Abbott Laboratories 10-Q for FY2022 Q1

Abbott Laboratories (ABT)

10-Q 2022-05-03 For: 2022-03-31

Added on April 11, 2026

About this 10-Q

Abbott Laboratories filed this 10-Q on May 3, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $11.9B; up 13.8% from $10.46B a year earlier
Net income: $2.45B; up 36.5% from net income of $1.79B a year earlier
Diluted EPS: $1.37; up 37.0% from $1.00 a year earlier

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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.


Large Accelerated Filer ☒		Accelerated Filer ☐

Non-Accelerated Filer ☐		Smaller reporting company ☐

		Emerging growth company ☐


Part I - Financial Information
	Page
Item 1. Financial Statements and Supplementary Data

Condensed Consolidated Statement of Earnings	3
Condensed Consolidated Statement of Comprehensive Income	4
Condensed Consolidated Balance Sheet	5
Condensed Consolidated Statement of Shareholders’ Investment	6
Condensed Consolidated Statement of Cash Flows	7
Notes to the Condensed Consolidated Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 4. Controls and Procedures	24

Part II - Other Information

Item 1. Legal Proceedings	24

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 6. Exhibits	26

Signature	27


	Three Months Ended
	March 31
	2022		2021
Net sales	$	11,895	$	10,456

Cost of products sold, excluding amortization of intangible assets		4,987		4,401
Amortization of intangible assets		512		509
Research and development		697		654
Selling, general and administrative		2,787		2,783
Total operating cost and expenses		8,983		8,347

Operating earnings		2,912		2,109

Interest expense		131		135
Interest (income)		(14)		(11)
Net foreign exchange (gain) loss		(3)		3
Other (income) expense, net		(78)		(61)
Earnings before taxes		2,876		2,043
Taxes on earnings		429		250
Net Earnings	$	2,447	$	1,793

Basic Earnings Per Common Share	$	1.38	$	1.00

Diluted Earnings Per Common Share	$	1.37	$	1.00

Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share		1,761,911		1,776,842
Dilutive Common Stock Options		12,631		14,661
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options		1,774,542		1,791,503

Outstanding Common Stock Options Having No Dilutive Effect		2,655		2,694


	Three Months Ended
	March 31
	2022		2021
Net Earnings	$	2,447	$	1,793

Foreign currency translation gain (loss) adjustments		(106)		(536)
Net actuarial gains (losses) and amortization of net actuarial (losses) and prior service (costs) and credits, net of taxes of $13 in 2022 and $18 in 2021		62		85
Net gains (losses) for derivative instruments designated as cash flow hedges, net of taxes of $(15) in 2022 and $46 in 2021		(56)		112
Other comprehensive income (loss)		(100)		(339)
Comprehensive Income (Loss)	$	2,347	$	1,454

	March 31,		December 31,
	2022		2021
Supplemental Accumulated Other Comprehensive Income (Loss) Information, net of tax:
Cumulative foreign currency translation (loss) adjustments	$	(5,945)	$	(5,839)
Net actuarial (losses) and prior service (costs) and credits		(2,608)		(2,670)
Cumulative gains (losses) on derivative instruments designated as cash flow hedges		79		135
Accumulated Other Comprehensive Income (Loss)	$	(8,474)	$	(8,374)


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


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

An Illinois Corporation		I.R.S. Employer Identification No.
		36-0698440



Liabilities and Shareholders’ Investment
Current Liabilities:
Trade accounts payable	$	4,757	$	4,408
Salaries, wages and commissions		1,147		1,625
Other accrued liabilities		5,577		5,181
Dividends payable		824		831
Income taxes payable		338		306
Current portion of long-term debt		4		754
Total Current Liabilities		12,647		13,105
Long-term debt		17,086		17,296
Post-employment obligations, deferred income taxes and other long-term liabilities		8,645		8,771
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: 2022: 1,985,525,053; 2021: 1,985,273,421		24,304		24,470
Common shares held in treasury, at cost — Shares: 2022: 234,582,764; 2021: 221,191,228		(13,726)		(11,822)
Earnings employed in the business		33,295		31,528
Accumulated other comprehensive income (loss)		(8,474)		(8,374)
Total Abbott Shareholders’ Investment		35,399		35,802
Noncontrolling Interests in Subsidiaries		230		222
Total Shareholders’ Investment		35,629		36,024
	$	74,007	$	75,196


