ABBOTT PARK, Ill., July 20, 2017
/PRNewswire/ -- Abbott (NYSE: ABT) today announced financial
results for the second quarter ended June
30, 2017.
- Second-quarter worldwide sales of $6.6
billion increased 24.4 percent on a reported basis
and 2.9 percent on a comparable operational*
basis.
- Reported diluted EPS from continuing operations under GAAP was
$0.15 in the second
quarter. Excluding specified items, adjusted diluted EPS from
continuing operations was $0.62 in
the second quarter, above the previous guidance range of
$0.59 to $0.61.
- Abbott is raising its full-year 2017 EPS guidance range, which
continues to reflect double-digit growth. Abbott projects full-year
diluted EPS from continuing operations on a GAAP basis of
$1.03 to $1.13. Projected full-year
adjusted diluted EPS from continuing operations is now $2.43 to $2.53.
- In the second quarter, Abbott submitted for FDA approval of
MRI-conditional labeling for its Quadra AssuraTM Cardiac
Resynchronization Therapy Defibrillator (CRT-D) products and
QuartetTM family of left ventricular leads.
- In May, Abbott announced CE Mark of the new Confirm
RxTM Insertable Cardiac Monitor (ICM), the world's first
smartphone compatible ICM that helps physicians detect cardiac
arrhythmias in order to guide therapy.
- In June, Abbott announced CE Mark of its new
AlinityTM hq hematology system, which identifies and
quantifies different types of blood cells to help diagnose
blood-related diseases. Alinity hq represents the fifth new
diagnostic system the company has launched in Europe since November 2016.
- In June, Abbott announced its FreeStyle® Libre
glucose monitoring system received regulatory approval in
Canada and national reimbursement
in France. This revolutionary
system transforms how people test their glucose levels by providing
a convenient alternative to painful finger sticks.
"Halfway through the year, we're on track with all of our key
priorities, including the integration of St. Jude and growth
contributions from our pipeline," said Miles D. White, chairman and chief executive
officer, Abbott. "We're also raising our full-year guidance range
as we continue to target double-digit ongoing EPS growth."
* See note on comparable operational growth below.
SECOND-QUARTER BUSINESS OVERVIEW
Note: Management
believes that measuring sales growth rates on a comparable
operational basis is an appropriate way for investors to best
understand the underlying performance of the business.
Comparable operational sales growth excludes
the impact of exchange and for Total Abbott and Medical Devices,
also includes prior year results for St. Jude Medical, which was
acquired on Jan. 4, 2017, and excludes prior year and current
year results for the Abbott Medical Optics (AMO) and St. Jude
Medical vascular closure businesses, which were divested during the
first quarter 2017. Comparable operational sales growth also
reflects a reduction to St. Jude Medical's historic
sales related to administrative fees paid to conform to
Abbott's presentation, as further described in Form
8-K issued on April 18, 2017.
Following are sales by business segment and commentary for
the second quarter and first half 2017:
Total Company
($ in millions)
|
|
|
|
|
|
|
|
% Change vs.
2Q16
|
|
|
Sales
2Q17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
*
|
|
2,360
|
|
4,277
|
|
6,637
|
|
42.5
|
|
16.3
|
|
24.4
|
|
3.0
|
|
2.9
|
|
2.9
|
Nutrition
|
|
773
|
|
958
|
|
1,731
|
|
3.1
|
|
(3.3)
|
|
(0.6)
|
|
3.1
|
|
(1.5)
|
|
0.5
|
Diagnostics
|
|
385
|
|
888
|
|
1,273
|
|
6.8
|
|
2.6
|
|
3.8
|
|
6.8
|
|
4.8
|
|
5.4
|
Established
Pharmaceuticals
|
|
--
|
|
1,021
|
|
1,021
|
|
n/a
|
|
4.1
|
|
4.1
|
|
n/a
|
|
3.5
|
|
3.5
|
Medical
Devices
|
|
1,191
|
|
1,405
|
|
2,596
|
|
122.4
|
|
68.0
|
|
89.2
|
|
1.7
|
|
4.4
|
|
3.2
|
|
* Total Abbott sales
from continuing operations include Other Sales of $16 million. In
2016, the AMO business, which was divested during the first quarter
2017, was reported as part of the Medical Devices group. Comparable
operational growth rates above exclude results from the AMO
business.
|
|
|
|
|
|
|
|
|
% Change vs.
1H16
|
|
|
Sales
1H17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
*
|
|
4,684
|
|
8,288
|
|
12,972
|
|
47.0
|
|
17.9
|
|
27.0
|
|
3.4
|
|
2.9
|
|
3.1
|
Nutrition
|
|
1,503
|
|
1,870
|
|
3,373
|
|
2.4
|
|
(3.8)
|
|
(1.1)
|
|
2.4
|
|
(2.2)
|
|
(0.3)
|
Diagnostics
|
|
756
|
|
1,675
|
|
2,431
|
|
8.1
|
|
1.9
|
|
3.7
|
|
8.1
|
|
3.8
|
|
5.1
|
Established
Pharmaceuticals
|
|
--
|
|
1,971
|
|
1,971
|
|
n/a
|
|
5.5
|
|
5.5
|
|
n/a
|
|
4.5
|
|
4.5
|
Medical
Devices
|
|
2,327
|
|
2,664
|
|
4,991
|
|
132.5
|
|
70.0
|
|
94.3
|
|
2.6
|
|
4.8
|
|
3.8
|
|
* In 2017, Total
Abbott sales from continuing operations include Other Sales of $206
million, including sales of $175 million from the AMO business,
which was divested during the first quarter 2017. In 2016, the AMO
business was reported as part of the Medical Devices group.
Comparable operational growth rates above exclude results from the
AMO business.
|
|
n/a = Not
Applicable.
|
|
Note: In order to
compute results excluding the impact of exchange rates, current
year U.S. dollar sales are multiplied or divided, as appropriate,
by the current year average foreign exchange rates and then those
amounts are multiplied or divided, as appropriate, by the prior
year average foreign exchange rates.
|
Second-quarter 2017 worldwide sales of $6.6 billion increased 24.4 percent on a reported
basis. On a comparable operational basis, worldwide sales increased
2.9 percent. Sales growth in the quarter was impacted by purchasing
patterns associated with the implementation of a new Goods and
Services Tax (GST) system in India. Excluding this transitory impact, which
primarily impacted Established Pharmaceuticals, total Abbott sales
would have grown 25.3 percent on a reported basis and 3.7 percent
on a comparable operational basis in the second quarter. Refer to
the tables titled Non-GAAP Reconciliation of Comparable
Historical Revenue for additional detail.
Nutrition
($ in
millions)
|
|
|
|
|
|
|
|
% Change vs.
2Q16
|
|
|
Sales
2Q17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
773
|
|
958
|
|
1,731
|
|
3.1
|
|
(3.3)
|
|
(0.6)
|
|
3.1
|
|
(1.5)
|
|
0.5
|
Pediatric
|
|
459
|
|
528
|
|
987
|
|
8.0
|
|
(3.7)
|
|
1.4
|
|
8.0
|
|
(1.8)
|
|
2.5
|
Adult
|
|
314
|
|
430
|
|
744
|
|
(3.4)
|
|
(2.8)
|
|
(3.1)
|
|
(3.4)
|
|
(1.0)
|
|
(2.0)
|
|
|
|
|
|
|
|
|
% Change vs.
1H16
|
|
|
Sales
1H17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
1,503
|
|
1,870
|
|
3,373
|
|
2.4
|
|
(3.8)
|
|
(1.1)
|
|
2.4
|
|
(2.2)
|
|
(0.3)
|
Pediatric
|
|
891
|
|
1,023
|
|
1,914
|
|
7.7
|
|
(8.0)
|
|
(1.3)
|
|
7.7
|
|
(6.4)
|
|
(0.4)
|
Adult
|
|
612
|
|
847
|
|
1,459
|
|
(4.5)
|
|
1.9
|
|
(0.9)
|
|
(4.5)
|
|
3.3
|
|
(0.1)
|
Worldwide Nutrition sales decreased 0.6 percent on a reported
basis in the second quarter, including an unfavorable 1.1 percent
effect of foreign exchange, and increased 0.5 percent on an
operational basis.
