ABBOTT LABORATORIES 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Page Consolidated Statement of Earnings 41 Consolidated Statement of Comprehensive Income 42 Consolidated Statement of Cash Flows 43 Consolidated Balance Sheet 44 Consolidated Statement of Shareholders’ Investment 46 Notes to Consolidated Financial Statements 47 Management Report on Internal Control Over Financial Reporting 76 Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 77 Report of Independent Registered Public Accounting Firm 92 40 Table of Contents Abbott Laboratories and Subsidiaries Consolidated Statement of Earnings (in millions except per share data) Year Ended December 31 2024 2023 2022 Net Sales $ 41,950 $ 40,109 $ 43,653 Cost of products sold, excluding amortization of intangible assets 18,706 17,975 19,142 Amortization of intangible assets 1,878 1,966 2,013 Research and development 2,844 2,741 2,888 Selling, general and administrative 11,697 10,949 11,248 Total Operating Cost and Expenses 35,125 33,631 35,291 Operating Earnings 6,825 6,478 8,362 Interest expense 559 637 558 Interest income ( 344 ) ( 385 ) ( 183 ) Net foreign exchange (gain) loss ( 27 ) 41 2 Other (income) expense, net ( 376 ) ( 479 ) ( 321 ) Earnings before Taxes 7,013 6,664 8,306 Taxes on Earnings ( 6,389 ) 941 1,373 Net Earnings $ 13,402 $ 5,723 $ 6,933 Basic Earnings Per Common Share $ 7.67 $ 3.28 $ 3.94 Diluted Earnings Per Common Share $ 7.64 $ 3.26 $ 3.91 Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share 1,740 1,740 1,753 Dilutive Common Stock Options 8 9 11 Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options 1,748 1,749 1,764 Outstanding Common Stock Options Having No Dilutive Effect 7 5 3 The accompanying notes to consolidated financial statements are an integral part of this statement. 41 Table of Contents Abbott Laboratories and Subsidiaries Consolidated Statement of Comprehensive Income (in millions) Year Ended December 31 2024 2023 2022 Net Earnings $ 13,402 $ 5,723 $ 6,933 Foreign currency translation gain (loss) adjustments ( 1,001 ) 229 ( 894 ) Net actuarial gains (losses) and prior service cost and credits and amortization of net actuarial losses and prior service cost and credits, net of taxes of $ 228 in 2024, $ 31 in 2023 and $ 330 in 2022 765 117 1,177 Net gains (losses) on derivative instruments designated as cash flow hedges, net of taxes of $ 48 in 2024, $( 66 ) in 2023 and $ 11 in 2022 169 ( 134 ) 40 Other Comprehensive Income (Loss) ( 67 ) 212 323 Comprehensive Income $ 13,335 $ 5,935 $ 7,256 Supplemental Accumulated Other Comprehensive Income (Loss) Information, net of tax as of December 31: Cumulative foreign currency translation (loss) adjustments $ ( 7,505 ) $ ( 6,504 ) $ ( 6,733 ) Net actuarial (losses) and prior service (cost) and credits ( 611 ) ( 1,376 ) ( 1,493 ) Cumulative gains (losses) on derivative instruments designated as cash flow hedges 210 41 175 Accumulated other comprehensive income (loss) $ ( 7,906 ) $ ( 7,839 ) $ ( 8,051 ) The accompanying notes to consolidated financial statements are an integral part of this statement. 42 Table of Contents Abbott Laboratories and Subsidiaries Consolidated Statement of Cash Flows (in millions) Year Ended December 31 2024 2023 2022 Cash Flow From (Used in) Operating Activities: Net earnings $ 13,402 $ 5,723 $ 6,933 Adjustments to reconcile earnings to net cash from operating activities — Depreciation 1,340 1,277 1,254 Amortization of intangible assets 1,878 1,966 2,013 Share-based compensation 673 644 685 Investing and financing losses, net 482 126 215 Trade receivables ( 691 ) ( 356 ) ( 68 ) Inventories ( 58 ) ( 232 ) ( 1,413 ) Prepaid expenses and other assets ( 796 ) ( 542 ) ( 75 ) Trade accounts payable and other liabilities 356 ( 760 ) 420 Income taxes ( 8,028 ) ( 585 ) ( 383 ) Net Cash From Operating Activities 8,558 7,261 9,581 Cash Flow From (Used in) Investing Activities: Acquisitions of property and equipment ( 2,207 ) ( 2,202 ) ( 1,777 ) Acquisitions of businesses and technologies, net of cash acquired — ( 877 ) — Proceeds from business dispositions 1 40 48 Purchases of investment securities ( 169 ) ( 159 ) ( 185 ) Proceeds from sales of investment securities 28 43 152 Other 9 22 22 Net Cash From (Used in) Investing Activities ( 2,338 ) ( 3,133 ) ( 1,740 ) Cash Flow From (Used in) Financing Activities: Proceeds from issuance of (repayments of) short-term debt, net and other ( 100 ) 21 47 Proceeds from issuance of long-term debt and debt with maturities over 3 months 223 2 7 Repayments of long-term debt and debt with maturities over 3 months ( 660 ) ( 2,498 ) ( 753 ) Purchases of common shares ( 1,295 ) ( 1,227 ) ( 3,795 ) Proceeds from stock options exercised 264 167 167 Dividends paid ( 3,836 ) ( 3,556 ) ( 3,309 ) Net Cash From (Used in) Financing Activities ( 5,404 ) ( 7,091 ) ( 7,636 ) Effect of exchange rate changes on cash and cash equivalents ( 96 ) ( 23 ) ( 122 ) Net Increase (Decrease) in Cash and Cash Equivalents 720 ( 2,986 ) 83 Cash and Cash Equivalents, Beginning of Year 6,896 9,882 9,799 Cash and Cash Equivalents, End of Year $ 7,616 $ 6,896 $ 9,882 Supplemental Cash Flow Information: Income taxes paid $ 1,723 $ 1,475 $ 1,864 Interest paid 604 662 563 The accompanying notes to consolidated financial statements are an integral part of this statement. 43 Table of Contents Abbott Laboratories and Subsidiaries Consolidated Balance Sheet (dollars in millions) December 31 2024 2023 Assets Current assets: Cash and cash equivalents $ 7,616 $ 6,896 Investments, primarily bank time deposits and U.S. treasury bills 351 383 Trade receivables, less allowances of — 2024: $ 439 ; 2023: $ 444 6,925 6,565 Inventories: Finished products 3,700 3,946 Work in process 840 807 Materials 1,654 1,817 Total inventories 6,194 6,570 Other prepaid expenses and receivables 2,570 2,256 Total current assets 23,656 22,670 Investments 886 799 Property and equipment, at cost: Land 528 529 Buildings 4,207 4,161 Equipment 15,517 15,179 Construction in progress 2,488 2,064 22,740 21,933 Less: accumulated depreciation and amortization 12,082 11,779 Net property and equipment 10,658 10,154 Intangible assets, net of amortization 6,647 8,815 Goodwill 23,108 23,679 Deferred income taxes and other assets 16,459 7,097 $ 81,414 $ 73,214 44 Table of Contents Abbott Laboratories and Subsidiaries Consolidated Balance Sheet (dollars in millions) December 31 2024 2023 Liabilities and Shareholders’ Investment Current liabilities: Trade accounts payable $ 4,195 $ 4,295 Salaries, wages and commissions 1,701 1,597 Other accrued liabilities 5,143 5,422 Dividends payable 1,024 955 Income taxes payable 594 492 Current portion of long-term debt 1,500 1,080 Total current liabilities 14,157 13,841 Long-term debt 12,625 13,599 Post-employment obligations and other long-term liabilities 6,731 6,947 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: 2024: 1,991,472,630 ; 2023: 1,987,883,852 25,153 24,869 Common shares held in treasury, at cost — Shares: 2024: 259,774,639 ; 2023: 253,807,494 ( 16,844 ) ( 15,981 ) Earnings employed in the business 47,261 37,554 Accumulated other comprehensive income (loss) ( 7,906 ) ( 7,839 ) Total Abbott Shareholders’ Investment 47,664 38,603 Noncontrolling interests in subsidiaries 237 224 Total Shareholders’ Investment 47,901 38,827 $ 81,414 $ 73,214 The accompanying notes to consolidated financial statements are an integral part of this statement. 