What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-21 compared with 2024-02-16 · 164 added, 148 removed, 1100 unchanged (22% of the section changed)

292 unchanged sentences

Recently Adopted Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which expands the breadth and frequency of required segment disclosures.

The guidance is required to be applied retrospectively to all periods presented in the financial statements.

Abbott adopted the standard on January 1, 2024.

The new standard did not have an impact on Abbott's consolidated financial statements, but required additional disclosures, retrospectively applied to all periods presented in Note 16 — Segment and geographic area information.

In September 2022, the FASB issued Accounting Standards Update (ASU) 2022-04, Disclosure of Supplier Finance Program Obligations , which requires an entity to report information about its supplier finance program.

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The new standard did not have an impact on Abbott's consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes , which among other things, eliminates certain exceptions in the current rules regarding the approach for intraperiod tax allocations and the methodology for calculating income taxes in an interim period, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

Abbott adopted the standard on January 1, 2021.

The new standard did not have an impact on its consolidated financial statements.

Recent Accounting Standards Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which expands the breadth and frequency of required segment disclosures.

The guidance is required to be applied retrospectively to all periods presented in the financial statements.

The standard becomes effective for Abbott for full year 2024 reporting and for interim periods beginning in the first quarter of 2025.

In November 2024, the FASB issued ASU 2024-03, Income Statement (Subtopic 220-40):

Reporting Comprehensive Income - Expense Disaggregation Disclosures , which requires an entity to disclose on an annual and interim basis, disaggregated information about specific income statement expense categories.

The guidance should be applied prospectively with the option to apply the standard retrospectively.

The standard becomes effective for Abbott for full year 2027 reporting.

Abbott is currently evaluating the impact of this new standard on its consolidated financial statements.

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Total — 5,194 5,194 — 5,066 5,066 — 4,912 4,912

Nutritionals —

Nutritional Products —

Pediatric Nutritionals 2,208 1,815 4,023 1,977 1,957 3,934 1,562 1,919 3,481

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Total 3,689 4,724 8,413 3,413 4,741 8,154 2,919 4,540 7,459

Diagnostics —

Diagnostic Products —

Core Laboratory 1,332 3,903 5,235 1,243 3,916 5,159 1,137 3,751 4,888

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The Acelis Connected Health business was internally transferred from Rapid Diagnostics to Heart Failure on January 1, 2023.

As a result, $ 115 million of sales in 2022 and $ 118 million of sales in 2021 were moved from Rapid Diagnostics to Heart Failure.

Products sold by the Diagnostics segment include various types of diagnostic tests to detect the COVID-19 coronavirus.

Abbott’s COVID-19 testing-related sales totaled approximately $ 1.6 billion in 2023, $ 8.4 billion in 2022 and $ 7.7 billion in 2021.

As a result, $ 115 million of sales in 2022 were moved from Rapid Diagnostics to Heart Failure.

Products sold by the Diagnostics segment include various types of diagnostic tests to detect COVID-19.

Abbott’s COVID-19 testing-related sales totaled approximately $ 747 million in 2024, $ 1.6 billion in 2023 and $ 8.4 billion in 2022.

Abbott Laboratories and Subsidiaries

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Other (income) expense, net , for 2024, 2023 and 2022 include s approximately $ 542 million, $ 498 million and $ 406 million of income, respectively, related to the non-service cost components of the net periodic benefit costs ass ociated with the pension and post-retirement medical plans.

In the second quarter of 2024, Abbott sold a non-core business related to its Established Pharmaceutical Products segment.

Abbott recorded a loss of approximately $ 143 million on the sale in Other (income) expense, net in its Consolidated Statement of Earnings.

Net assets which primarily related to inventory and net property and equipment and had a carrying value of $ 28 million were included in the sale.

The loss on the sale also included $ 116 million of cumulative foreign currency translation adjustment previously recorded in Accumulated other comprehensive income (loss).

The following summarizes the activity related to the allowance for doubtful accounts:

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Balance at December 31, 2024 $ 247

The allowance for doubtful accounts reflects the current estimate of credit losses expected to be incurred over the life of the accounts receivable.

Abbott considers various factors in establishing, monitoring, and adjusting its allowance for doubtful accounts, including the aging of the accounts and aging trends, the historical level of charge-offs, and specific exposures related to particular customers.

Abbott also monitors other risk factors and forward-looking information, such as country risk, when determining credit limits for customers and establishing adequate allowances.

Abbott Laboratories and Subsidiaries

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Note 4 — Supplemental Financial Information (Continued)

The allowance for doubtful accounts reflects the current estimate of credit losses expected to be incurred over the life of the accounts receivable.

Abbott also monitors other risk factors and forward-looking information, such as country risk, when determining credit limits for customers and establishing adequate allowances.

The detail of various balance sheet components is as follows:

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Total $ 886 $ 799

The increase in Abbott’s long-term investments as of December 31, 2023 versus the balance as of December 31, 2022 is primarily due to investments acquired as part of a business acquisition and other additional investments, partially offset by the impact of equity method investment losses.

Abbott’s equity securities as of December 31, 2023 and December 31, 2022, include $ 314 million and $ 298 million, respectively, of investments in mutual funds that are held in a rabbi trust acquired as part of the St.

Jude Medical, Inc.

Jude Medical) business acquisition.

The increase in Abbott’s long-term investments as of December 31, 2024 versus the balance as of December 31, 2023 primarily relates to investment in long term deposits and equity method investments, partially offset by the impairment of certain securities.

Abbott’s equity securities as of December 31, 2024 and December 31, 2023, include $ 313 million and $ 314 million, respectively, of investments in mutual funds that are held in a rabbi trust.

These investments, which are specifically designated as available for the purpose of paying benefits under a deferred compensation plan, are not available for general corporate purposes and are subject to creditor claims in the event of insolvency.

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________________________________________________________

(a) (Income) loss amounts reclassified from accumulated other comprehensive income related to cash flow hedges are recorded as Cost of products sold.

