SEC Filing | Abbott Laboratories

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

July 22, 2021

Date of Report (Date of earliest event reported)

ABBOTT LABORATORIES

(Exact name of registrant as specified in charter)

Illinois	1-2189	36-0698440
(State or other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

100 Abbott Park Road

Abbott Park, Illinois 60064-6400

(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (224) 667-6100

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Shares, Without Par Value		ABT		New York Stock Exchange Chicago Stock Exchange, Inc.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02

Results of Operations and Financial Condition

On July 22, 2021, Abbott Laboratories announced its results of operations for the second quarter 2021.

Furnished as Exhibit 99.1, and incorporated herein by reference, is the news release issued by Abbott announcing those results. In that news release, Abbott uses various non-GAAP financial measures including, among others, net earnings from continuing operations excluding specified items. These non-GAAP financial measures adjust for factors that are unusual or unpredictable, such as expenses primarily associated with acquisitions, restructuring actions, cost reduction initiatives, certain litigation, the acquisition of an R&D asset, the impairment of certain assets, the gain on the disposition of an equity method investment, tax benefits associated with specified items, and excess tax benefits associated with share-based compensation. These non-GAAP financial measures also exclude intangible amortization expense to provide greater visibility on the results of operations excluding these costs, similar to how Abbott’s management internally assesses performance. Abbott’s management believes the presentation of these non-GAAP financial measures provides useful information to investors regarding Abbott’s results of operations as these non-GAAP financial measures allow investors to better evaluate ongoing business performance. Abbott’s management also uses these non-GAAP financial measures internally to monitor performance of the businesses. Abbott, however, cautions investors to consider these non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

Item 9.01

Financial Statements and Exhibits

Exhibit No.		Exhibit

99.1		Press Release dated July 22, 2021 (furnished pursuant to Item 2.02).

104

Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ABBOTT LABORATORIES


Date: July 22, 2021	By:	/s/ Robert E. Funck, Jr.
		Robert E. Funck, Jr.
		Executive Vice President, Finance and Chief Financial Officer

Exhibit 99.1

News Release

Abbott Reports Second-Quarter 2021 Results

-	Sales growth of 39.5 percent; organic sales growth of 35.0 percent
-	GAAP diluted EPS from continuing operations growth of 120.0 percent; adjusted diluted EPS growth of 105.3 percent
-	Second-quarter sales, excluding COVID-19 testing-related sales, grew 12.3 percent on a reported basis and 11.3 percent on an organic basis compared to sales in 2019
-	Achieved strong sales growth across all four major business areas
-	Full-year forecast continues to reflect strong, double-digit EPS growth on both a GAAP and adjusted basis

ABBOTT PARK, Ill., July 22, 2021 — Abbott today announced financial results for the second quarter ended June 30, 2021.

Second-quarter sales of $10.2 billion increased 39.5 percent on a reported basis and 35.0 percent on an organic basis, which excludes the impact of foreign exchange.

Second-quarter GAAP diluted EPS was $0.66 and adjusted diluted EPS, which excludes specified items, was $1.17, reflecting 105.3 percent growth versus the prior year.¹

Abbott continues to project full-year 2021 diluted EPS from continuing operations on a GAAP basis of $2.75 to $2.95 and full-year adjusted diluted EPS from continuing operations of $4.30 to $4.50, reflecting strong, double-digit growth versus the prior year.

Diagnostics sales increased 62.8 percent on a reported basis and 57.2 percent on an organic basis in the second quarter. Global COVID-19 testing-related sales were $1.3 billion in the second quarter.

Nutrition sales increased 11.9 percent on a reported basis and 9.5 percent on an organic basis in the second quarter. Sales performance was led by double-digit growth in Adult Nutrition globally.

Established Pharmaceuticals sales increased 16.4 percent on a reported basis and 14.5 percent on an organic basis in the second quarter. Sales performance was led by double-digit growth in several countries, including India, China, Russia, and several countries across Latin America.