Worldwide Pediatric Nutrition sales increased 1.4 percent on a
reported basis in the second quarter, including an unfavorable 1.1
percent effect of foreign exchange, and increased 2.5 percent on an
operational basis. In the U.S., above-market sales growth was
driven by recently launched new products across Abbott's infant
formula portfolio as well as strong growth of its
PediaSure® toddler brand. International sales declined
3.7 percent on a reported basis and 1.8 percent on an operational
basis. As expected, market conditions in China remain challenging.
Worldwide Adult Nutrition sales decreased 3.1 percent on a
reported basis in the second quarter, including an unfavorable 1.1
percent effect of foreign exchange, and decreased 2.0 percent on an
operational basis. Global Adult Nutrition sales were impacted by
competitive and market dynamics.
Diagnostics
($ in millions)
|
|
|
|
|
|
|
|
% Change vs.
2Q16
|
|
|
Sales
2Q17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
385
|
|
888
|
|
1,273
|
|
6.8
|
|
2.6
|
|
3.8
|
|
6.8
|
|
4.8
|
|
5.4
|
Core
Laboratory
|
|
232
|
|
788
|
|
1,020
|
|
12.5
|
|
2.0
|
|
4.2
|
|
12.5
|
|
4.4
|
|
6.1
|
Molecular
|
|
41
|
|
73
|
|
114
|
|
(18.6)
|
|
6.1
|
|
(4.5)
|
|
(18.6)
|
|
6.7
|
|
(4.1)
|
Point of
Care
|
|
112
|
|
27
|
|
139
|
|
8.0
|
|
11.2
|
|
8.6
|
|
8.0
|
|
12.7
|
|
8.9
|
|
|
|
|
|
|
|
|
% Change vs.
1H16
|
|
|
Sales
1H17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
756
|
|
1,675
|
|
2,431
|
|
8.1
|
|
1.9
|
|
3.7
|
|
8.1
|
|
3.8
|
|
5.1
|
Core
Laboratory
|
|
448
|
|
1,483
|
|
1,931
|
|
13.1
|
|
1.1
|
|
3.6
|
|
13.1
|
|
3.2
|
|
5.3
|
Molecular
|
|
86
|
|
140
|
|
226
|
|
(11.7)
|
|
8.0
|
|
(0.5)
|
|
(11.7)
|
|
8.3
|
|
(0.3)
|
Point of
Care
|
|
222
|
|
52
|
|
274
|
|
7.6
|
|
9.8
|
|
8.0
|
|
7.6
|
|
10.7
|
|
8.2
|
Worldwide Diagnostics sales increased 3.8 percent on a reported
basis in the second quarter, including an unfavorable 1.6 percent
effect of foreign exchange, and increased 5.4 percent on an
operational basis.
Core Laboratory Diagnostics sales increased 4.2 percent on a
reported basis in the second quarter, including an unfavorable 1.9
percent effect of foreign exchange, and increased 6.1 percent on an
operational basis. In the U.S., double-digit growth was driven by
share capture in Abbott's blood screening business. During the
quarter, Abbott announced CE Mark of its new Alinity hq hematology
system to identify and quantify different types of blood cells to
help diagnose blood-related diseases. Alinity hq represents the
fifth new diagnostic system the company has launched in
Europe since November 2016.
Molecular Diagnostics sales decreased 4.5 percent on a reported
basis in the second quarter, including an unfavorable 0.4 percent
effect of foreign exchange, and decreased 4.1 percent on an
operational basis. Continued growth in infectious disease testing,
Abbott's core area of focus in the molecular diagnostics market,
was offset by a planned scale down in other testing areas.
Point of Care Diagnostics sales increased 8.6 percent on a
reported basis in the second quarter, including an unfavorable 0.3
percent effect of foreign exchange, and increased 8.9 percent on an
operational basis. Sales growth in the quarter was led by continued
adoption of Abbott's i-STAT® handheld system in the U.S.
and strong growth internationally.
Established Pharmaceuticals
($ in millions)
|
|
|
|
|
|
|
|
% Change vs.
2Q16
|
|
|
Sales
2Q17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
--
|
|
1,021
|
|
1,021
|
|
n/a
|
|
4.1
|
|
4.1
|
|
n/a
|
|
3.5
|
|
3.5
|
Key Emerging
Markets
|
|
--
|
|
798
|
|
798
|
|
n/a
|
|
5.8
|
|
5.8
|
|
n/a
|
|
4.6
|
|
4.6
|
Other
|
|
--
|
|
223
|
|
223
|
|
n/a
|
|
(1.5)
|
|
(1.5)
|
|
n/a
|
|
(0.2)
|
|
(0.2)
|
|
|
|
|
|
|
|
|
% Change vs.
1H16
|
|
|
Sales
1H17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
--
|
|
1,971
|
|
1,971
|
|
n/a
|
|
5.5
|
|
5.5
|
|
n/a
|
|
4.5
|
|
4.5
|
Key Emerging
Markets
|
|
--
|
|
1,528
|
|
1,528
|
|
n/a
|
|
10.1
|
|
10.1
|
|
n/a
|
|
8.2
|
|
8.2
|
Other
|
|
--
|
|
443
|
|
443
|
|
n/a
|
|
(7.8)
|
|
(7.8)
|
|
n/a
|
|
(6.1)
|
|
(6.1)
|
Established Pharmaceuticals sales increased 4.1 percent on a
reported basis in the second quarter, including a favorable 0.6
percent effect of foreign exchange, and increased 3.5 percent on an
operational basis. Sales growth in the quarter was impacted by
purchasing patterns associated with the implementation of a new
Goods and Services Tax (GST) system in India. Excluding this transitory impact, total
Established Pharmaceutical sales would have grown in the
high-single digits in the second quarter.
Key Emerging Markets include Brazil, Russia, India
and China, along with several
additional emerging countries that represent the most attractive
long-term growth opportunities for Abbott's branded generics
product portfolio. Sales in these key geographies increased 5.8
percent on a reported basis and 4.6 percent on an operational basis
in the second quarter. Strong growth in Russia, China, and several countries across
Latin America was partially offset
by the impact associated with implementation of a new GST system in
India. Excluding this transitory
impact, sales in Key Emerging Markets would have grown
double-digits in the second quarter.
Medical Devices
($ in millions)
|
|
|
|
|
|
|
|
% Change vs.
2Q16
|
|
|
Sales
2Q17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
1,191
|
|
1,405
|
|
2,596
|
|
122.4
|
|
68.0
|
|
89.2
|
|
1.7
|
|
4.4
|
|
3.2
|
Cardiovascular and
Neuromodulation
|
|
1,110
|
|
1,150
|
|
2,260
|
|
220.3
|
|
164.2
|
|
189.0
|
|
1.1
|
|
0.7
|
|
0.9
|
Rhythm
Management
|
|
273
|
|
279
|
|
552
|
|
n/m
|
|
n/m
|
|
n/m
|
|
(13.7)
|
|
(4.5)
|
|
(9.2)
|
Electrophysiology
|
|
154
|
|
189
|
|
343
|
|
n/m
|
|
n/m
|
|
n/m
|
|
13.0
|
|
7.7
|
|
10.0
|
Heart
Failure
|
|
123
|
|
36
|
|
159
|
|
n/m
|
|
n/m
|
|
n/m
|
|
0.7
|
|
1.3
|
|
0.8
|
Vascular
|
|
295
|
|
436
|
|
731
|
|
(2.3)
|
|
13.5
|
|
6.6
|
|
(10.8)
|
|
(2.5)
|
|
(6.0)
|
Structural
Heart
|
|
104
|
|
164
|
|
268
|
|
149.2
|
|
219.2
|
|
187.9
|
|
9.1
|
|
9.0
|
|
9.1
|
Neuromodulation
|
|
161
|
|
46
|
|
207
|
|
n/m
|
|
n/m
|
|
n/m
|
|
65.5
|
|
11.5
|
|
49.0
|
Diabetes
Care
|
|
81
|
|
255
|
|
336
|
|
10.7
|
|
21.4
|
|
18.7
|
|
10.7
|
|
24.9
|
|
21.3
|
|
|
|
|
|
|
|
|
% Change vs.
