Abbott Laboratories (ABT) 10-Q 7 Aug 09 2009 Q2 Quarterly report Financial data

Condensed Consolidated Statemen

Condensed Consolidated Statement of Earnings (USD $)
In Thousands, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Statement of Earnings
Net Sales	$7,494,876	$7,314,021	$14,213,244	$14,079,624
Cost of products sold	3,128,998	3,119,700	6,064,919	6,080,772
Research and development	670,206	656,863	1,320,949	1,276,820
Acquired in-process research and development		78,556		97,256
Selling, general and administrative	2,024,252	2,052,317	4,095,197	4,070,350
Total Operating Cost and Expenses	5,823,456	5,907,436	11,481,065	11,525,198
Operating Earnings	1,671,420	1,406,585	2,732,179	2,554,426
Interest expense	136,969	137,769	261,159	280,303
Interest (income)	(33,877)	(54,448)	(69,921)	(103,804)
(Income) from TAP Pharmaceutical Products Inc. joint venture		(17,055)		(118,997)
Net foreign exchange loss (gain)	14,394	14,472	28,828	20,693
Other (income) expense, net	(13,104)	(310,471)	(987,404)	(320,813)
Earnings Before Taxes	1,567,038	1,636,318	3,499,517	2,797,044
Taxes on Earnings	278,933	314,304	772,775	537,163
Net Earnings	$1,288,105	$1,322,014	$2,726,742	$2,259,881
Basic Earnings Per Common Share (in dollars per share)	0.83	0.86	1.76	1.47
Diluted Earnings Per Common Share (in dollars per share)	0.83	0.85	1.75	1.45
Cash Dividends Declared Per Common Share (in dollars per share)	0.4	0.36	0.8	0.72
Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share (in shares)	1,545,643	1,539,786	1,546,317	1,541,909
Dilutive Common Stock Options and Awards (in shares)	4,921	13,609	7,337	15,076
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options and Awards (in shares)	1,550,564	1,553,395	1,553,654	1,556,985
Outstanding Common Stock Options Having No Dilutive Effect (in shares)	90,451	48,423	67,391	6,399

1_Condensed Consolidated Statem

Condensed Consolidated Statement of Cash Flows (USD $)
In Thousands	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Cash Flow From (Used in) Operating Activities
Net earnings	$2,726,742	$2,259,881
Adjustments to reconcile earnings to net cash from operating activities -
Depreciation	574,139	534,626
Amortization of intangible assets	427,304	383,088
Share-based compensation	244,911	219,793
Derecognition of a contingent liability associated with the conclusion of the TAP Pharmaceutical Products Inc. joint venture	(797,130)
Gain on dissolution of TAP Pharmaceutical Products Inc. joint venture		(94,656)
Acquired in-process research and development		97,256
Trade receivables	427,257	(53,079)
Inventories	(280,610)	(35,087)
Other, net	(910,094)	(248,196)
Net Cash From Operating Activities	2,412,519	3,063,626
Cash Flow From (Used in) Investing Activities
Acquisitions of property and equipment	(514,891)	(703,327)
Acquisitions of businesses, net of cash acquired	(1,509,391)
Proceeds from sales of Boston Scientific common stock		318,645
Purchases of other investment securities, net	(1,717,733)	(1,209,203)
Other, net	(1,135)	(87,322)
Net Cash (Used in) Investing Activities	(3,743,150)	(1,681,207)
Cash Flow From (Used in) Financing Activities
Proceeds from issuance of short-term debt and other	2,547,425	1,699,869
Proceeds from issuance of long-term debt	3,000,000
Repayments of long-term debt	(2,483,176)	(200,000)
Purchases of common shares	(824,781)	(1,071,435)
Proceeds from stock options exercised, including tax benefit	292,819	463,169
Dividends paid	(1,177,308)	(1,060,186)
Net Cash From (Used in) Financing Activities	1,354,979	(168,583)
Effect of exchange rate changes on cash and cash equivalents	67,934	126,366
Net Increase in Cash and Cash Equivalents	92,282	1,340,202
Cash and Cash Equivalents, Beginning of Year	4,112,022	2,456,384
Cash and Cash Equivalents, End of Period	$4,204,304	$3,796,586