Net actuarial losses and prior service cost is included as a component of net periodic benefit cost – see Note 14 for additional information.

(a) The reclassification of $ 116 million out of Accumulated other comprehensive income (loss) in 2024 is included in the loss related to the sale of a non-core business included in Other (income) expense.

(Income) loss amounts reclassified from accumulated other comprehensive income related to cash flow hedges are recorded as Cost of products sold.

Net actuarial losses and prior service cost is included as a component of net periodic benefit cost – see Note 14 — Post-Employment Benefits for additional information.

Note 6 — Business Acquisitions

On September 22, 2023, Abbott completed the acquisition of Bigfoot Biomedical, Inc.

(Bigfoot), which will further Abbott's efforts to develop connected solutions for making diabetes management more personal and precise.

The purchase price, the preliminary allocation of acquired assets and liabilities, and the revenue and net income contributed by Bigfoot since the date of acquisition are not material to Abbott's consolidated financial statements.

(Bigfoot), which furthers Abbott's efforts to develop connected solutions for making diabetes management more personal and precise.

The purchase price, the final allocation of acquired assets and liabilities, and the revenue and net income contributed by Bigfoot since the date of acquisition are not material to Abbott's consolidated financial statements.

On April 27, 2023, Abbott completed the acquisition of Cardiovascular Systems, Inc.

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CSI's atherectomy system, which is used in treating peripheral and coronary artery disease, adds complementary technologies to Abbott's portfolio of vascular device offerings.

The preliminary allocation of the purchase price of the CSI acquisition resulted in the recording of two non-deductible developed technology intangible assets of $ 305 million;

non-deductible in-process research and development of $ 15 million, which will be accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation;

The final allocation of the purchase price of the CSI acquisition resulted in the recording of two non-deductible developed technology intangible assets totaling $ 305 million;

a non-deductible in-process research and development asset of $ 15 million, which will be accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation;

non-deductible goodwill of $ 369 million;

net deferred tax assets of approximately $ 46 million and other net assets of approximately $ 114 million.

net deferred tax assets of $ 46 million and other net assets of $ 116 million.

The goodwill is identifiable to the Medical Devices reportable segment and is attributable to expected synergies from combining operations, as well as intangible assets that do not qualify for separate recognition.

Allocation of the purchase price of the acquisition will be finalized when the valuation of assets and liabilities is completed.

Revenues and earnings of CSI included in Abbott's consolidated financial statements since the acquisition date are not material to Abbott's consolidated revenue and earnings.

If the acquisition of CSI had taken place as of the beginning of 2022, consolidated net sales and earnings would not have been significantly different from reported amounts.

Abbott Laboratories and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 6 — Business Acquisitions (Continued)

In September 2021, Abbott acquired Walk Vascular, LLC (Walk Vascular), a commercial-stage medical device company with a minimally invasive thrombectomy system designed to remove peripheral blood clots.

Walk Vascular’s peripheral thrombectomy system has been incorporated into Abbott’s existing endovascular portfolio.

The purchase price, the allocation of acquired assets and liabilities, and the revenue and net income contributed by Walk Vascular since the date of acquisition are not material to Abbott’s consolidated financial statements.

Note 7 — Goodwill and Intangible Assets

The total amount of goodwill reported was $ 23.7 billion at December 31, 2023 and $ 22.8 billion at December 31, 2022.

In 2023, recent business acquisitions increased goodwill by approximately $ 576 million.

Foreign currency translation adjustments increased goodwill by $ 304 million in 2023 and decreased goodwill b y $ 431 million in 2022.

The total amount of reported goodwill was $ 23.1 billion at December 31, 2024 and $ 23.7 billion at December 31, 2023.

Foreign currency translation adjustments decreased goodwill by $ 533 million in 2024 and increased goodwill b y $ 304 million in 2023.

In 2023, business acquisitions increased goodwill by approximately $ 576 million.

The amount of goodwill related to reportable segments at December 31, 2024 was $ 2.6 billion for the Estab lished Pharmaceutical Products segment, $ 285 million for the Nutritional Products segment, $ 3.5 billion for the Diagnostic Products segment, and $ 16.8 billion for the Medical Devices segment.

There were no reductions of goodwill relating to impairments in 2024 and 2023.

The gross amount of amortizable intangible assets, primarily product rights and technology, was $ 27.7 billion and $ 27.2 billion as of December 31, 2023 and 2022, respectively.

The gross amount of amortizable intangible assets increased by $ 305 million due to a recent business acquisition.

Accumulated amortization was $ 19.7 billion and $ 17.6 billion as of December 31, 2023 and December 31, 2022, respectively.

Foreign currency translation adjustments increased intangible assets by $ 44 million in 2023 and decreased intangible assets by $ 150 million in 2022.

The estimated annual amortization expense for intangible assets recorded at December 31, 2023 is approximately $ 1.9 billion in 2024, $ 1.7 billion in 2025, $ 1.6 billion in 2026, $ 1.3 billion in 2027 and $ 0.7 billion in 2028.

The gross amount of amortizable intangible assets, primarily product rights and technology, was $ 27.1 billion and $ 27.7 billion as of December 31, 2024 and 2023, respectivel y.

In 2023, the gross amount of amortizable intangible assets increased by $ 305 million due to a business acquisition.

Accumulated amortization was $ 21.3 billion and $ 19.7 billion as of December 31, 2024 and 2023 , respectively.

Foreign currency translation adjustments decreased intangible assets by $ 78 million in 2024 and increased intangible assets by $ 44 million in 2023.

In 2024, intangible assets decreased $ 207 million due to impairment charges recorded on the Cost of products sold line of the Consolidated Statement of Earnings, primarily related to the Medical Devices reportable segment .

The estimated annual amortization expense for intangible assets recorded at December 31, 2024 is approximately $ 1.7 billion in 2025, $ 1.5 billion in 2026, $ 1.2 billion in 2027, $ 668 million in 2028 and $ 605 million in 2029.

Amortizable intangible assets are amortized over 2 to 20 years.