1H16
|
|
|
Sales
1H17
|
|
Reported
|
|
Comparable
Operational
|
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
|
U.S.
|
|
Int'l
|
|
Total
|
Total
|
|
2,327
|
|
2,664
|
|
4,991
|
|
132.5
|
|
70.0
|
|
94.3
|
|
2.6
|
|
4.8
|
|
3.8
|
Cardiovascular and
Neuromodulation
|
|
2,171
|
|
2,192
|
|
4,363
|
|
241.7
|
|
163.6
|
|
197.4
|
|
2.1
|
|
1.0
|
|
1.6
|
Rhythm
Management
|
|
533
|
|
530
|
|
1,063
|
|
n/m
|
|
n/m
|
|
n/m
|
|
(15.7)
|
|
(4.3)
|
|
(10.3)
|
Electrophysiology
|
|
299
|
|
360
|
|
659
|
|
n/m
|
|
n/m
|
|
n/m
|
|
11.6
|
|
9.5
|
|
10.4
|
Heart
Failure
|
|
232
|
|
69
|
|
301
|
|
n/m
|
|
n/m
|
|
n/m
|
|
(4.7)
|
|
3.1
|
|
(3.0)
|
Vascular
|
|
599
|
|
835
|
|
1,434
|
|
8.2
|
|
13.9
|
|
11.4
|
|
(3.1)
|
|
(3.2)
|
|
(3.1)
|
Structural
Heart
|
|
211
|
|
313
|
|
524
|
|
180.8
|
|
220.3
|
|
203.2
|
|
15.3
|
|
10.1
|
|
12.1
|
Neuromodulation
|
|
297
|
|
85
|
|
382
|
|
n/m
|
|
n/m
|
|
n/m
|
|
64.0
|
|
16.3
|
|
50.1
|
Diabetes
Care
|
|
156
|
|
472
|
|
628
|
|
9.5
|
|
23.1
|
|
19.4
|
|
9.5
|
|
26.7
|
|
22.0
|
|
n/m = Percent change
is not meaningful.
|
Worldwide Medical Devices sales increased 89.2 percent on a
reported basis in the second quarter. On a comparable operational
basis, sales increased 3.2 percent, or 4.4 percent excluding the
comparison impact from the favorable resolution of a third-party
royalty agreement last year. Refer to the tables
titled Non-GAAP Reconciliation of Comparable Historical
Revenue for additional detail.
Worldwide sales of Cardiovascular and Neuromodulation products
were led by strong growth in Electrophysiology, Structural Heart
and Neuromodulation. In Electrophysiology, Abbott announced the
European launch of its Confirm Rx Insertable Cardiac Monitor (ICM),
the world's first smartphone compatible ICM that helps physicians
detect cardiac arrhythmias in order to guide therapy. Growth in
Structural Heart was driven by continued double-digit growth of
MitraClip®, Abbott's market-leading device for the
treatment of mitral regurgitation. In Neuromodulation, strong
double-digit growth was led by several recently launched products
for the treatment of chronic pain and movement disorders. As
expected, Rhythm Management sales in the U.S. were impacted by
continued competitive dynamics in the MRI-conditional category of
products. In the quarter, Abbott submitted for FDA approval
of MRI-conditional labeling for its Quadra Assura Cardiac
Resynchronization Therapy Defibrillator (CRT-D) products and
Quartet family of left ventricular leads.
Worldwide Diabetes Care sales increased 18.7 percent on a
reported basis in the second quarter, including an unfavorable 2.6
percent effect of foreign exchange, and increased 21.3 percent on
an operational basis. Strong double-digit international sales
growth was led by continued consumer uptake of FreeStyle Libre,
Abbott's revolutionary sensor-based glucose monitoring system,
which received regulatory approval in Canada in June and is now available for sale
in more than thirty-five countries.
ABBOTT RAISES FULL-YEAR EARNINGS-PER-SHARE
GUIDANCE
Abbott is raising its full-year 2017 earnings per
share guidance range, which continues to reflect double-digit
growth. Abbott now projects diluted earnings per share from
continuing operations under Generally Accepted Accounting
Principles (GAAP) to be $1.03 to
$1.13. Projected diluted earnings per share from continuing
operations on an adjusted basis is now $2.43
to $2.53 for the full year 2017.
Abbott forecasts net specified items for the full year 2017 of
approximately $1.40 per share.
Specified items include acquisition-related expenses, intangible
amortization expense, charges associated with cost reduction
initiatives and other expenses, partially offset by a gain on the
sale of the AMO business.
ABBOTT DECLARES 374TH QUARTERLY DIVIDEND
On June 9, 2017, the board of
directors of Abbott declared the company's quarterly dividend of
$0.265 per share. Abbott's cash
dividend is payable Aug. 15, 2017, to
shareholders of record at the close of business on July 14, 2017.
Abbott has increased its dividend payout for 45 consecutive
years and is a member of the S&P 500 Dividend Aristocrats
Index, which tracks companies that have annually increased their
dividend for at least 25 consecutive years.
About Abbott:
Abbott is a global healthcare company devoted to improving life
through the development of products and technologies that span the
breadth of healthcare. With a portfolio of leading, science-based
offerings in diagnostics, medical devices, nutritionals and branded
generic pharmaceuticals, Abbott serves people in more than 150
countries and employs approximately 94,000 people.
Visit Abbott at www.abbott.com and connect with us on Twitter at
@AbbottNews.
Abbott will webcast its live second-quarter earnings conference
call through its Investor Relations website at
www.abbottinvestor.com at 8 a.m. Central
time today. An archived edition of the call will be
available later that day.
— Private Securities Litigation Reform
Act of 1995 —
A Caution Concerning Forward-Looking
Statements
Some statements in this news release may be forward-looking
statements for purposes of the Private Securities Litigation Reform
Act of 1995. Abbott cautions that these forward-looking statements
are subject to risks and uncertainties that may cause actual
results to differ materially from those indicated in the
forward-looking statements. Economic, competitive, governmental,
technological and other factors that may affect Abbott's operations
are discussed in Item 1A, "Risk Factors'' to our Annual Report on
Securities and Exchange Commission Form 10-K for the year ended
Dec. 31, 2016, and are incorporated
by reference. Abbott undertakes no obligation to release publicly
any revisions to forward-looking statements as a result of
subsequent events or developments, except as required by
law.
Abbott Laboratories
and Subsidiaries
|
Condensed
Consolidated Statement of Earnings
|
Second Quarter Ended
June 30, 2017 and 2016
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
2Q17
|
|
2Q16
|
|
%
Change
|
|
Net Sales
|
|
$6,637
|
|
$5,333
|
|
24.4
|
|
|
|
|
|
|
|
|
|
Cost of products
sold, excluding amortization expense
|
|
3,173
|
|
2,287
|
|
38.7
|
|
Amortization of
intangible assets
|
|
392
|
|
145
|
|
n/m
|
|
Research and
development
|
|
513
|
|
348
|
|
47.5
|
|
Selling, general, and
administrative
|
|
2,132
|
|
1,737
|
|
22.7
|
|
Total Operating Cost
and Expenses
|
|
6,210
|
|
4,517
|
|
37.5
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
|
427
|
|
816
|
|
(47.7)
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
183
|
|
83
|
|
n/m
|
|
Net foreign exchange
(gain) loss
|
|
(12)
|
|
10
|
|
n/m
|
|
Other (income)
expense, net
|
|
(39)
|
|
8
|
|
n/m
|
|
Earnings from
Continuing Operations before taxes
|
|
295
|
|
715
|
|
(58.8)
|
|
|
|
|
|
|
|
|
|
Tax expense on
Earnings from Continuing Operations
|
|
25
|
|
116
|
|
(78.6)
|
|
Earnings from
Continuing Operations
|
|
270
|
|
599
|
|
(54.9)
|
|
|
|
|
|
|
|
|
|
Earnings from
Discontinued Operations, net of taxes
|
|
13
|
|
16
|
|
(22.5)
|
|
Gain on Sale of
Discontinued Operations, net of taxes
|
|
--
|
|
--
|
|
|
|
Net Earnings from
Discontinued Operations, net of taxes
|
|
13
|
|
16
|
|
(22.5)
|
|
|
|
|
|
|
|
|
|
Net
Earnings
|
|
$283
|
|
$615
|
|
(54.1)
|
|
|
|
|
|
|
|
|
|
Earnings from
Continuing Operations, excluding
|
|
|
|
|
|
|
|
Specified Items, as
described below
|
|
$1,096
|
|
$812
|
|
34.9
|
1)
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Common Share from:
|
|
|
|
|
|
|
|
Continuing
Operations
|
|
$0.15
|
|
$0.40
|
|
(62.5)
|
|
Discontinued
Operations
|
|
0.01
|
|
0.01
|
|
--
|
|
Total
|
|
$0.16
|
|
$0.41
|
|
(61.0)
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Common Share from Continuing
|
|
|
|
|
|
|
|
Operations, excluding
Specified Items, as described below
|
|
$0.62
|
|
$0.55
|
|
12.7
|
1)
|
|
|
|
|
|
|
|
|
Average Number of
Common Shares Outstanding
|
|
|
|
|
|
|
|
Plus Dilutive Common
Stock Options
|
|
1,749
|
|
1,480
|
|
|
|
|
NOTES:
|
|
See tables below
for an explanation of certain non-GAAP financial
information.