Condensed Consolidated Balance

Condensed Consolidated Balance Sheet (USD $)
In Thousands	Jun. 30, 2009	Dec. 31, 2008
Current Assets
Cash and cash equivalents	$4,204,304	$4,112,022
Investments, primarily time deposits and certificates of deposit	2,683,639	967,603
Trade receivables, less allowances of $299,234 in 2009 and $263,632 in 2008	5,452,765	5,465,660
Inventories:
Finished products	2,262,439	1,545,950
Work in process	647,612	698,140
Materials	610,788	531,759
Total inventories	3,520,839	2,775,849
Prepaid expenses, deferred income taxes, and other receivables	3,766,829	3,721,425
Total Current Assets	19,628,376	17,042,559
Investments	1,051,952	1,073,736
Property and Equipment, at Cost	15,884,553	15,188,673
Less: accumulated depreciation and amortization	8,436,250	7,969,507
Net Property and Equipment	7,448,303	7,219,166
Intangible Assets, net of amortization	5,996,480	5,151,106
Goodwill	12,217,882	9,987,361
Deferred Income Taxes and Other Assets	1,287,024	1,945,276
Total Assets	47,630,017	42,419,204
Current Liabilities:
Short-term borrowings	4,295,727	1,691,069
Trade accounts payable	1,185,405	1,351,436
Salaries, dividends payable, and other accruals	5,556,720	5,787,118
Income taxes payable	932,321	805,397
Obligation in connection with conclusion of TAP Pharmaceutical Products, Inc. joint venture	36,105	915,982
Current portion of long-term debt	36,103	1,040,906
Total Current Liabilities	12,042,381	11,591,908
Long-term Debt	11,371,518	8,713,327
Post-employment Obligations and Other Long-term Liabilities	4,296,050	4,595,278
Shareholders' Investment:
Preferred shares, one dollar par value; Authorized - 1,000,000 shares, none issued	0	0
Common shares, without par value; Authorized - 2,400,000,000 shares; Issued at stated capital amount - Shares: 2009: 1,607,948,710; 2008: 1,601,580,899	7,927,426	7,444,411
Common shares held in treasury, at cost - Shares: 2009: 62,036,267; 2008: 49,147,968	(3,338,360)	(2,626,404)
Earnings employed in the business	15,296,662	13,825,383
Accumulated other comprehensive income (loss)	(6,616)	(1,163,839)
Total Abbott Shareholders' Investment	19,879,112	17,479,551
Noncontrolling Interests in Subsidiaries	40,956	39,140
Total Equity	19,920,068	17,518,691
Total Liabilities and Shareholders' Equity	$47,630,017	$42,419,204

2_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheet Parenthetical (USD $)
In Thousands, except Share data	Jun. 30, 2009	Dec. 31, 2008
Balance Sheet
Trade receivables allowances of $314,325 in 2009 and $263,632 in 2008 (in dollars)	$299,234	$263,632
Preferred shares authorized (in shares)	1,000,000	1,000,000
Preferred shares issued (in shares)	0	0
Common shares authorized (in shares)	2,400,000,000	2,400,000,000
Common shares issued (in shares)	1,607,948,710	1,601,580,899
Common shares held in treasury (in shares)	62,036,267	49,147,968

Basis of Presentation

Basis of Presentation
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Basis of Presentation	Note 1 Basis of Presentation The accompanying unaudited, condensed consolidated financial statements have been prepared pursuant to rulesand 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 Abbotts Annual Report on Form10-K for the year ended December31, 2008. Events that occurred after June30, 2009 through the date that these financial statements have been filed with the Securities and Exchange Commission were considered in the preparation of these financial statements. On January1, 2009, Abbott adopted SFAS No.160 Noncontrolling Interests in Consolidated Financial Statementsan amendment of ARB No.51 and accordingly, noncontrolling interests in subsidiaries are presented as a component of total equity as of June30, 2009 and December31, 2008.