Indefinite-lived intangible assets, which relate to IPR&D acquired in a business combination, were approximately $ 784 million and $ 787 million at December 31, 2024 and 2023, respectively.

In 2023, $ 100 million of impairment charges related to certain indefinite-lived intangible assets in the Medical Devices reportable segment were recorded on the Research and development line of the Consolidated Statement of Earnings.

Recent business acquisitions increased IPR&D assets by $ 80 million.

In 2022, $ 111 million of impairment charges were recorded on the Research and development line of the Consolidated Statement of Earnings related to certain IPR&D intangible assets associated with the Medical Devices business segment.

In 2024, IPR&D decreased by $ 39 million of charges recorded on the Research and development line of the Consolidated Statement of Earnings for the impairment of an indefinite-lived intangible asset related to the Medical Devices reportable segment and was partially offset by an increase of $ 35 million due to the finalization of purchase accounting related to a business acquisition.

In 2023, $ 100 million of impairment charges related to certain indefinite-lived intangible assets in the M edical Devices reportable segment were recorded on the Research and development line of the Consolidated Statement of Earnings.

In 2023, business acquisitions increased IPR&D assets by $ 80 million.

Abbott Laboratories and Subsidiaries

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Note 8 — Restructuring Plans

In 2023, Abbott management approved plans to restructure various operations in order to reduce costs in its medical devices, diagnostic, and established pharmaceutical businesses.

Abbott recorded employee related severance and other charges of approximately $ 144 million of which approximately $ 56 million was recorded in Cost of products sold, approximately $ 22 million was recorded in Research and development and approximately $ 66 million was recorded in Selling, general and administrative expenses.

In 2024, Abbott management approved plans to streamline certain operations in order to reduce costs and improve efficiencies in its Diagnostic, Medical Devices, Established Pharmaceutical and Nutritional businesses, including the discontinuation of its ZonePerfect ® product line.

Abbott recorded employee related severance and other charges of $ 129 million , of which $ 62 million was recorded in Cost of products sold, $ 21 million was recorded in Research and development, and $ 46 million was recorded in Selling, general and administrative expenses.

Payments related to these actions totaled $ 32 million in 2024 and the remaining liability totaled $ 97 million at December 31, 2024.

In addition, Abbott recognized fixed asset impairment and inventory related charges of approximately $ 31 million related to these restructuring plans.

In 2022, Abbott management approved plans to streamline operations in order to reduce costs and improve efficiencies in its medical devices, nutritional, diagnostic, and established pharmaceutical businesses.

Abbott recorded employee related severance and other charges of approximately $ 234 million of which approximately $ 59 million was recorded in Cost of products sold, approximately $ 36 million was recorded in Research and development and approximately $ 139 million was recorded in Selling, general and administrative expenses.

In addition, Abbott recognized inventory related charges of approximately $ 23 million and fixed assets impairment charges of approximately $ 4 million related to these restructuring plans.

In addition, Abbott recognized inventory related charges of $ 34 million and fixed asset impairment charges of $ 12 million related to these restructuring plans.

In 2023, Abbott management approved plans to restructure various operations in order to reduce costs in its Medical Devices, Diagnostic, and Established Pharmaceutical businesses.

Abbott recorded employee related severance and other charges of $ 144 million of which $ 56 million was recorded in Cost of products sold, $ 22 million was recorded in Research and development and $ 66 million was recorded in Selling, general and administrative expenses.

In addition, Abbott recognized fixed asset impairment and inventory related charges of $ 31 million related to these restructuring plans.

The following summarizes the activity related to the 2023 restructuring actions and the status of the related accruals as of December 31, 2024:

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Accrued balance at December 31, 2024 $ 21

In 2021, Abbott management approved a restructuring plan related to its Diagnostic Products segment to align its manufacturing network for COVID-19 diagnostic tests with changes in the second quarter of 2021 in projected testing demand driven by several factors, including significant reductions in cases in the U.S.

and other major developed countries, the accelerated rollout of COVID-19 vaccines globally and the U.S.

health authority’s updated guidance on testing for fully vaccinated individuals.

Charges under this plan were recorded in Cost of products sold and totaled $ 441 million in 2021.

The following summarizes the activity related to this restructuring action and the status of the related accruals as of December 31, 2023:

(in millions) Inventory-

Charges Fixed Asset

Write-Downs Other Exit

Restructuring charges recorded in 2021 $ 248 $ 80 $ 113 $ 441

Payments — — ( 90 ) ( 90 )

Other non-cash ( 248 ) ( 80 ) — ( 328 )

In 2022, Abbott management approved plans to streamline operations in order to reduce costs and improve efficiencies in its Medical Devices, Nutritional, Diagnostic, and Established Pharmaceutical businesses.

Abbott recorded employee related severance and other charges of $ 234 million of which $ 59 million was recorded in Cost of products sold, $ 36 million was recorded in Research and development and $ 139 million was recorded in Selling, general and administrative expenses.

In addition, Abbott recognized inventory related charges of $ 23 million and fixed asset impairment charges of $ 4 million related to these restructuring plans.

The following summarizes the activity related to the 2022 restructuring actions and the status of the related accruals as of December 31, 2024:

(in millions)

Restructuring charges in 2022 $ 234

Payments and other adjustments ( 6 )

Accrued balance at December 31, 2022 228

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Accrued balance at December 31, 2024 $ 9

In 2021, Abbott management approved plans to streamline operations in order to reduce costs and improve efficiencies in its diagnostic, established pharmaceutical, nutritional, and medical device businesses.

Abbott recorded employee related severance and other charges of approximately $ 68 million of which approximately $ 16 million was recorded in Cost of products sold, approximately $ 4 million was recorded in Research and development and approximately $ 48 million was recorded in Selling, general and administrative expenses.

Restructuring activities under the 2021 plans have been completed and there are no remaining liabilities under these plans as of December 31, 2023.

Abbott Laboratories and Subsidiaries

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Dividend yield is based on the option’s exercise price and annual dividend rate at the time of grant.