	Three Months Ended March 31
	2022		2021
Common Shares:
Balance at January 1
Shares: 2022: 1,985,273,421; 2021: 1,981,156,896	$	24,470	$	24,145
Issued under incentive stock programs
Shares: 2022: 251,632; 2021: 1,048,595		14		47
Share-based compensation		324		304
Issuance of restricted stock awards		(504)		(473)
Balance at March 31
Shares: 2022: 1,985,525,053; 2021: 1,982,205,491	$	24,304	$	24,023

Common Shares Held in Treasury:
Balance at January 1
Shares: 2022: 221,191,228; 2021: 209,926,622	$	(11,822)	$	(10,042)
Issued under incentive stock programs
Shares: 2022: 4,144,476; 2021: 4,818,787		223		231
Purchased
Shares: 2022: 17,536,012; 2021: 277,508		(2,127)		(34)
Balance at March 31
Shares: 2022: 234,582,764; 2021: 205,385,343	$	(13,726)	$	(9,845)

Earnings Employed in the Business:
Balance at January 1	$	31,528	$	27,627
Net earnings		2,447		1,793
Cash dividends declared on common shares (per share — 2022: $0.47; 2021: $0.45)		(826)		(803)
Effect of common and treasury share transactions		146		52
Balance at March 31	$	33,295	$	28,669

Accumulated Other Comprehensive Income (Loss):
Balance at January 1	$	(8,374)	$	(8,946)
Other comprehensive income (loss)		(100)		(339)
Balance at March 31	$	(8,474)	$	(9,285)

Noncontrolling Interests in Subsidiaries:
Balance at January 1	$	222	$	219
Noncontrolling Interests’ share of income, business combinations, net of distributions and share repurchases		8		7
Balance at March 31	$	230	$	226


	Three Months Ended March 31, 2022						Three Months Ended March 31, 2021
(in millions)	U.S.		Int’l		Total		U.S.		Int’l		Total
Established Pharmaceutical Products —
Key Emerging Markets	$	—	$	902	$	902	$	—	$	821	$	821
Other		—		245		245		—		249		249
Total		—		1,147		1,147		—		1,070		1,070
Nutritionals —
Pediatric Nutritionals		338		509		847		508		558		1,066
Adult Nutritionals		339		708		1,047		328		642		970
Total		677		1,217		1,894		836		1,200		2,036
Diagnostics —
Core Laboratory		268		916		1,184		271		911		1,182
Molecular		172		248		420		175		272		447
Point of Care		91		37		128		92		37		129
Rapid Diagnostics		2,210		1,344		3,554		1,103		1,153		2,256
Total		2,741		2,545		5,286		1,641		2,373		4,014
Medical Devices —
Rhythm Management		248		276		524		241		278		519
Electrophysiology		216		269		485		179		252		431
Heart Failure		167		54		221		145		49		194
Vascular		209		410		619		219		416		635
Structural Heart		190		221		411		169		208		377
Neuromodulation		143		36		179		145		39		184
Diabetes Care		343		783		1,126		253		727		980
Total		1,516		2,049		3,565		1,351		1,969		3,320

Other		3		—		3		10		6		16

Total	$	4,937	$	6,958	$	11,895	$	3,838	$	6,618	$	10,456


(in millions)
Contract Liabilities:
Balance at December 31, 2021	$	520
Unearned revenue from cash received during the period		171
Revenue recognized related to contract liability balance		(178)
Balance at March 31, 2022	$	513


