7)(10.7)
Total International
Total International

Notes:The Acelis Connected Health business was internally transferred from Diagnostic Products to Medical Devices on January 1, 2023. As a result, $29 million of sales for the first quarter of 2022 were moved from Diagnostic Products to Medical Devices.
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

The 14.85.1 percent decreaseincrease in total net sales during the first three months of 2023,2024, excluding the impact of foreign exchange, reflected higher sales primarily in the Medical Devices and Established Pharmaceuticals segments, partially offset by a decrease in demand for Abbott’s rapid diagnostic tests to detect COVID-19, partially offset by higher growth across other businesses.COVID-19. Abbott’s COVID-19 testing-related sales totaled approximately$204 million during the first quarter of 2024 and $730 million during the first quarter of 2023 and approximately $3.3 billion during the first quarter of 2022.2023. Excluding the impact of COVID-19 testing-related sales, Abbott’s total net sales increased 4.98.2 percent. Excluding the impacts of COVID-19 testing-related sales and foreign exchange, Abbott’s total net sales increased 9.411.3 percent. In the first quarter of 2024, Abbott’s net sales were unfavorably impacted by changes in foreign exchange rates in the first quarter as the relatively stronger U.S. dollar decreased total international sales by 5.74.8 percent and total sales by 3.32.9 percent.

Due to the unpredictability of demand for COVID-19 tests, the future extent to which COVID-19 will have a material effect on Abbott’s business, financial condition or results of operations is uncertain.

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The table below provides detail by sales category for the three months ended March 31. Percent changes are versus the prior year and are based on unrounded numbers.

(in millions)(in millions)March 31,
2023
March 31,
2022
Total
Change
Impact of
Foreign
Exchange
Total Change
Excl. Foreign
Exchange
(in millions)March 31,
2024
March 31,
2023
Total
Change
Impact of
Foreign
Exchange
Total Change
Excl. Foreign
Exchange
Established Pharmaceutical Products —Established Pharmaceutical Products —
Key Emerging MarketsKey Emerging Markets$912 $906 0.7 %(7.6)%8.3 %
Key Emerging Markets
Key Emerging Markets$928 $912 1.7 %(13.7)%15.4 %
Other Emerging MarketsOther Emerging Markets277 241 15.0 (6.8)21.8 
Nutritionals —Nutritionals —
Nutritionals —
Nutritionals —
International Pediatric Nutritionals
International Pediatric Nutritionals
International Pediatric NutritionalsInternational Pediatric Nutritionals465 509 (8.6)(4.7)(3.9)
U.S. Pediatric NutritionalsU.S. Pediatric Nutritionals459 338 36.1 — 36.1 
International Adult NutritionalsInternational Adult Nutritionals690 708 (2.6)(7.0)4.4 
U.S. Adult NutritionalsU.S. Adult Nutritionals353 339 3.9 — 3.9 
Diagnostics —Diagnostics —
Diagnostics —
Diagnostics —
Core Laboratory
Core Laboratory
Core LaboratoryCore Laboratory1,182 1,184 (0.2)(5.3)5.1 
MolecularMolecular147 420 (65.0)(1.0)(64.0)
Point of CarePoint of Care134 128 4.7 (1.0)5.7 
Rapid DiagnosticsRapid Diagnostics1,225 3,525 (65.3)(0.8)(64.5)
Medical Devices —Medical Devices —
Medical Devices —
Medical Devices —
Rhythm Management
Rhythm Management
Rhythm ManagementRhythm Management527 524 0.4 (3.6)4.0 
ElectrophysiologyElectrophysiology505 485 3.9 (4.9)8.8 
Heart FailureHeart Failure281 250 12.4 (1.2)13.6 
VascularVascular617 619 (0.2)(4.1)3.9 
Structural HeartStructural Heart461 411 12.2 (4.2)16.4 
NeuromodulationNeuromodulation196 179 9.4 (1.8)11.2 
Diabetes CareDiabetes Care1,313 1,126 16.6 (4.4)21.0 

Note: The Acelis Connected Health business was internally transferred from Rapid Diagnostics to Heart Failure on January 1, 2023. As a result, $29 million of sales for the first quarter of 2022 were moved from Rapid Diagnostics to Heart Failure.
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Excluding the unfavorable effect of foreign exchange, sales in the Key Emerging Markets for Established Pharmaceutical Products increased 8.315.4 percent in the first three months of 2023,2024, led by growth in several countries including Brazil, China and southeast Asia, and across several therapeutic areas, including cardio-metabolic, respiratory, women's health, and central nervous system/pain management. Other Emerging Markets, excluding the effect of foreign exchange, increased by 21.88.2 percent in the first three months of 2023.2024.