Abbott Laboratories and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 10 — Debt and Lines of Credit

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2.95 % Notes, due 2025

5 -year term loan due 2024

3.875 % Notes, due 2025

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1.15 % Notes, due 2028

0.375 % Notes, due 2027

1.15 % Notes, due 2028

5 -year term loan due 2029

1.40 % Notes, due 2030

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Total long-term portion $ 12,625 $ 13,599

Abbott Laboratories and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 10 — Debt and Lines of Credit (Continued)

On November 19, 2024, Abbott repaid the € 590 million outstanding principal amount of its 0.10 % Notes upon maturity.

The repayment equated to approximately $ 640 million.

On November 30, 2023, Abbott repaid the $ 1.05 billion outstanding principal amount of its 3.40 % Notes upon maturity.

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In September 2023, Abbott repaid approximately $ 197 million of debt assumed as part of a recent business acquisition.

On March 15, 2022, Abbott repaid the $ 750 million outstanding principal amount of its 2.55 % Notes upon maturity.

In December 2021, Abbott repaid a short-term facility for approximately $ 195 million.

After the repayment, Abbott has no short-term borrowings.

On June 26, 2024, Abbott modified its existing, yen-denominated 5 -year term loan scheduled to mature in November 2024.

The amended terms include a net increase in principal debt from ¥ 59.8 billion to ¥ 92.0 billion, with a new maturity date in June 2029.

The modified, 5 -year term loan bears interest at the Tokyo Interbank Offered Rate (TIBOR) plus a fixed spread, and the interest rate is reset quarterly.

The net proceeds equated to approximately $ 201 million.

Abbott has readily available financial resources, including unused lines of credit that support commercial paper borrowing arrangements and provide Abbott with the ability to borrow up to $ 5 billion on an unsecured basis.

The lines of credit as of December 31, 2023 were a part of a Five Year Credit Agreement that Abbott entered into on November 12, 2020.

On January 29, 2024, Abbott terminated the 2020 Agreement and entered into a new Five Year Credit Agreement (Revolving Credit Agreement).

On January 29, 2024, Abbott terminated its 2020 Five Year Credit Agreement (2020 Agreement) and entered into a new Five Year Credit Agreement (Revolving Credit Agreement).

There were no outstanding borrowings under the 2020 Agreement at the time of its termination.

Any borrowings under the Revolving Credit Agreement will mature and be payable on January 29, 2029 and will bear interest, at Abbott’s option, based on either a base rate or Secured Overnight Financing Rate (SOFR) rate, plus an applicable margin based on Abbott’s credit ratings.

Abbott Laboratories and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 10 — Debt and Lines of Credit (Continued)

Principal payments required on long-term debt outstanding at December 31, 2023 are $ 1.1 billion in 2024, $ 1.5 billion in 2025, $ 3.0 billion in 2026, $ 656 million in 2027, $ 651 million in 2028 and $ 8.0 billion in 2029 and thereafter.

Any borrowings under the Revolving Credit Agreement will mature and be payable on January 29, 2029 and will bear interest, at Abbott’s option, based on either a base rate or Secured Overnight Financing Rate (SOFR), plus an applicable margin based on Abbott’s credit ratings.

Principal payments required on long-term debt outstanding at December 31, 2024 are $ 1.5 billion in 2025, $ 2.9 billion in 2026, $ 617 million in 2027, $ 650 million in 2028, $ 583 million in 2029 and $ 8.0 billion in 2030 and thereafter.

At December 31, 2024, Abbott’s long-term debt rating was AA- by S&P Global Ratings and Aa3 by Moody’s Investors Service.

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As Abbott’s leases typically do not provide an implicit rate, the interest rate used to determine the present value of the payments under each lease typically reflects Abbott’s incremental borrowing rate based on information available at the lease commencement date.

Abbott Laboratories and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 11 — Leases (Continued)

The following table provides information related to Abbott’s operating leases:

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Present value of lease liabilities $ 1,150

Abbott Laboratories and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 11 — Leases (Continued)

The following table summarizes the amounts and location of operating lease ROU assets and lease liabilities:

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Operating lease revenue represented less than 3 percent of Abbott’s total net sales in the years ended December 31, 2024, 2023 and 2022.

Abbott Laboratories and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 11 — Leases (Continued)

Assets related to operating leases are reported within Net property and equipment on the Consolidated Balance Sheet.

The original cost and the net book value of such assets were $ 3.9 billion and $ 1.8 billion, respectively, as of December 31, 2023 and $ 3.6 billion and $ 1.6 billion, respectively, as of December 31, 2022.

The original cost and the net book value of such assets were $ 3.9 billion and $ 1.8 billion, respectively, as of December 31, 2024 and December 31, 2023.

Note 12 — Financial Instruments, Derivatives and Fair Value Measures

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Abbott has designated a yen-denominated, 5 -year term loan of approximately $ 583 million and $ 419 million as of December 31, 2024 and December 31, 2023, respectively, as a hedge of the net investment in certain foreign subsidiaries.

The change in the value of the debt, which is due to changes in foreign exchange rates, is recorded in Accumulated other comprehensive income (loss), net of tax.

The change in the value of the debt is due to the net incremental borrowing of $ 201 million discussed in Note 10 — Debt and Lines of Credit, as well as changes in foreign exchange rates, recorded in Accumulated other comprehensive income (loss), net of tax.

Abbott is a party to interest rate hedge contracts to manage its exposure to changes in the fair value of fixed-rate debt.

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Note 12 — Financial Instruments, Derivatives and Fair Value Measures (Continued)

$ 2.9 billion in 2022.

The decrease from 2022 was due to the maturity of $ 700 million of interest rate hedge contracts in 2023 in conjunction with long-term debt that also matured in 2023.