Supplemental Financial Informat

Supplemental Financial Information
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Supplemental Financial Information	Note 2 Supplemental Financial Information Other (income) expense, net, for the first six months of 2009 includes the derecognition of a contingent liability of $797 million associated with the conclusion of the TAP joint venture as discussed in Note 9 and income from the recording of certain investments at fair value in connection with business acquisitions. Other (income) expense, net, for the second quarter and first six months of 2009 and 2008 includes ongoing contractual payments from Takeda associated with the conclusion of the TAP joint venture. In connection with the dissolution of the TAP Pharmaceutical Products Inc. joint venture, Abbott recorded a gain of approximately $95 million in the second quarter 2008, which is included in Other (income) expense, net. Other (income) expense, net for the second quarter and six months ended June30, 2008 also includes a gain of approximately $52 million on the sale of an equity investment accounted for as an available-for-sale investment. Supplemental Cash Flow Information Other, net in Net cash from operating activities for 2009 and 2008 includes the effects of contributions to the main domestic defined benefit plan of $700 million and $200 million, respectively, and to the post-employment medical and dental plans of $13 million and $65 million in 2009 and 2008, respectively. Purchases of other investment securities, net in 2009 and 2008 reflects the acquisition of short-term investments with original maturities of over three months. The components of long-term investments as of June30, 2009 and December31, 2008 are as follows: June30 December31 (dollars in millions) 2009 2008 Equity securities $ 113 $ 147 Note receivable from Boston Scientific, 4% interest, due in 2011 872 865 Other 67 62 Total $ 1,052 $ 1,074

Taxes on Earnings

Taxes on Earnings
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Taxes on Earnings	Note 3 Taxes on Earnings Taxes on earnings reflect the estimated annual effective rates and include charges for interest and penalties. The effective tax rates are less than the statutory U.S. federal income tax rate principally due to the benefit of lower statutory tax rates and tax exemptions in several foreign taxing jurisdictions. In the second quarter of 2008, Abbotts federal income tax returns for 2004 and 2005 were settled, resulting in a net reduction of income taxes of approximately $30 million.

Litigation and Environmental Ma

Litigation and Environmental Matters
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Litigation and Environmental Matters	Note 4 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 $3million, and the aggregate cleanup exposure is not expected to exceed $15million. There are a number of patent disputes with third parties who claim Abbotts products infringe their patents. In April2007, New York University (NYU) and Centocor,Inc. filed a lawsuit in the Eastern District of Texas asserting that HUMIRA infringes a patent co-owned by NYU and Centocor. In June2009, a jury found that Abbott had willfully infringed the patent and awarded NYU and Centocor approximately $1.67 billion in past compensatory damages. The award is subject to review by the trial court. Abbott will ask the trial court to overturn the verdict and/or reduce the damages award. In the event that the trial court does not overturn the verdict, Abbott will appeal. Abbott is confident in the merits of its case and believes that it will prevail on appeal. As a result, no reserves have been recorded in this case. Abbotts acquisition of Kos Pharmaceuticals Inc. resulted in the assumption of various cases and investigations and Abbott has recorded reserves related to several of those cases and investigations. There are several civil actions pending brought by individuals or entities that allege generally that Abbott and numerous pharmaceutical companies reported false or misleading pricing information relating to the average wholesale price of certain pharmaceutical products in connection with federal, state and private reimbursement. Civil actions have also been brought against Abbott, and in some cases other members of the pharmaceutical industry, by state attorneys general seeking to recover alleged damages on behalf of state Medicaid programs. In May2006, Abbott was notified that the U.S. Department of Justice intervened in a civil whistle-blower lawsuit alleging that Abbott inflated prices for Medicaid and Medicare reimbursable drugs. Abbott has settled a few of the cases and recorded reserves for its estimated losses in a few other cases, however, Abbott is unable to estimate the range or amount of possible loss for the remaining cases, and no loss reserves have been recorded for them. Many of the products involved in these cases are Hospira products. Hospira, Abbotts former hospital products business, was spun off to Abbotts shareholders in 2004. Abbott retained liability for losses that result from these cases and investigations to the extent any such losses both relate to the sale of Hospiras products prior to the spin-off of Hospira and relate to allegations that were made in such pending and future cases and investigations that were the same as allegations existing at the date of the spin-off. There are several civil actions pending

