Abbott Laboratories 10-Q for FY2021 Q2

Abbott Laboratories (ABT)

10-Q 2021-08-04 For: 2021-06-30

Added on April 11, 2026

About this 10-Q

Abbott Laboratories filed this 10-Q on August 4, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $10.22B; up 39.5% from $7.33B a year earlier
Net income: $1.19B; up 121.4% from net income of $537M a year earlier
Diluted EPS: $0.66; up 120.0% from $0.30 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	8
Notes to the Condensed Consolidated Financial Statements	9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 4. Controls and Procedures	28

Part II - Other Information

Item 1. Legal Proceedings	28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	28

Item 6. Exhibits	29

Signature	30


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
Net sales	$	10,223	$	7,328	$	20,679	$	15,054

Cost of products sold, excluding amortization of intangible assets		4,947		3,263		9,348		6,544
Amortization of intangible assets		504		553		1,013		1,114
Research and development		654		564		1,308		1,142
Selling, general and administrative		2,726		2,276		5,509		4,824
Total operating cost and expenses		8,831		6,656		17,178		13,624

Operating earnings		1,392		672		3,501		1,430

Interest expense		134		134		269		273
Interest (income)		(11)		(9)		(22)		(27)
Net foreign exchange (gain) loss		—		(1)		3		4
Other (income) expense, net		(79)		22		(140)		21
Earnings from continuing operations before taxes		1,348		526		3,391		1,159
Tax expense (benefit) on earnings from continuing operations		159		(11)		409		78
Earnings from continuing operations		1,189		537		2,982		1,081

Earnings from discontinued operations, net of tax		—		—		—		20

Net Earnings	$	1,189	$	537	$	2,982	$	1,101

Basic Earnings Per Common Share —
Continuing operations	$	0.67	$	0.30	$	1.67	$	0.61
Discontinued operations		—		—		—		0.01
Net earnings	$	0.67	$	0.30	$	1.67	$	0.62

Diluted Earnings Per Common Share —
Continuing operations	$	0.66	$	0.30	$	1.66	$	0.60
Discontinued operations		—		—		—		0.01
Net earnings	$	0.66	$	0.30	$	1.66	$	0.61

Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share		1,779,203		1,772,953		1,778,049		1,770,970
Dilutive Common Stock Options		14,076		12,087		14,369		11,882
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options		1,793,279		1,785,040		1,792,418		1,782,852

Outstanding Common Stock Options Having No Dilutive Effect		2,720		50		2,694		50


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
Net Earnings	$	1,189	$	537	$	2,982	$	1,101
Foreign currency translation gain (loss) adjustments		165		355		(371)		(789)
Net actuarial gains (losses) and amortization of net actuarial losses and prior service costs and credits, net of taxes of $18 and $36 in 2021 and $13 and $28 in 2020		48		37		133		94
Net gains (losses) for derivative instruments designated as cash flow hedges and other, net of taxes of $2 and $48 in 2021 and $(29) and $19 in 2020		6		(86)		118		80
Other comprehensive income (loss)		219		306		(120)		(615)
Comprehensive Income	$	1,408	$	843	$	2,862	$	486


⌧	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


	June 30,		December 31,
	2021		2020
Supplemental Accumulated Other Comprehensive Income (Loss) Information, net of tax:
Cumulative foreign currency translation (loss) adjustments	$	(5,230)	$	(4,859)
Net actuarial (losses) and prior service (costs) and credits		(3,738)		(3,871)
Cumulative gains (losses) on derivative instruments designated as cash flow hedges and other		(98)		(216)
Accumulated other comprehensive income (loss)	$	(9,066)	$	(8,946)