(in millions)
Allowance for Doubtful Accounts:
Balance at December 31, 2021	$	313
Provisions/charges to income		3
Amounts charged off and other deductions		(15)
Balance at March 31, 2022	$	301


	Three Months Ended March 31
									Cumulative Gains (Losses)
	Cumulative Foreign				Net Actuarial (Losses) and				on Derivative Instruments
	Currency Translation				Prior Service (Costs) and				Designated as Cash Flow
	Adjustments				Credits				Hedges
(in millions)	2022		2021		2022		2021		2022		2021
Balance at January 1	$	(5,839)	$	(4,859)	$	(2,670)	$	(3,871)	$	135	$	(216)
Other comprehensive income (loss) before reclassifications		(106)		(536)		17		22		(34)		96
Amounts reclassified from accumulated other comprehensive income		—		—		45		63		(22)		16
Net current period comprehensive income (loss)		(106)		(536)		62		85		(56)		112
Balance at March 31	$	(5,945)	$	(5,395)	$	(2,608)	$	(3,786)	$	79	$	(104)


	Inventory-
	Related		Fixed Asset		Other Exit
(in millions)	Charges		Write-Downs		Costs		Total
Restructuring charges recorded in 2021	$	248	$	80	$	113	$	441
Payments		—		—		(90)		(90)
Other non-cash		(248)		(80)		—		(328)
Accrued balance at December 31, 2021		—		—		23		23
Payments and other adjustments		—		—		(3)		(3)
Accrued balance at March 31, 2022	$	—	$	—	$	20	$	20


	March 31,		December 31,
	2022		2021
Assets
Current Assets:
Cash and cash equivalents	$	7,675	$	9,799
Short-term investments		483		450
Trade receivables, less allowances of $640 in 2022 and $519 in 2021		7,179		6,487
Inventories:
Finished products		3,470		3,081
Work in process		695		694
Materials		1,526		1,382
Total inventories		5,691		5,157
Prepaid expenses and other receivables		2,401		2,346
Total Current Assets		23,429		24,239
Investments		763		816
Property and equipment, at cost		19,521		19,364
Less: accumulated depreciation and amortization		10,613		10,405
Net property and equipment		8,908		8,959
Intangible assets, net of amortization		12,225		12,739
Goodwill		23,179		23,231
Deferred income taxes and other assets		5,503		5,212
	$	74,007	$	75,196


	Three Months Ended March 31
	2022		2021
Cash Flow From (Used in) Operating Activities:
Net earnings	$	2,447	$	1,793
Adjustments to reconcile net earnings to net cash from operating activities —
Depreciation		311		425
Amortization of intangible assets		512		509
Share-based compensation		305		288
Trade receivables		(751)		165
Inventories		(554)		(537)
Other, net		(205)		(6)
Net Cash From Operating Activities		2,065		2,637

Cash Flow From (Used in) Investing Activities:
Acquisitions of property and equipment		(321)		(397)
Acquisitions of businesses and technologies, net of cash acquired		—		(15)
Sales (purchases) of other investment securities, net		(41)		(14)
Other		2		4
Net Cash (Used in) Investing Activities		(360)		(422)

Cash Flow From (Used in) Financing Activities:
Net borrowings (repayments) of short-term debt and other		8		24
Repayments of long-term debt		(751)		(2)
Purchases of common shares		(2,307)		(275)
Proceeds from stock options exercised		59		86
Dividends paid		(832)		(800)
Net Cash (Used in) Financing Activities		(3,823)		(967)

Effect of exchange rate changes on cash and cash equivalents		(6)		(32)

Net Increase (Decrease) in Cash and Cash Equivalents		(2,124)		1,216
Cash and Cash Equivalents, Beginning of Year		9,799		6,838
Cash and Cash Equivalents, End of Period	$	7,675	$	8,054