45 Table of Contents Abbott Laboratories and Subsidiaries Consolidated Statement of Shareholders’ Investment (in millions except shares and per share data) Year Ended December 31 2024 2023 2022 Common Shares: Beginning of Year Shares: 2024: 1,987,883,852 ; 2023: 1,986,519,278 ; 2022: 1,985,273,421 $ 24,869 $ 24,709 $ 24,470 Issued under incentive stock programs Shares: 2024: 3,588,778 ; 2023: 1,364,574 ; 2022: 1,245,857 173 66 72 Share-based compensation 673 646 687 Issuance of restricted stock awards ( 562 ) ( 552 ) ( 520 ) End of Year Shares: 2024: 1,991,472,630 ; 2023: 1,987,883,852 ; 2022: 1,986,519,278 $ 25,153 $ 24,869 $ 24,709 Common Shares Held in Treasury: Beginning of Year Shares: 2024: 253,807,494 ; 2023: 248,724,257 ; 2022: 221,191,228 $ ( 15,981 ) $ ( 15,229 ) $ ( 11,822 ) Issued under incentive stock programs Shares: 2024: 4,423,897 ; 2023: 4,881,031 ; 2022: 4,980,202 280 297 269 Purchased Shares: 2024: 10,391,042 ; 2023: 9,964,268 ; 2022: 32,513,231 ( 1,143 ) ( 1,049 ) ( 3,676 ) End of Year Shares: 2024: 259,774,639 ; 2023: 253,807,494 ; 2022: 248,724,257 $ ( 16,844 ) $ ( 15,981 ) $ ( 15,229 ) Earnings Employed in the Business: Beginning of Year $ 37,554 $ 35,257 $ 31,528 Net earnings 13,402 5,723 6,933 Cash dividends declared on common shares (per share — 2024: $ 2.24 ; 2023: $ 2.08 ; 2022: $ 1.92 ) ( 3,904 ) ( 3,625 ) ( 3,365 ) Effect of common and treasury share transactions 209 199 161 End of Year $ 47,261 $ 37,554 $ 35,257 Accumulated Other Comprehensive Income (Loss): Beginning of Year $ ( 7,839 ) $ ( 8,051 ) $ ( 8,374 ) Other comprehensive income (loss) ( 67 ) 212 323 End of Year $ ( 7,906 ) $ ( 7,839 ) $ ( 8,051 ) Noncontrolling Interests in Subsidiaries: Beginning of Year $ 224 $ 219 $ 222 Noncontrolling Interests’ share of income, net of distributions and share repurchases 13 5 ( 3 ) End of Year $ 237 $ 224 $ 219 The accompanying notes to consolidated financial statements are an integral part of this statement. 46 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements Note 1 — Summary of Significant Accounting Policies NATURE OF BUSINESS — Abbott’s principal business is the discovery, development, manufacture and sale of a broad line of health care products. BASIS OF CONSOLIDATION — The consolidated financial statements include the accounts of the parent company and subsidiaries, after elimination of intercompany transactions. USE OF ESTIMATES — The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those amounts. Significant estimates include amounts for sales rebates, income taxes, pension and other post-employment benefits, valuation of intangible assets, litigation, derivative financial instruments, and inventory and accounts receivable exposures. FOREIGN CURRENCY TRANSLATION — The statements of earnings of foreign subsidiaries whose functional currencies are other than the U.S. dollar are translated into U.S. dollars using average exchange rates for the period. The net assets of foreign subsidiaries whose functional currencies are other than the U.S. dollar are translated into U.S. dollars using exchange rates as of the balance sheet date. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recorded in the foreign currency translation adjustment account, which is included in equity as a component of Accumulated other comprehensive income (loss). Transaction gains and losses are recorded on the Net foreign exchange (gain) loss line of the Consolidated Statement of Earnings. REVENUE RECOGNITION — Revenue from product sales is recognized upon the transfer of control, which is generally upon shipment or delivery, depending on the delivery terms set forth in the customer contract. Provisions for discounts, rebates and sales incentives to customers, and returns and other adjustments are provided for in the period the related sales are recorded. Sales incentives to customers are not material. Historical data is readily available and reliable, and is used for estimating the amount of the reduction in gross sales. Revenue from the launch of a new product, from an improved version of an existing product, or for shipments in excess of a customer’s normal requirements are recorded when the conditions noted above are met. In those situations, management records a returns reserve for such revenue, if necessary. In certain Abbott businesses, primarily within diagnostics, Abbott participates in selling arrangements that include multiple performance obligations (e.g., instruments, reagents, procedures, and service agreements). The total transaction price of the contract is allocated to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. INCOME TAXES — Deferred income taxes are provided for the tax effect of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at the enacted statutory rate to be in effect when the taxes are paid. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax related to the U.S. Tax Cuts and Jobs Act (TCJA), or any additional outside basis differences that exist, as these amounts continue to be indefinitely reinvested in foreign operations. The TCJA subjects taxpayers to tax on global intangible low-taxed income (GILTI) earned by certain foreign subsidiaries. Abbott treats the GILTI tax as a period expense and provides for the tax in the year that the tax is incurred. Interest and penalties on income tax obligations are included in taxes on earnings. EARNINGS PER SHARE — Unvested restricted stock units and awards that contain non-forfeitable rights to dividends are treated as participating securities and are included in the computation of earnings per share under the two-class method. Under the two-class method, net earnings are allocated between common shares and participating securities. Net earnings allocated to common shares in 2024, 2023 and 2022 were $ 13.351 billion, $ 5.701 billion and $ 6.905 billion, respectively. PENSION AND POST-EMPLOYMENT BENEFITS — Abbott accrues for the actuarially determined cost of pension and post-employment benefits over the service attribution periods of the employees. Abbott must develop long-term assumptions, the most significant of which are the health care cost trend rates, discount rates and the expected return on plan assets. Differences between the expected long-term return on plan assets and the actual return are amortized over a five-year period. Actuarial losses and gains are amortized over the remaining service attribution periods of the employees under the corridor method. 