The following table summarizes the amounts and location of certain derivative financial instruments as of December 31:

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Non-current $ — $ — Deferred income taxes and other assets $ 51 $ 95 Post-employment obligations and other long-term liabilities

Current — — Other prepaid expenses and receivables — 20 Other accrued liabilities

Current 1 — Prepaid expenses and other receivables — — Other accrued liabilities

Foreign currency forward exchange contracts:

Hedging instruments 88 304 Other prepaid expenses and receivables 134 96 Other accrued liabilities

Others not designated as hedges 81 108 Other prepaid expenses and receivables 97 130 Other accrued liabilities

Debt designated as a hedge of net investment in a foreign subsidiary — — n/a 419 446 Current portion of long-term debt (Long-term debt in 2022)

Hedging instruments 243 88 Prepaid expenses and other receivables 19 134 Other accrued liabilities

Others not designated as hedges 147 81 Prepaid expenses and other receivables 112 97 Other accrued liabilities

Debt designated as a hedge of net investment in a foreign subsidiary — — n/a 583 419 Long-term debt (Current portion of long-term debt in 2023)

$ 391 $ 169 $ 765 $ 745

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Interest rate swaps designated as fair value hedges n/a n/a n/a 44 61 ( 243 ) Interest expense

A loss of $ 44 million and gains of $ 70 million and $ 19 million were recognized in 2023, 2022 and 2021, respectively, related to foreign currency forward exchange contracts not designated as hedges.

A gain of $ 131 million, a loss of $ 44 million and a gain of $ 70 million were recognized in 2024, 2023 and 2022, respectively, related to foreign currency forward exchange contracts not designated as hedges.

These amounts are reported in the Consolidated Statement of Earnings on the Net foreign exchange (gain) loss line.

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The carrying values of all other financial instruments approximate their estimated fair values.

The counterparties to

The counterparties to financial instruments consist of select major international financial institutions.

Abbott does not expect any losses from nonperformance by these counterparties.

Abbott Laboratories and Subsidiaries

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Note 12 — Financial Instruments, Derivatives and Fair Value Measures (Continued)

financial instruments consist of select major international financial institutions.

Abbott does not expect any losses from nonperformance by these counterparties.

(in millions) Carrying Value Fair Value Carrying Value Fair Value

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Interest Rate Hedge Contracts:

Receivable position 1 1 — —

(Payable) position ( 51 ) ( 51 ) ( 95 ) ( 95 )

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Equity securities $ 323 $ 323 $ — $ —

Interest rate swap derivative financial instruments 1 — 1 —

Foreign currency forward exchange contracts 390 — 390 —

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The fair value of the contingent consideration was determined based on independent appraisals at the time of acquisition, adjusted for the time value of money and other changes in fair value.

The decrease in the amount of contingent consideration from December 31, 2022 reflects the impact of projected timeline changes for events that will trigger payment of contingent consideration, partially offset by additional contingent consideration assumed in a business acquisition in 2023.

The decrease in the amount of contingent consideration from December 31, 2023 reflects a payment of $ 40 million and a $ 34 million change in the fair value of the remaining contingent consideration.

The maximum amount for certain contingent consideration is not determinable as it is based on a percent of certain sales.

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No individual site cleanup exposure is expected to exceed $ 4 million, and the aggregate cleanup exposure is not expected to exceed $ 10 million.

Abbott has been named as a defendant in a number of lawsuits alleging that its preterm infant formula and human milk fortifier products that contain cow’s milk cause an intestinal disease known as necrotizing enterocolitis (NEC) and inadequately warn about the risk of NEC.

These lawsuits claim that certain preterm infants suffered injury or death as a result of contracting NEC.

In a trial held in July 2024, a jury in a Missouri state court awarded a plaintiff $ 495 million in damages.

Abbott stands by its products and the information it provided about them, and it appealed this jury’s verdict with the Missouri Court of Appeals in December 2024.

In a trial held in October 2024 involving Abbott and another infant formula manufacturer and the treating hospital as co-defendants, a jury in a Missouri state court returned a unanimous verdict for Abbott and its co-defendants.

In December 2024, the plaintiff filed a motion for a new trial.

Abbott does not believe that it is probable that a material loss will be incurred related to these lawsuits and therefore, no reserves have been recorded.

Given the uncertainty as to the possible outcome in each of these lawsuits, Abbott is unable to reasonably estimate a range of possible loss related to these lawsuits.

Abbott is involved in various claims and legal proceedings, and Abbott estimates the range of possible loss for its legal proceedings and environmental exposures to be from approximately $ 25 million to $ 35 million.

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450, “Contingencies.” Within the next year, legal proceedings may occur that may result in a change in the estimated loss accrued by Abbott.

While it is not feasible to predict the outcome of all such proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on Abbott’s financial position, cash flows, or results of operations, except for the cases discussed in the second paragraph of this note, the resolution of which could be material to Abbott's financial position, cash flows, or results of operations.

Abbott Laboratories and Subsidiaries

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Total $ 777 $ 1,757 $ 21 $ 40

The $ 763 million of defined benefit plan gains and $ 33 million of medical and dental plan gains in 2024 that decreased the projected benefit obligations primarily reflect the year-over-year increase in the discount rates used to measure the obligations.

The $ 458 million of defined benefit plan losses and $ 35 million of medical and dental plan losses in 2023 that increased the projected benefit obligations primarily reflect the year-over-year decline in the discount rates used to measure the obligations.

The $ 3.6 billion of defined benefit plan gains and $ 437 million of medical and dental plan gains in 2022 that decreased the projected benefit obligations primarily reflect the year-over-year increase in the discount rates used to measure the obligations.

The projected benefit obligations for non-U.S.

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Fair value of plan assets 149 144

The components of the net periodic benefit cost were as follows:

Retirement plans consist of defined benefit, defined contribution, and medical and dental plans.

Net periodic benefit costs, other than service costs, are recognized in the Other (income) expense, net line of the Condensed Consolidated Statement of Earnings.