Medical Devices sales increased 51.3 percent on a reported basis and 45.1 percent on an organic basis in the second quarter. Compared to pre-pandemic sales in 2019, Medical Devices sales increased 19.2 percent on a reported basis and 15.6 percent on an organic basis in the second quarter, led by double-digit growth in Electrophysiology, Heart Failure, Structural Heart and Diabetes Care.²

"We're achieving very strong growth across our portfolio," said Robert B. Ford, president and chief executive officer, Abbott. "Perhaps most impressively, excluding COVID testing-related sales, our sales grew more than 11 percent on an organic basis compared to pre-pandemic levels in the second quarter of 2019, which demonstrates the fundamental strength of our performance."

—more—

SECOND-Quarter Business Overview

Note: Management believes that measuring sales growth rates on an organic basis is an appropriate way for investors to best understand the underlying performance of the business. Organic sales growth excludes the impact of foreign exchange.

Following are sales by business segment and commentary for the second quarter 2021:

Total Company

($ in millions)

							% Change vs. 2Q20
	Sales 2Q21						Reported						Organic
	U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total *		3,581		6,642		10,223		35.8		41.6		39.5		35.8		34.6		35.0
Nutrition		873		1,235		2,108		8.0		14.9		11.9		8.0		10.6		9.5
Diagnostics		1,155		2,092		3,247		34.8		83.9		62.8		34.8		74.0		57.2
Established Pharmaceuticals		--		1,180		1,180		n/a		16.4		16.4		n/a		14.5		14.5
Medical Devices		1,538		2,128		3,666		59.3		46.0		51.3		59.3		35.6		45.1

* Total Q2 2021 Abbott sales from continuing operations include Other Sales of approximately $22 million.

							% Change vs. 1H20
	Sales 1H21						Reported						Organic
	U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total *		7,419		13,260		20,679		35.0		38.7		37.4		35.0		33.3		33.9
Nutrition		1,709		2,435		4,144		5.5		12.3		9.4		5.5		9.8		8.0
Diagnostics		2,796		4,465		7,261		68.5		106.6		90.0		68.5		97.1		84.7
Established Pharmaceuticals		--		2,250		2,250		n/a		9.4		9.4		n/a		10.3		10.3
Medical Devices		2,889		4,097		6,986		31.4		29.6		30.3		31.4		20.8		25.2

* Total 1H 2021 Abbott sales from continuing operations include Other Sales of approximately $38 million.

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 2021 worldwide sales of $10.2 billion increased 39.5 percent on a reported basis and 35.0 percent on an organic basis.

Compared to pre-pandemic sales in 2019, worldwide sales increased 12.3 percent on a reported basis and 11.3 percent on an organic basis in the second quarter, excluding COVID-19 testing-related sales.³

Nutrition

($ in millions)

							% Change vs. 2Q20
	Sales 2Q21						Reported						Organic
	U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		873		1,235		2,108		8.0		14.9		11.9		8.0		10.6		9.5
Pediatric		528		565		1,093		8.9		4.7		6.7		8.9		0.3		4.4
Adult		345		670		1,015		6.6		25.2		18.2		6.6		21.1		15.6

							% Change vs. 1H20
	Sales 1H21						Reported						Organic
	U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l			Total
Total		1,709		2,435		4,144		5.5		12.3		9.4		5.5		9.8			8.0
Pediatric		1,036		1,123		2,159		3.4		1.1		2.2		3.4		(1.4	)		0.8
Adult		673		1,312		1,985		8.9		24.2		18.5		8.9		21.6			16.9

Worldwide Nutrition sales increased 11.9 percent on a reported basis and 9.5 percent on an organic basis in the second quarter. Strong performance of Ensure^®, Abbott's market-leading complete and balanced nutrition brand, and Glucerna^®, Abbott's market-leading diabetes nutrition brand, led to global Adult Nutrition sales growth of 18.2 percent on a reported basis and 15.6 percent on an organic basis.