47 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 1 — Summary of Significant Accounting Policies (Continued) FAIR VALUE MEASUREMENTS — For assets and liabilities that are measured using quoted prices in active markets, total fair value is the published market price per unit multiplied by the number of units held without consideration of transaction costs. Assets and liabilities that are measured using significant other observable inputs are valued by reference to similar assets or liabilities, adjusted for contract restrictions and other terms specific to that asset or liability. For these items, a significant portion of fair value is derived by reference to quoted prices of similar assets or liabilities in active markets. For all remaining assets and liabilities, fair value is derived using a fair value model, such as a discounted cash flow model or Black-Scholes model. Purchased intangible assets are recorded at fair value. The fair value of significant purchased intangible assets is based on independent appraisals. Abbott uses a discounted cash flow model to value intangible assets. The discounted cash flow model requires assumptions about the timing and amount of future net cash flows, risk, the cost of capital, terminal values and market participants. Intangible assets are reviewed for impairment on a quarterly basis. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually. SHARE-BASED COMPENSATION — The fair value of stock options and restricted stock awards and units are amortized over their requisite service period, which could be shorter than the vesting period if an employee is retirement eligible, with a charge to compensation expense. LITIGATION — Abbott accounts for litigation losses in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) No. 450, “Contingencies.” Under ASC No. 450, loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount is recorded. Legal fees are recorded as incurred. CASH, CASH EQUIVALENTS AND INVESTMENTS — Cash equivalents consist of bank time deposits, U.S. government securities, money market funds and U.S. treasury bills with original maturities of three months or less. Abbott holds certain investments with a carrying value of $ 139 million that are accounted for under the equity method of accounting. Investments held in a rabbi trust and investments in publicly traded equity securities are recorded at fair value and changes in fair value are recorded in earnings. Investments in equity securities that are not traded on public stock exchanges are recorded at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. TRADE RECEIVABLE VALUATIONS — Accounts receivable are stated at the net amount expected to be collected. 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. Accounts receivable are charged off after all reasonable means to collect the full amount (including litigation, where appropriate) have been exhausted. INVENTORIES — Inventories are stated at the lower of cost (first-in, first-out basis) or net realizable value. Cost includes material and conversion costs. PROPERTY AND EQUIPMENT — Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets. The following table shows estimated useful lives of property and equipment: Classification Estimated Useful Lives Buildings 10 to 50 years Equipment 2 to 20 years PRODUCT LIABILITY — Abbott accrues for product liability claims when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated based on existing information. The liabilities are adjusted quarterly as additional information becomes available. Product liability losses are self-insured. RESEARCH AND DEVELOPMENT COSTS — Internal research and development costs are expensed as incurred. Clinical trial costs incurred by third parties are expensed as the contracted work is performed. Where contingent milestone payments are due to third parties under research and development arrangements, the milestone payment obligations are expensed when the milestone results are achieved. 48 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 1 — Summary of Significant Accounting Policies (Continued) ACQUIRED IN-PROCESS AND COLLABORATIONS RESEARCH AND DEVELOPMENT (IPR&D) — The initial costs of rights to IPR&D projects obtained in an asset acquisition are expensed as IPR&D unless the project has an alternative future use. These costs include initial payments incurred prior to regulatory approval in connection with research and development collaboration agreements that provide rights to develop, manufacture, market and/or sell pharmaceutical or medical device products. The fair value of IPR&D projects acquired in a business combination are capitalized and accounted for as indefinite-lived intangible assets until completed and are then amortized over the remaining useful life. Collaborations are not significant. CONCENTRATION OF RISK AND GUARANTEES — Due to the nature of its operations, Abbott is not subject to significant concentration risks relating to customers, products or geographic locations. Product warranties are not significant. Abbott has no material exposures to off-balance sheet arrangements; no special purpose entities; nor activities that include non-exchange-traded contracts accounted for at fair value. Abbott periodically acquires a business or product rights in which Abbott agrees to pay contingent consideration based on attaining certain thresholds or based on the occurrence of certain events. Note 2 — New Accounting Standards 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. Abbott adopted the standard on January 1, 2023. The new standard did not have an impact on Abbott's consolidated financial statements. Recent Accounting Standards Not Yet Adopted 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. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires an entity to disclose annually additional information related to the company's income tax rate reconciliation and income taxes paid during the period. The guidance should be applied prospectively with the option to apply the standard retrospectively. The standard becomes effective for Abbott for full year 2025 reporting. Abbott is currently evaluating the impact of this new standard on its consolidated financial statements. Note 3 — Revenue Abbott’s revenues are derived primarily from the sale of a broad line of health care products under short-term receivable arrangements. Patent protection and licenses, technological and performance features, and inclusion of Abbott’s products under a contract most impact which products are sold; price controls, competition and rebates most impact the net selling prices of products; and foreign currency translation impacts the measurement of net sales and costs. Abbott’s products are generally sold directly to retailers, wholesalers, distributors, hospitals, health care facilities, laboratories, physicians’ offices and government agencies throughout the world. Abbott has four reportable segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices. 49 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 3 — Revenue (Continued) The following tables provide detail by sales category: 2024 2023 2022 (in millions) U.S. Int’l Total U.S. Int’l Total U.S. Int’l Total Established Pharmaceutical Products — Key Emerging Markets $ — $ 3,858 $ 3,858 $ — $ 3,807 $ 3,807 $ — $ 3,766 $ 3,766 Other — 1,336 1,336 — 1,259 1,259 — 1,146 1,146 Total — 5,194 5,194 — 5,066 5,066 — 4,912 4,912 Nutritional Products — Pediatric Nutritionals 2,208 1,815 4,023 1,977 1,957 3,934 1,562 1,919 3,481 Adult Nutritionals 1,481 2,909 4,390 1,436 2,784 4,220 1,357 2,621 3,978 Total 3,689 4,724 8,413 3,413 4,741 8,154 2,919 4,540 7,459 Diagnostic Products — Core Laboratory 1,332 3,903 5,235 1,243 3,916 5,159 1,137 3,751 4,888 Molecular 150 371 521 172 402 574 370 625 995 Point of Care 408 180 588 396 169 565 372 153 525 Rapid Diagnostics 1,940 1,057 2,997 2,518 1,172 3,690 6,652 3,409 10,061 Total 3,830 5,511 9,341 4,329 5,659 9,988 8,531 7,938 16,469 Medical Devices — Rhythm Management 1,154 1,236 2,390 1,085 1,170 2,255 1,029 1,090 2,119 Electrophysiology 1,141 1,326 2,467 1,008 1,187 2,195 909 1,018 1,927 Heart Failure 986 293 1,279 888 273 1,161 809 226 1,035 Vascular 1,056 1,781 2,837 978 1,703 2,681 864 1,619 2,483 Structural Heart 1,051 1,195 2,246 883 1,061 1,944 818 894 1,712 Neuromodulation 767 195 962 725 165 890 619 151 770 Diabetes Care 2,633 4,172 6,805 2,129 3,632 5,761 1,633 3,123 4,756 Total 8,788 10,198 18,986 7,696 9,191 16,887 6,681 8,121 14,802 Other 16 — 16 14 — 14 11 — 11 Total $ 16,323 $ 25,627 $ 41,950 $ 15,452 $ 24,657 $ 40,109 $ 18,142 $ 25,511 $ 43,653 Note: 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 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. 