The components of the net periodic benefit cost as of December 31 were as follows:

Defined Benefit Plans Medical and

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Other comprehensive income (loss) for each respective year also includes:

net actuarial gains of $ 182 million for defined benefit plans and a loss of $ 33 million for medical and dental plans in 2023;

net actuarial gains of $ 858 million for defined benefit plans and a gain o f $ 374 million for medical and dental plans in 2022 , and net actuarial gains of $ 1.14 billion for defined benefit plans and a gain of $ 45 million for medical and dental plans in 2021.

net actuarial gains of $ 971 million for defined benefit plans and a gain of $ 36 million for medical and dental plans in 2024;

net actuarial gains of $ 182 million for defined benefit plans and a loss o f $ 33 million for medical and dental plans in 2023 , and net actuarial gains of $ 858 million for defined benefit plans and a gain of $ 374 million for medical and dental plans in 2022.

The net actuarial gains in 2024 related to defined benefit plans are primarily due to the favorable impact of actual asset returns in excess of expected returns and the year-over-year increase in discount rates.

The net actuarial gain in 2024 related to medical and dental plans is primarily due to the year-over-year increase in discount rates.

The net actuarial gains in 2023 related to defined benefit plans are primarily due to the favorable impact of actual asset returns in excess of expected returns, partially offset by the year-over-year decrease in discount rates.

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The net actuarial gains in 2022 were primarily due to the year-over-year increase in discount rates, partially offset by the impact of 2022 actual asset returns being less than expected returns.

The net actuarial gains in 2021 are primarily due to the favorable impact of actual 2021 asset returns in excess of expected returns and the year-over-year increase in discount rates.

The weighted average assumptions used to determine benefit obligations for defined benefit plans and medical and dental plans are as follows:

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Absolute return funds are valued at the NAV provided by the fund administrator.

All private funds are valued at the NAV provided by the fund on a one-quarter lag adjusted for known cash flows and significant events through the reporting date.

Abbott did no t have any unfunded commitments related to absolute return funds at December 31, 2024 and 2023.

Investments in these funds may be generally redeemed monthly or quarterly with required notice periods ranging from 5 to 90 days.

For approximately $ 280 million and $ 250 million of the absolute return funds, redemptions are subject to a 33 percent gate and a 25 percent gate, respectively, and $ 80 million is subject to a lock u ntil 2025.

For approximately $ 300 million of the absolute return funds, redemptions are subject to a 25 percent gate and $ 60 million is subject to a lock u ntil 2025.

All private funds are valued at the NAV provided by the fund on a one-quarter lag adjusted for known cash flows and significant events through the reporting date.

Investments in the private funds cannot be redeemed but the funds will make distributions through liquidation.

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International pension plans are funded according to similar regulations.

Abbott funded $ 349 million in 2023 and $ 413 million in 2022 to defined pension plans.

Abbott funded $ 349 million in 2024 and 2023 to defined pension plans.

Abbott expects to contribute approximately $ 302 million to its pension plans in 2025.

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Taxes on earnings include approximately $ 50 million, $ 22 million and $ 43 million in excess tax benefits associated with share-based compensation in 2024, 2023 and 2022, respectively.

As a result of the resolution of various tax positions related to prior years, taxes on earnings in 2023, 2022 and 2021 also include approximately $ 80 million and $ 20 million of net tax expense and $ 55 million of net tax benefits, respectively.

As a result of the resolution of various tax positions related to prior years, taxes on earnings in 2024, 2023 and 2022 also include approximately $ 25 million, $ 80 million and $ 20 million of net tax expense, respectively.

In the fourth quarter of 2024, taxes on earnings includes $ 7.5 billion in non-cash valuation allowance adjustments resulting from the restructuring of certain foreign affiliates and the confirmation of certain tax filing positions.

The restructuring improved profitability to several of Abbott’s affiliates and management concluded that the related preexisting deferred tax assets, which historically had a full valuation allowance, were more likely than not to be realizable in future periods.

In particular, Abbott considered the likelihood of sustained ongoing profitability of the affiliates as a positive factor that outweighed all available negative evidence considered.

Accordingly, Abbott released the full valuation allowance on such deferred tax assets and recorded the offset to tax expense.

The TCJA includes a one-time transition tax that is based on Abbott’s total post-1986 earnings and profits (E&P) that were previously deferred from U.S.

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The tax computation also requires the determination of the amount of post-1986 E&P considered held in cash and other specified assets.

As of December 31, 2023, the remaining balance of Abbott’s transition tax obligation related to the TCJA is approximately $ 598 million, which will be paid over the next three years as allowed by the TCJA.

As of December 31, 2024, the remaining balance of Abbott’s transition tax obligation related to the TCJA is approximately $ 432 million, which will be paid over the next two years as allowed by the TCJA.

Undistributed foreign earnings remain indefinitely reinvested in foreign operations.

Determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax and additional outside basis difference in its foreign entities is not practicable.

Abbott Laboratories and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 15 — Taxes on Earnings (Continued)

In the U.S., Abbott’s federal income tax returns through 2016 are settled.

In September 2023, Abbott received a Statutory Notice of Deficiency (SNOD) from the IRS for the 2019 Federal tax year in the amount of $ 417 million.

In September 2023, Abbott received a Statutory Notice of Deficiency (SNOD) from the U.S.

Internal Revenue Service (IRS) for the 2019 Federal tax year in the amount of $ 417 million.

The primary adjustments proposed in the SNOD relate to the reallocation of income between Abbott’s U.S.

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Abbott filed a petition with the U.S.

Tax Court contesting the SNOD in December of 2023.

Abbott’s 2017 and 2018 Federal tax years are also currently under examination by the IRS with respect to income reallocation issues similar to those included in the 2019 Federal tax year.

Tax Court contesting the SNOD in December 2023.

In June 2024, Abbott received a SNOD from the IRS for the 2017 and 2018 Federal tax years in the amount of $ 192 million.

The matters proposed in the 2017/2018 SNOD are substantially similar to the income allocation adjustments included in the 2019 SNOD.

Abbott filed a petition in September 2024 with the U.S.

Tax Court contesting the 2017/2018 SNOD in a manner consistent with its petition for the 2019 SNOD.

In October 2024, Abbott received a SNOD from the IRS for the 2020 Federal tax year assessing an additional $ 443 million of income tax.

