Abbott Laboratories 10-Q for FY2021 Q1

Abbott Laboratories (ABT)

10-Q 2021-05-05 For: 2021-03-31

Added on April 11, 2026

About this 10-Q

Abbott Laboratories filed this 10-Q on May 5, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $10.46B; up 35.3% from $7.73B a year earlier
Net income: $1.79B; up 217.9% from net income of $564M a year earlier
Diluted EPS: $1.00; up 222.6% from $0.31 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	18

Item 4. Controls and Procedures	23

Part II - Other Information

Item 1. Legal Proceedings	23

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	23

Item 6. Exhibits	24

Signature	25


	Three Months Ended March 31
	2021		2020
Net sales	$	10,456	$	7,726

Cost of products sold, excluding amortization of intangible assets		4,401		3,281
Amortization of intangible assets		509		561
Research and development		654		578
Selling, general and administrative		2,783		2,548
Total operating cost and expenses		8,347		6,968

Operating earnings		2,109		758

Interest expense		135		139
Interest (income)		(11)		(18)
Net foreign exchange (gain) loss		3		5
Other (income) expense, net		(61)		(1)
Earnings from continuing operations before tax		2,043		633
Tax expense on earnings from continuing operations		250		89
Earnings from continuing operations		1,793		544

Earnings from discontinued operations, net of tax		—		20

Net Earnings	$	1,793	$	564

Basic Earnings Per Common Share —
Continuing operations	$	1.00	$	0.31
Discontinued operations		—		0.01
Net earnings	$	1.00	$	0.32

Diluted Earnings Per Common Share —
Continuing operations	$	1.00	$	0.30
Discontinued operations		—		0.01
Net earnings	$	1.00	$	0.31

Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share		1,776,842		1,768,901
Dilutive Common Stock Options		14,661		11,677
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options		1,791,503		1,780,578

Outstanding Common Stock Options Having No Dilutive Effect		2,694		4,035


	Three Months Ended March 31
	2021		2020
Net Earnings	$	1,793	$	564

Foreign currency translation gain (loss) adjustments		(536)		(1,144)
Net actuarial gains (losses) and amortization of net actuarial (losses) and prior service (cost) and credits, net of taxes of $18 in 2021 and $15 in 2020		85		57
Net gains (losses) for derivative instruments designated as cash flow hedges, net of taxes of $46 in 2021 and $48 in 2020		112		166
Other comprehensive income (loss)		(339)		(921)
Comprehensive Income (Loss)	$	1,454	$	(357)

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


	March 31,		December 31,
	2021		2020
Supplemental Accumulated Other Comprehensive Income (Loss) Information, net of tax:
Cumulative foreign currency translation (loss) adjustments	$	(5,395)	$	(4,859)
Net actuarial (losses) and prior service (cost) and credits		(3,786)		(3,871)
Cumulative gains (losses) on derivative instruments designated as cash flow hedges		(104)		(216)
Accumulated Other Comprehensive Income (Loss)	$	(9,285)	$	(8,946)


Liabilities and Shareholders’ Investment
Current Liabilities:
Short-term borrowings	$	199	$	213
Trade accounts payable		4,066		3,946
Salaries, wages and commissions		1,117		1,416
Other accrued liabilities		5,247		5,165
Dividends payable		801		798
Income taxes payable		276		362
Current portion of long-term debt		756		7
Total Current Liabilities		12,462		11,907
Long-term debt		17,489		18,527
Post-employment obligations, deferred income taxes and other long-term liabilities		9,046		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: 1,982,205,491; 2020: 1,981,156,896		24,023		24,145
Common shares held in treasury, at cost — Shares: 2021: 205,385,343; 2020: 209,926,622		(9,845)		(10,042)
Earnings employed in the business		28,669		27,627
Accumulated other comprehensive income (loss)		(9,285)		(8,946)
Total Abbott Shareholders’ Investment		33,562		32,784
Noncontrolling Interests in Subsidiaries		226		219
Total Shareholders’ Investment		33,788		33,003
	$	72,785	$	72,548


	Three Months Ended March 31, 2021						Three Months Ended March 31, 2020
(in millions)	U.S.		Int’l		Total		U.S.		Int’l		Total
Established Pharmaceutical Products —
Key Emerging Markets	$	—	$	821	$	821	$	—	$	813	$	813
Other		—		249		249		—		231		231
Total		—		1,070		1,070		—		1,044		1,044

Nutritionals —
Pediatric Nutritionals		508		558		1,066		518		571		1,089
Adult Nutritionals		328		642		970		294		521		815
Total		836		1,200		2,036		812		1,092		1,904

Diagnostics —
Core Laboratory		271		911		1,182		267		722		989
Molecular		175		272		447		65		74		139
Point of Care		92		37		129		103		35		138
Rapid Diagnostics		1,103		1,153		2,256		368		192		560
Total		1,641		2,373		4,014		803		1,023		1,826

