UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

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

 

For the quarterly period ended June 30, 2010

 

OR

 

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

 

For the transition period from                 to                

 

Commission File No. 1-2189

 

ABBOTT LABORATORIES

 

An Illinois Corporation

 

I.R.S. Employer Identification No.
36-0698440

 

100 Abbott Park Road

Abbott Park, Illinois 60064-6400

 

Telephone:  (847) 937-6l00

 

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

 

Large Accelerated Filer x

 

Accelerated Filer o

 

 

 

Non-Accelerated Filer o

 

Smaller reporting company o

(Do not check if a smaller reporting company)

 

 

 

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 June 30, 2010, Abbott Laboratories had 1,544,028,722 common shares without par value outstanding.

 

 

 



 

PART  I.  FINANCIAL INFORMATION

 

Abbott Laboratories and Subsidiaries

 

Condensed Consolidated Financial Statements

 

(Unaudited)

 



 

Abbott Laboratories and Subsidiaries

 

Condensed Consolidated Statement of Earnings

 

(Unaudited)

 

(dollars and shares in thousands except per share data)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30

 

June 30

 

 

 

2010

 

2009

 

2010

 

2009

 

Net Sales

 

$

8,826,014

 

$

7,494,876

 

$

16,524,368

 

$

14,213,244

 

 

 

 

 

 

 

 

 

 

 

Cost of products sold

 

3,543,932

 

3,128,998

 

6,879,036

 

6,064,919

 

Research and development

 

857,698

 

670,206

 

1,588,065

 

1,320,949

 

Acquired in-process research and development

 

75,000

 

 

75,000

 

 

Selling, general and administrative

 

2,743,418

 

2,024,252

 

4,905,818

 

4,095,197

 

Total Operating Cost and Expenses

 

7,220,048

 

5,823,456

 

13,447,919

 

11,481,065

 

 

 

 

 

 

 

 

 

 

 

Operating Earnings

 

1,605,966

 

1,671,420

 

3,076,449

 

2,732,179

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

134,488

 

136,969

 

252,689

 

261,159

 

Interest (income)

 

(38,172

)

(33,877

)

(67,703

)

(69,921

)

Net foreign exchange loss (gain)

 

(40,883

)

14,394

 

29,136

 

28,828

 

Other (income) expense, net

 

(8,154

)

(13,104

)

(18,567

)

(987,404

)

Earnings Before Taxes

 

1,558,687

 

1,567,038

 

2,880,894

 

3,499,517

 

Taxes on Earnings

 

267,037

 

278,933

 

586,229

 

772,775

 

 

 

 

 

 

 

 

 

 

 

Net Earnings

 

$

1,291,650

 

$

1,288,105

 

$

2,294,665

 

$

2,726,742

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Common Share

 

$

0.83

 

$

0.83

 

$

1.48

 

$

1.76

 

 

 

 

 

 

 

 

 

 

 

Diluted Earnings Per Common Share

 

$

0.83

 

$

0.83

 

$

1.47

 

$

1.75

 

 

 

 

 

 

 

 

 

 

 

Cash Dividends Declared Per Common Share

 

$

0.44

 

$

0.40

 

$

0.88

 

$

0.80

 

 

 

 

 

 

 

 

 

 

 

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

 

1,544,415

 

1,545,643

 

1,546,375

 

1,546,317

 

Dilutive Common Stock Options and Awards

 

7,367

 

4,921

 

10,438

 

7,337

 

 

 

 

 

 

 

 

 

 

 

Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options and Awards

 

1,551,782

 

1,550,564

 

1,556,813

 

1,553,654

 

 

 

 

 

 

 

 

 

 

 

Outstanding Common Stock Options Having No Dilutive Effect

 

66,601

 

90,451

 

66,601

 

67,391

 

 

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

 

2



 

Abbott Laboratories and Subsidiaries

 

Condensed Consolidated Statement of Cash Flows

 

(Unaudited)

 

(dollars in thousands)

 

 

 

Six Months Ended

 

 

 

June 30

 

 

 

2010

 

2009

 

Cash Flow From (Used in) Operating Activities:

 

 

 

 

 

Net earnings

 

$

2,294,665

 

$

2,726,742

 

Adjustments to reconcile earnings to net cash from operating activities —

 

 

 

 

 

Depreciation

 

591,061

 

574,139

 

Amortization of intangible assets

 

646,642

 

427,304

 

Share-based compensation

 

258,090

 

244,911

 

Derecognition of a contingent liability associated with the conclusion of the TAP Pharmaceutical Products Inc. joint venture

 

 

(797,130

)

Trade receivables

 

245,835

 

427,257

 

Inventories

 

(25,831

)

(280,610

)

Other, net

 

(139,413

)

(910,094

)

Net Cash From Operating Activities

 

3,871,049

 

2,412,519

 

 

 

 

 

 

 