	Outstanding		Exercisable
Number of shares		29,479,237		23,547,781
Weighted average remaining life (years)		5.9		5.1
Weighted average exercise price	$	69.87	$	59.23
Aggregate intrinsic value (in millions)	$	1,445	$	1,397


	Gain (loss) Recognized in				Income (expense) and
	Other Comprehensive				Gain (loss) Reclassified
	Income (loss)				into Income
(in millions)	2022		2021		2022		2021		Income Statement Caption
Foreign currency forward exchange contracts designated as cash flow hedges	$	(49)	$	134	$	27	$	(23)	Cost of products sold
Debt designated as a hedge of net investment in a foreign subsidiary		30		35		—		—	n/a
Interest rate swaps designated as fair value hedges		n/a		n/a		(121)		(69)	Interest expense


(in millions)
Restructuring charges	$	68
Payments and other adjustments		(7)
Accrued balance at December 31, 2021		61
Payments and other adjustments		(16)
Accrued balance at March 31, 2022	$	45


	Fair Value - Assets					Fair Value - Liabilities
	March 31,		Dec. 31,			March 31,		Dec. 31,
(in millions)	2022		2021		Balance Sheet Caption	2022		2021		Balance Sheet Caption
Interest rate swaps designated as fair value hedges	$	—	$	87	Deferred income taxes and other assets	$	34	$	—	Post-employment obligations, deferred income taxes and other long-term liabilities
Foreign currency forward exchange contracts:
Hedging instruments		204		222	Prepaid expenses and other receivables		183		65	Other accrued liabilities
Others not designated as hedges		149		70	Prepaid expenses and other receivables		93		32	Other accrued liabilities
Debt designated as a hedge of net investment in a foreign subsidiary		—		—	n/a		491		521	Long-term debt
	$	353	$	379		$	801	$	618


	March 31, 2022				December 31, 2021
	Carrying		Fair		Carrying		Fair
(in millions)	Value		Value		Value		Value
Long-term Investment Securities:
Equity securities	$	703	$	703	$	748	$	748
Other		60		60		68		68
Total long-term debt		(17,090)		(18,704)		(18,050)		(21,152)
Foreign Currency Forward Exchange Contracts:
Receivable position		353		353		292		292
(Payable) position		(276)		(276)		(97)		(97)
Interest Rate Hedge Contracts:
Receivable position		—		—		87		87
(Payable) position		(34)		(34)		—		—


			Basis of Fair Value Measurement
			Quoted		Significant
			Prices in		Other		Significant
	Outstanding		Active		Observable		Unobservable
(in millions)	Balances		Markets		Inputs		Inputs
March 31, 2022:
Equity securities	$	367	$	367	$	—	$	—
Foreign currency forward exchange contracts		353		—		353		—
Total Assets	$	720	$	367	$	353	$	—

Fair value of hedged long-term debt	$	2,805	$	—	$	2,805	$	—
Interest rate swap derivative financial instruments		34		—		34		—
Foreign currency forward exchange contracts		276		—		276		—
Contingent consideration related to business combinations		134		—		—		134
Total Liabilities	$	3,249	$	—	$	3,115	$	134

December 31, 2021:
Equity securities	$	402	$	402	$	—	$	—
Interest rate swap derivative financial instruments		87		—		87		—
Foreign currency forward exchange contracts		292		—		292		—
Total Assets	$	781	$	402	$	379	$	—

Fair value of hedged long-term debt	$	2,926	$	—	$	2,926	$	—
Foreign currency forward exchange contracts		97		—		97		—
Contingent consideration related to business combinations		130		—		—		130
Total Liabilities	$	3,153	$	—	$	3,023	$	130


	Defined Benefit Plans				Medical and Dental Plans
	March 31,		March 31,		March 31,		March 31,
(in millions)	2022		2021		2022		2021

Service cost — benefits earned during the period	$	96	$	100	$	13	$	14
Interest cost on projected benefit obligations		76		62		10		8
Expected return on plan assets		(236)		(211)		(7)		(7)
Net amortization of:
Actuarial loss, net		59		81		5		7
Prior service cost (credit)		—		—		(6)		(7)
Net cost (credit)	$	(5)	$	32	$	15	$	15