Liabilities and Shareholders’ Investment
Current Liabilities:
Short-term borrowings	$	199	$	213
Trade accounts payable		4,017		3,946
Salaries, wages and commissions		1,248		1,416
Other accrued liabilities		5,354		5,165
Dividends payable		799		798
Income taxes payable		242		362
Current portion of long-term debt		755		7
Total Current Liabilities		12,614		11,907
Long-term debt		17,547		18,527
Post-employment obligations, deferred income taxes and other long-term liabilities		9,079		9,111
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: 2021: 1,982,553,488; 2020: 1,981,156,896		24,153		24,145
Common shares held in treasury, at cost — Shares: 2021: 209,736,139; 2020: 209,926,622		(10,340)		(10,042)
Earnings employed in the business		29,053		27,627
Accumulated other comprehensive income (loss)		(9,066)		(8,946)
Total Abbott Shareholders’ Investment		33,800		32,784
Noncontrolling Interests in Subsidiaries		229		219
Total Shareholders’ Investment		34,029		33,003
	$	73,269	$	72,548


	Three Months Ended June 30, 2021						Three Months Ended June 30, 2020
(in millions)	U.S.		Int’l		Total		U.S.		Int’l		Total
Established Pharmaceutical Products —
Key Emerging Markets	$	—	$	915	$	915	$	—	$	764	$	764
Other		—		265		265		—		249		249
Total		—		1,180		1,180		—		1,013		1,013

Nutritionals —
Pediatric Nutritionals		528		565		1,093		484		540		1,024
Adult Nutritionals		345		670		1,015		324		535		859
Total		873		1,235		2,108		808		1,075		1,883

Diagnostics —
Core Laboratory		283		1,023		1,306		289		698		987
Molecular		94		196		290		144		215		359
Point of Care		97		40		137		79		39		118
Rapid Diagnostics		681		833		1,514		345		185		530
Total		1,155		2,092		3,247		857		1,137		1,994

Medical Devices —
Rhythm Management		269		298		567		185		216		401
Electrophysiology		209		278		487		120		179		299
Heart Failure		168		59		227		115		43		158
Vascular		246		451		697		168		313		481
Structural Heart		191		231		422		91		132		223
Neuromodulation		166		44		210		85		21		106
Diabetes Care		289		767		1,056		202		553		755
Total		1,538		2,128		3,666		966		1,457		2,423

Other		15		7		22		7		8		15

Total	$	3,581	$	6,642	$	10,223	$	2,638	$	4,690	$	7,328


	Six Months Ended June 30, 2021						Six Months Ended June 30, 2020
(in millions)	U.S.		Int’l		Total		U.S.		Int’l		Total
Established Pharmaceutical Products —
Key Emerging Markets	$	—	$	1,736	$	1,736	$	—	$	1,577	$	1,577
Other		—		514		514		—		480		480
Total		—		2,250		2,250		—		2,057		2,057

Nutritionals —
Pediatric Nutritionals		1,036		1,123		2,159		1,002		1,111		2,113
Adult Nutritionals		673		1,312		1,985		618		1,056		1,674
Total		1,709		2,435		4,144		1,620		2,167		3,787

Diagnostics —
Core Laboratory		554		1,934		2,488		556		1,420		1,976
Molecular		269		468		737		209		289		498
Point of Care		189		77		266		182		74		256
Rapid Diagnostics		1,784		1,986		3,770		713		377		1,090
Total		2,796		4,465		7,261		1,660		2,160		3,820

Medical Devices —
Rhythm Management		510		576		1,086		413		462		875
Electrophysiology		388		530		918		284		403		687
Heart Failure		313		108		421		267		94		361
Vascular		465		867		1,332		398		708		1,106
Structural Heart		360		439		799		227		314		541
Neuromodulation		311		83		394		222		61		283
Diabetes Care		542		1,494		2,036		388		1,119		1,507
Total		2,889		4,097		6,986		2,199		3,161		5,360

Other		25		13		38		15		15		30

Total	$	7,419	$	13,260	$	20,679	$	5,494	$	9,560	$	15,054


(in millions)
Contract Liabilities:
Balance at December 31, 2020	$	405
Unearned revenue from cash received during the period		280
Revenue recognized related to contract liability balance		(279)
Balance at June 30, 2021	$	406