Excluding the impact of foreign exchange, total Nutritional Products sales in the first three months of 20232024 increased 7.7 percent.percent. In U.S. Pediatric Nutritionals, the 36.112.0 percent increase in sales in the first three months of 2023 reflects2024 reflects the impact of the unfavorable effects ofcontinued progress in recovering market share following the voluntary recall of certain infant formula products in the first quarter of 2022, partially offset by a decrease in 2023PediaSure® and Pedialyte® sales.sales. Excluding the effect of foreign exchange, the 3.98.9 percent decreaseincrease in International Pediatric Nutritional sales in the first three months of 20232024 primarily reflects the impact of exiting the pediatric nutrition business in China, partially offset by growth in Canada and several other markets.countries in Asia Pacific and Latin America.

Excluding the effect of foreign exchange, the increases of 3.93.0 percent in U.S. Adult Nutritionals and 4.46.4 percent in International Adult Nutritionals in the first three months of 2023 were led by2024 reflect growth of Ensure® products.and Glucerna® product sales.
The 47.115.5 percent decrease in Diagnostic Products sales in the first three months of 2023,2024, excluding the impact of foreign exchange, was primarily driven by lower demand for COVID-19 tests. In Rapid Diagnostics, sales decreased 64.538.7 percent in the first three months of 2023,2024, excluding the effect of foreign exchange, due to lower demand for COVID-19 tests. In the first three months of 20232024 and 2022,2023, Rapid Diagnostics COVID-19 testing-related sales were $704$197 million and $3.0 billion,$704 million, respectively. In the first three months of 2023,2024, Rapid Diagnostics sales increased 5.14.4 percent, excluding COVID-19 testing-related sales, and increased 8.05.6 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.
In Core Laboratory Diagnostics, sales increased 5.15.9 percent in the first three months of 2023,2024, excluding the effect of foreign exchange, due to the continued deployment of Abbott's Alinity® testing platform and higher volume of routine diagnostic testing performed in hospitals and other laboratories, partially offset by lower test sales for the detection of COVID-19 IgG and IgM antibodies. In the first three months of 20232024 and 2022,2023, Core Laboratory Diagnostics COVID-19 testing-related sales were $6$3 million and $28$6 million, respectively. In the first three months of 2023,2024, Core Laboratory Diagnostics sales increased 1.72.2 percent, excluding COVID-19 testing-related sales, and increased 7.16.2 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.

The 64.011.7 percent decrease in Molecular Diagnostics sales in the first three months of 2023,2024, excluding the effect of foreign exchange, was primarily driven by lower demand for laboratory-based molecular tests for COVID-19 as well as lower demand for respiratory testing compared to significantly higher-than-usual demand in the first quarter of 2022.COVID-19. In the first three months of 20232024 and 2022,2023, Molecular Diagnostics COVID-19 testing-related sales were $20$4 million and $246$20 million, respectively. In the first three months of 2023,2024, Molecular Diagnostics sales decreased 27.11.1 percent, excluding COVID-19 testing-related sales, and decreased 24.80.8 percent, excluding the impact of foreign exchange and COVID-19 testing-related sales.

Excluding the effect of foreign exchange, total Medical Devices sales grew 12.4increased 15.4 percent in the first three months of 2023,2024, led by double-digit growth in Diabetes Care, Electrophysiology, Vascular, Structural Heart Heart Failure and Neuromodulation. Higher Diabetes Care sales were driven by continued growth of FreeStyle Libre®, Abbott’s continuous glucose monitoring system, in the U.S. and internationally. FreeStyle Libre sales totaled $1.2$1.5 billion in the first three months of 2023,2024, which reflected a 25.423.3 percent increase, excluding the effect of foreign exchange, over the first three months of 20222023 when FreeStyle Libre sales totaled $1.0$1.2 billion.

In January 2024, Abbott announced that Tandem Diabetes Care, Inc.'s t:slim X2™ insulin pump is the first automated insulin delivery system in the U.S. to integrate with Abbott's FreeStyle Libre 2 Plus sensor for treating diabetes. In February 2024, Insulet's Omnipod® 5 Automated Insulin Delivery System received CE Mark approval to be offered as an integrated solution with Abbott's FreeStyle Libre 2 Plus sensor.