Cash Flow From (Used in) Investing Activities:

 

 

 

 

 

 

 

 

 

 

 

Acquisitions of property and equipment

 

(518,657

)

(514,891

)

Acquisitions of businesses, net of cash acquired

 

(6,920,043

)

(1,509,391

)

Proceeds from sales of (purchases of) investment securities, net

 

1,959,380

 

(1,717,733

)

Deposit of restricted funds

 

(1,870,000

)

 

Other, net

 

(5,608

)

(1,135

)

Net Cash (Used in) Investing Activities

 

(7,354,928

)

(3,743,150

)

 

 

 

 

 

 

Cash Flow From (Used in) Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

(Repayments of) proceeds from issuance of short-term debt and other

 

(1,345,857

)

2,547,425

 

Proceeds from issuance of long-term debt

 

3,000,000

 

3,000,000

 

Payments of long-term debt

 

(1,254

)

(2,483,176

)

Purchases of common shares

 

(863,847

)

(824,781

)

Proceeds from stock options exercised, including tax benefit

 

203,588

 

292,819

 

Dividends paid

 

(1,299,951

)

(1,177,308

)

Net Cash (Used in) From Financing Activities

 

(307,321

)

1,354,979

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(696,437

)

67,934

 

 

 

 

 

 

 

Net (Decrease) Increase in Cash and Cash Equivalents

 

(4,487,637

)

92,282

 

Cash and Cash Equivalents, Beginning of Year

 

8,809,339

 

4,112,022

 

Cash and Cash Equivalents, End of Period

 

$

4,321,702

 

$

4,204,304

 

 

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

 

3



 

Abbott Laboratories and Subsidiaries

 

Condensed Consolidated Balance Sheet

 

(Unaudited)

 

(dollars in thousands)

 

 

 

June 30
2010

 

December 31
2009

 

Assets

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

4,321,702

 

$

8,809,339

 

Investments, primarily time deposits and certificates of deposit

 

51,076

 

1,122,709

 

Restricted funds, primarily U.S. treasury bills

 

1,870,936

 

 

Trade receivables, less allowances of $304,348 in 2010 and $311,546 in 2009

 

6,338,350

 

6,541,941

 

Inventories:

 

 

 

 

 

Finished products

 

1,933,692

 

2,289,280

 

Work in process

 

724,835

 

448,487

 

Materials

 

510,114

 

527,110

 

Total inventories

 

3,168,641

 

3,264,877

 

Prepaid expenses, deferred income taxes, and other receivables

 

4,164,602

 

3,575,025

 

Total Current Assets

 

19,915,307

 

23,313,891

 

Investments

 

251,240

 

1,132,866

 

Property and Equipment, at Cost

 

16,856,968

 

16,486,906

 

Less: accumulated depreciation and amortization

 

8,981,360

 

8,867,417

 

Net Property and Equipment

 

7,875,608

 

7,619,489

 

Intangible Assets, net of amortization

 

10,266,399

 

6,291,989

 

Goodwill

 

14,218,098

 

13,200,174

 

Deferred Income Taxes and Other Assets

 

854,750

 

858,214

 

 

 

$

53,381,402

 

$

52,416,623

 

Liabilities and Shareholders’ Investment

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Short-term borrowings

 

$

3,650,975

 

$

4,978,438

 

Trade accounts payable

 

1,615,606

 

1,280,542

 

Salaries, dividends payable, and other accruals

 

6,298,586

 

6,137,187

 

Income taxes payable

 

906,674

 

442,140

 

Current portion of long-term debt

 

2,217,419

 

211,182

 

Total Current Liabilities

 

14,689,260

 

13,049,489

 

 

 

 

 

 

 

Long-term Debt

 

12,612,655

 

11,266,294

 

Post-employment Obligations and Other Long-term Liabilities

 

6,084,853

 

5,202,111

 

Commitments and Contingencies

 

 

 

 

 

Shareholders’ Investment:

 

 

 

 

 

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: 2010: 1,617,202,849; 2009: 1,612,683,987

 

8,504,865

 

8,257,873

 

Common shares held in treasury, at cost -

 

 

 

 

 

Shares: 2010: 73,174,127; 2009: 61,516,398

 

(3,942,188

)

(3,310,347

)

Earnings employed in the business

 

17,978,462

 

17,054,027

 

Accumulated other comprehensive income (loss)

 

(2,629,430

)

854,074

 

Total Abbott Shareholders’ Investment

 

19,911,709

 

22,855,627

 

Noncontrolling Interests in Subsidiaries

 

82,925

 

43,102

 

Total Equity

 

19,994,634

 

22,898,729

 

 

 

$

53,381,402

 

$

52,416,623

 

 

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

 

4



 

Abbott Laboratories and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements

 

June 30, 2010

 

(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, 2009.