Medical Devices —
Rhythm Management		241		278		519		228		246		474
Electrophysiology		179		252		431		164		224		388
Heart Failure		145		49		194		152		51		203
Vascular		219		416		635		230		395		625
Structural Heart		169		208		377		136		182		318
Neuromodulation		145		39		184		137		40		177
Diabetes Care		253		727		980		186		566		752
Total		1,351		1,969		3,320		1,233		1,704		2,937

Other		10		6		16		8		7		15

Total	$	3,838	$	6,618	$	10,456	$	2,856	$	4,870	$	7,726


(in millions)
Contract Liabilities:
Balance at December 31, 2020	$	405
Unearned revenue from cash received during the period		174
Revenue recognized related to contract liability balance		(163)
Balance at March 31, 2021	$	416


(in millions)
Allowance for Doubtful Accounts:
Balance at December 31, 2020	$	288
Provisions/charges to income		15
Amounts charged off and other deductions		(8)
Balance at March 31, 2021	$	295


	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)	2021		2020		2021		2020		2021		2020
Balance at January 1	$	(4,859)	$	(4,924)	$	(3,871)	$	(3,540)	$	(216)	$	(1)
Other comprehensive income (loss) before reclassifications		(536)		(1,144)		22		7		96		176
Amounts reclassified from accumulated other comprehensive income		—		—		63		50		16		(10)
Net current period comprehensive income (loss)		(536)		(1,144)		85		57		112		166
Balance at March 31	$	(5,395)	$	(6,068)	$	(3,786)	$	(3,483)	$	(104)	$	165


(in millions)
Accrued balance at December 31, 2020	$	70
Restructuring charges recorded in 2021		1
Payments and other adjustments		(13)
Accrued balance at March 31, 2021	$	58


	Outstanding		Exercisable
Number of shares		30,484,541		23,519,084
Weighted average remaining life (years)		6.2		5.4
Weighted average exercise price	$	62.17	$	51.23
Aggregate intrinsic value (in millions)	$	1,769	$	1,614


	Fair Value - Assets					Fair Value - Liabilities
	March 31,		Dec. 31,			March 31,		Dec. 31,
(in millions)	2021		2020		Balance Sheet Caption	2021		2020		Balance Sheet Caption

Interest rate swaps designated as fair value hedges	$	141	$	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		105		30	Prepaid expenses and other receivables		167		433	Other accrued liabilities
Others not designated as hedges		76		60	Prepaid expenses and other receivables		92		65	Other accrued liabilities
Debt designated as a hedge of net investment in a foreign subsidiary		—		—	n/a		542		577	Long-term debt
	$	322	$	300		$	801	$	1,075


	March 31,		December 31,
	2021		2020
Assets
Current Assets:
Cash and cash equivalents	$	8,054	$	6,838
Short-term investments		318		310
Trade receivables, less allowances of $475 in 2021 and $460 in 2020		6,096		6,414
Inventories:
Finished products		3,219		3,030
Work in process		773		712
Materials		1,395		1,270
Total inventories		5,387		5,012
Prepaid expenses and other receivables		1,962		1,867
Total Current Assets		21,817		20,441
Investments		832		821
Property and equipment, at cost		18,697		18,793
Less: accumulated depreciation and amortization		9,865		9,764
Net property and equipment		8,832		9,029
Intangible assets, net of amortization		14,181		14,784
Goodwill		23,384		23,744
Deferred income taxes and other assets		3,739		3,729
	$	72,785	$	72,548


	Three Months Ended March 31
	2021		2020
Cash Flow From (Used in) Operating Activities:
Net earnings	$	1,793	$	564
Adjustments to reconcile net earnings to net cash from operating activities-
Depreciation		425		267
Amortization of intangible assets		509		561
Share-based compensation		288		233
Trade receivables		165		(104)
Inventories		(537)		(437)
Other, net		(6)		(369)
Net Cash From Operating Activities		2,637		715

Cash Flow From (Used in) Investing Activities:
Acquisitions of property and equipment		(397)		(360)
Acquisitions of businesses and technologies, net of cash acquired		(15)		—
Sales (purchases) of other investment securities, net		(14)		(36)
Other		4		3
Net Cash (Used in) Investing Activities		(422)		(393)

Cash Flow From (Used in) Financing Activities:
Net borrowings (repayments) of short-term debt and other		24		51
Repayments of long-term debt		(2)		(1)
Purchases of common shares		(275)		(236)
Proceeds from stock options exercised		86		89
Dividends paid		(800)		(638)
Net Cash (Used in) Financing Activities		(967)		(735)

Effect of exchange rate changes on cash and cash equivalents		(32)		(70)

Net Increase (Decrease) in Cash and Cash Equivalents		1,216		(483)
Cash and Cash Equivalents, Beginning of Year		6,838		3,860
Cash and Cash Equivalents, End of Period	$	8,054	$	3,377