Worldwide Pediatric Nutrition sales increased 6.7 percent on a reported basis and 4.4 percent on an organic basis. Strong performance of Abbott's market-leading toddler brands, Pedialyte^®and PediaSure^®, and continued share growth in infant nutrition led to U.S. Pediatric Nutrition growth of 8.9 percent.

Diagnostics

($ in millions)

							% Change vs. 2Q20
	Sales 2Q21						Reported									Organic
	U.S.		Int'l		Total		U.S.			Int'l			Total			U.S.			Int'l			Total
Total		1,155		2,092		3,247		34.8			83.9			62.8			34.8			74.0			57.2
Core Laboratory		283		1,023		1,306		(2.2	)		46.6			32.3			(2.2	)		38.7			26.7
Molecular		94		196		290		(34.8	)		(8.7	)		(19.1	)		(34.8	)		(15.2	)		(23.1	)
Point of Care		97		40		137		24.2			(1.2	)		15.7			24.2			(5.9	)		14.1
Rapid Diagnostics		681		833		1,514		97.2			349.4			185.4			97.2			327.1			177.6

							% Change vs. 1H20
	Sales 1H21						Reported							Organic
	U.S.		Int'l		Total		U.S.			Int'l		Total		U.S.			Int'l			Total
Total		2,796		4,465		7,261		68.5			106.6		90.0		68.5			97.1			84.7
Core Laboratory		554		1,934		2,488		(0.2	)		36.2		25.9		(0.2	)		29.8			21.4
Molecular		269		468		737		28.8			61.9		48.0		28.8			52.8			42.7
Point of Care		189		77		266		4.0			3.0		3.7		4.0			(1.4	)		2.4
Rapid Diagnostics		1,784		1,986		3,770		150.1			426.3		245.7		150.1			403.7			237.9

Worldwide Diagnostics sales increased 62.8 percent on a reported basis in the second quarter and increased 57.2 percent on an organic basis. Global COVID-19 testing-related sales were $1.3 billion in the second quarter, led by combined sales of $1.0 billion from Abbott's BinaxNOW^®, Panbio^®and ID NOW^® rapid testing platforms. Excluding COVID-19 testing-related sales, worldwide diagnostics sales increased 42.5 percent on a reported basis in the second quarter and 37.2 percent on an organic basis.⁴Compared to 2019, sales in Core Laboratory and Molecular Diagnostics, excluding COVID-19 testing-related sales, grew 6.8 percent and 8.3 percent, respectively, on a reported basis in the second quarter and grew 4.2 percent and 6.5 percent, respectively, on an organic basis.⁵

Established Pharmaceuticals

($ in millions)

							% Change vs. 2Q20
	Sales 2Q21						Reported						Organic
	U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		--		1,180		1,180		n/a		16.4		16.4		n/a		14.5		14.5
Key Emerging Markets		--		915		915		n/a		19.7		19.7		n/a		18.4		18.4
Other		--		265		265		n/a		6.5		6.5		n/a		2.6		2.6

							% Change vs. 1H20
	Sales 1H21						Reported						Organic
	U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		--		2,250		2,250		n/a		9.4		9.4		n/a		10.3		10.3
Key Emerging Markets		--		1,736		1,736		n/a		10.1		10.1		n/a		12.4		12.4
Other		--		514		514		n/a		7.1		7.1		n/a		3.4		3.4

Established Pharmaceuticals sales increased 16.4 percent on a reported basis in the second quarter and increased 14.5 percent on an organic basis.

Key Emerging Markets include India, Brazil, Russia 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 geographies increased 19.7 percent on a reported basis in the quarter and increased 18.4 percent on an organic basis. Organic sales growth was led by strong growth across several geographies, including India, China, Russia, and several countries across Latin America.

Other sales increased 6.5 percent on a reported basis in the quarter and increased 2.6 percent on an organic basis.