50 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 3 — Revenue (Continued) Abbott recognizes revenue from product sales upon the transfer of control, which is generally upon shipment or delivery, depending on the delivery terms set forth in the customer contract. For maintenance agreements that provide service beyond Abbott’s standard warranty and other service agreements, revenue is recognized ratably over the contract term. A time-based measure of progress appropriately reflects the transfer of services to the customer. Payment terms between Abbott and its customers vary by the type of customer, country of sale, and the products or services offered. The term between invoicing and the payment due date is not significant. Management exercises judgment in estimating variable consideration. Provisions for discounts, rebates and sales incentives to customers, and returns and other adjustments are provided for in the period the related sales are recorded. Sales incentives to customers are not material. Historical data is readily available and reliable, and is used for estimating the amount of the reduction in gross sales. Abbott provides rebates to government agencies, wholesalers, group purchasing organizations and other private entities. Rebate amounts are usually based upon the volume of purchases using contractual or statutory prices for a product. Factors used in the rebate calculations include the identification of which products have been sold subject to a rebate, which customer or government agency price terms apply, and the estimated lag time between sale and payment of a rebate. Using historical trends, adjusted for current changes, Abbott estimates the amount of the rebate that will be paid, and records the liability as a reduction of gross sales when Abbott records its sale of the product. Settlement of the rebate generally occurs from one to six months after sale. Abbott regularly analyzes the historical rebate trends and makes adjustments to reserves for changes in trends and terms of rebate programs. Historically, adjustments to prior years’ rebate accruals have not been material to net income. Other allowances charged against gross sales include cash discounts and returns, which are not significant. Cash discounts are known within 15 to 30 days of sale, and therefore can be reliably estimated. Returns can be reliably estimated because Abbott’s historical returns are low, and because sales return terms and other sales terms have remained relatively unchanged for several periods. Product warranties are also not significant. Abbott also applies judgment in determining the timing of revenue recognition related to contracts that include multiple performance obligations. The total transaction price of the contract is allocated to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. For goods or services for which observable standalone selling prices are not available, Abbott uses an expected cost plus a margin approach to estimate the standalone selling price of each performance obligation. Remaining Performance Obligations As of December 31, 2024, the estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) was approximately $ 5.5 billion in the Diagnostic Products segment and approximately $ 440 million in the Medical Devices segment. Abbott expects to recognize revenue on approximately 56 percent of these remaining performance obligations over the next 24 months, approximately 17 percent over the subsequent 12 months and the remainder thereafter. These performance obligations primarily reflect the future sale of reagents/consumables in contracts with minimum purchase obligations, extended warranty or service obligations related to previously sold equipment, and remote monitoring services related to previously implanted devices. Abbott has applied the practical expedient described in ASC 606-10-50-14 and has not included remaining performance obligations related to contracts with original expected durations of one year or less in the amounts above. Assets Recognized for Costs to Obtain a Contract with a Customer Abbott has applied the practical expedient in ASC 340-40-25-4 and records as an expense the incremental costs of obtaining contracts with customers in the period of occurrence when the amortization period of the asset that Abbott otherwise would have recognized is one year or less. Upfront commission fees paid to sales personnel as a result of obtaining or renewing contracts with customers are incremental to obtaining the contract. Abbott capitalizes these amounts as contract costs. Capitalized commission fees are amortized based on the contract duration to which the assets relate which ranges from two to ten years . The amounts as of December 31, 2024 and 2023 were not significant. 51 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 3 — Revenue (Continued) Additionally, the cost of transmitters provided to customers that use Abbott’s remote monitoring service with respect to certain medical devices are capitalized as contract costs. Capitalized transmitter costs are amortized based on the timing of the transfer of services to which the assets relate, which typically ranges from eight to ten years . The amounts as of December 31, 2024 and 2023 were not significant. Other Contract Assets and Liabilities Abbott discloses Trade receivables separately in the Consolidated Balance Sheet at the net amount expected to be collected. Contract assets primarily relate to Abbott’s conditional right to consideration for work completed but not billed at the reporting date. Contract assets at the beginning and end of the period, as well as the changes in the balance, were not significant. Contract liabilities primarily relate to payments received from customers in advance of performance under the contract. Abbott’s contract liabilities arise primarily in the Medical Devices reportable segment when payment is received upfront for various multi-period extended service arrangements. Changes in the contract liabilities during the period are as follows: (in millions) Contract Liabilities: Balance at December 31, 2022 $ 500 Unearned revenue from cash received during the period 469 Revenue recognized related to contract liability balance ( 424 ) Balance at December 31, 2023 545 Unearned revenue from cash received during the period 483 Revenue recognized related to contract liability balance ( 460 ) Balance