(in millions)
Allowance for Doubtful Accounts:
Balance at December 31, 2020	$	288
Provisions/charges to income		31
Amounts charged off and other deductions		(9)
Balance at June 30, 2021	$	310


	Three Months Ended June 30
									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)	2021		2020		2021		2020		2021		2020
Balance at March 31	$	(5,395)	$	(6,068)	$	(3,786)	$	(3,483)	$	(104)	$	165
Other comprehensive income (loss) before reclassifications		165		355		(12)		(9)		(28)		(67)
Amounts reclassified from accumulated other comprehensive income		—		—		60		46		34		(19)
Net current period comprehensive income (loss)		165		355		48		37		6		(86)
Balance at June 30	$	(5,230)	$	(5,713)	$	(3,738)	$	(3,446)	$	(98)	$	79


	June 30,		December 31,
	2021		2020
Assets
Current Assets:
Cash and cash equivalents	$	8,658	$	6,838
Short-term investments		286		310
Trade receivables, less allowances of $498 in 2021 and $460 in 2020		6,113		6,414
Inventories:
Finished products		3,118		3,030
Work in process		796		712
Materials		1,525		1,270
Total inventories		5,439		5,012
Prepaid expenses and other receivables		2,131		1,867
Total Current Assets		22,627		20,441
Investments		805		821
Property and equipment, at cost		19,074		18,793
Less: accumulated depreciation and amortization		10,258		9,764
Net property and equipment		8,816		9,029
Intangible assets, net of amortization		13,681		14,784
Goodwill		23,485		23,744
Deferred income taxes and other assets		3,855		3,729
	$	73,269	$	72,548


	Six Months Ended June 30
	2021		2020
Cash Flow From (Used in) Operating Activities:
Net earnings	$	2,982	$	1,101
Adjustments to reconcile net earnings to net cash from operating activities —
Depreciation		795		539
Amortization of intangible assets		1,013		1,114
Share-based compensation		420		348
Trade receivables		200		127
Inventories		(542)		(987)
Other, net		(103)		(205)
Net Cash From Operating Activities		4,765		2,037

Cash Flow From (Used in) Investing Activities:
Acquisitions of property and equipment		(810)		(1,002)
Acquisitions of businesses and technologies, net of cash acquired		(15)		(32)
Proceeds from business dispositions		48		48
Sales (purchases) of other investment securities, net		81		(32)
Other		10		6
Net Cash (Used in) Investing Activities		(686)		(1,012)

Cash Flow From (Used in) Financing Activities:
Net borrowings (repayments) of short-term debt and other		20		31
Proceeds from issuance of long-term debt		—		1,279
Repayments of long-term debt		(5)		(2)
Purchases of common shares		(746)		(240)
Proceeds from stock options exercised		103		146
Dividends paid		(1,603)		(1,280)
Other		—		(11)
Net Cash (Used in) Financing Activities		(2,231)		(77)

Effect of exchange rate changes on cash and cash equivalents		(28)		(45)

Net Increase in Cash and Cash Equivalents		1,820		903
Cash and Cash Equivalents, Beginning of Year		6,838		3,860
Cash and Cash Equivalents, End of Period	$	8,658	$	4,763


	Inventory
	Related		Fixed Asset		Other Exit
(in millions)	Charges		Write-Downs		Costs		Total
Restructuring charges recorded in 2021	$	248	$	80	$	171	$	499
Payments		—		—		(19)		(19)
Other-non-cash		(248)		(80)		—		(328)
Accrued balance at June 30, 2021	$	—	$	—	$	152	$	152


	Outstanding		Exercisable
Number of shares		30,091,814		23,273,096
Weighted average remaining life (years)		6.0		5.2
Weighted average exercise price	$	62.45	$	51.56
Aggregate intrinsic value (in millions)	$	1,631	$	1,498