Medical Devices

($ in millions)

							% Change vs. 2Q20
	Sales 2Q21						Reported						Organic
	U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		1,538		2,128		3,666		59.3		46.0		51.3		59.3		35.6		45.1
Rhythm Management		269		298		567		46.0		37.2		41.2		46.0		27.7		36.1
Electrophysiology		209		278		487		74.6		55.6		63.2		74.6		47.2		58.2
Heart Failure		168		59		227		46.8		35.7		43.8		46.8		25.8		41.0
Vascular		246		451		697		45.4		44.2		44.6		45.4		35.1		38.7
Structural Heart		191		231		422		109.4		75.1		89.2		109.4		63.3		82.2
Neuromodulation		166		44		210		95.1		110.4		98.1		95.1		92.7		94.7
Diabetes Care		289		767		1,056		43.4		38.7		40.0		43.4		27.3		31.6

							% Change vs. 1H20
	Sales 1H21						Reported						Organic
	U.S.		Int'l		Total		U.S.		Int'l		Total		U.S.		Int'l		Total
Total		2,889		4,097		6,986		31.4		29.6		30.3		31.4		20.8		25.2
Rhythm Management		510		576		1,086		23.7		24.5		24.1		23.7		16.2		19.7
Electrophysiology		388		530		918		36.7		31.5		33.7		36.7		24.0		29.3
Heart Failure		313		108		421		17.5		14.2		16.6		17.5		6.2		14.5
Vascular		465		867		1,332		16.5		22.6		20.4		16.5		15.3		15.7
Structural Heart		360		439		799		58.6		39.8		47.7		58.6		30.4		42.2
Neuromodulation		311		83		394		40.3		36.9		39.5		40.3		26.3		37.3
Diabetes Care		542		1,494		2,036		39.7		33.5		35.1		39.7		23.4		27.6

Worldwide Medical Devices sales increased 51.3 percent on a reported basis in the second quarter and increased 45.1 percent on an organic basis. Strong growth in the quarter was driven by continued strong recovery from the COVID-19 pandemic.

Compared to pre-pandemic sales in 2019, Medical Devices sales increased 19.2 percent on a reported basis and 15.6 percent on an organic basis in the second quarter, led by double-digit growth in Electrophysiology, Heart Failure, Structural Heart and Diabetes Care.²

In Structural Heart, MitraClip^®sales increased 88.0 percent on a reported basis and 82.1 percent on an organic basis in the second quarter compared to the prior year, driven by the highest-ever number of MitraClip procedures in the second quarter.

In Diabetes Care, sales of FreeStyle Libre^®and Libre Sense^® were $904 million in the quarter, which represents 52.5 percent reported sales growth and 42.9 percent organic sales growth compared to the prior year.

Abbott'S EARNINGS-PER-SHARE guidance

Abbott projects 2021 diluted earnings per share from continuing operations under GAAP of $2.75 to $2.95. Abbott forecasts specified items for the full-year 2021 of $1.55 per share primarily related to intangible amortization, restructuring and cost reduction initiatives, including expenses to align its COVID-19 testing-related business with current and projected demand, expenses associated with acquisitions and other net expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $4.30 to $4.50 for full-year 2021.

Abbott declares 390^th consecutive QUARTERLY DIVIDEND

On June 11, 2021, the board of directors of Abbott declared the company's quarterly dividend of $0.45 per share. Abbott's cash dividend is payable Aug. 16, 2021 to shareholders of record at the close of business on July 15, 2021.

Abbott has increased its dividend payout for 49 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 leader that helps people live more fully at all stages of life. Our portfolio of life-changing technologies spans the spectrum of healthcare, with leading businesses and products in diagnostics, medical devices, nutritionals and branded generic medicines. Our 109,000 colleagues serve people in more than 160 countries.

Connect with us at www.abbott.com, on LinkedIn at www.linkedin.com/company/abbott-/, on Facebook at www.facebook.com/Abbott and on Twitter @AbbottNews.

Abbott will live-webcast its 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 webcast 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" in our Annual Report on Form 10-K for the year ended Dec. 31, 2020, and are incorporated herein by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.