at December 31, 2024 $ 568 Note 4 — Supplemental Financial Information 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: (in millions) Allowance for Doubtful Accounts: Balance at December 31, 2022 $ 262 Provisions/charges to income 26 Amounts charged off and other deductions ( 47 ) Balance at December 31, 2023 241 Provisions/charges to income 61 Amounts charged off and other deductions ( 55 ) Balance at December 31, 2024 $ 247 52 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) 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 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. The detail of various balance sheet components is as follows: (in millions) December 31, 2024 December 31, 2023 Long-term Investments: Equity securities $ 553 $ 555 Other 333 244 Total $ 886 $ 799 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. Abbott also holds certain investments as of December 31, 2024 with a carrying value of $ 139 million that are accounted for under the equity method of accounting and other equity investments with a carrying value of $ 91 million that do not have a readily determinable fair va lue. (in millions) December 31, 2024 December 31, 2023 Other Accrued Liabilities: Accrued rebates payable to government agencies $ 621 $ 650 Accrued other rebates (a) 1,098 1,091 All other 3,424 3,681 Total $ 5,143 $ 5,422 ________________________________________________________ (a) Accrued wholesaler chargeback rebates of $ 262 million and $ 232 million at December 31, 2024 and 2023, respectively, are netted in trade receivables because Abbott’s customers are invoiced at a higher catalog price but only remit to Abbott their contract price for the products. (in millions) December 31, 2024 December 31, 2023 Post-employment Obligations and Other Long-term Liabilities: Defined benefit pension plans and post-employment medical and dental plans for significant plans $ 1,880 $ 1,964 Deferred income taxes 512 568 Operating lease liabilities 896 949 All other (b) 3,443 3,466 Total $ 6,731 $ 6,947 ________________________________________________________ (b) Includes approximately $ 860 million and $ 650 million of net unrecognized tax benefits and $ 210 million and $ 430 million of transition tax obligation related to the TCJA in 2024 and 2023, respectively. 53 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 5 — Accumulated Other Comprehensive Income (Loss) The components of the changes in accumulated other comprehensive income (loss), net of income taxes, are as follows: (in millions) Cumulative Foreign Currency Translation Adjustments Net Actuarial Gains (Losses) and Prior Service (Costs) and Credits Cumulative Gains (Losses) on Derivative Instruments Designated as Cash Flow Hedges Total Balance at December 31, 2022 $ ( 6,733 ) $ ( 1,493 ) $ 175 $ ( 8,051 ) Other comprehensive income (loss) before reclassifications 212 127 5 344 (Income) loss amounts reclassified from accumulated other comprehensive income (a) 17 ( 10 ) ( 139 ) ( 132 ) Net current period other comprehensive income (loss) 229 117 ( 134 ) 212 Balance at December 31, 2023 ( 6,504 ) ( 1,376 ) 41 ( 7,839 ) Other comprehensive income (loss) before reclassifications ( 1,117 ) 757 245 ( 115 ) (Income) loss amounts reclassified from accumulated other comprehensive income (a) 116 8 ( 76 ) 48 Net current period other comprehensive income (loss) ( 1,001 ) 765 169 ( 67 ) Balance at December 31, 2024 $ ( 7,505 ) $ ( 611 ) $ 210 $ ( 7,906 ) ________________________________________________________ (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 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. (CSI) for $ 20 per common share, which equated to a purchase price of $ 851 million . The transaction was funded with cash on hand and accounted for as a business combination. 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 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 $ 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. 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. 54 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 7 — Goodwill and Intangible Assets 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 $ 27.1 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 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. 55 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 8 — Restructuring Plans 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 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: (in millions) Restructuring charges in 2023 $ 144 Payments and other adjustments ( 65 ) Accrued balance at December 31, 2023 79 Payments and other adjustments ( 58 ) Accrued balance at December 31, 2024 $ 21 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 Payments and other adjustments ( 170 ) Accrued balance at December 31, 2023 $ 58 Payments and other adjustments ( 49 ) Accrued balance at December 31, 2024 $ 9 56 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 9 — Incentive Stock Program The 2017 Incentive Stock Program authorizes the granting of nonqualified stock options, restricted stock awards, restricted stock units, performance awards, foreign benefits and other share-based awards. Stock options and restricted stock awards and units comprise the majority of benefits that have been granted and are currently outstanding under this program and a prior program. In 2024, Abbott granted 1,683,097 stock options, 404,597 restricted stock awards and 5,341,050 restricted stock units under this program. Under Abbott’s stock incentive programs, the purchase price of shares under option must be at least equal to the fair market value of the common stock on the date of grant, and the maximum term of an option is 10 years. Options generally vest equally over three years . Restricted stock awards generally vest over three years , with no more than one-third of the award vesting in any one year upon Abbott reaching a minimum return on equity target. Restricted stock units vest over three years and upon vesting, the recipient receives one share of Abbott stock for each vested restricted stock unit. The aggregate fair market value of options and restricted stock awards and units is recognized as expense over the requisite service period, which may be shorter than the vesting period if an employee is retirement eligible. Forfeitures are estimated at the time of grant. Restricted stock awards and settlement of vested restricted stock units are issued out of treasury shares. Abbott generally issues new shares for exercises of stock options. As a policy, Abbott does not purchase its shares relating to its share-based programs. In April 2017, Abbott’s shareholders authorized the 2017 Incentive Stock Program under which a maximum of 170 million shares were available for issuance. At December 31, 2024, approximately 61 million shares remained available for future issuance. The following table summarizes stock option activity for the year ended December 31, 2024 and the outstanding stock options as of December 31, 2024. (intrinsic values in millions) Options Weighted Average Exercise Price Weighted Average Remaining Life (Years) Aggregate Intrinsic Value Outstanding at December 31, 2023 28,569,075 $ 74.52 4.8 $ 1,073 Granted 1,683,097 116.88 Exercised ( 3,593,503 ) 47.26 Lapsed ( 111,920 ) 119.40 Outstanding at December 31, 2024 26,546,749 $ 80.70 4.6 $ 906 Exercisable at December 31, 2024 22,712,676 $ 75.20 3.9 $ 897 The following table summarizes restricted stock awards and units activity for the year ended December 31, 2024. Share Units Weighted Average Grant-Date Fair Value Outstanding at December 31, 2023 10,278,286 $ 112.51 Granted 5,745,647 116.78 Vested ( 4,978,325 ) 115.35 Forfeited ( 536,036 ) 112.82 Outstanding at December 31, 2024 10,509,572 $ 113.48 The fair market value of restricted stock awards and units vested in 2024, 2023 and 2022 was $ 570 million, $ 536 million and $ 639 million, respectively. The total intrinsic value of options exercised in 2024, 2023 and 2022 was $ 238 million, $ 102 million and $ 85 million, respectively. The total unrecognized compensation cost related to all share-based compensation plans at December 31, 2024 amounted to approximately $ 462 million, which is expected to be recognized over the next three years . 