 

The consolidated financial statements include the accounts of the parent company and subsidiaries, after elimination of intercompany transactions. The accounts of foreign subsidiaries are consolidated as of May 31, due to the time needed to consolidate these subsidiaries.  In June 2010, a foreign subsidiary acquired certain product rights that were accounted for as acquired in-process research and development and another subsidiary received payment on a note receivable.  These transactions were recorded in the second quarter of 2010 due to the significance of the amounts.

 

Note 2 — Supplemental Financial Information

 

Unvested restricted stock units 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 and six months ended June 30, 2010 were $1.287 billion and $2.288 billion, respectively, and net earnings allocated to common shares for the three months and six months ended June 30, 2009 were $1.285 billion and $2.721 billion, respectively.

 

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 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 2010 and 2009 includes ongoing contractual payments from Takeda associated with the conclusion of the TAP joint venture.

 

Net foreign exchange loss (gain) for the first six months of 2010 includes a charge of approximately $86 million for the impact of the devaluation of the bolivar currency in Venezuela on balance sheet translation.

 

Other, net in Net cash from operating activities for 2010 and 2009 includes the effects of contributions to defined benefit plans of approximately $490 million and $775 million, respectively, and to the post-employment medical and dental benefit plans of $66 million and $13 million, respectively.

 

The judgment entered by the U.S. District Court for the Eastern District of Texas against Abbott in its litigation with New York University and Centocor, Inc. requires Abbott to secure the judgment in the event that its appeal to the Federal Circuit court is unsuccessful in overturning the district court’s decision.  In the first quarter of 2010, Abbott deposited $1.87 billion with an escrow agent and considers these assets to be restricted.

 

The components of long-term investments as of June 30, 2010 and December 31, 2009 are as follows:

 

 

 

June 30

 

December 31

 

(dollars in millions)

 

2010

 

2009

 

Equity securities

 

$

168

 

$

153

 

Note receivable from Boston Scientific, 4% interest

 

 

880

 

Other

 

83

 

100

 

Total

 

$

251

 

$

1,133

 

 

Under a registration statement filed with the Securities and Exchange Commission in February 2009, Abbott issued $3.0 billion of long-term debt in the second quarter of 2010 that matures in 2015, 2020 and 2040 with interest rates of 2.7 percent, 4.125 percent and 5.3 percent, respectively.

 

5



 

Notes to Condensed Consolidated Financial Statements

June 30, 2010

(Unaudited), continued

 

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.  As a result of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act which were signed into law in the first quarter of 2010, Abbott recorded a charge of approximately $60 million in the first quarter 2010 to reduce deferred tax assets associated with retiree health care liabilities related to the Medicare Part D retiree drug subsidy.

 

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 $3 million, and the aggregate cleanup exposure is not expected to exceed $15 million.

 

There are a number of patent disputes with third parties who claim Abbott’s products infringe their patents.  In April 2007, 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 and exclusively licensed to Centocor.  In June 2009, a jury found that Abbott had willfully infringed the patent and awarded NYU and Centocor approximately $1.67 billion in past compensatory damages.  In October 2009, the district court overturned the jury’s finding that Abbott’s infringement was willful, but denied Abbott’s request to overturn the jury’s verdict on validity, infringement, and damages.  In December 2009, the district court issued a final judgment and awarded the plaintiffs an additional $175 million in prejudgment interest.  Abbott has appealed the jury’s verdict.  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.  Abbott’s acquisition of Kos Pharmaceuticals Inc. resulted in the assumption of various cases and investigations and Abbott has recorded a reserve.

 

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 May 2006, 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 other cases. Abbott is unable to estimate the range or amount of possible loss for some of the remaining cases, and no loss reserves have been recorded for them.  Many of the products involved in these cases are Hospira products.  Hospira, Abbott’s former hospital products business, was spun off to Abbott’s 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 Hospira’s 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.

 

Within the next year, legal proceedings may occur that may result in a change in the estimated reserves recorded by Abbott.  For its legal proceedings and environmental exposures, except as noted above, Abbott estimates the range of possible loss to be from approximately $255 million to $300 million.  The recorded reserve balance at June 30, 2010 for these proceedings and exposures was approximately $275 million.  These reserves represent management’s best estimate of probable loss, as defined by FASB ASC No. 450, “Contingencies.”

 

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, except for the patent case discussed in the second paragraph of this footnote, the resolution of which could be material to cash flows or results of operations.