Post-Employment Benefits

Post-Employment Benefits
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Post-Employment Benefits	Note 5 Post-Employment Benefits Retirement plans consist of defined benefit, defined contribution, and medical and dental plans. Net cost for the three and six months ended June30 for Abbotts major defined benefit plans and post-employment medical and dental benefit plans is as follows: Defined Benefit Plans Medical and Dental Plans Three Months Six Months Three Months Six Months Ended June30 Ended June30 Ended June30 Ended June30 (dollars in millions) 2009 2008 2009 2008 2009 2008 2009 2008 Service cost benefits earned during the period $ 60 $ 55 $ 120 $ 115 $ 12 $ 11 $ 24 $ 23 Interest cost on projected benefit obligations 94 84 188 170 26 22 51 48 Expected return on plans assets (127 ) (120 ) (254 ) (239 ) (6 ) (8 ) (12 ) (16 ) Net amortization 18 5 36 18 4 1 9 6 Net Cost $ 45 $ 24 $ 90 $ 64 $ 36 $ 26 $ 72 $ 61 Abbott funds its domestic defined benefit plans according to IRS funding limitations. In the first quarters of 2009 and 2008, $700 million and $200 million, respectively, was contributed to the main domestic defined benefit plan and $13 million and $65 million, respectively, was contributed to the post-employment medical and dental benefit plans.

Comprehensive Income, net of ta

Comprehensive Income, net of tax
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Comprehensive Income, net of tax	Note 6 Comprehensive Income, net of tax Three Months Ended Six Months Ended June30 June30 (dollars in millions) 2009 2008 2009 2008 Foreign currency translation gain adjustments $ 1,223 $ 242 $ 1,164 $ 433 Unrealized (losses) gains on marketable equity securities (2 ) 3 (27 ) Amortization of net actuarial losses and prior service cost and credits 14 4 30 16 Net adjustments for derivative instruments designated as cash flow hedges (49 ) 2 (40 ) (4 ) Other comprehensive income, net of tax 1,188 246 1,157 418 Net Earnings 1,288 1,322 2,727 2,260 Comprehensive Income $ 2,476 $ 1,568 $ 3,884 $ 2,678 June30 2009 December31 2008 Supplemental Comprehensive Income Information, net of tax: Cumulative foreign currency translation (gain) adjustments $ (1,904 ) $ (740 ) Cumulative unrealized (gains) on marketable equity securities (20 ) (17 ) Net actuarial losses and prior service cost and credits 1,871 1,901 Cumulative losses on derivative instruments designated as cash flow hedges 60 20

Segment Information

Segment Information
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Segment Information	Note 7 Segment Information Abbotts principal business is the discovery, development, manufacture and sale of a broad line of health care products. Abbotts products are generally sold directly to retailers, wholesalers, hospitals, health care facilities, laboratories, physicians offices and government agencies throughout the world. Abbotts reportable segments are as follows: Pharmaceutical Products Worldwide sales of a broad line of pharmaceuticals. For segment reporting purposes, two pharmaceutical divisions are aggregated and reported as the Pharmaceutical Products segment. 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, three diagnostic divisions are aggregated and reported as the Diagnostic Products segment. Vascular Products Worldwide sales of coronary, endovascular, vessel closure and other products. Abbotts 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. For acquisitions prior to 2006, substantially all intangible assets and related amortization are not allocated to segments. The following segment information has been prepared in accordance with the internal accounting policies of Abbott, as described above, and are not presented in accordance with generally accepted accounting principles applied to the consolidated financial statements. Net Sales to External Customers Operating Earnings Three Months Six Months Three Months Six Months Ended June30 Ended June30 Ended June30 Ended June30 (dollars in millions) 2009 2008 2009 2008 2009 2008 2009 2008 Pharmaceutical Products $ 3,946 $ 4,123 $ 7,582 $ 7,978 $ 1,554 $ 1,541 $ 2,859 $ 2,886 Nutritional Products 1,283 1,235 2,465 2,344 215 193 396 376 Diagnostic Products 878 936 1,694 1,768 103 102 190 155 Vascular Products 658 489 1,302 941 138 47 297 16 Total Reportable Segments 6,765 6,783 13,043 13,031 2,010 1,883 3,742 3,433 Other 730 531 1,170 1,049 Net Sales $ 7,495 $ 7,314 $ 14,213 $ 14,080 Corporate functions and benefit plans costs (107 ) (97 ) (201 ) (210 ) Non-reportable segments 114 41 171 113 Net interest expense (103 ) (83 ) (191 ) (176 ) Acquired