57 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 9 — Incentive Stock Program (Continued) Total non-cash stock compensation expense charged against income in 2024, 2023 and 2022 for share-based plans totaled approximately $ 673 million, $ 644 million and $ 685 million, respectively, and the tax benefit recognized was approximately $ 181 million, $ 144 million and $ 170 million, respectively. Stock compensation cost capitalized as part of inventory is not significant. The table below summarizes the fair value of an option granted in 2024, 2023 and 2022 and the assumptions included in the Black-Scholes option-pricing model used to estimate the fair value: 2024 2023 2022 Fair value $ 31.10 $ 26.87 $ 25.26 Risk-free interest rate 4.3 % 4.0 % 1.9 % Average life of options (years) 6.0 6.0 6.0 Volatility 25.2 % 24.4 % 23.8 % Dividend yield 1.9 % 1.9 % 1.6 % The risk-free interest rate is based on the rates available at the time of the grant for zero-coupon U.S. government issues with a remaining term equal to the option’s expected life. The average life of an option is based on both historical and projected exercise and lapsing data. Expected volatility is based on implied volatilities from traded options on Abbott’s stock and historical volatility of Abbott’s stock over the expected life of the option. Dividend yield is based on the option’s exercise price and annual dividend rate at the time of grant. Note 10 — Debt and Lines of Credit The following is a summary of long-term debt at December 31: (in millions) 2024 2023 0.10 % Notes, due 2024 — 655 2.95 % Notes, due 2025 1,000 1,000 3.875 % Notes, due 2025 500 500 1.50 % Notes, due 2026 1,188 1,266 3.75 % Notes, due 2026 1,700 1,700 0.375 % Notes, due 2027 615 655 1.15 % Notes, due 2028 650 650 5 -year term loan due 2029 583 419 1.40 % Notes, due 2030 650 650 4.75 % Notes, due 2036 1,650 1,650 6.15 % Notes, due 2037 547 547 6.00 % Notes, due 2039 515 515 5.30 % Notes, due 2040 694 694 4.75 % Notes, due 2043 700 700 4.90 % Notes, due 2046 3,250 3,250 Unamortized debt issuance costs ( 53 ) ( 56 ) Other, including fair value adjustments relating to interest rate hedge contracts designated as fair value hedges ( 64 ) ( 116 ) Total carrying amount of long-term debt 14,125 14,679 Less: Current portion 1,500 1,080 Total long-term portion $ 12,625 $ 13,599 58 Table of Contents 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. On September 27, 2023, Abbott repaid the € 1.14 billion outstanding principal amount of its 0.875 % Notes upon maturity. The repayment equated to approximately $ 1.2 billion. In September 2023, Abbott repaid approximately $ 197 million of debt assumed as part of a recent business acquisition. 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. 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), 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. Abbott expects to maintain an investment grade rating. Note 11 — Leases Leases where Abbott is the Lessee Abbott has entered into operating leases as the lessee for office space, manufacturing facilities, R&D laboratories, warehouses, vehicles and equipment. Finance leases are not significant. Abbott’s operating leases generally have remaining lease terms of 1 to 10 years. Some leases include options to extend beyond the original lease term, generally up to 10 years and some include options to terminate early. These options have been included in the determination of the lease liability when it is reasonably certain that the option will be exercised. For all of its asset classes, Abbott elected the practical expedient allowed under FASB ASC No. 842, “Leases” to account for each lease component (e.g., the right to use office space) and the associated non-lease components (e.g., maintenance services) as a single lease component. Abbott also elected the short-term lease accounting policy for all asset classes; therefore, Abbott is not recognizing a lease liability or right of use (ROU) asset for any lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that Abbott is reasonably certain to exercise. 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. 59 Table of Contents 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: (in millions, except weighted averages) 2024 2023 2022 Operating lease cost (a) $ 366 $ 356 $ 355 Cash paid for amounts included in the measurement of operating lease liabilities 300 276 274 ROU assets arising from entering into new operating lease obligations 253 253 263 Weighted average remaining lease term at December 31 (in years) 7 7 8 Weighted average discount rate at December 31 3.6 % 3.4 % 2.9 % ________________________________________________________ (a) Includes short-term lease expense and variable lease costs, which were immaterial in the years ended December 31, 2024, 2023 and 2022. Future minimum lease payments under non-cancellable operating leases as of December 31, 2024 were as follows: (in millions) 2025 $ 290 2026 252 2027 183 2028 134 2029 103 Thereafter 356 Total future minimum lease payments – undiscounted 1,318 Less: imputed interest ( 168 ) Present value of lease liabilities $ 1,150 The following table summarizes the amounts and location of operating lease ROU assets and lease liabilities: (in millions) December 31, 2024 December 31, 2023 Balance Sheet Caption Operating Lease - ROU Asset $ 1,075 $ 1,122 Deferred income taxes and other assets Operating Lease Liability: Current $ 254 $ 245 Other accrued liabilities Non-current 896 949 Post-employment obligations and other long-term liabilities Total Liability $ 1,150 $ 1,194 Leases where Abbott is the Lessor Certain assets, primarily diagnostics instruments, are leased to customers under contractual arrangements that typically include an operating or sales-type lease as well as performance obligations for reagents and other consumables. Sales-type leases are not significant. Contract terms vary by customer and may include options to terminate the contract or options to extend the contract. Where instruments are provided under operating lease arrangements, some portion or the entire lease revenue may be variable and subject to subsequent non-lease component (e.g., reagent) sales. The allocation of revenue between the lease and non-lease components is based on standalone selling prices. Operating lease revenue represented less than 3 percent of Abbott’s total net sales in the years ended December 31, 2024, 2023 and 2022. 