|
n/m = Percent change
is not meaningful.
|
See footnote
below.
|
|
|
|
|
1)
|
2017 Net Earnings and
Diluted Earnings per Common Share from Continuing Operations,
excluding Specified Items, excludes net after-tax charges of $826
million, or $0.47 per share, for intangible amortization expense
and other expenses primarily associated with acquisitions and
restructuring actions.
|
|
|
|
2016 Net Earnings and
Diluted Earnings per Common Share from Continuing Operations,
excluding Specified Items, excludes net after-tax charges of $213
million, or $0.15 per share, for intangible amortization
expense, expenses primarily associated with acquisitions,
including bridge facility fees, and charges related to cost
reduction initiatives and other expenses.
|
Abbott Laboratories
and Subsidiaries
|
Condensed
Consolidated Statement of Earnings
|
First Half Ended June
30, 2017 and 2016
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
1H17
|
|
1H16
|
|
%
Change
|
|
Net Sales
|
|
$12,972
|
|
$10,218
|
|
27.0
|
|
|
|
|
|
|
|
|
|
Cost of products
sold, excluding amortization expense
|
|
6,217
|
|
4,427
|
|
40.4
|
|
Amortization of
intangible assets
|
|
914
|
|
289
|
|
n/m
|
|
Research and
development
|
|
1,060
|
|
727
|
|
45.9
|
|
Selling, general, and
administrative
|
|
4,556
|
|
3,435
|
|
32.6
|
|
Total Operating Cost
and Expenses
|
|
12,747
|
|
8,878
|
|
43.6
|
|
|
|
|
|
|
|
|
|
Operating
earnings
|
|
225
|
|
1,340
|
|
(83.2)
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
387
|
|
108
|
|
n/m
|
|
Net foreign exchange
(gain) loss
|
|
(28)
|
|
488
|
|
n/m
|
1)
|
Other (income)
expense, net
|
|
(1,165)
|
|
27
|
|
n/m
|
2)
|
Earnings from
Continuing Operations before taxes
|
|
1,031
|
|
717
|
|
43.8
|
|
|
|
|
|
|
|
|
|
Tax expense on
Earnings from Continuing Operations
|
|
375
|
|
62
|
|
n/m
|
3)
|
Earnings from
Continuing Operations
|
|
656
|
|
655
|
|
0.1
|
|
|
|
|
|
|
|
|
|
Earnings from
Discontinued Operations, net of taxes
|
|
46
|
|
260
|
|
(82.4)
|
|
Gain on Sale of
Discontinued Operations, net of taxes
|
|
--
|
|
16
|
|
n/m
|
|
Net Earnings from
Discontinued Operations, net of taxes
|
|
46
|
|
276
|
|
(83.4)
|
4)
|
|
|
|
|
|
|
|
|
Net
Earnings
|
|
$702
|
|
$931
|
|
(24.7)
|
|
|
|
|
|
|
|
|
|
Earnings from
Continuing Operations, excluding
|
|
|
|
|
|
|
|
Specified Items, as
described below
|
|
$1,939
|
|
$1,427
|
|
35.9
|
5)
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Common Share from:
|
|
|
|
|
|
|
|
Continuing
Operations
|
|
$0.37
|
|
$0.44
|
|
(15.9)
|
|
Discontinued
Operations
|
|
0.03
|
|
0.19
|
|
(84.2)
|
4)
|
Total
|
|
$0.40
|
|
$0.63
|
|
(36.5)
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per
Common Share from Continuing
|
|
|
|
|
|
|
|
Operations, excluding
Specified Items, as described below
|
|
$1.11
|
|
$0.96
|
|
15.6
|
5)
|
|
|
|
|
|
|
|
|
Average Number of
Common Shares Outstanding
|
|
|
|
|
|
|
|
Plus Dilutive Common
Stock Options
|
|
1,742
|
|
1,482
|
|
|
|
|
NOTES:
|
|
See tables below
for an explanation of certain non-GAAP financial
information.
|
n/m = Percent change
is not meaningful.
|
See footnotes
below.
|
|
|
|
|
1)
|
2016 Net foreign
exchange (gain) loss includes a loss of $477 million related to the
revaluation of Abbott's net monetary assets in Venezuela using the
Dicom exchange rate, which is the Venezuelan government's official
floating exchange rate.
|
|
|
2)
|
2017 Other (income)
expense, net includes a pretax gain of $1.151 billion from the sale
of the AMO business.
|
|
|
3)
|
2017 Tax expense on
Earnings from Continuing Operations includes the tax associated
with a $1.151 billion pretax gain on the sale of the AMO
business.
|
|
|
|
2016 Tax expense on
Earnings from Continuing Operations includes the impact of a net
tax benefit of approximately $145 million as a result of the
resolution of various tax positions from prior years, partially
offset by the unfavorable impact of non-deductible foreign exchange
losses related to Venezuela.
|
|
|
4)
|
2017 Earnings and
Diluted Earnings per Common Share from Discontinued Operations, net
of taxes primarily relates to a net tax benefit as a result of the
resolution of various tax positions from prior years.
|
|
|
|
2016 Earnings and
Diluted Earnings per Common Share from Discontinued Operations, net
of taxes primarily reflect the impact of a net tax benefit of $266
million as a result of the resolution of various tax positions from
prior years.
|
|
|
5)
|
2017 Net Earnings and
Diluted Earnings per Common Share from Continuing Operations,
excluding Specified Items, excludes net after-tax charges of $1.283
billion, or $0.74 per share, for intangible amortization expense
and other expenses primarily associated with acquisitions and
restructuring actions, partially offset by a gain on the sale of
the AMO business.
|
|
|
|
2016 Net Earnings and
Diluted Earnings per Common Share from Continuing Operations,
excluding Specified Items, excludes net after-tax charges of $772
million, or $0.52 per share, for intangible amortization expense,
the foreign exchange loss related to Venezuela, expenses associated
with acquisitions, including bridge facility fees, and other
charges related to cost reduction initiatives and other expenses,
partially offset by the favorable impact of a net tax benefit as a
result of the resolution of various tax positions from prior
years.