The primary adjustments proposed in the SNOD are substantially similar to the income allocation adjustments included in the 2017/2018 and 2019 SNODs.

Abbott believes that the income reallocation adjustments proposed in the SNOD are without merit.

The SNOD also contains other proposed adjustments and omissions that Abbott believes are erroneous and unsupported.

In addition to the tax assessment for the 2020 tax year, the 2020 SNOD also contested a deduction for which an estimated $ 440 million cash tax benefit would be available in a different taxable year as allowed under applicable U.S.

Abbott filed a petition with the U.S.

Tax Court contesting the SNOD in December 2024.

Abbott intends to vigorously defend its filing positions through ongoing discussions with the IRS, the IRS independent appeals process and/or through litigation as necessary.

Abbott Laboratories and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 15 — Taxes on Earnings (Continued)

Abbott reserves for uncertain tax positions related to unresolved matters with the IRS and other taxing authorities.

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Pillar 2 proposes to assess a 15 percent minimum tax on the earnings of in-scope multinational corporations on a country-by-country basis.

Numerous countries have enacted legislation to adopt the Pillar 2 model rules with a subset of the rules becoming effective January 1, 2024, and the remaining rules becoming effective January 1, 2025, or in later periods.

Abbott is also continuing to analyze the Pillar 2 model rules.

Implementation of the OECD proposal may have a material impact on Abbott’s Consolidated Financial Statements in the future.

Numerous countries have enacted legislation to adopt the Pillar 2 model rules.

The enactment of current Pillar 2 model rules did not and is not projected to have a material impact to Abbott's consolidated financial statements.

Abbott Laboratories and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 15 — Taxes on Earnings (Continued)

Earnings before taxes, and the related provisions for taxes on earnings, were as follows:

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Foreign-derived intangible income benefit ( 2.3 ) ( 2.2 ) ( 2.0 )

Domestic impairment loss — — ( 0.1 )

Valuation allowance adjustments ( 107.1 ) — —

Excess tax benefits related to stock compensation ( 0.7 ) ( 0.3 ) ( 0.5 )

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Effective tax rate on earnings ( 91.1 ) % 14.1 % 16.5 %

Impact of foreign operations is primarily derived from operations in Puerto Rico, Switzerland, Ireland, the Netherlands, Costa Rica, Singapore, Malta and Malaysia.

Abbott Laboratories and Subsidiaries

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Note 15 — Taxes on Earnings (Continued)

Impact of foreign operations is primarily derived from operations in Puerto Rico, Switzerland, Ireland, the Netherlands, Costa Rica, Singapore, Malta and Malaysia.

The tax effect of the differences that give rise to deferred tax assets and liabilities were as follows:

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Deferred tax liabilities:

Compensation and employee benefits ( 276 ) —

Depreciation ( 408 ) ( 414 )

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Total net deferred tax assets (liabilities) $ 8,111 $ 414

Abbott has incurred losses in a foreign jurisdiction where realization of the future economic benefit was, in previous reporting periods, considered so remote that the benefit was not recognized as a deferred tax asset.

In 2023, Abbott concluded that the future economic benefit of the incurred losses is no longer remote and therefore, a deferred tax asset was recognized.

Abbott also concluded that it is not more likely than not that the tax benefit associated with the deferred tax asset will be realized;

therefore, an offsetting valuation allowance was recognized.

The following table summarizes the gross amounts of unrecognized tax benefits without regard to reduction in tax liabilities or additions to deferred tax assets and liabilities if such unrecognized tax benefits were settled:

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Abbott’s unrecognized tax benefits table includes amounts related to tax positions for which a deferred tax asset has not been recognized because the recognition of the future benefit is not expected.

In 2023, Abbott's unrecognized tax benefits increased by $ 1.3 billion to $ 3.32 billion, which includes $ 2.06 billion attributable to tax positions that, if recognized, would result in a deferred tax asset and a related valuation allowance.

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is approximately $ 2.6 billion.

Abbott believes that it is reasonably possible that the recorded amount of gross unrecognized tax benefits may decrease between $ 70 million and $ 1.48 billion, including cash adjustments, within the next twelve months as a result of concluding various domestic and international tax matters.

Abbott believes that it is reasonably possible that the recorded amount of gross unrecognized tax benefits may decrease approximately $ 90 million, including cash adjustments, within the next twelve months as a result of concluding various domestic and international tax matters.

Abbott Laboratories and Subsidiaries

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Segment disclosures are on a performance basis consistent with internal management reporting.

The chief operating decision maker (CODM) at Abbott is the Chief Executive Officer (CEO).

The CODM primarily considers sales and operating margin to assess the performance of segments and to allocate resources, where segment operating margin profitability includes cost of products sold and operating expenses.

The cost of some corporate functions and the cost of certain employee benefits are charged to segments at predetermined rates that approximate cost.

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In addition, intangible asset amortization is not allocated to operating segments, and intangible assets and goodwill are not included in the measure of each segment’s assets.

The following segment information has been prepared in accordance with the internal accounting policies of Abbott, as described above, and are not presented in accordance with generally accepted accounting principles applied to the consolidated financial statements.

Net Sales to External Customers (a) Operating Earnings (a)

(in millions) 2023 2022 2021 2023 2022 2021

Established Pharmaceutical Products $ 5,066 $ 4,912 $ 4,718 $ 1,206 $ 1,049 $ 889

Nutritional Products 8,154 7,459 8,294 1,333 706 1,763

Diagnostic Products (b) 9,988 16,469 15,526 2,433 6,640 6,237

Medical Devices (b) 16,887 14,802 14,485 5,306 4,436 4,533

Total Reportable Segments 40,095 43,642 43,023 $ 10,278 $ 12,831 $ 13,422

Other 14 11 52

Total $ 40,109 $ 43,653 $ 43,075

________________________________________________________

(a) In 2023 and 2022, foreign exchange unfavorably impacted net sales and operating earnings.

In 2021, foreign exchange favorably impacted net sales and unfavorably impacted operating earnings.