During the first three months of 2023,2024, procedure volumes increasedcontinued to increase across the cardiovascular and neuromodulation businesses. In Structural Heart, the 16.413.0 percent increase in sales, excluding the effect of foreign exchange, primarily reflects an acceleration in thecontinued growth of the MitraClip®product along with contributions from recently launched products, including Amulet and®, Navitor®, and TriClip®.products, as well as various structural intervention products. In Vascular, the 3.912.7 percent increase in sales, excluding the impact of foreign exchange, during the first three months of 2024 was primarily due to the acquisition of Cardiovascular Systems, Inc. (CSI) in April 2023 primarily reflectsand double-digit growth in other endovascular sales.

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In Electrophysiology, the 8.818.4 percent increase in sales, excluding the effect of foreign exchange, primarily reflects higher procedure volumes in the U.S., the Asia Pacific region and various European countries and the U.S.countries. In Neuromodulation, the 11.217.4 percent increase in sales, excluding the effect of foreign exchange, was driven by the recent launch of the EternaTM rechargeable spinal cord stimulation system for the treatment of chronic pain along with market growth compared to the prior year period.

In the first three months of 2023, Medical Devices received various product approvals. In January 2023, Abbott announced that the U.S. Food and Drug Administration (FDA) had approved Navitor, Abbott's second-generation transcatheter aortic valve implantation system to treat people with severe aortic stenosis who are at high or extreme risk for open-heart surgery. In March 2023, Abbott's Freestyle Libre continuous glucose monitoring system received U.S. FDA clearance for integration with automated insulin delivery systems. In March 2023, the U.S. FDA approved Abbott's Epic® Max stented tissue valve to treat people with aortic regurgitation or stenosis.pain.

TheAbbott's gross profit margin percentage wasremained at 50.5 percent for the first quarter of 20232024 compared to 53.8 percent for the first quarter of 2022. The decrease in the first quarter of 2023 reflectsas the unfavorable effectseffect of lower sales of COVID-19 tests, foreign exchange and higher costs for various manufacturing inputs, partiallywas offset by the impact in 2022 of the voluntary product recall in the Nutritional business and the impact in 2023favorable impacts of gross margin improvement initiatives.initiatives, higher pricing in various businesses and product mix.

Research and development (R&D) expenses decreased $43increased $30 million, or 6.24.5 percent, in the first quarter of 20232024 compared to the prior year. The decreaseincrease in R&D expenses in the first quarter of 20232024 was primarily driven by the timing ofhigher spending on various projectsprojects.

Selling, general and administrative (SG&A) expenses increased $197 million, or 7.1 percent, in the first quarter of 2024 compared to the prior year as higher SG&A spending to drive growth across various businesses was partially offset by the favorable impact of foreign exchange.

Restructuring Plans

In 2024, Abbott management approved plans to streamline operations in order to reduce costs and improve efficiencies in its nutritional business, including the discontinuation of its ZonePerfect® product line, and in its medical devices segment. In the first three months of 2024, Abbott recorded employee related severance and other charges of approximately $17 million, of which approximately $11 million was recorded in Cost of products sold, approximately $1 million was recorded in Research and development and approximately $5 millionwas recorded in Selling, general and administrative expenses decreased $25expenses. Payments related to these actions totaled $3 million or 0.9 percent, in the first quarterthree months of 2023 compared to the prior year as higher selling and marketing spending to drive growth across various businesses was offset by the favorable impact of foreign exchange2024 and the nonrecurrenceremaining liabilities totaled $14 million at March 31, 2024. In addition, Abbott recognized asset impairment charges of 2022 expensesapproximately $30 million related to the product recall in the Nutritional segment.these restructuring plans.

Other (Income) Expense, net

Other income, net increased from $78totaled $111 million of income in the first quarter of 2022 to $111 million of income in the first quarter of2024 and 2023. ThAne increase in income associated withthe first quarter of 2023 reflects higher income in 2023 related to the non-service cost components of net pension and post-retirement medical benefit costs.costs and a favorable change in the fair value of contingent consideration liabilities were offset by charges related to investment impairments.

Interest Expense, net

Interest expense, net decreased $65increased from $52 million in the first quarter of 2023 to $61 million in the first quarter of 2024 as interest income decreased from $101 million to $80 million due to a lower average cash balance in the first quarter of 2024 versus the first quarter of 2023. The decrease in interest income was partially offset by lower interest expense due to the impactrepayment of higher interest rates on interest income, partially offset by the impactapproximately $2.25 billion of interest rate hedge contracts related to certain fixed-rate debt.long-term debt in September and November of 2023.

Taxes on Earnings

Taxes on earnings reflect the estimated annual effective rates and include charges for interest and penalties. In the first three months of 20232024 and 2022,2023, taxes on earnings include approximately $3$25 million and $30$3 million, respectively, in excess tax benefits associated with share-based compensation. In the first three months of 20232024 and 2022,2023, taxes on earnings also include approximately $22$10 million and $30$22 million, respectively, of tax expense as the 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 $75$82 million to $80 million,$1.34 billion, including cash adjustments, within the next twelve months as a result of concluding various domestic and international tax matters.