|
NON-GAAP RECONCILIATION OF FINANCIAL INFORMATION FROM
CONTINUING OPERATIONS
Abbott Laboratories
and Subsidiaries
|
Non-GAAP
Reconciliation of Financial Information From Continuing
Operations
|
Second Quarter Ended
June 30, 2017 and 2016
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
2Q17
|
|
|
As
Reported
(GAAP)
|
|
Specified
Items
|
|
As
Adjusted
|
|
% to
Sales
|
Intangible
Amortization
|
|
$392
|
|
$(392)
|
|
--
|
|
|
Gross
Margin
|
|
3,072
|
|
895
|
|
$3,967
|
|
59.8%
|
R&D
|
|
513
|
|
(15)
|
|
498
|
|
7.5%
|
SG&A
|
|
2,132
|
|
(138)
|
|
1,994
|
|
30.0%
|
Interest expense,
net
|
|
183
|
|
(2)
|
|
181
|
|
|
Other (income)
expense, net
|
|
(39)
|
|
32
|
|
(7)
|
|
|
Earnings from
Continuing Operations before taxes
|
|
295
|
|
1,018
|
|
1,313
|
|
|
Tax expense on
Earnings from Continuing Operations
|
|
25
|
|
192
|
|
217
|
|
|
Earnings from
Continuing Operations
|
|
270
|
|
826
|
|
1,096
|
|
|
Diluted Earnings per
Share from Continuing Operations
|
|
$0.15
|
|
$0.47
|
|
$0.62
|
|
|
Specified items reflect intangible amortization expense of
$392 million and other expenses of
$626 million, primarily associated
with acquisitions, including approximately $430 million of inventory step-up amortization
related to St. Jude Medical and other expenses. For additional
details, refer to the table titled Details of Specified
Items for the second quarter ended June
30, 2017.
|
|
2Q16
|
|
|
As
Reported
(GAAP)
|
|
Specified
Items
|
|
As
Adjusted
|
|
% to
Sales
|
Intangible
Amortization
|
|
$145
|
|
$(145)
|
|
--
|
|
|
Gross
Margin
|
|
2,901
|
|
170
|
|
$3,071
|
|
57.6%
|
R&D
|
|
348
|
|
(1)
|
|
347
|
|
6.5%
|
SG&A
|
|
1,737
|
|
(54)
|
|
1,683
|
|
31.6%
|
Interest expense,
net
|
|
83
|
|
(57)
|
|
26
|
|
|
Other (income)
expense, net
|
|
8
|
|
(1)
|
|
7
|
|
|
Earnings from
Continuing Operations before taxes
|
|
715
|
|
283
|
|
998
|
|
|
Tax expense on
Earnings from Continuing Operations
|
|
116
|
|
70
|
|
186
|
|
|
Earnings from
Continuing Operations
|
|
599
|
|
213
|
|
812
|
|
|
Diluted Earnings per
Share from Continuing Operations
|
|
$0.40
|
|
$0.15
|
|
$0.55
|
|
|
Specified items reflect intangible amortization expense of
$145 million, and other expenses of
$138 million, primarily associated
with acquisitions, including bridge facility fees, and charges
related to cost reduction initiatives and other expenses. For
additional details, refer to the table titled Details of
Specified Items for the second quarter ended June 30, 2016.
Abbott Laboratories
and Subsidiaries
|
Non-GAAP
Reconciliation of Financial Information From Continuing
Operations
|
First Half Ended June
30, 2017 and 2016
|
(in millions, except
per share data)
|
(unaudited)
|
|
|
|
1H17
|
|
|
As
Reported
(GAAP)
|
|
Specified
Items
|
|
As
Adjusted
|
|
% to
Sales
|
Intangible
Amortization
|
|
$914
|
|
$(914)
|
|
--
|
|
|
Gross
Margin
|
|
5,841
|
|
1,879
|
|
$7,720
|
|
59.5%
|
R&D
|
|
1,060
|
|
(55)
|
|
1,005
|
|
7.7%
|
SG&A
|
|
4,556
|
|
(505)
|
|
4,051
|
|
31.2%
|
Interest expense,
net
|
|
387
|
|
(19)
|
|
368
|
|
|
Other (income)
expense, net
|
|
(1,165)
|
|
1,166
|
|
1
|
|
|
Earnings from
Continuing Operations before taxes
|
|
1,031
|
|
1,292
|
|
2,323
|
|
|
Tax expense on
Earnings from Continuing Operations
|
|
375
|
|
9
|
|
384
|
|
|
Earnings from
Continuing Operations
|
|
656
|
|
1,283
|
|
1,939
|
|
|
Diluted Earnings per
Share from Continuing Operations
|
|
$0.37
|
|
$0.74
|
|
$1.11
|
|
|
Specified items reflect intangible amortization expense of
$914 million and other expenses of
$1.529 billion, primarily associated
with acquisitions, including approximately $820 million of inventory step-up amortization
related to St. Jude Medical, charges related to restructuring
actions and other expenses, partially offset by a gain of
$1.151 billion from the sale of the
AMO business. For additional details, refer to the table
titled Details of Specified Items for the first
half ended June 30, 2017.
|
|
1H16
|
|
|
As
Reported
(GAAP)
|
|
Specified
Items
|
|
As
Adjusted
|
|
% to
Sales
|
Intangible
Amortization
|
|
$289
|
|
$(289)
|
|
--
|
|
|
Gross
Margin
|
|
5,502
|
|
342
|
|
$5,844
|
|
57.2%
|
R&D
|
|
727
|
|
(46)
|
|
681
|
|
6.7%
|
SG&A
|
|
3,435
|
|
(97)
|
|
3,338
|
|
32.7%
|
Interest expense,
net
|
|
108
|
|
(69)
|
|
39
|
|
|
Net foreign exchange
(gain) loss
|
|
488
|
|
(477)
|
|
11
|
|
|
Other (income)
expense, net
|
|
27
|
|
(5)
|
|
22
|
|
|
Earnings from
Continuing Operations before taxes
|
|
717
|
|
1,036
|
|
1,753
|
|
|
Tax expense on
Earnings from Continuing Operations
|
|
62
|
|
264
|
|
326
|
|
|
Earnings from
Continuing Operations
|
|
655
|
|
772
|
|
1,427
|
|
|
Diluted Earnings per
Share from Continuing Operations
|
|
$0.44
|
|
$0.52
|
|
$0.96
|
|
|
Specified items reflect intangible amortization expense of
$289 million, the impact of the
foreign exchange loss in Venezuela
of $477 million, and other expenses
of $270 million, primarily associated
with acquisitions, including bridge facility fees, and charges
related to cost reduction initiatives and other expenses, partially
offset by a net tax benefit of approximately $145 million as a result of the resolution of
various tax positions from prior years. For additional
details, refer to the table titled Details of Specified
Items for the first half ended June 30, 2016.
RECONCILIATION OF TAX RATE FOR CONTINUING OPERATIONS
A
reconciliation of the second-quarter tax rates for continuing
operations for 2017 and 2016 is shown below:
|
|
|
2Q17
|
|
($ in
millions)
|
|
Pre-Tax
Income
|
|
Taxes on
Earnings
|
|
Tax
Rate
|
|
As reported
(GAAP)
|
|
$295
|
|
$25
|
|
8.4%
|
1)
|
Specified
items
|
|
1,018
|
|
192
|
|
|
|
Excluding
specified items
|
|
$1,313
|
|
$217
|
|
16.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q16
|
|
($ in
millions)
|
|
Pre-Tax
Income
|
|
Taxes on
Earnings
|
|
Tax
Rate
|
|
As reported
(GAAP)
|
|
$715
|
|
$116
|
|
16.2%
|
|
Specified
items
|
|
283
|
|
70
|
|
|
|
Excluding
specified items
|
|
$998
|
|
$186
|
|
18.6%
|
|
|
|
1)
|
Reported tax rate on
a GAAP basis for the second quarter of 2017 includes the impact of
approximately $25 million in excess tax benefits associated
with share-based compensation.
|
A reconciliation of the year-to-date tax rates for continuing
operations for 2017 and 2016 is shown below:
|
|
|
1H17
|
|
($ in
millions)
|
|
Pre-Tax
Income
|
|
Taxes on
Earnings
|
|
Tax
Rate
|
|
As reported
(GAAP)
|
|
$1,031
|
|
$375
|
|
36.4%
|
2)
|
Specified
items
|
|
1,292
|
|
9
|
|
|
|
Excluding
specified items
|
|
$2,323
|
|
$384
|
|
16.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H16
|
|
($ in
millions)
|
|
Pre-Tax
Income
|
|
Taxes on
Earnings
|
|
Tax
Rate
|
|
As reported
(GAAP)
|
|
$717
|
|
$62
|
|
8.6%
|
3)
|
Specified
items
|
|
1,036
|
|
264
|
|
|
|
Excluding
specified items
|
|
$1,753
|
|
$326
|
|
18.6%
|
|
|
|
2)
|
Reported tax rate on
a GAAP basis for 2017 includes the impact of taxes associated with
a $1.151 billion pretax gain on the sale of the AMO
business.
|
|
|
3)
|
Reported tax rate on
a GAAP basis for 2016 includes the impact of a net tax benefit of
approximately $145 million as a result of the resolution of various
tax positions from prior years, partially offset by the unfavorable
impact of non-deductible foreign exchange losses related to
Venezuela.
|
Abbott Laboratories
and Subsidiaries
|
Non-GAAP
Reconciliation of Comparable Historical Revenue
|
Second Quarter Ended
June 30, 2017 and 2016
|
($ in millions)
(unaudited)
|
|
|
|
2Q17
|
|
2Q16
|
|
% Change vs.