 

6



 

Notes to Condensed Consolidated Financial Statements

June 30, 2010

(Unaudited), continued

 

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 June 30 for Abbott’s major defined benefit plans and post-employment medical and dental benefit plans is as follows:

 

 

 

Defined Benefit Plans

 

Medical and Dental Plans

 

 

 

Three Months

 

Six Months

 

Three Months

 

Six Months

 

 

 

Ended June 30

 

Ended June 30

 

Ended June 30

 

Ended June 30

 

(dollars in millions)

 

2010

 

2009

 

2010

 

2009

 

2010

 

2009

 

2010

 

2009

 

Service cost — benefits earned during the period

 

$

78

 

$

60

 

$

156

 

$

120

 

$

14

 

$

12

 

$

28

 

$

24

 

Interest cost on projected benefit obligations

 

117

 

94

 

234

 

188

 

26

 

26

 

52

 

51

 

Expected return on plans’ assets

 

(149

)

(127

)

(298

)

(254

)

(7

)

(6

)

(14

)

(12

)

Net amortization

 

28

 

18

 

56

 

36

 

6

 

4

 

11

 

9

 

Net Cost

 

$

74

 

$

45

 

$

148

 

$

90

 

$

39

 

$

36

 

$

77

 

$

72

 

 

Abbott funds its domestic defined benefit plans according to IRS funding limitations.  In the first six months of 2010 and 2009, $490 million and $775 million, respectively, was contributed to defined benefit plans and $66 million and $13 million, respectively, was contributed to the post-employment medical and dental benefit plans.

 

Note 6 — Comprehensive Income, net of tax

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30

 

June 30

 

(dollars in millions)

 

2010

 

2009

 

2010

 

2009

 

Foreign currency translation (loss) gain adjustments

 

$

(1,739

)

$

1,223

 

$

(3,725

)

$

1,164

 

Unrealized (losses) gains on marketable equity securities

 

(1

)

 

(3

)

3

 

Amortization of net actuarial losses and prior service cost and credits

 

21

 

14

 

43

 

30

 

Net adjustments for derivative instruments designated as cash flow hedges

 

65

 

(49

)

202

 

(40

)

Other comprehensive (loss) income, net of tax

 

(1,654

)

1,188

 

(3,483

)

1,157

 

Net Earnings

 

1,292

 

1,288

 

2,295

 

2,727

 

Comprehensive Income (Loss)

 

$

(362

)

$

2,476

 

$

(1,188

)

$

3,884

 

 

 

 

June 30
2010

 

December 31
2009

 

Supplemental Comprehensive Income Information, net of tax:

 

 

 

 

 

 

 

 

 

 

 

Cumulative foreign currency translation loss (gain) adjustments

 

$

690

 

$

(3,035

)

Cumulative unrealized (gains) on marketable equity securities

 

(21

)

(24

)

Net actuarial losses and prior service cost and credits

 

2,118

 

2,161

 

Cumulative (gains) losses on derivative instruments designated as cash flow hedges

 

(158

)

44

 

 

7



 

Notes to Condensed Consolidated Financial Statements

June 30, 2010

(Unaudited), continued

 

Note 7 — 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:

 

Pharmaceutical Products — Worldwide sales of a broad line of pharmaceuticals.  For segment reporting purposes, three 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.

 

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.  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 June 30

 

Ended June 30

 

Ended June 30

 

Ended June 30

 

(dollars in millions)

 

2010

 

2009

 

2010

 

2009

 

2010

 

2009

 

2010

 

2009

 

Pharmaceutical Products

 

$

 

4,914

 

$

3,946

 

$

9,018

 

$

7,582

 

$

1,624

 

$

1,554

 

$

3,152

 

$

2,859

 

Nutritional Products

 

1,414

 

1,283

 

2,734

 

2,465

 

239

 

215

 

427

 

396

 

Diagnostic Products

 

948

 

878

 

1,863

 

1,694

 

160

 

103

 

306

 

190

 

Vascular Products

 

835

 

658

 

1,581

 

1,302

 

242

 

138

 

424

 

297

 

Total Reportable Segments

 

8,111

 

6,765

 

15,196

 

13,043

 

2,265

 

2,010

 

4,309

 

3,742

 

Other

 

715

 

730

 

1,328

 

1,170

 

 

 

 

 

 

 

 

 

Net Sales

 

$

 

8,826

 

$

7,495

 

$

16,524

 

$

14,213

 

 

 

 

 

 

 

 

 

Corporate functions and benefit plans costs

 

 

 

 

 

 

 

 

 

(221

)

(107

)

(341

)

(201

)

Non-reportable segments

 

 

 

 

 

 

 

 

 

114

 

114

 

204

 

171

 

Net interest expense

 

 

 

 

 

 

 

 

 

(96

)

(103

)

(185

)

(191

)

Acquired in-process research and development

 

 

 

 

 

 

 

 

 

(75

)

 

(75

)

 

Share-based compensation (a)

 

 

 

 

 

 

 

 

 

(88

)

(71

)

(257

)

(245

)

Other, net (b)

 

 

 

 

 

 

 

 

 

(340

)

(276

)

(774

)

224

 

Consolidated Earnings Before Taxes

 

 

 

 

 

 

 

 

 

$

1,559

 

$

1,567

 

$

2,881

 

$

3,500

 

 


(a)          Approximately 40 to 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 six months ended June 30, 2009, includes the derecognition of a contingent liability of $797 established in connection with the conclusion of the TAP joint venture.