	March 31, 2021				December 31, 2020
	Carrying		Fair		Carrying		Fair
(in millions)	Value		Value		Value		Value

Long-term Investment Securities:
Equity securities	$	785	$	785	$	776	$	776
Other		47		47		45		45
Total Long-term Debt		(18,245)		(21,046)		(18,534)		(22,809)
Foreign Currency Forward Exchange Contracts:
Receivable position		181		181		90		90
(Payable) position		(259)		(259)		(498)		(498)
Interest Rate Hedge Contracts:
Receivable position		141		141		210		210


	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)	2021		2020		Change		Exchange		Exchange

Established Pharmaceutical Products	$	1,070	$	1,044	2.5	%	(3.7)	%	6.2	%
Nutritional Products		2,036		1,904	6.9		0.5		6.4
Diagnostic Products		4,014		1,826	119.8		5.0		114.8
Medical Devices		3,320		2,937	13.1		4.3		8.8
Total Reportable Segments		10,440		7,711	35.3		2.4		32.9
Other		16		15	7.8		3.6		4.2
Net sales	$	10,456	$	7,726	35.3		2.4		32.9

Total U.S.	$	3,838	$	2,856	34.4		—		34.4

Total International	$	6,618	$	4,870	35.9		3.9		32.0


	Gain (loss) Recognized in				Income (expense) and
	Other Comprehensive				Gain (loss) Reclassified
	Income (loss)				into Income
(in millions)	2021		2020		2021		2020		Income Statement Caption


Foreign currency forward exchange contracts designated as cash flow hedges	$	134	$	227	$	(23)	$	11	Cost of products sold
Debt designated as a hedge of net investment in a foreign subsidiary		35		(8)		—		—	n/a
Interest rate swaps designated as fair value hedges		n/a		n/a		(69)		168	Interest expense


			Basis of Fair Value Measurement
			Quoted		Significant
			Prices in		Other		Significant
	Outstanding		Active		Observable		Unobservable
(in millions)	Balances		Markets		Inputs		Inputs
March 31, 2021:
Equity securities	$	391	$	391	$	—	$	—
Interest rate swap derivative financial instruments		141		—		141		—
Foreign currency forward exchange contracts		181		—		181		—
Total Assets	$	713	$	391	$	322	$	—

Fair value of hedged long-term debt	$	2,980	$	—	$	2,980	$	—
Foreign currency forward exchange contracts		259		—		259		—
Contingent consideration related to business combinations		67		—		—		67
Total Liabilities	$	3,306	$	—	$	3,239	$	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
	March 31,		March 31,		March 31,		March 31,
(in millions)	2021		2020		2021		2020
Service cost — benefits earned during the period	$	100	$	85	$	14	$	12
Interest cost on projected benefit obligations		62		75		8		12
Expected return on plan assets		(211)		(192)		(7)		(7)
Net amortization of:
Actuarial loss, net		81		63		7		8
Prior service cost (credit)		—		—		(7)		(7)
Net cost — continuing operations	$	32	$	31	$	15	$	18


	Three Months Ended March 31
	Net Sales to External Customers				Operating Earnings
(in millions)	2021		2020		2021		2020
Established Pharmaceutical Products	$	1,070	$	1,044	$	169	$	181
Nutritional Products		2,036		1,904		467		459
Diagnostic Products		4,014		1,826		1,701		405
Medical Devices		3,320		2,937		1,007		803
Total Reportable Segments		10,440		7,711		3,344		1,848
Other		16		15
Net sales	$	10,456	$	7,726
Corporate functions and benefit plans costs						(114)		(132)
Net interest expense						(124)		(121)
Share-based compensation (a)						(288)		(233)
Amortization of intangible assets						(509)		(561)
Other, net (b)						(266)		(168)
Earnings from continuing operations before taxes					$	2,043	$	633


						(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, 2021 – January 31, 2021	1,785	⁽¹⁾	$	109.110	0	$	3,097,391,913	⁽²⁾
February 1, 2021 – February 28, 2021	10,000	⁽¹⁾		122.543	0		3,097,391,913	⁽²⁾
March 1, 2021 – March 31, 2021	0	⁽¹⁾		0	0		3,097,391,913	⁽²⁾
Total	11,785	⁽¹⁾	$	120.509	0	$	3,097,391,913	⁽²⁾


Exhibit No.		Exhibit

3.1		Amended and Restated Articles of Incorporation of Abbott Laboratories, filed as Exhibit 3.1 to the Abbott Laboratories Current Report on Form 8-K filed on April 26, 2021.

3.2		By-Laws of Abbott Laboratories, as amended and restated effective April 23, 2021, filed as Exhibit 3.1 to the Abbott Laboratories Current Report on Form 8-K filed on February 19, 2021.

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, 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: May 5, 2021