2Q16
|
|
|
Abbott
Reported
|
|
Divested
Businesses
|
|
Comparable
Revenue
|
|
Abbott
Reported
|
|
Acquired
St. Jude
Businessa)
|
|
AMO
|
|
Comparable
Revenue
|
|
|
|
Comparable
|
|
|
|
|
|
|
|
|
|
Reported
|
|
Reported
|
|
Operationalb)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
6,637
|
|
--
|
|
6,637
|
|
5,333
|
|
1,484
|
|
(307)
|
|
6,510
|
|
24.4
|
|
1.9
|
|
2.9
|
U.S.
|
|
2,360
|
|
--
|
|
2,360
|
|
1,655
|
|
752
|
|
(116)
|
|
2,291
|
|
42.5
|
|
3.0
|
|
3.0
|
Int'l
|
|
4,277
|
|
--
|
|
4,277
|
|
3,678
|
|
732
|
|
(191)
|
|
4,219
|
|
16.3
|
|
1.4
|
|
2.9
|
Total Medical
Devices
|
|
2,596
|
|
--
|
|
2,596
|
|
1,372
|
|
1,484
|
|
(307)
|
|
2,549
|
|
89.2
|
|
1.9
|
|
3.2
|
U.S.
|
|
1,191
|
|
--
|
|
1,191
|
|
535
|
|
752
|
|
(116)
|
|
1,171
|
|
122.4
|
|
1.7
|
|
1.7
|
Int'l
|
|
1,405
|
|
--
|
|
1,405
|
|
837
|
|
732
|
|
(191)
|
|
1,378
|
|
68.0
|
|
2.0
|
|
4.4
|
Cardiovascular and
Neuromodulation
|
2,260
|
|
--
|
|
2,260
|
|
782
|
|
1,484
|
|
--
|
|
2,266
|
|
189.0
|
|
(0.2)
|
|
0.9
|
U.S.
|
|
1,110
|
|
--
|
|
1,110
|
|
346
|
|
752
|
|
--
|
|
1,098
|
|
220.3
|
|
1.1
|
|
1.1
|
Int'l
|
|
1,150
|
|
--
|
|
1,150
|
|
436
|
|
732
|
|
--
|
|
1,168
|
|
164.2
|
|
(1.5)
|
|
0.7
|
Rhythm
Management
|
|
552
|
|
--
|
|
552
|
|
--
|
|
614
|
|
--
|
|
614
|
|
n/m
|
|
(10.4)
|
|
(9.2)
|
U.S.
|
|
273
|
|
--
|
|
273
|
|
--
|
|
315
|
|
--
|
|
315
|
|
n/m
|
|
(13.7)
|
|
(13.7)
|
Int'l
|
|
279
|
|
--
|
|
279
|
|
--
|
|
299
|
|
--
|
|
299
|
|
n/m
|
|
(6.9)
|
|
(4.5)
|
Electrophysiology
|
|
343
|
|
--
|
|
343
|
|
3
|
|
313
|
|
--
|
|
316
|
|
n/m
|
|
8.8
|
|
10.0
|
U.S.
|
|
154
|
|
--
|
|
154
|
|
3
|
|
134
|
|
--
|
|
137
|
|
n/m
|
|
13.0
|
|
13.0
|
Int'l
|
|
189
|
|
--
|
|
189
|
|
--
|
|
179
|
|
--
|
|
179
|
|
n/m
|
|
5.5
|
|
7.7
|
Heart
Failure
|
|
159
|
|
--
|
|
159
|
|
--
|
|
159
|
|
--
|
|
159
|
|
n/m
|
|
0.2
|
|
0.8
|
U.S.
|
|
123
|
|
--
|
|
123
|
|
--
|
|
122
|
|
--
|
|
122
|
|
n/m
|
|
0.7
|
|
0.7
|
Int'l
|
|
36
|
|
--
|
|
36
|
|
--
|
|
37
|
|
--
|
|
37
|
|
n/m
|
|
(1.5)
|
|
1.3
|
Vascular
|
|
731
|
|
--
|
|
731
|
|
686
|
|
102
|
|
--
|
|
788
|
|
6.6
|
|
(7.1)
|
|
(6.0)
|
U.S.
|
|
295
|
|
--
|
|
295
|
|
301
|
|
30
|
|
--
|
|
331
|
|
(2.3)
|
|
(10.8)
|
|
(10.8)
|
Int'l
|
|
436
|
|
--
|
|
436
|
|
385
|
|
72
|
|
--
|
|
457
|
|
13.5
|
|
(4.3)
|
|
(2.5)
|
Structural
Heart
|
|
268
|
|
--
|
|
268
|
|
93
|
|
156
|
|
--
|
|
249
|
|
187.9
|
|
7.5
|
|
9.1
|
U.S.
|
|
104
|
|
--
|
|
104
|
|
42
|
|
54
|
|
--
|
|
96
|
|
149.2
|
|
9.1
|
|
9.1
|
Int'l
|
|
164
|
|
--
|
|
164
|
|
51
|
|
102
|
|
--
|
|
153
|
|
219.2
|
|
6.5
|
|
9.0
|
Neuromodulation
|
|
207
|
|
--
|
|
207
|
|
--
|
|
140
|
|
--
|
|
140
|
|
n/m
|
|
48.1
|
|
49.0
|
U.S.
|
|
161
|
|
--
|
|
161
|
|
--
|
|
97
|
|
--
|
|
97
|
|
n/m
|
|
65.5
|
|
65.5
|
Int'l
|
|
46
|
|
--
|
|
46
|
|
--
|
|
43
|
|
--
|
|
43
|
|
n/m
|
|
8.4
|
|
11.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a) Reflects reported
actuals for St. Jude Medical, excluding results from the vascular
closure business, as well as a reduction to St. Jude Medical sales
related to the reclassification of fees paid to group purchasing
organizations from the Selling, general, and administrative
line.
|
b) In order to
compute results excluding the impact of exchange rates, current
year U.S. dollar sales are multiplied or divided, as appropriate,
by the current year average foreign exchange rates and then those
amounts are multiplied or divided, as appropriate, by the prior
year average foreign exchange rates.
|
Abbott Laboratories
and Subsidiaries
|
Non-GAAP
Reconciliation of Comparable Historical Revenue
|
First Half Ended June
30, 2017 and 2016
|
($ in millions)
(unaudited)
|
|
|
|
1H17
|
|
1H16
|
|
% Change vs.