(in millions)
Accrued balance at December 31, 2020	$	70
Restructuring charges recorded in 2021		1
Payments and other adjustments		(24)
Accrued balance at June 30, 2021	$	47


	Fair Value - Assets					Fair Value - Liabilities
	June 30,		Dec. 31,			June 30,		Dec. 31,
(in millions)	2021		2020		Balance Sheet Caption	2021		2020		Balance Sheet Caption
Interest rate swaps designated as fair value hedges	$	143	$	210	Deferred income taxes and other assets	$	—	$	—	Post-employment obligations, deferred income taxes and other long-term liabilities
Foreign currency forward exchange contracts:
Hedging instruments		98		30	Prepaid expenses and other receivables		151		433	Other accrued liabilities
Others not designated as hedges		43		60	Prepaid expenses and other receivables		67		65	Other accrued liabilities
Debt designated as a hedge of net investment in a foreign subsidiary		—		—	n/a		540		577	Long-term debt
	$	284	$	300		$	758	$	1,075


	Gain (loss) Recognized in Other								Income (expense) and Gain (loss)
	Comprehensive Income (loss)								Reclassified into Income
	Three Months				Six Months				Three Months				Six Months
	Ended June 30				Ended June 30				Ended June 30				Ended June 30
(in millions)	2021		2020		2021		2020		2021		2020		2021		2020		Income Statement Caption
Foreign currency forward exchange contracts designated as cash flow hedges	$	(88)	$	(89)	$	46	$	138	$	(92)	$	31	$	(115)	$	42	Cost of products sold
Debt designated as a hedge of net investment in a foreign subsidiary		2		(2)		37		(10)		—		—		—		—	n/a
Interest rate swaps designated as fair value hedges		n/a		n/a		n/a		n/a		2		27		(67)		195	Interest expense


	June 30, 2021				December 31, 2020
	Carrying		Fair		Carrying		Fair
(in millions)	Value		Value		Value		Value
Long-term Investment Securities:
Equity securities	$	754	$	754	$	776	$	776
Other		51		51		45		45
Total Long-term Debt		(18,302)		(21,592)		(18,534)		(22,809)
Foreign Currency Forward Exchange Contracts:
Receivable position		141		141		90		90
(Payable) position		(218)		(218)		(498)		(498)
Interest Rate Hedge Contracts:
Receivable position		143		143		210		210


			Basis of Fair Value Measurement
			Quoted		Significant
			Prices in		Other		Significant
	Outstanding		Active		Observable		Unobservable
(in millions)	Balances		Markets		Inputs		Inputs
June 30, 2021:
Equity securities	$	403	$	403	$	—	$	—
Interest rate swap derivative financial instruments		143		—		143		—
Foreign currency forward exchange contracts		141		—		141		—
Total Assets	$	687	$	403	$	284	$	—

Fair value of hedged long-term debt	$	2,982	$	—	$	2,982	$	—
Foreign currency forward exchange contracts		218		—		218		—
Contingent consideration related to business combinations		67		—		—		67
Total Liabilities	$	3,267	$	—	$	3,200	$	67

December 31, 2020:
Equity securities	$	386	$	386	$	—	$	—
Interest rate swap derivative financial instruments		210		—		210		—
Foreign currency forward exchange contracts		90		—		90		—
Total Assets	$	686	$	386	$	300	$	—

Fair value of hedged long-term debt	$	3,049	$	—	$	3,049	$	—
Foreign currency forward exchange contracts		498		—		498		—
Contingent consideration related to business combinations		68		—		—		68
Total Liabilities	$	3,615	$	—	$	3,547	$	68