Incentive Stock Program

Incentive Stock Program
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Incentive Stock Program	Note 8 Incentive Stock Program In the first six months of 2009, Abbott granted 1,712,400 stock options, 797,763 replacement stock options, 1,274,400 restricted stock awards and 5,468,552 restricted stock units under this program. In addition, 2,899,411 options were issued in connection with the conversion of Advanced Medical Optics,Inc. options to Abbott options. At June30, 2009, approximately 220million shares were reserved for future grants, including 175 million shares authorized by Abbotts shareholders in April2009. Information regarding the number of options outstanding and exercisable at June30, 2009 is as follows: Outstanding Exercisable Number of shares 124,936,705 102,978,217 Weighted average remaining life (years) 6.1 5.6 Weighted average exercise price $ 49.72 $ 48.70 Aggregate intrinsic value (in millions) $ 232 $ 232 The total unrecognized share-based compensation cost at June30, 2009 amounted to approximately $340 million which is expected to be recognized over the next three years.

Conclusion of TAP Pharmaceutica

Conclusion of TAP Pharmaceutical Products Inc. Joint Venture
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Conclusion of TAP Pharmaceutical Products Inc. Joint Venture	Note 9 Conclusion of TAP Pharmaceutical Products Inc. Joint Venture On April30, 2008, Abbott and Takeda concluded their TAP Pharmaceutical Products Inc. (TAP) joint venture, evenly splitting the value and assets of the joint venture. Abbott exchanged its 50 percent equity interest in TAP for the assets, liabilities and employees related to TAPs Lupron business. Beginning on May1, 2008, Abbott began recording U.S. Lupron net sales and costs in its operating results and no longer records income from the TAP joint venture. Abbott receives payments based on specified development, approval and commercial events being achieved with respect to products retained by Takeda and payments from Takeda based on sales of products retained by Takeda, which are recorded by Abbott as Other (income) expense, net as earned. Abbott also agreed to remit cash to Takeda if certain research and development events were not achieved on the development assets retained by Takeda. These amounts were recorded as a liability at closing in the amount of approximately $1.1 billion. Of the $1.1 billion, Abbott made tax-deductible payments of $83 million and $200 million in 2009 and 2008, respectively, and Abbott will make a tax-deductible payment of approximately $36 million in 2010. In the first quarter of 2009, events occurred resulting in certain payments not being required and a liability in the amount of $797 million was derecognized and recorded as income in Other (income) expense, net. The 50 percent-owned joint venture was accounted for under the equity method of accounting. Summarized financial information for TAP for the three months and six months ended June30, 2008 are as follows below: (dollars in millions) Three Months Six Months Net sales $ 141 $ 853 Cost of sales 46 229 Income before taxes 35 356 Net earnings 34 238