 

8



 

Notes to Condensed Consolidated Financial Statements

June 30, 2010

(Unaudited), continued

 

Note 8 — Incentive Stock Program

 

In the first six months of 2010, Abbott granted 1,578,076 stock options, 233,568 replacement stock options, 1,779,200 restricted stock awards and 5,813,486 restricted stock units under this program.  At June 30, 2010, approximately 200 million shares were reserved for future grants.  Information regarding the number of options outstanding and exercisable at June 30, 2010 is as follows:

 

 

 

Outstanding

 

Exercisable

 

Number of shares

 

113,193,629

 

103,205,962

 

Weighted average remaining life (years)

 

5.3

 

5.0

 

Weighted average exercise price

 

$

50.29

 

$

49.84

 

Aggregate intrinsic value (in millions)

 

$

159

 

$

159

 

 

The total unrecognized share-based compensation cost at June 30, 2010 amounted to approximately $390 million which is expected to be recognized over the next three years.

 

Note 9 — Business Acquisitions

 

In February 2010, Abbott acquired Solvay’s pharmaceuticals business (Solvay Pharmaceuticals) for approximately $6.1 billion, in cash, plus additional payments of up to EUR 100 million per year if certain sales milestones are met in 2011, 2012 and 2013.  Contingent consideration of approximately $290 million was recorded based on a preliminary valuation. The acquisition of Solvay Pharmaceuticals provides Abbott with a large and complementary portfolio of pharmaceutical products and expands Abbott’s presence in key global emerging markets.  Abbott acquired control of this business on February 15, 2010 and the financial results of the acquired operations are included in these financial statements beginning on that date. Net sales for the acquired operations for the second quarter and first six months of 2010 were approximately $880 million and $1.1 billion, respectively.  Pretax loss of the acquired operations, including acquisition and integration expenses, for the second quarter and first six months of 2010 were approximately $35 million and $70 million, respectively. The acquisition was funded with current cash and short-term investments.  The preliminary allocation of the fair value of the acquisition is shown in the table below (in billions of dollars).  The allocation of the fair value of the acquisition will be finalized when the valuations are completed.

 

Goodwill, non-deductible

 

$

2.0

 

Acquired intangible assets, non-deductible

 

4.2

 

Acquired in-process research and development, non-deductible

 

0.5

 

Acquired net tangible assets

 

0.8

 

Deferred income taxes recorded at acquisition

 

(1.1

)

Total preliminary allocation of fair value

 

$

6.4

 

 

Acquired intangible assets consist primarily of product rights for currently marketed products and will be amortized over 2 to 14 years (average of 11 years).  Acquired in-process research and development will be accounted for as indefinite lived intangible assets until regulatory approval or discontinuation.  The net tangible assets acquired consist primarily of trade accounts receivable of approximately $695 million, inventory of approximately $420 million, property and equipment of approximately $710 million, net of assumed liabilities, primarily trade accounts payable, accrued compensation and other liabilities.

 

The following unaudited pro forma financial information reflects the consolidated results of operations of Abbott as if the acquisition of Solvay Pharmaceuticals had taken place on January 1, 2010 and January 1, 2009.  The pro forma information includes adjustments for amortization of intangible assets and fair value adjustments to acquisition-date inventory as well as acquisition and integration expenses.  The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transaction been effected on the assumed date. (in billions of dollars, except per share amounts)

 

9



 

Notes to Condensed Consolidated Financial Statements

June 30, 2010

(Unaudited), continued

 

 

 

Three Months Ended
June 30

 

Six Months Ended
June 30

 

 

 

2010

 

2009

 

2010

 

2009

 

Net sales

 

$

8.8

 

$

8.3

 

$

17.1

 

$

15.7

 

Net earnings

 

1.3

 

1.2

 

2.3

 

2.5

 

Diluted earnings per common share

 

0.83

 

0.78

 

1.46

 

1.63

 

 

In March 2010, Abbott acquired STARLIMS Technologies for approximately $100 million, in cash, net of cash held by STARLIMS, providing Abbott with leading products and expertise to build its position in laboratory informatics.   A substantial portion of the fair value of the acquisition has been allocated to amortizable intangible assets and goodwill. The allocation of the fair value of the acquisition will be finalized when the valuation is completed.

 

In April 2010, Abbott acquired the outstanding shares of Facet Biotech Corporation for approximately $430 million, in cash, net of cash held by Facet.   The acquisition enhances Abbott’s early- and mid-stage pharmaceutical pipeline, including a biologic for multiple sclerosis and compounds that complement Abbott’s oncology program.  A substantial portion of the fair value of the acquisition has been allocated to acquired in-process research and development that will be accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation.  The allocation of the fair value of the acquisition will be finalized when the valuation is completed.