	Defined Benefit Plans								Medical and Dental Plans
	Three Months				Six Months				Three Months				Six Months
(in millions)	Ended June 30				Ended June 30				Ended June 30				Ended June 30
	2021		2020		2021		2020		2021		2020		2021		2020
Service cost — benefits earned during the period	$	96	$	81	$	196	$	166	$	14	$	11	$	28	$	23
Interest cost on projected benefit obligations		62		74		124		149		9		9		17		21
Expected return on plan assets		(211)		(191)		(422)		(383)		(7)		(7)		(14)		(14)
Net amortization of:
Actuarial loss, net		78		64		159		127		7		2		14		10
Prior service cost (credit)		1		1		1		1		(7)		(7)		(14)		(14)
Net cost — continuing operations	$	26	$	29	$	58	$	60	$	16	$	8	$	31	$	26


	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
(in millions)	2021		2020		2021		2020		2021		2020		2021		2020
Established Pharmaceutical Products	$	1,180	$	1,013	$	2,250	$	2,057	$	220	$	206	$	389	$	387
Nutritional Products		2,108		1,883		4,144		3,787		490		474		957		933
Diagnostic Products		3,247		1,994		7,261		3,820		1,076		522		2,777		927
Medical Devices		3,666		2,423		6,986		5,360		1,208		391		2,215		1,194
Total Reportable Segments		10,201		7,313		20,641		15,024		2,994		1,593		6,338		3,441
Other		22		15		38		30
Net sales	$	10,223	$	7,328	$	20,679	$	15,054
Corporate functions and benefit plan costs										(132)		(106)		(246)		(238)
Net interest expense										(123)		(125)		(247)		(246)
Share-based compensation (a)										(132)		(115)		(420)		(348)
Amortization of intangible assets										(504)		(553)		(1,013)		(1,114)
Other, net (b)										(755)		(168)		(1,021)		(336)
Earnings from continuing operations before taxes									$	1,348	$	526	$	3,391	$	1,159


							Impact of		Total Change
	June 30,		June 30,		Total		Foreign		Excl. Foreign
(in millions)	2021		2020		Change		Exchange		Exchange
Established Pharmaceutical Products —
Key Emerging Markets	$	1,736	$	1,577	10.1	%	(2.3)	%	12.4	%
Other Emerging Markets		514		480	7.1		3.7		3.4

Nutritionals —
International Pediatric Nutritionals		1,123		1,111	1.1		2.5		(1.4)
U.S. Pediatric Nutritionals		1,036		1,002	3.4		—		3.4
International Adult Nutritionals		1,312		1,056	24.2		2.6		21.6
U.S. Adult Nutritionals		673		618	8.9		—		8.9

Diagnostics —
Core Laboratory		2,488		1,976	25.9		4.5		21.4
Molecular		737		498	48.0		5.3		42.7
Point of Care		266		256	3.7		1.3		2.4
Rapid Diagnostics		3,770		1,090	245.7		7.8		237.9

Medical Devices —
Rhythm Management		1,086		875	24.1		4.4		19.7
Electrophysiology		918		687	33.7		4.4		29.3
Heart Failure		421		361	16.6		2.1		14.5
Vascular		1,332		1,106	20.4		4.7		15.7
Structural Heart		799		541	47.7		5.5		42.2
Neuromodulation		394		283	39.5		2.2		37.3
Diabetes Care		2,036		1,507	35.1		7.5		27.6


						(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
April 1, 2021 – April 30, 2021	18,202	⁽¹⁾	$	120.900	0	$	3,097,391,913	⁽²⁾
May 1, 2021 – May 31, 2021	0	⁽¹⁾		0	0		3,097,391,913	⁽²⁾
June 1, 2021 – June 30, 2021	4,500,000	⁽¹⁾		111.575	4,500,000		2,595,306,483	⁽²⁾
Total	4,518,202	⁽¹⁾	$	111.612	4,500,000	$	2,595,306,483	⁽²⁾


Exhibit No.		Exhibit

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 and six months ended June 30, 2021, 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: August 4, 2021