	Three Months Ended March 31
	Net Sales to				Operating
	External Customers				Earnings
(in millions)	2022		2021		2022		2021
Established Pharmaceutical Products	$	1,147	$	1,070	$	242	$	169
Nutritional Products		1,894		2,036		251		467
Diagnostic Products		5,286		4,014		2,569		1,701
Medical Devices		3,565		3,320		1,078		1,007
Total Reportable Segments		11,892		10,440		4,140		3,344
Other		3		16
Net sales	$	11,895	$	10,456
Corporate functions and benefit plans costs						(114)		(114)
Net interest expense						(117)		(124)
Share-based compensation (a)						(305)		(288)
Amortization of intangible assets						(512)		(509)
Other, net (b)						(216)		(266)
Earnings before taxes					$	2,876	$	2,043


	Net Sales to External Customers
	Three Months		Three Months
	Ended		Ended				Impact of		Total Change
	March 31,		March 31,		Total		Foreign		Excl. Foreign
(in millions)	2022		2021		Change		Exchange		Exchange

Established Pharmaceutical Products	$	1,147	$	1,070	7.1	%	(6.3)	%	13.4	%
Nutritional Products		1,894		2,036	(7.0)		(2.6)		(4.4)
Diagnostic Products		5,286		4,014	31.7		(3.4)		35.1
Medical Devices		3,565		3,320	7.4		(4.1)		11.5
Total Reportable Segments		11,892		10,440	13.9		(3.8)		17.7
Other		3		16	(85.8)		—		(85.8)
Net Sales	$	11,895	$	10,456	13.8		(3.7)		17.5

Total U.S.	$	4,937	$	3,838	28.6		—		28.6

Total International	$	6,958	$	6,618	5.1		(6.0)		11.1


						(d) Maximum
						Number (or
					(c) Total Number	Approximate
					of Shares (or	Dollar Value) of
	(a) Total				Units) Purchased	Shares (or Units)
	Number of		(b) Average		as Part of	that May Yet Be
	Shares (or		Price Paid per		Publicly	Purchased Under
	Units)		Share (or		Announced Plans	the Plans or
Period	Purchased		Unit)		or Programs	Programs
January 1, 2022 – January 31, 2022	650,000	⁽¹⁾	$	127.262	650,000	$	5,998,449,112	⁽²⁾
February 1, 2022 – February 28, 2022	8,550,000	⁽¹⁾		123.643	8,550,000		4,941,301,237	⁽²⁾
March 1, 2022 – March 31, 2022	8,113,060	⁽¹⁾		118.344	8,113,060		3,981,169,070	⁽²⁾
Total	17,313,060	⁽¹⁾	$	121.296	17,313,060	$	3,981,169,070	⁽²⁾


Exhibit No.		Exhibit

3.1		By-Laws of Abbott Laboratories, as amended and restated effective April 29, 2022, filed as Exhibit 3.1 to the Abbott Laboratories Current Report on Form 8-K filed on February 22, 2022.

31.1		Certification of Chief Executive Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).

31.2		Certification of Chief Financial Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).

Exhibits 32.1 and 32.2 are furnished herewith and should not be deemed to be “filed” under the Securities Exchange Act of 1934.

32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following financial statements and notes from the Abbott Laboratories Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL: (i) Condensed Consolidated Statement of Earnings; (ii) Condensed Consolidated Statement of Comprehensive Income; (iii) Condensed Consolidated Balance Sheet; (iv) Condensed Consolidated Statement of Shareholders’ Investment; (v) Condensed Consolidated Statement of Cash Flows; and (vi) Notes to the Condensed Consolidated Financial Statements.

104		Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document and included in Exhibit 101).

ABBOTT LABORATORIES

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

	Date: May 3, 2022