 

In February 2009, Abbott acquired the outstanding shares of Advanced Medical Optics, Inc. (AMO) 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 AMO’s premier position in its field. Abbott acquired control of this business on February 25, 2009 and the financial results of the acquired operations are included in these financial statements beginning on that date. The acquisition was financed with long-term debt. The allocation of the fair value of the acquisition is shown in the table below: (dollars in billions)

 

Goodwill, non-deductible

 

$

1.7

 

Acquired intangible assets, non-deductible

 

0.9

 

Acquired in-process research and development, non-deductible

 

0.2

 

Acquired net tangible assets

 

0.4

 

Acquired debt

 

(1.5

)

Deferred income taxes recorded at acquisition

 

(0.3

)

Total allocation of fair value

 

$

1.4

 

 

Acquired intangible assets consist of established customer relationships, developed technology and trade names and are amortized over 2 to 30 years (average of 15 years). Acquired in-process research and development is 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. In addition, subsequent to the acquisition, Abbott repaid substantially all of the acquired debt of AMO.

 

In January 2009, Abbott acquired Ibis Biosciences, Inc. (Ibis) for $175 million, in cash, to expand Abbott’s position in molecular diagnostics for infectious disease. Including a $40 million investment in Ibis in 2008, Abbott 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 that 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 connection with the acquisition, the carrying amount of this investment was revalued to fair value resulting in recording $33 million of income, which is reported as Other (income) expense, net.

 

10



 

Notes to Condensed Consolidated Financial Statements

June 30, 2010

(Unaudited), continued

 

The allocation of the fair value of the 2009 acquisitions of Visiogen, Inc. and Evalve, Inc. will be completed when the valuations are completed.

 

Except for the acquisition of Solvay Pharmaceuticals, had the above acquisitions taken place on January 1 of the previous year, consolidated net sales and income would not have been significantly different from reported amounts.

 

In May 2010, Abbott announced an agreement to acquire Piramal Healthcare Limited’s Healthcare Solutions business, a leader in the Indian branded generics market, for $2.12 billion, in cash, plus additional payments of $400 million annually in 2011, 2012, 2013 and 2014.  This transaction is expected to close in the second half of 2010.

 

Note 10 — Acquired In-process Research and Development

 

In the second quarter of 2010, Abbott entered into an agreement to develop and commercialize a product for the treatment of endometriosis resulting in a charge to acquired in-process research and development of $75 million.  Additional payments of approximately $500 million could be required for the achievement of certain development, regulatory and commercial milestones.

 

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 $816 million and $2.0 billion at June 30, 2010 and December 31, 2009, 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 June 30, 2010 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 2010 and 2009 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 June 30, 2010 and December 31, 2009, Abbott held $8.6 billion and $7.5 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 a foreign subsidiary of approximately $600 million and approximately $575 million as of June 30, 2010 and December 31, 2009, 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 $7.3 billion and $5.5 billion at June 30, 2010 and December 31, 2009, respectively, to manage its exposure to changes in the fair value of $7.3 billion and $5.5 billion, respectively, of fixed-rate debt due 2011 through 2020.  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 2010 or 2009 for these hedges.

 

11



 

Notes to Condensed Consolidated Financial Statements

June 30, 2010

(Unaudited), continued

 

The following table summarizes the amounts and location of certain derivative financial instruments as of June 30, 2010 and December 31, 2009:

 

 

 

Fair Value - Assets

 

Fair Value - Liabilities

 

(dollars in millions)

 

June 30
2010

 

Dec. 31
2009

 

Balance Sheet Caption

 

June 30
2010

 

Dec. 31
2009

 

Balance Sheet Caption

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps designated as fair value hedges

 

$

176

 

$

80

 

Deferred income taxes and other assets

 

$

3

 

$

218

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps designated as fair value hedges

 

15

 

 

Prepaid expenses, deferred income taxes, and other receivables

 

 

 

n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward exchange contracts —

 

 

 

 

 

 

 

 

 

 

 

 

 

Hedging instruments

 

120

 

 

Prepaid expenses, deferred income taxes, and other receivables

 

1

 

27

 

Salaries, dividends payable and other accruals

 

Others not designated as hedges

 

146

 

31

 

 

71

 

87

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt designated as a hedge of net investment in a foreign subsidiary

 

 

 

n/a

 

600

 

575

 

Short-term borrowings

 

 

 

$

457

 

$

111

 

 

 

$

675

 

$

907

 

 

 

 

The following table summarizes the activity for foreign currency forward exchange contracts designated as cash flow hedges, debt designated as a hedge of net investment in a foreign subsidiary and the amounts and location of income (expense) and gain (loss) reclassified into income in the second quarter and first six months of 2010 and 2009 and for certain other derivative financial instruments.  The amount of hedge ineffectiveness was not significant in 2010 and 2009 for these hedges.