1H16
|
|
|
Abbott
Reported
|
|
Divested
Businessesa)
|
|
Comparable
Revenue
|
|
Abbott
Reported
|
|
Acquired
St. Jude
Businessb)
|
|
AMO
|
|
Comparable
Revenue
|
|
|
|
Comparable
|
|
|
|
|
|
|
|
|
|
Reported
|
|
Reported
|
|
Operationalc)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
12,972
|
|
(187)
|
|
12,785
|
|
10,218
|
|
2,857
|
|
(576)
|
|
12,499
|
|
27.0
|
|
2.3
|
|
3.1
|
U.S.
|
|
4,684
|
|
(84)
|
|
4,600
|
|
3,186
|
|
1,485
|
|
(224)
|
|
4,447
|
|
47.0
|
|
3.4
|
|
3.4
|
Int'l
|
|
8,288
|
|
(103)
|
|
8,185
|
|
7,032
|
|
1,372
|
|
(352)
|
|
8,052
|
|
17.9
|
|
1.7
|
|
2.9
|
Total Medical
Devices
|
|
4,991
|
|
(12)
|
|
4,979
|
|
2,569
|
|
2,857
|
|
(576)
|
|
4,850
|
|
94.3
|
|
2.7
|
|
3.8
|
U.S.
|
|
2,327
|
|
(6)
|
|
2,321
|
|
1,001
|
|
1,485
|
|
(224)
|
|
2,262
|
|
132.5
|
|
2.6
|
|
2.6
|
Int'l
|
|
2,664
|
|
(6)
|
|
2,658
|
|
1,568
|
|
1,372
|
|
(352)
|
|
2,588
|
|
70.0
|
|
2.7
|
|
4.8
|
Cardiovascular and
Neuromodulation
|
4,363
|
|
(12)
|
|
4,351
|
|
1,467
|
|
2,857
|
|
--
|
|
4,324
|
|
197.4
|
|
0.6
|
|
1.6
|
U.S.
|
|
2,171
|
|
(6)
|
|
2,165
|
|
635
|
|
1,485
|
|
--
|
|
2,120
|
|
241.7
|
|
2.1
|
|
2.1
|
Int'l
|
|
2,192
|
|
(6)
|
|
2,186
|
|
832
|
|
1,372
|
|
--
|
|
2,204
|
|
163.6
|
|
(0.8)
|
|
1.0
|
Rhythm
Management
|
|
1,063
|
|
--
|
|
1,063
|
|
--
|
|
1,196
|
|
--
|
|
1,196
|
|
n/m
|
|
(11.3)
|
|
(10.3)
|
U.S.
|
|
533
|
|
--
|
|
533
|
|
--
|
|
632
|
|
--
|
|
632
|
|
n/m
|
|
(15.7)
|
|
(15.7)
|
Int'l
|
|
530
|
|
--
|
|
530
|
|
--
|
|
564
|
|
--
|
|
564
|
|
n/m
|
|
(6.3)
|
|
(4.3)
|
Electrophysiology
|
|
659
|
|
--
|
|
659
|
|
7
|
|
594
|
|
--
|
|
601
|
|
n/m
|
|
9.7
|
|
10.4
|
U.S.
|
|
299
|
|
--
|
|
299
|
|
7
|
|
262
|
|
--
|
|
269
|
|
n/m
|
|
11.6
|
|
11.6
|
Int'l
|
|
360
|
|
--
|
|
360
|
|
--
|
|
332
|
|
--
|
|
332
|
|
n/m
|
|
8.1
|
|
9.5
|
Heart
Failure
|
|
301
|
|
--
|
|
301
|
|
--
|
|
313
|
|
--
|
|
313
|
|
n/m
|
|
(3.5)
|
|
(3.0)
|
U.S.
|
|
232
|
|
--
|
|
232
|
|
--
|
|
243
|
|
--
|
|
243
|
|
n/m
|
|
(4.7)
|
|
(4.7)
|
Int'l
|
|
69
|
|
--
|
|
69
|
|
--
|
|
70
|
|
--
|
|
70
|
|
n/m
|
|
0.5
|
|
3.1
|
Vascular
|
|
1,434
|
|
(12)
|
|
1,422
|
|
1,287
|
|
198
|
|
--
|
|
1,485
|
|
11.4
|
|
(4.1)
|
|
(3.1)
|
U.S.
|
|
599
|
|
(6)
|
|
593
|
|
553
|
|
59
|
|
--
|
|
612
|
|
8.2
|
|
(3.1)
|
|
(3.1)
|
Int'l
|
|
835
|
|
(6)
|
|
829
|
|
734
|
|
139
|
|
--
|
|
873
|
|
13.9
|
|
(4.9)
|
|
(3.2)
|
Structural
Heart
|
|
524
|
|
--
|
|
524
|
|
173
|
|
300
|
|
--
|
|
473
|
|
203.2
|
|
10.7
|
|
12.1
|
U.S.
|
|
211
|
|
--
|
|
211
|
|
75
|
|
108
|
|
--
|
|
183
|
|
180.8
|
|
15.3
|
|
15.3
|
Int'l
|
|
313
|
|
--
|
|
313
|
|
98
|
|
192
|
|
--
|
|
290
|
|
220.3
|
|
7.7
|
|
10.1
|
Neuromodulation
|
|
382
|
|
--
|
|
382
|
|
--
|
|
256
|
|
--
|
|
256
|
|
n/m
|
|
49.4
|
|
50.1
|
U.S.
|
|
297
|
|
--
|
|
297
|
|
--
|
|
181
|
|
--
|
|
181
|
|
n/m
|
|
64.0
|
|
64.0
|
Int'l
|
|
85
|
|
--
|
|
85
|
|
--
|
|
75
|
|
--
|
|
75
|
|
n/m
|
|
13.9
|
|
16.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a) Reflects sales
related to the AMO and St. Jude Medical vascular closure businesses
prior to divesting in the first quarter 2017.
|
b) Reflects reported
actuals for St. Jude Medical, excluding results from the vascular
closure business, as well as a reduction to St. Jude Medical sales
related to the reclassification of fees paid to group purchasing
organizations from the Selling, general, and administrative
line.
|
c) In order to
compute results excluding the impact of exchange rates, current
year U.S. dollar sales are multiplied or divided, as appropriate,
by the current year average foreign exchange rates and then those
amounts are multiplied or divided, as appropriate, by the prior
year average foreign exchange rates.
|
Abbott Laboratories
and Subsidiaries
|
Details of Specified
Items
|
Second Quarter Ended
June 30, 2017
|
(in millions, except
per share data)
|
|
|
|
Acquisition or
Divestiture-
related (a)
|
|
Restructuring
and Cost
Reduction
Initiatives (b)
|
|
Intangible
Amortization
|
|
Total
Specifieds
|
Gross
Margin
|
|
$
438
|
|
$
65
|
|
$
392
|
|
$
895
|
R&D
|
|
(12)
|
|
(3)
|
|
--
|
|
(15)
|
SG&A
|
|
(134)
|
|
(4)
|
|
--
|
|
(138)
|
Interest expense,
net
|
|
(2)
|
|
--
|
|
--
|
|
(2)
|
Other (income)
expense, net
|
|
32
|
|
--
|
|
--
|
|
32
|
Earnings from
Continuing Operations before taxes
|
|
$
554
|
|
$
72
|
|
$
392
|
|
1,018
|
Tax expense on
Earnings from Continuing Operations (c)
|
|
|
|
|
|
|
192
|
Earnings from
Continuing Operations
|
|
|
|
|
|
|
|
$
826
|
Diluted Earnings per
Share from Continuing Operations
|
|
|
|
|
|
|
$
0.47
|
|
The table above
provides additional details regarding the specified items for the
second quarter ended June 30, 2017.
|
|
a)
|
Acquisition-related
expenses include costs for legal, accounting, tax, and other
services related to business acquisitions and integration costs
which represent incremental costs directly related to integrating
the acquired businesses and include expenditures for consulting,
retention, severance, and the integration of systems, processes and
business activities, fair value adjustments to contingent
consideration related to a business acquisition, and inventory
step-up amortization. The specified items in interest expense
include amortization expense associated with acquisition-related
bridge facility fees. Divestiture-related expenses include
incremental costs to separate the divested businesses.
|
b)
|
Restructuring and
cost reduction initiative expenses include severance, outplacement,
inventory write-downs, asset impairments, accelerated depreciation,
and other direct costs associated with specific restructuring plans
and cost reduction initiatives. Restructuring and cost reduction
plans consist of distinct initiatives to streamline operations
including the consolidation and rationalization of business
activities and facilities, workforce reductions, the transfer of
product lines between manufacturing facilities, and the transfer of
other business activities between sites. Any gains related to the
divestiture of a facility as part of a restructuring program are
also included in this category.
|
c)
|
Reflects the net tax
benefit associated with the specified items and excess tax benefits
associated with share-based compensation.