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In September 2023, Abbott received a Statutory Notice of Deficiency (SNOD) from the IRS for the 2019 Federal tax year in the amount of $417 million. The primary adjustments proposed in the SNOD relate to the reallocation of income between Abbott’s U.S. entities and its foreign affiliates. Abbott believes that the income reallocation adjustments proposed in the SNOD are without merit, in part because certain adjustments contradict methods that were agreed to with the IRS in prior audit periods. The SNOD also contains other proposed adjustments that Abbott believes are erroneous and unsupported. Abbott filed a petition with the U.S. Tax Court contesting the SNOD in December 2023.

Abbott’s 2017 and 2018 Federal tax years are also currently under examination by the IRS with respect to income reallocation issues similar to those included in the 2019 Federal tax year. Abbott intends to vigorously defend its filing positions through ongoing discussions with the IRS, the IRS independent appeals process and/or through litigation as necessary.

Abbott reserves for uncertain tax positions related to unresolved matters with the IRS and other taxing authorities. Abbott continues to believe that its reserves for uncertain tax positions are appropriate.

The Organization for Economic Cooperation & Development (OECD) has proposed a two-pillared plan for a revised international tax system. Pillar 1 proposes to reallocate taxing rights among the jurisdictions in which in-scope multinational corporations operate. Abbott is continuing to analyze the Pillar 1 proposal. Pillar 2 proposes to assess a 15 percent minimum tax on the earnings of in-scope multinational corporations on a country-by-country basis. Numerous countries have enacted legislation to adopt the Pillar 2 model rules. A subset of the rules became effective January 1, 2024, and the remaining rules become effective January 1, 2025 or later.Abbott continues to analyze the Pillar 2 model rules. The full implementation of the model rules may have a material impact on Abbott’s condensed consolidated financial statements in the future.

Liquidity and Capital Resources March 31, 2023 Compared with December 31, 2022

The decrease in cash and cash equivalents from $9.9$6.9 billion at December 31, 20222023 to $9.2$6.3 billion at March 31, 20232024 primarily reflects the payment of dividends share repurchases and capital expenditures, partially offset by the cash generated from operations in the first three months of 2023.2024. Working capital was $9.8$8.4 billion at March 31, 20232024 and $9.7$8.8 billion at December 31, 2022.2023. The increasedecrease in working capital in 20232024 primarily reflects an increase in inventory and a decrease in accounts payable, partially offset by a decrease in cash and cash equivalents.equivalents, as well as an increase in the current portion of long-term debt, partially offset by decreases in accrued salaries and accounts payable.

In the Condensed Consolidated Statement of Cash Flows, Net cash from operating activities for the first three months of 20232024 totaled approximately $1.1$1.0 billion, which reflects a decrease of $922$118 million from the prior year. The decrease is primarily due to a decline inreflects lower operating earnings partially offset by the timing of the collection ofand an increase in trade receivables in 2024. In the first three months of 2024, Net cash from operating activities includes $280 million of pension contributions and a reduction inthe payment of cash taxes paid.of approximately $225 million. In the first three months of 2023, Net cash from operating activities includes $282 million of pension contributions and the payment of cash taxes of approximately $122 million. In the first three months of 2022, Net cash from operating activities includes $334 million of pension contributions and the payment of cash taxes of approximately $195 million.

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 March 31, 2023, $2.15 billion of the $5 billion authorization remains available.

At March 31, 2023,2024, Abbott’s long-term debt rating was AA- by Standard & Poor’s CorporationS&P Global Ratings and A1Aa3 by Moody’s Investors Service. Abbott expects to maintain an investment grade rating.

Abbott has readily available financial resources, including unused lines of credit of $5.0that support commercial paper borrowing arrangements and provide Abbott with the ability to borrow up to $5 billion which expire in 2025.

Inon an unsecured basis. On January 29, 2024, Abbott terminated its 2020 Five Year Credit Agreement (2020 Agreement) and entered into a new Five Year Credit Agreement (Revolving Credit Agreement). There were no outstanding borrowings under the first quarter of 2023, Abbott repurchased approximately 3 million2020 Agreement at the time of its common shares for $300 million. As of March 31, 2023, $2.134 billion remains available for repurchasetermination. Any borrowings under the share repurchase program authorized by the board of directors in December 2021.Revolving Credit Agreement will mature and be payable on January 29, 2029 and will bear interest, at Abbott’s option, based on either a base rate or Secured Overnight Financing Rate (SOFR), plus an applicable margin based on Abbott’s credit ratings.