 

 

 

Gain (loss) Recognized in Other
Comprehensive Income (loss)

 

Income (expense) and Gain (loss)
Reclassified into Income

 

 

 

 

 

Three Months
Ended June 30

 

Six Months
Ended June 30

 

Three Months
Ended June 30

 

Six Months
Ended June 30

 

Income Statement

 

(dollars in millions)

 

2010

 

2009

 

2010

 

2009

 

2010

 

2009

 

2010

 

2009

 

Caption

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward exchange contracts designated as cash flow hedges

 

$

34

 

$

(14

)

$

61

 

$

(17

)

$

 

$

(3

)

$

 

$

(5

)

Cost of products sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt designated as a hedge of net investment in a foreign subsidiary

 

(28

)

(9

)

(26

)

32

 

 

 

 

 

n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps designated as fair value hedges

 

n/a

 

n/a

 

n/a

 

n/a

 

250

 

(305

)

326

 

(328

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward exchange contracts not designated as hedges

 

n/a

 

n/a

 

n/a

 

n/a

 

70

 

(85

)

84

 

(11

)

Net foreign exchange loss (gain)

 

 

12



 

Notes to Condensed Consolidated Financial Statements

June 30, 2010

(Unaudited), continued

 

The interest rate swaps 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 hedged debt is marked to market, offsetting the effect of marking the interest rate swaps to market.

 

The carrying values and fair values of certain financial instruments as of June 30, 2010 and December 31, 2009 are shown in the table below. 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 nonperformance by these counterparties.

 

 

 

June 30 2010

 

December 31 2009

 

(dollars in millions)

 

Carrying
Value

 

Fair
Value

 

Carrying
Value

 

Fair
Value

 

Long-term Investments:

 

 

 

 

 

 

 

 

 

Available-for-sale equity securities

 

$

168

 

$

168

 

$

153

 

$

153

 

Note receivable

 

 

 

880

 

925

 

Other

 

83

 

65

 

100

 

79

 

Total Long-term Debt

 

(14,830

)

(16,125

)

(11,477

)

(12,304

)

Foreign Currency Forward Exchange Contracts:

 

 

 

 

 

 

 

 

 

Receivable position

 

266

 

266

 

31

 

31

 

(Payable) position

 

(72

)

(72

)

(114

)

(114

)

Interest Rate Hedge Contracts:

 

 

 

 

 

 

 

 

 

Receivable position

 

191

 

191

 

80

 

80

 

(Payable) position

 

(3

)

(3

)

(218

)

(218

)

 

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

 

 

 

Outstanding

 

Quoted Prices
in Active

 

Significant
Other
Observable

 

Significant
Unobservable

 

(dollars in millions)

 

Balances

 

Markets

 

Inputs

 

Inputs

 

June 30, 2010:

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity and other securities

 

$

78

 

$

68

 

$

 

$

10

 

Interest rate swap derivative financial instruments

 

191

 

 

191

 

 

Foreign currency forward exchange contracts

 

266

 

 

266

 

 

Total Assets

 

$

535

 

$

68

 

$

457

 

$

10

 

 

 

 

 

 

 

 

 

 

 

Fair value of hedged long-term debt

 

$

7,517

 

$

 

$

7,517

 

$

 

Interest rate swap derivative financial instruments

 

3

 

 

3

 

 

Foreign currency forward exchange contracts

 

72

 

 

72

 

 

Contingent consideration related to business combinations

 

418

 

 

 

418

 

Total Liabilities

 

$

8,010

 

$

 

$

7,592

 

$

418

 

 

 

 

 

 

 

 

 

 

 

December 31, 2009:

 

 

 

 

 

 

 

 

 

Equity and other securities

 

$

104

 

$

75

 

$

 

$

29

 

Interest rate swap derivative financial instruments

 

80

 

 

80

 

 

Foreign currency forward exchange contracts

 

31

 

 

31

 

 

Total Assets

 

$

215

 

$

75

 

$

111

 

$

29

 

 

 

 

 

 

 

 

 

 

 

Fair value of hedged long-term debt

 

$

5,362

 

$

 

$

5,362

 

$

 

Interest rate swap derivative financial instruments

 

218

 

 

218

 

 

Foreign currency forward exchange contracts

 

114

 

 

114

 

 

Total Liabilities

 

$

5,694

 

$

 

$

5,694

 

$

 

 

13



 

Notes to Condensed Consolidated Financial Statements

June 30, 2010

(Unaudited), continued

 

The recorded value of investments that are valued using significant unobservable inputs did not change significantly.  Changes in these values are recorded in Accumulated other comprehensive income.  The fair value of the contingent consideration was determined based on an independent appraisal adjusted during the period for the time value of money.