Abbott Financial:

Scott Leinenweber, 224-668-0791

Michael Comilla, 224-668-1872

Laura Dauer, 224-667-2299

Abbott Media:

Darcy Ross, 224-667-3655

Kate Dyer, 224-668-9965

Second-quarter 2021 diluted EPS from continuing operations on a GAAP basis reflects 120.0 percent growth.

In the second quarter of 2019, Medical Devices sales were $3.075 billion.

In the second quarter of 2019, worldwide sales were $7.979 billion. In the second quarter of 2021, COVID-19 testing-related sales were $1.267 billion.

⁴

In the second quarter of 2020, Diagnostics sales were $1.99 billion, which included COVID-19 testing-related sales of $0.6 billion.

⁵

In the second quarter of 2019, Core Laboratory and Molecular Diagnostics sales were $1.169 billion and $107 million, respectively. In the second quarter of 2021, COVID-19 testing-related sales for Core Laboratory and Molecular Diagnostics were $58 million and $173 million, respectively.

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

Second Quarter Ended June 30, 2021 and 2020

(in millions, except per share data)

(unaudited)

		2Q21			2Q20		% Change
Net Sales	$	10,223		$	7,328		39.5

Cost of products sold, excluding amortization expense		4,947			3,263		51.7		1)
Amortization of intangible assets		504			553		(9.0	)
Research and development		654			564		15.7
Selling, general, and administrative		2,726			2,276		19.8
Total Operating Cost and Expenses		8,831			6,656		32.7

Operating Earnings		1,392			672		107.4

Interest expense, net		123			125		(1.0	)
Net foreign exchange (gain) loss		--			(1	)	n/m
Other (income) expense, net		(79	)		22		n/m
Earnings from Continuing Operations before taxes		1,348			526		156.5

Tax expense on Earnings from Continuing Operations		159			(11	)	n/m		2)
Earnings from Continuing Operations		1,189			537		121.5

Earnings from Discontinued Operations, net of taxes		--			--		n/m

Net Earnings	$	1,189		$	537		121.5

Earnings from Continuing Operations, excluding Specified Items, as described below	$	2,115		$	1,018		107.7		3)

Diluted Earnings per Common Share from:
Continuing Operations	$	0.66		$	0.30		120.0
Discontinued Operations		--			--		n/m
Total	$	0.66		$	0.30		120.0

Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, as described below	$	1.17		$	0.57		105.3		3)

Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options		1,793			1,785

NOTES:

See tables on page 13 for an explanation of certain non-GAAP financial information.

n/m = Percent change is not meaningful.

See footnotes on the following page.

2021 Cost of products sold, excluding amortization expense includes approximately $500 million of charges associated with a restructuring plan to align Abbott's manufacturing network for COVID-19 diagnostic tests with changes during the second quarter in projected testing demand.

2020 Tax expense on Earnings from Continuing Operations includes the recognition of approximately $80 million of net tax benefits as a result of the resolution of various tax positions related to prior years and approximately $20 million in excess tax benefits associated with share-based compensation.

2021 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $926 million, or $0.51 per share, for intangible amortization and other net expenses primarily associated with restructuring actions, certain litigation and acquisitions.

2020 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $481 million, or $0.27 per share, for intangible amortization expense, other expenses primarily associated with acquisitions and restructuring actions and charges for equity investment impairments.

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

First Half Ended June 30, 2021 and 2020

(in millions, except per share data)

(unaudited)

		1H21			1H20	% Change
Net Sales	$	20,679		$	15,054	37.4

Cost of products sold, excluding amortization expense		9,348			6,544	42.9		1)
Amortization of intangible assets		1,013			1,114	(9.1	)
Research and development		1,308			1,142	14.5
Selling, general, and administrative		5,509			4,824	14.2
Total Operating Cost and Expenses		17,178			13,624	26.1

Operating Earnings		3,501			1,430	144.9

Interest expense, net		247			246	0.6
Net foreign exchange (gain) loss		3			4	(46.1	)
Other (income) expense, net		(140	)		21	n/m
Earnings from Continuing Operations before taxes		3,391			1,159	192.6