Business Acquisitions

Business Acquisitions
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Business Acquisitions	Note 10 Business Acquisitions In February2009, Abbott acquired the outstanding shares of Advanced Medical Optics,Inc. (AMO), a marketer of ophthalmic surgical technology and devices, as well as eye care solutions for approximately $1.4 billion in cash, net of cash held by AMO. Prior to the acquisition, Abbott held a small investment in AMO. Abbott acquired AMO to take advantage of increasing demand for vision care technologies due to population growth and demographic shifts and AMOs premier position in its field. Abbott acquired control of this business on February25, 2009 and the financial results of the acquired operations are included in these financial statements beginning on that date in accordance with Statement of Financial Accounting Standards No.141(R). The acquisition was financed with long-term debt. The preliminary allocation of the fair value of the acquisition is shown in the table below (in billions of dollars). These allocations will be finalized when appraisals are completed. Goodwill, non-deductible $ 1.6 Acquired intangible assets, non-deductible 0.9 Acquired in-process research and development 0.2 Acquired net tangible assets 0.5 Acquired debt (1.5 ) Deferred income taxes recorded at acquisition (0.3 ) Total preliminary allocation of fair value $ 1.4 Acquired intangible assets consist of established customer relationships, developed technology and trade names and will be amortized over 2 to 30 years (average of 15 years). Acquired in-process research and development will be accounted for as an indefinite lived intangible asset until regulatory approval or discontinuation. The net tangible assets acquired consist primarily of trade accounts receivable, inventory, property and equipment and other assets, net of assumed liabilities, primarily trade accounts payable, accrued compensation and other liabilities. Abbott incurred approximately $70 million of acquisition related expenses in the first six months of 2009 which are classified as Selling, general and administrative expense. In addition, subsequent to the acquisition, Abbott repaid substantially all of the acquired debt of AMO. In January2009, Abbott acquired Ibis Biosciences,Inc. (Ibis) for $175 million, in cash, to expand Abbotts position in molecular diagnostics for infectious disease. Including a $40 million investment in Ibis in 2008, Abbott has acquired 100 percent of the outstanding shares of Ibis. A substantial portion of the fair value of the acquisition has been allocated to goodwill and amortizable intangible assets, and acquired in-process research and development which will be accounted for as an indefinite lived intangible asset until regulatory approval or discontinuation. The investment in Ibis in 2008 resulted in a charge to acquired in-process research and development in the first six months of 2008. In connection with the acquisition, the carrying amount of this investment was revalued to fair value in the first quarter of 2009 resulting in recording $33 million of income, which is reported as Other (income) expense, net. Had the above acquisitions taken place on January1

Financial Instruments, Derivati

Financial Instruments, Derivatives and Fair Value Measures
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Financial Instruments, Derivatives and Fair Value Measures	Note 11 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 for anticipated intercompany purchases by those subsidiaries whose functional currencies are not the U.S. dollar. These contracts, totaling $470 million and $129 million at June30, 2009 and December31, 2008, respectively, are designated as cash flow hedges of the variability of the cash flows due to changes in foreign exchange rates. Accumulated gains and losses as of June30, 2009 will be included in Cost of products sold at the time the products are sold, generally through the next twelve months. The amount of hedge ineffectiveness was not significant in 2009 and 2008 for these hedges. 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 and Japanese yen, 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, European currencies and Japanese yen. At June30, 2009 and December31, 2008, Abbott held $6.5 billion and $8.3 billion, respectively, of such foreign currency forward exchange contracts. Abbott has designated foreign denominated short-term debt as a hedge of the net investment in certain foreign subsidiaries of approximately $556 million and approximately $585 million as of June30, 2009 and December31, 2008, respectively. Accordingly, changes in the fair value of this debt due to changes in exchange rates are recorded in Accumulated other comprehensive income (loss), net of tax. Abbott is a party to interest rate swap contracts totaling $5.5 billion and $2.5 billion at June30, 2009 and December31, 2008, respectively, to manage its exposure to changes in the fair value of $5.5 billion and $2.5 billion, respectively, of fixed-rate debt due 2011 through 2019. 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. No hedge ineffectiveness was recorded in income in 2009 or 2008 for these hedges. The following table summarizes the amounts and location of certain derivative financial instruments as of June30, 2009 and December31, 2008: Fair Value - Assets Fair Value - Liabilities (dollars in millions) June 30 2009 December31 2008 Balance Sheet Caption June 30 2009 December31 2008 Balance Sheet Caption Interest rate swaps