(b) 2022 and 2021 Sales and Operating Earnings for the Diagnostic Products and Medical Devices reportable segments have been updated to reflect the internal transfer of the Acelis Connected Health business from Diagnostic Products to Medical Devices on January 1, 2023.

Abbott Laboratories and Subsidiaries

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Note 16 — Segment and Geographic Area Information (Continued)

Net Sales to External Customers (a) Cost of Products Sold Research and Development Selling, General and Administrative Operating Earnings (a)

(in millions) 2024 2023 2022 2024 2023 2022 2024 2023 2022 2024 2023 2022 2024 2023 2022

Total Reportable Segment Operating Earnings $ 10,278 $ 12,831 $ 13,422

Corporate functions and benefit plan costs ( 308 ) ( 509 ) ( 801 )

Established Pharmaceuticals $ 5,194 $ 5,066 $ 4,912 $ ( 2,444 ) $ ( 2,357 ) $ ( 2,305 ) $ ( 176 ) $ ( 173 ) $ ( 186 ) $ ( 1,341 ) $ ( 1,330 ) $ ( 1,372 ) $ 1,233 $ 1,206 $ 1,049

Nutritionals 8,413 8,154 7,459 ( 4,532 ) ( 4,495 ) ( 4,314 ) ( 209 ) ( 204 ) ( 191 ) ( 2,167 ) ( 2,122 ) ( 2,248 ) 1,505 1,333 706

Diagnostics (b) 9,341 9,988 16,469 ( 4,995 ) ( 5,264 ) ( 7,287 ) ( 656 ) ( 698 ) ( 777 ) ( 1,617 ) ( 1,593 ) ( 1,765 ) 2,073 2,433 6,640

Medical Devices (b) 18,986 16,887 14,802 ( 6,408 ) ( 5,803 ) ( 4,968 ) ( 1,546 ) ( 1,362 ) ( 1,328 ) ( 4,879 ) ( 4,416 ) ( 4,070 ) 6,153 5,306 4,436

Total $ 41,934 $ 40,095 $ 43,642 $ ( 18,379 ) $ ( 17,919 ) $ ( 18,874 ) $ ( 2,587 ) $ ( 2,437 ) $ ( 2,482 ) $ ( 10,004 ) $ ( 9,461 ) $ ( 9,456 ) $ 10,964 $ 10,278 $ 12,831

Other 16 14 11

Net sales $ 41,950 $ 40,109 $ 43,653

Corporate functions and plan benefit costs ( 422 ) ( 308 ) ( 509 )

Net interest expense ( 215 ) ( 252 ) ( 375 )

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________________________________________________________

(a) In 2024, 2023 and 2022, foreign exchange unfavorably impacted net sales and operating earnings.

(b) 2022 Sales and Operating Earnings for the Diagnostic Products and Medical Devices reportable segments have been updated to reflect the internal transfer of the Acelis Connected Health business from Diagnostic Products to Medical Devices on January 1, 2023.

(c) Other, net includes costs directly related to integrating acquired businesses and restructuring charges in 2024, 2023, and 2022.

Charges and expenses for restructuring actions and other cost reduction initiatives were approximately $ 185 million in 2024, $ 122 million in 2023, and $ 265 million in 2022.

Other, net in 2023 also includes charges of $ 100 million related to indefinite-lived intangible asset impairments, partially offset by income arising from fair value changes in contingent consideration related to previous business acquisitions.

Other, net in 2022 also includes $ 176 million of charges related to a voluntary recall within the Nutritional products segment and $ 111 million of charges related to the impairment of IPR&D intangible assets.

Other, net in 2021 also includes costs related to certain litigation.

Other, net also includes:

in 2024, a $ 143 million loss on the divestiture of a non-core business, as well as intangible and IRP&D asset impairments;

in 2023, charges of $ 100 million related to intangible asset impairments, partially offset by income arising from fair value changes in contingent consideration related to previous business acquisitions;

and in 2022, charges of $ 176 million related to a voluntary recall within the Nutritional products segment and charges of $ 111 million related to the impairment of IPR&D intangible assets.

Abbott Laboratories and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 16 — Segment and Geographic Area Information (Continued)

Depreciation Additions to

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(e) All other includes the long-term assets associated with the defined benefit plans of $ 5.7 billion in 2024 and $ 4.2 billion in 2023.

Abbott Laboratories and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

Note 16 — Segment and Geographic Area Information (Continued)

In 2024, all other also includes $ 7.5 billion deferred tax assets for which full valuation allowances were adjusted in 2024.

Net Sales to External

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Chairman of the Board and Chief Executive Officer

Senior Vice President, Finance and Chief Financial Officer

Executive Vice President, Finance and Chief Financial Officer

Vice President, Finance and Controller

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For example, we tested controls over management’s review of the completeness of identified unrecognized tax benefits, as well as controls over management’s review of significant assumptions used within the measurement of unrecognized tax benefits.

With the support of our tax professionals, among other audit procedures performed, we evaluated the reasonableness of management’s judgment with respect to the interpretation of tax laws of multiple jurisdictions by reading and evaluating management’s documentation, including relevant accounting policies, and by considering how tax law, including statutes, regulations, and case law, affected management’s judgments.

We tested the completeness of management’s assessment of the identification of unrecognized tax benefits and possible outcomes related to it including evaluation of technical merits of the unrecognized tax benefits.

With the support of our tax professionals, among other audit procedures performed, we evaluated the reasonableness of management’s judgment with respect to the interpretation of tax laws of multiple jurisdictions by reading and evaluating management’s documentation, including relevant accounting policies, and by considering how tax laws, including statutes, regulations, and case law, affected management’s judgments.

We tested the completeness of management’s assessment of the identification of unrecognized tax benefits including evaluation of the technical merits of the unrecognized tax benefits.

We also tested the appropriateness and consistency of management’s methods and significant assumptions associated with the measurement of unrecognized tax benefits, including assessing the estimated amount of tax liability that may be incurred should the tax position not be sustained upon inspection by a tax authority.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data