Tax expense on Earnings from Continuing Operations		409			78	n/m		2)
Earnings from Continuing Operations		2,982			1,081	175.9

Earnings from Discontinued Operations, net of taxes		--			20	n/m

Net Earnings	$	2,982		$	1,101	170.9

Earnings from Continuing Operations, excluding Specified Items, as described below	$	4,483		$	2,180	105.6		3)

Diluted Earnings per Common Share from:
Continuing Operations	$	1.66		$	0.60	176.7
Discontinued Operations		--			0.01	n/m
Total	$	1.66		$	0.61	172.1

Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, as described below	$	2.49		$	1.22	104.1		3)

Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options		1,792			1,783

NOTES:

See tables on page 14 for an explanation of certain non-GAAP financial information.

n/m = Percent change is not meaningful.

See footnotes on the following page.

2021 Tax expense on Earnings from Continuing Operations includes the recognition of approximately $90 million in excess tax benefits associated with share-based compensation.

2020 Tax expense on Earnings from Continuing Operations includes the recognition of approximately $80 million of net tax benefits as a result of the resolution of various tax positions related to prior years and approximately $70 million in excess tax benefits associated with share-based compensation.

2021 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $1.501 billion, or $0.83 per share, for intangible amortization and other net expenses primarily associated with restructuring actions, certain litigation and acquisitions.

2020 Net Earnings and Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, excludes net after-tax charges of $1.099 billion, or $0.62 per share, for intangible amortization expense and other expenses primarily associated with acquisitions and restructuring actions.

Abbott Laboratories and Subsidiaries

Non-GAAP Reconciliation of Financial Information From Continuing Operations

Second Quarter Ended June 30, 2021 and 2020

(in millions, except per share data)

(unaudited)

		2Q21
		As Reported (GAAP)			Specified Items			As Adjusted		% to Sales
Intangible Amortization	$	504		$	(504	)	$	--
Gross Margin		4,772			1,048			5,820		56.9	%
R&D		654			(18	)		636		6.2	%
SG&A		2,726			(90	)		2,636		25.8	%
Other (income) expense, net		(79	)		35			(44	)
Earnings from Continuing Operations before taxes		1,348			1,121			2,469
Tax expense on Earnings from Continuing Operations		159			195			354
Earnings from Continuing Operations		1,189			926			2,115
Diluted Earnings per Share from Continuing Operations	$	0.66		$	0.51		$	1.17

Specified items reflect intangible amortization expense of $504 million and other net expenses of $617 million, primarily associated with restructuring actions, certain litigation, acquisitions and other expenses. See page 16 for additional details regarding specified items.

		2Q20
		As Reported (GAAP)			Specified Items			As Adjusted		% to Sales
Intangible Amortization	$	553		$	(553	)	$	--
Gross Margin		3,512			591			4,103		56.0	%
R&D		564			(28	)		536		7.3	%
SG&A		2,276			(24	)		2,252		30.7	%
Other (income) expense, net		22			(68	)		(46	)
Earnings from Continuing Operations before taxes		526			711			1,237
Tax expense on Earnings from Continuing Operations		(11	)		230			219
Earnings from Continuing Operations		537			481			1,018
Diluted Earnings per Share from Continuing Operations	$	0.30		$	0.27		$	0.57

Specified items reflect intangible amortization expense of $553 million and other expenses of $158 million, primarily associated with acquisitions, restructuring actions and other expenses. See page 17 for additional details regarding specified items.