In the first quarter of 2023,2024, Abbott declared a quarterly dividend of $0.51$0.55 per share on its common shares, which represents an increase of 8.57.8 percent over the $0.47$0.51 per share dividend declared in the first quarter of 2022.2023.

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Business Acquisition

On September 22, 2023, Abbott completed the acquisition of Bigfoot Biomedical, Inc. (Bigfoot), which will further Abbott's efforts to develop connected solutions for making diabetes management more personal and precise. The purchase price, the preliminary allocation of acquired assets and liabilities, and the revenue and net income contributed by Bigfoot since the date of acquisition are not material to Abbott's condensed consolidated financial statements.

On April 27, 2023, Abbott completed the acquisition of Cardiovascular Systems, Inc. (CSI)CSI for $20 per common share, which equated to a purchase price of approximately $850$851 million. The acquisitiontransaction was funded with cash on hand. CSI sells anhand and accounted for as a business combination. CSI's atherectomy system, which is used in treating peripheral and coronary artery disease. The acquisitiondisease, adds complementary technologies to Abbott’sAbbott's portfolio of vascular device offerings.

The transactionfinal allocation of the purchase price of the CSI acquisition resulted in the recording of two non-deductible developed technology intangible assets totaling $305 million; non-deductible in-process research and development of $15 million, which will be accounted for as a business combination.an indefinite-lived intangible asset until regulatory approval or discontinuation; non-deductible goodwill of $369 million; net deferred tax assets of $46 million and other net assets of $116 million. The goodwill is identifiable to the Medical Devices reportable segment and is attributable to expected synergies from combining operations, as well as intangible assets that do not qualify for separate recognition. Revenues and earnings of CSI included in Abbott's condensed consolidated financial statements since the acquisition date are not material to Abbott's consolidated revenue and earnings.

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 20222023 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 operations are discussed in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022,2023, 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.

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PART I. FINANCIAL INFORMATION

Item 4.     Controls and Procedures

(a)Evaluation of disclosure controls and procedures. The Chief Executive Officer, Robert B. Ford, and Chief Financial Officer, Robert E. Funck, Jr.,Philip P. Boudreau, 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 March 31, 2023,2024, 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 including thoseas described in our Annual Report on Form 10-K for the year ended December 31, 2022.2023, including those described below (as of March 31, 2024, except where noted below). While it is not feasible to predict the outcome of such pending claims, proceedings, and investigations with certainty, management is of the opinion that their ultimate resolution should not have a material adverse effect on Abbott's financial position, cash flows, or results of operations.

In its 2023 Annual Report on Form 10-K, Abbott reported that its first U.S. patent infringement trial against DexCom, Inc. (DexCom) was scheduled for March 2024. In March 2024, the trial occurred, with the jury finding that DexCom's G6 products infringe one of Abbott's inserter patents. A further trial to determine damages will occur at a future date.

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
January 1, 2023 - January 31, 2023— (1)$— — $2,434,092,348 (2)
February 1, 2023 - February 28, 2023600,000 (1)100.933 600,000 2,373,532,278 (2)
March 1, 2023 - March 31, 20232,369,830 (1)101.037 2,369,830 2,134,092,391 (2)
Total2,969,830 (1)101.016 2,969,830 $2,134,092,391 (2)
Period(a) Total
Number of
Shares (or
Units)
Purchased
(b) Average
Price Paid per
Share (or
Unit)
(c) Total Number
of Shares (or
Units) Purchased
as Part of
Publicly
Announced Plans
or Programs
(d) Maximum
Number (or
Approximate
Dollar Value) of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or
Programs
January 1, 2024 - January 31, 2024— (1)$— — $1,409,092,884 (2)
February 1, 2024 - February 29, 2024— (1)— — 1,409,092,884 (2)
March 1, 2024 - March 31, 2024— (1)— — 1,409,092,884 (2)
Total— (1)$— — $1,409,092,884 (2)

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

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Item 6.     Exhibits
Exhibit No.Exhibit
3.1
10.1
31.1
31.2
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
32.2
101The following financial statements and notes from the Abbott Laboratories Quarterly Report on Form 10-Q for the quarter ended March 31, 2023,2024, 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.
104Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document and included in Exhibit 101).
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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
By:/s/ ROBERT E. FUNCK, JR.PHILIP P. BOUDREAU
Robert E. Funck, Jr.Philip P. Boudreau
ExecutiveSenior Vice President, Finance
and Chief Financial Officer
Date: May 4, 20232, 2024
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