 

Note 12 — Goodwill and Intangible Assets

 

Abbott recorded goodwill of approximately $2.1 billion in 2010 related to the acquisitions of Solvay Pharmaceuticals, STARLIMS Technologies and Facet Biotech.  In addition, in the first quarter of 2010, Abbott paid $250 million to Boston Scientific as a result of the approval to market the Xience V drug-eluting stent in Japan, resulting in an increase in goodwill.  Abbott recorded goodwill of approximately $1.7 billion in 2009 related to the acquisitions of Advanced Medical Optics, Inc. and Ibis Biosciences, Inc.  Goodwill related to the Solvay Pharmaceuticals acquisition was allocated to the Pharmaceutical Products segment, goodwill related to the Boston Scientific payment was allocated to the Vascular Products segment and goodwill associated with the Ibis acquisition was allocated to the Diagnostic Products segment.  Foreign currency translation adjustments and other adjustments decreased goodwill in the first six months of 2010 by approximately $1.3 billion and increased goodwill by approximately $505 million in the first six months of 2009.  The amount of goodwill related to reportable segments at June 30, 2010 was $7.7 billion for the Pharmaceutical Products segment, $208 million for the Nutritional Products segment, $386 million for the Diagnostic Products segment and $2.6 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 $14.6 billion as of June 30, 2010 and $10.8 billion as of December 31, 2009, and accumulated amortization was $5.8 billion as of June 30, 2010 and $5.1 billion as of December 31, 2009.  Indefinite-lived intangible assets, which relate to in-process research and development acquired in a business combination, was approximately $1.5 billion and $610 million at June 30, 2010 and December 31, 2009, respectively. The estimated annual amortization expense for intangible assets is approximately $1.4 billion in 2010, $1.4 billion in 2011, $1.3 billion in 2012, $1.0 billion in 2013 and $945 million in 2014.  Amortizable intangible assets are amortized over 2 to 30 years (average 11 years).

 

14



 

Notes to Condensed Consolidated Financial Statements

June 30, 2010

(Unaudited), continued

 

Note 13 — Restructuring Plans

 

In 2008, Abbott management approved a plan to streamline global manufacturing operations, reduce overall costs, and improve efficiencies in Abbott’s core diagnostic business.  Charges of approximately $29 million and $23 million were recorded in the first six months of 2010 and 2009, respectively, 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)

 

 

 

2010

 

2009

 

Accrued balance at January 1

 

$

98

 

$

110

 

Restructuring charges

 

 

1

 

Payments and other adjustments

 

(5

)

(10

)

Accrued balance at June 30

 

$

93

 

$

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.  Charges of $3 million and $20 million were subsequently recorded in the first six months of 2010 and 2009, respectively, relating to these restructurings, primarily for accelerated depreciation and product transfer costs.  The following summarizes the activity for these restructurings: (dollars in millions)

 

 

 

2010

 

2009

 

Accrued balance at January 1

 

$

145

 

$

105

 

Restructuring charges

 

 

26

 

Payments and other adjustments

 

(71

)

(34

)

Accrued balance at June 30

 

$

74

 

$

97

 

 

15



 

FINANCIAL REVIEW

 

Results of Operations

 

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

 

 

 

Net Sales to External Customers

 

 

 

Three Months Ended June 30

 

Six Months Ended June 30

 

(dollars in millions)

 

2010

 

Percent
Change

 

2009

 

Percent
Change

 

2010

 

Percent
Change

 

2009

 

Percent 
Change

 

Pharmaceutical Products

 

$

4,914

 

24.5

 

$

3,946

 

(4.3

)

$

9,018

 

18.9

 

$

7,582

 

(5.0

)

Nutritional Products

 

1,414

 

10.1

 

1,283

 

4.0

 

2,734

 

10.9

 

2,465

 

5.1

 

Diagnostic Products

 

948

 

8.0

 

878

 

(6.2

)

1,863

 

9.9

 

1,694

 

(4.1

)

Vascular Products

 

835

 

26.9

 

658

 

34.3

 

1,581

 

21.4

 

1,302

 

38.3

 

Total Reportable Segments

 

8,111

 

19.9

 

6,765

 

(0.3

)

15,196

 

16.5

 

13,043

 

0.1

 

Other

 

715

 

(2.0

)

730

 

37.5

 

1,328

 

13.5

 

1,170

 

11.6

 

Net Sales

 

$

8,826

 

17.8

 

$

7,495

 

2.5

 

$

16,524

 

16.3

 

$

14,213

 

0.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total U.S.

 

$

3,791

 

6.4

 

$

3,563

 

4.5

 

$

7,043

 

7.3

 

$

6,565

 

1.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total International

 

$

5,035

 

28.1

 

$

3,932

 

0.7

 

$

9,481

 

24.0

 

$

7,648

 

0.3

 

 

Worldwide sales for the second quarter and the first six months of 2010 compared to 2009 reflect the acquisition of Solvay Pharma