Goodwill and Intangible Assets

Goodwill and Intangible Assets
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Goodwill and Intangible Assets	Note12 Goodwill and Intangible Assets Abbott recorded goodwill of approximately $1.7 billion in 2009 related to the acquisitions of Advanced Medical Optics,Inc. and Ibis Biosciences,Inc. In connection with the dissolution of the TAP Pharmaceutical Products Inc. (TAP) joint venture in 2008, Abbott recorded approximately $350 million of goodwill. Goodwill related to the Ibis acquisition was allocated to the Diagnostic Products segment and goodwill related to TAP was allocated to the Pharmaceutical Products segment. Foreign currency translation adjustments and other adjustments increased goodwill in the first six months of 2009 and 2008 by approximately $506 million and $312 million, respectively. The amount of goodwill related to reportable segments at June30, 2009 was $6.3 billion for the Pharmaceutical Products segment, $206 million for the Nutritional Products segment, $386 million for the Diagnostic Products segment and $2.4 billion for the Vascular Products segment. There were no reductions of goodwill relating to impairments or disposal of all or a portion of a business. The gross amount of amortizable intangible assets, primarily product rights and technology, was $10.6 billion as of June30, 2009 and $9.4 billion as of December31, 2008, and accumulated amortization was $4.6 billion as of June30, 2009 and $4.2 billion as of December31, 2008. The estimated annual amortization expense for intangible assets is approximately $847 million in 2009, $859 million in 2010, $844 million in 2011, $831 million in 2012 and $675 million in 2013. Amortizable intangible assets are amortized over 4 to 25years (average 11 years).

Restructuring Plans

Restructuring Plans
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Restructuring Plans	Note 13 Restructuring Plans In 2008, Abbott management approved a plan to streamline global manufacturing operations, reduce overall costs, and improve efficiencies in Abbotts core diagnostic business. Additional charges of approximately $23 million were recorded in the first six months of 2009 relating to this restructuring, primarily for accelerated depreciation and product transfer costs. Additional charges will occur through 2011 as a result of product re-registration timelines required under manufacturing regulations in a number of countries and product transition timelines. The following summarizes the activity for this restructuring: (dollars in millions) 2009 Accrued balance at January1 $ 110 Restructuring charges 1 Payments and other adjustments (10 ) Accrued balance at June30 $ 101 In 2009 and prior years, Abbott management approved plans to realign its worldwide pharmaceutical and vascular manufacturing operations and selected domestic and international commercial and research and development operations in order to reduce costs. Additional charges of $20 million and $44 million were subsequently recorded in the first six months of 2009 and 2008, respectively, relating to these restructurings, primarily for accelerated depreciation and product transfer costs. The following summarizes the activity for these restructurings: (dollars in millions) 2009 2008 Accrued balance at January1 $ 105 $ 194 Restructuring charges 26 11 Payments and other adjustments (34 ) (59 ) Accrued balance at June30 $ 97 $ 146

Subsequent Event - Litigation S

Subsequent Event - Litigation Settlement
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements
Subsequent Event - Litigation Settlement	Note 14 Subsequent Event Litigation Settlement In July2009, Abbott and Medtronic,Inc. reached a settlement resolving all outstanding intellectual property litigation between the two parties. Under the terms of the settlement, Medtronic will pay Abbott $400 million. The settlement also includes a mutual agreement not to pursue additional litigation on current and future vascular products, subject to specific conditions and time limits. The one-time impact of this settlement will be included in third quarter 2009 earnings.

Document and Entity Information

Document and Entity Information (USD $)
	6 Months Ended Jun. 30, 2009	Jun. 30, 2008
Document and Entity Information
Document Type	10-Q
Document Period End Date	2009-06-30
Amendment Flag	false
Entity Registrant Name	ABBOTT LABORATORIES
Entity Central Index Key	0000001800
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding	1,545,912,443
Entity Public Float		$78,771,016,188