|
Abbott Laboratories
and Subsidiaries
|
Details of Specified
Items
|
Second Quarter Ended
June 30, 2016
|
(in millions, except
per share data)
|
|
|
|
Acquisition or
Divestiture-
related (a)
|
|
Restructuring
and Cost
Reduction
Initiatives (b)
|
|
Intangible
Amortization
|
|
Total
Specifieds
|
Gross
Margin
|
|
$
6
|
|
$
19
|
|
$
145
|
|
$
170
|
R&D
|
|
(1)
|
|
--
|
|
--
|
|
(1)
|
SG&A
|
|
(29)
|
|
(25)
|
|
--
|
|
(54)
|
Interest expense,
net
|
|
(57)
|
|
--
|
|
--
|
|
(57)
|
Other (income)
expense, net
|
|
(1)
|
|
--
|
|
--
|
|
(1)
|
Earnings from
Continuing Operations before taxes
|
|
$
94
|
|
$
44
|
|
$
145
|
|
283
|
Tax expense on
Earnings from Continuing Operations (c)
|
|
|
|
|
|
70
|
Earnings from
Continuing Operations
|
|
|
|
|
|
|
|
$
213
|
Diluted Earnings per
Share from Continuing Operations
|
|
|
|
|
|
|
$
0.15
|
|
The table above
provides additional details regarding the specified items for the
second quarter ended June 30, 2016.
|
|
|
a)
|
Acquisition-related
expenses include costs for legal, accounting, tax, and other
services related to business acquisitions and integration costs
which represent incremental costs directly related to integrating
the acquired businesses and include expenditures for consulting,
severance, and the integration of processes and business
activities. The specified items in interest expense include
amortization expense associated with acquisition-related bridge
facility fees. Divestiture-related expenses include incremental
costs to separate the divested businesses.
|
b)
|
Restructuring and
cost reduction expenses include severance, outplacement, inventory
write-downs, asset impairments, accelerated depreciation, and other
direct costs associated with specific restructuring plans and cost
reduction initiatives. Restructuring and cost reduction plans
consist of distinct initiatives to streamline operations including
the consolidation and rationalization of business activities and
facilities, workforce reductions, the transfer of product lines
between manufacturing facilities, and the transfer of other
business activities between sites.
|
c)
|
Reflects the net tax
benefit associated with the specified items and a net tax benefit
of approximately $5 million primarily as a result of the resolution
of various tax positions from prior years.
|
Abbott Laboratories
and Subsidiaries
|
Details of Specified
Items
|
First Half Ended June
30, 2017
|
(in millions, except
per share data)
|
|
|
|
Acquisition or
Divestiture-
related (a)
|
|
Restructuring
and Cost
Reduction
Initiatives (b)
|
|
Intangible
Amortization
|
|
Total
Specifieds
|
Gross
Margin
|
|
$
844
|
|
$
121
|
|
$
914
|
|
$
1,879
|
R&D
|
|
(26)
|
|
(29)
|
|
--
|
|
(55)
|
SG&A
|
|
(486)
|
|
(19)
|
|
--
|
|
(505)
|
Interest expense,
net
|
|
(19)
|
|
--
|
|
--
|
|
(19)
|
Other (income)
expense, net
|
|
1,200
|
|
(34)
|
|
--
|
|
1,166
|
Earnings from
Continuing Operations before taxes
|
|
$
175
|
|
$
203
|
|
$
914
|
|
1,292
|
Tax expense on
Earnings from Continuing Operations (c)
|
|
|
|
|
|
|
9
|
Earnings from
Continuing Operations
|
|
|
|
|
|
|
|
$
1,283
|
Diluted Earnings per
Share from Continuing Operations
|
|
|
|
|
|
|
$
0.74
|
|
The table above provides additional details regarding
the specified items for the first half ended June 30,
2017.
|
|
|
a)
|
Acquisition-related
expenses include bankers' fees and costs for legal, accounting,
tax, and other services related to business acquisitions,
integration costs which represent incremental costs directly
related to integrating the acquired businesses and include
expenditures for consulting, retention, severance, and the
integration of systems, processes and business activities, fair
value adjustments to contingent consideration related to a business
acquisition, and inventory step-up amortization. The specified
items in interest expense include amortization expense associated
with acquisition-related bridge facility fees. Divestiture-related
expenses include incremental costs to separate the divested
businesses as well as bankers' fees and costs for legal,
accounting, tax, and other services related to the
divestitures.
|
b)
|
Restructuring and
cost reduction initiative expenses include severance, outplacement,
inventory write-downs, asset impairments, accelerated depreciation,
and other direct costs associated with specific restructuring plans
and cost reduction initiatives. Restructuring and cost reduction
plans consist of distinct initiatives to streamline operations
including the consolidation and rationalization of business
activities and facilities, workforce reductions, the transfer of
product lines between manufacturing facilities, and the transfer of
other business activities between sites. Any gains related to the
divestiture of a facility as part of a restructuring program are
also included in this category.
|
c)
|
Reflects the net tax
benefit associated with the specified items and excess tax benefits
associated with share-based compensation.
|
Abbott Laboratories
and Subsidiaries
|
Details of Specified
Items
|
First Half Ended June
30, 2016
|
(in millions, except
per share data)
|
|
|
|
Acquisition or
Divestiture-
related (a)
|
|
Restructuring
and Cost
Reduction
Initiatives (b)
|
|
Venezuela
Devaluation (c)
|
|
Intangible
Amortization
|
|
Other (d)
|
|
Total
Specifieds
|
Gross
Margin
|
|
$
10
|
|
$
28
|
|
$
15
|
|
$
289
|
|
$
--
|
|
$
342
|
R&D
|
|
(2)
|
|
(1)
|
|
--
|
|
--
|
|
(43)
|
|
(46)
|
SG&A
|
|
(41)
|
|
(47)
|
|
(9)
|
|
--
|
|
--
|
|
(97)
|
Interest expense,
net
|
|
(69)
|
|
--
|
|
--
|
|
--
|
|
--
|
|
(69)
|
Net foreign exchange
(gain) loss
|
|
--
|
|
--
|
|
(477)
|
|
--
|
|
--
|
|
(477)
|
Other (income)
expense, net
|
|
(3)
|
|
--
|
|
(2)
|
|
--
|
|
--
|
|
(5)
|
Earnings from
Continuing Operations before taxes
|
|
$
125
|
|
$
76
|
|
$
503
|
|
$
289
|
|
$
43
|
|
1,036
|
Tax expense on
Earnings from Continuing Operations (e)
|
|
|
|
|
|
|
|
|
|
|
264
|
Earnings from
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
$
772
|
Diluted Earnings per
Share from Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
$
0.52
|
|
The table above provides additional details regarding
the specified items for the first half ended June 30,
2016.
|
|
|
a)
|
Acquisition-related
expenses include costs for legal, accounting, tax, and other
services related to business acquisitions and integration costs
which represent incremental costs directly related to integrating
the acquired businesses and include expenditures for consulting,
severance, and the integration of processes and business
activities. The specified items in interest expense include
amortization expense associated with acquisition-related bridge
facility fees. Divestiture-related expenses include incremental
costs to separate the divested businesses.
|
b)
|
Restructuring and
cost reduction expenses include severance, outplacement, inventory
write-downs, asset impairments, accelerated depreciation, and other
direct costs associated with specific restructuring plans and cost
reduction initiatives. Restructuring and cost reduction plans
consist of distinct initiatives to streamline operations including
the consolidation and rationalization of business activities and
facilities, workforce reductions, the transfer of product lines
between manufacturing facilities, and the transfer of other
business activities between sites. Any gains related to the
divestiture of a facility as part of a restructuring program are
also included in this category.
|
c)
|
Venezuela devaluation
expenses include the foreign exchange loss of $477 million related
to the revaluation of Abbott's net monetary assets in Venezuela
using the Dicom exchange rate as well as inventory and other asset
impairments in Venezuela related to the move to the Dicom exchange
rate. The Dicom rate is the Venezuelan government's official
floating exchange rate.
|
d)
|
Other expense relates
to other unusual significant costs, such as the impairment of an
R&D asset.
|
e)
|
Reflects the net tax
benefit associated with the specified items and a net tax benefit
of approximately $145 million primarily as a result of the
resolution of various tax positions from prior years.
|
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SOURCE Abbott