Abbott Laboratories and Subsidiaries

Non-GAAP Reconciliation of Financial Information From Continuing Operations

First Half Ended June 30, 2021 and 2020

(in millions, except per share data)

(unaudited)

	1H21
	As Reported (GAAP)			Specified Items			As Adjusted			% to Sales
Intangible Amortization	$	1,013		$	(1,013	)	$	--
Gross Margin		10,318			1,597			11,915			57.6	%
R&D		1,308			(46	)		1,262			6.1	%
SG&A		5,509			(244	)		5,265			25.5	%
Other (income) expense, net		(140	)		23			(117	)
Earnings from Continuing Operations before taxes		3,391			1,864			5,255
Tax expense on Earnings from Continuing Operations		409			363			772
Earnings from Continuing Operations		2,982			1,501			4,483
Diluted Earnings per Share from Continuing Operations	$	1.66		$	0.83		$	2.49

Specified items reflect intangible amortization expense of $1.013 billion and other net expenses of $851 million, primarily associated with restructuring actions, certain litigation, acquisitions and other expenses. See page 18 for additional details regarding specified items.

	1H20
	As Reported (GAAP)		Specified Items			As Adjusted			% to Sales
Intangible Amortization	$	1,114	$	(1,114	)	$	--
Gross Margin		7,396		1,190			8,586			57.0	%
R&D		1,142		(43	)		1,099			7.3	%
SG&A		4,824		(82	)		4,742			31.5	%
Other (income) expense, net		21		(110	)		(89	)
Earnings from Continuing Operations before taxes		1,159		1,425			2,584
Tax expense on Earnings from Continuing Operations		78		326			404
Earnings from Continuing Operations		1,081		1,099			2,180
Diluted Earnings per Share from Continuing Operations	$	0.60	$	0.62		$	1.22

Specified items reflect intangible amortization expense of $1.114 billion and other expenses of $311 million, primarily associated with acquisitions, restructuring actions and other expenses. See page 19 for additional details regarding specified items.

A reconciliation of the second-quarter tax rates for continuing operations for 2021 and 2020 is shown below:

	2Q21
($ in millions)	Pre-Tax Income		Taxes on Earnings		Tax Rate
As reported (GAAP)	$	1,348	$	159		11.9	%
Specified items		1,121		195
Excluding specified items	$	2,469	$	354		14.4	%

	2Q20
($ in millions)	Pre-Tax Income		Taxes on Earnings			Tax Rate
As reported (GAAP)	$	526		(11	)		(2.1	%)	1)
Specified items		711		230
Excluding specified items	$	1,237	$	219			17.7	%

A reconciliation of the year-to-date tax rates for continuing operations for 2021 and 2020 is shown below:

	1H21
($ in millions)	Pre-Tax Income		Taxes on Earnings		Tax Rate
As reported (GAAP)	$	3,391	$	409		12.1	%	2)
Specified items		1,864		363
Excluding specified items	$	5,255	$	772		14.7	%

	1H20
($ in millions)	Pre-Tax Income		Taxes on Earnings		Tax Rate
As reported (GAAP)	$	1,159	$	78		6.7	%	3)
Specified items		1,425		326
Excluding specified items	$	2,584	$	404		15.6	%

2)	2021 Tax expense on Earnings from Continuing Operations includes the recognition of approximately $90 million in excess tax benefits associated with share-based compensation.

2020 Tax expense on Earnings from Continuing Operations includes the recognition of approximately $80 million of net tax benefits as a result of the resolution of various tax positions related to prior years and approximately $70 million in excess tax benefits associated with share-based compensation.

Abbott Laboratories and Subsidiaries

Details of Specified Items

Second Quarter Ended June 30, 2021

(in millions, except per share data)

(unaudited)

	Acquisition or Divestiture- related (a)			Restructuring and Cost Reduction Initiatives (b)		Intangible Amortization		Other (c)			Total Specifieds
Gross Margin	$	21		$	510	$	504		13		$	1,048
R&D		(3	)		1		--		(16	)		(18	)
SG&A		(18	)		2		--		(74	)		(90	)
Other (income) expense, net		(3	)		--		--		38			35
Earnings from Continuing Operations before taxes	$	45		$	507	$	504	$	65			1,121
Tax expense on Earnings from Continuing Operations (d)												195
Earnings from Continuing Operations											$	926
Diluted Earnings per Share from Continuing Operations											$	0.51

The table above provides additional details regarding the specified items described on page 13.

Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities.

Restructuring and cost reduction initiative expenses include severance, outplacement, 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. The Gross Margin amount includes charges associated with a restructuring plan to align Abbott's manufacturing network for COVID-19 diagnostic tests with changes during the second quarter in projected testing demand.

Other includes costs related to certain litigation and the impairment of an intangible asset, as well as a gain on the disposition of an equity method investment.

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, 2020

(in millions, except per share data)

(unaudited)

	Acquisition or Divestiture- related (a)			Restructuring and Cost Reduction Initiatives (b)			Intangible Amortization		Other (c)			Total Specifieds
Gross Margin	$	22		$	15		$	553	$	1		$	591
R&D		(3	)		(2	)		--		(23	)		(28	)
SG&A		(27	)		3			--		--			(24	)
Other (income) expense, net		(3	)		--			--		(65	)		(68	)
Earnings from Continuing Operations before taxes	$	55		$	14		$	553	$	89			711
Tax expense on Earnings from Continuing Operations (d)													230
Earnings from Continuing Operations												$	481
Diluted Earnings per Share from Continuing Operations												$	0.27

The table above provides additional details regarding the specified items described on page 13.

a)	Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for retention, severance, and the integration of systems, processes and business activities.

c)	Other primarily relates to the impairment of equity investments and the costs to acquire research and development assets.

d)	Reflects the net tax benefit associated with the specified items, the resolution of prior years' tax positions and excess tax benefits associated with share-based compensation.

Abbott Laboratories and Subsidiaries

Details of Specified Items

First Half Ended June 30, 2021

(in millions, except per share data)

(unaudited)

	Acquisition or Divestiture- related (a)			Restructuring and Cost Reduction Initiatives (b)		Intangible Amortization		Other (c)			Total Specifieds
Gross Margin	$	40		$	529	$	1,013		15		$	1,597
R&D		(5	)		1		--		(42	)		(46	)
SG&A		(31	)		1		--		(214	)		(244	)
Other (income) expense, net		(3	)		1		--		25			23
Earnings from Continuing Operations before taxes	$	79		$	526	$	1,013	$	246			1,864
Tax expense on Earnings from Continuing Operations (d)												363
Earnings from Continuing Operations											$	1,501
Diluted Earnings per Share from Continuing Operations											$	0.83

The table above provides additional details regarding the specified items described on page 14.

a)	Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for the integration of systems, processes and business activities.

c)	Other primarily relates to the costs related to certain litigation, the acquisition of a research and development asset, the impairments of an equity investment and an intangible asset, and the gain on the disposition of an equity method investment.

d)	Reflects the net tax benefit associated with the specified items and excess tax benefits associated with share-based compensation.

Abbott Laboratories and Subsidiaries

Details of Specified Items

First Half Ended June 30, 2020

(in millions, except per share data)

(unaudited)

	Acquisition or Divestiture- related (a)			Restructuring and Cost Reduction Initiatives (b)			Intangible Amortization		Other (c)			Total Specifieds
Gross Margin	$	45		$	30		$	1,114	$	1		$	1,190
R&D		(7	)		(8	)		--		(28	)		(43	)
SG&A		(55	)		(27	)		--		--			(82	)
Other (income) expense, net		(1	)		--			--		(109	)		(110	)
Earnings from Continuing Operations before taxes	$	108		$	65		$	1,114	$	138			1,425
Tax expense on Earnings from Continuing Operations (d)													326
Earnings from Continuing Operations												$	1,099
Diluted Earnings per Share from Continuing Operations												$	0.62

The table above provides additional details regarding the specified items described on page 14.

Acquisition-related expenses include integration costs, which represent incremental costs directly related to integrating the acquired businesses and include expenditures for retention, severance, and the integration of systems, processes and business activities.

Other primarily relates to the impairment of equity investments and the costs to acquire research and development assets.

Reflects the net tax benefit associated with the specified items, the resolution of prior years' tax positions and excess tax benefits associated with share-based compensation.

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