60 Table of Contents 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, 2024 and December 31, 2023. Note 12 — Financial Instruments, Derivatives and Fair Value Measures Certain Abbott foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates primarily for anticipated intercompany purchases by those subsidiaries whose functional currencies are not the U.S. dollar. These contracts, with gross notional amounts totaling $ 7.0 billion at December 31, 2024, and $ 7.3 billion at December 31, 2023, are designated as cash flow hedges of the variability of the cash flows due to changes in foreign exchange rates and are recorded at fair value. Accumulated gains and losses as of December 31, 2024 will be included in Cost of products sold at the time the products are sold, generally through the next twelve to eighteen months . Abbott enters into foreign currency forward exchange contracts to manage currency exposures for foreign currency denominated third-party trade payables and receivables, and for intercompany loans and trade accounts payable where the receivable or payable is denominated in a currency other than the functional currency of the entity. For intercompany loans, the contracts require Abbott to sell or buy foreign currencies, primarily European currencies, in exchange for primarily U.S. dollars and European currencies. For intercompany and trade payables and receivables, the currency exposures are primarily the U.S. dollar and European currencies. At December 31, 2024 and 2023, Abbott held gross notional amounts of $ 16.2 billion and $ 13.8 billion, respectively, of such foreign currency forward exchange contracts. 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 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. These contracts are designated as fair value hedges of the variability of the fair value of fixed-rate debt due to changes in the long-term benchmark interest rates. The effect of the hedge is to change a fixed-rate interest obligation to a variable rate for that portion of the debt. Abbott records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount. Abbott had interest rate contracts totaling approximately $ 2.2 billion at December 31, 2024 and 2023. 61 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 12 — Financial Instruments, Derivatives and Fair Value Measures (Continued) The following table summarizes the amounts and location of certain derivative financial instruments as of December 31: Fair Value — Assets Fair Value — Liabilities (in millions) 2024 2023 Balance Sheet Caption 2024 2023 Balance Sheet Caption Interest rate swaps designated as fair value hedges: Non-current $ — $ — Deferred income taxes and other assets $ 51 $ 95 Post-employment obligations and other long-term liabilities Current 1 — Prepaid expenses and other receivables — — Other accrued liabilities Foreign currency forward exchange contracts: 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 The following table summarizes the activity for foreign currency forward exchange contracts designated as cash flow hedges, debt designated as a hedge of net investment in a foreign subsidiary and certain other derivative financial instruments, as well as the amounts and location of income (expense) and gain (loss) reclassified into income. Gain (loss) Recognized in Other Comprehensive Income (loss) Income (expense) and Gain (loss) Reclassified into Income (in millions) 2024 2023 2022 2024 2023 2022 Income Statement Caption Foreign currency forward exchange contracts designated as cash flow hedges $ 347 $ ( 22 ) $ 281 $ 103 $ 187 $ 234 Cost of products sold Debt designated as a hedge of net investment in a foreign subsidiary 37 27 75 n/a n/a n/a n/a Interest rate swaps designated as fair value hedges n/a n/a n/a 44 61 ( 243 ) Interest expense 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. The interest rate swaps are designated as fair value hedges of the variability of the fair value of fixed-rate debt due to changes in the long-term benchmark interest rates. The hedged debt is marked to market, offsetting the effect of marking the interest rate swaps to market. The carrying values and fair values of certain financial instruments as of December 31 are shown in the table below. The carrying values of all other financial instruments approximate their estimated fair values. The counterparties to financial instruments consist of select major international financial institutions. Abbott does not expect any losses from nonperformance by these counterparties. 62 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 12 — Financial Instruments, Derivatives and Fair Value Measures (Continued) 2024 2023 (in millions) Carrying Value Fair Value Carrying Value Fair Value Long-term Investment Securities: Equity securities $ 553 $ 553 $ 555 $ 555 Other 333 333 244 244 Total long-term debt ( 14,125 ) ( 13,710 ) ( 14,679 ) ( 14,769 ) Foreign Currency Forward Exchange Contracts: Receivable position 390 390 169 169 (Payable) position ( 131 ) ( 131 ) ( 231 ) ( 231 ) Interest Rate Hedge Contracts: Receivable position 1 1 — — (Payable) position ( 51 ) ( 51 ) ( 95 ) ( 95 ) The fair value of the debt was determined based on significant other observable inputs, including current interest rates. The following table summarizes the bases used to measure certain assets and liabilities at fair value on a recurring basis in the balance sheet: Basis of Fair Value Measurement (in millions) Outstanding Balances Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs December 31, 2024: Equity securities $ 323 $ 323 $ — $ — Interest rate swap derivative financial instruments 1 — 1 — Foreign currency forward exchange contracts 390 — 390 — Total Assets $ 714 $ 323 $ 391 $ — Fair value of hedged long-term debt $ 2,096 $ — $ 2,096 $ — Interest rate swap derivative financial instruments 51 — 51 — Foreign currency forward exchange contracts 131 — 131 — Contingent consideration related to business combinations 38 — — 38 Total Liabilities $ 2,316 $ — $ 2,278 $ 38 December 31, 2023: Equity securities $ 326 $ 326 $ — $ — Foreign currency forward exchange contracts 169 — 169 — Total Assets $ 495 $ 326 $ 169 $ — Fair value of hedged long-term debt $ 2,052 $ — $ 2,052 $ — Interest rate swap derivative financial instruments 95 — 95 — Foreign currency forward exchange contracts 231 — 231 — Contingent consideration related to business combinations 112 — — 112 Total Liabilities $ 2,490 $ — $ 2,378 $ 112 63 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 12 — Financial Instruments, Derivatives and Fair Value Measures (Continued) The fair value of foreign currency forward exchange contracts is determined using a market approach, which utilizes values for comparable derivative instruments. The fair value of the debt was determined based on the face value of the debt adjusted for the fair value of the interest rate swaps, which is based on a discounted cash flow analysis using significant other observable inputs. Contingent consideration relates to businesses acquired by Abbott. 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, 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. Excluding such contingent consideration, the maximum amount that may be due under the other contingent consideration arrangements was estimated at December 31, 2024 to be approxima tely $ 65 million, w hich is dependent upon attaining certain sales thresholds or upon the occurrence of certain events, such as regulatory approvals. Note 13 — Litigation and Environmental Matters Abbott has been identified as a potentially responsible party for investigation and cleanup costs at a number of locations in the United States and Puerto Rico under federal and state remediation laws and is investigating potential contamination at a number of company-owned locations. Abbott has recorded an estimated cleanup cost for each site for which management believes Abbott has a probable loss exposure. 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. The recorded accrual balance at December 31, 2024 for these proceedings and exposures was approximately $ 30 million. This accrual represents management’s best estimate of probable loss, as defined by FASB ASC No. 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. 64 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 14 — Post-Employment Benefits Retirement plans consist of defined benefit, defined contribution and medical and dental plans. Information for Abbott’s major defined benefit plans and post-employment medical and dental benefit plans is as follows: Defined Benefit Plans Medical and Dental Plans (in millions) 2024 2023 2024 2023 Projected benefit obligations, January 1 $ 10,030 $ 9,167 $ 1,181 $ 1,126 Service cost — benefits earned during the year 242 230 39 38 Interest cost on projected benefit obligations 469 455 54 59 (Gains) losses, primarily changes in discount rates, plan design changes, law changes and differences between actual and estimated health care costs ( 763 ) 458 ( 33 ) 35 Benefits paid ( 398 ) ( 377 ) ( 73 ) ( 77 ) Other, including foreign currency translation ( 130 ) 97 ( 2 ) — Projected benefit obligations, December 31 $ 9,450 $ 10,030 $ 1,166 $ 1,181 Plan assets at fair value, January 1 $ 13,085 $ 11,373 $ 288 $ 302 Actual return (loss) on plan assets 1,259 1,611 26 26 Company contributions 349 349 36 37 Benefits paid ( 398 ) ( 377 ) ( 73 ) ( 77 ) Other, including foreign currency translation ( 152 ) 129 — — Plan assets at fair value, December 31 $ 14,143 $ 13,085 $ 277 $ 288 Projected benefit obligations less (greater) than plan assets, December 31 $ 4,693 $ 3,055 $ ( 889 ) $ ( 893 ) Long-term assets $ 5,724 $ 4,164 $ — $ — Short-term liabilities ( 38 ) ( 36 ) ( 2 ) ( 2 ) Long-term liabilities ( 993 ) ( 1,073 ) ( 887 ) ( 891 ) Net asset (liability) $ 4,693 $ 3,055 $ ( 889 ) $ ( 893 ) Amounts Recognized in Accumulated Other Comprehensive Income (loss): Actuarial losses, net $ 772 $ 1,751 $ 29 $ 62 Prior service costs (credits) 5 6 ( 8 ) ( 22 ) 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 projected benefit obligations for non-U.S. defined benefit plans were $ 2.3 billion and $ 2.6 billion at December 31, 2024 and 2023, respectively. The accumulated benefit obligations for all defined benefit plans were $ 8.7 billion and $ 9.2 billion at December 31, 2024 and 2023, respectively. For plans where the projected benefit obligations exceeded plan assets at December 31, 2024 and 2023, the projected benefit obligations and the aggregate plan assets were as follows: (in millions) 2024 2023 Projected benefit obligation $ 1,180 $ 1,314 Fair value of plan assets 149 205 65 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 14 — Post-Employment Benefits (Continued) For plans where the accumulated benefit obligations exceeded plan assets at December 31, 2024 and 2023, the aggregate accumulated benefit obligations, the projected benefit obligations and the aggregate plan assets were as follows: (in millions) 2024 2023 Accumulated benefit obligation $ 1,112 $ 1,175 Projected benefit obligation 1,180 1,248 Fair value of plan assets 149 144 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 Dental Plans (in millions) 2024 2023 2022 2024 2023 2022 Service cost — benefits earned during the year $ 242 $ 230 $ 374 $ 39 $ 38 $ 50 Interest cost on projected benefit obligations 469 455 300 54 59 36 Expected return on plans’ assets ( 1,050 ) ( 971 ) ( 931 ) ( 24 ) ( 23 ) ( 30 ) Amortization of actuarial losses (gains) 24 11 231 ( 2 ) ( 2 ) 11 Amortization of prior service costs (credits) 1 1 1 ( 13 ) ( 13 ) ( 24 ) Total net cost (income) $ ( 314 ) $ ( 274 ) $ ( 25 ) $ 54 $ 59 $ 43 In addition, approximately $ 15 million of income was recognized in 2023 related to the curtailment of a non-U.S. defined benefit plan. Other comprehensive income (loss) for each respective year includes the amortization of actuarial losses and prior service costs (credits) as noted in the previous table. Other comprehensive income (loss) for each respective year also includes: 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. The net actuarial losses in 2023 related to medical and dental plans are primarily due to the year-over-year decrease in discount rates. 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 weighted average assumptions used to determine benefit obligations for defined benefit plans and medical and dental plans are as follows: 2024 2023 2022 Discount rate 5.4 % 4.8 % 5.0 % Expected aggregate average long-term change in compensation 4.6 % 4.6 % 4.5 % The weighted average assumptions used to determine the net cost for defined benefit plans and medical and dental plans are as follows: 2024 2023 2022 Discount rate 4.8 % 5.0 % 2.7 % Expected return on plan assets 7.6 % 7.6 % 7.5 % Expected aggregate average long-term change in compensation 4.6 % 4.5 % 4.4 % 66 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 14 — Post-Employment Benefits (Continued) The assumed health care cost trend rates for medical and dental plans at December 31 were as follows: 2024 2023 2022 Health care cost trend rate assumed for the next year 8 % 8 % 7 % Rate that the cost trend rate gradually declines to 5 % 5 % 5 % Year that rate reaches the assumed ultimate rate 2031 2029 2027 The discount rates used to measure liabilities were determined based on high-quality fixed income securities that match the duration of the expected retiree benefits. The health care cost trend rates represent Abbott’s expected annual rates of change in the cost of health care benefits and are forward projections of health care costs as of the measurement date. The following table summarizes the bases used to measure the defined benefit and medical and dental plan assets at fair value: Basis of Fair Value Measurement (in millions) Outstanding Balances Quoted Prices in Active Markets Significant Other Observable Inputs Significant Unobservable Inputs Measured at NAV (j) December 31, 2024 Equities: U.S. large cap (a) $ 3,873 $ 2,714 $ — $ — $ 1,159 U.S. mid and small cap (b) 918 909 — 1 8 International (c) 2,827 518 — — 2,309 Fixed income securities: U.S. government securities (d) 441 7 420 — 14 Corporate debt instruments (e) 1,558 120 1,032 — 406 Non-U.S. government securities (f) 627 43 2 — 582 Other (g) 916 335 175 — 406 Absolute return funds (h) 1,814 283 — — 1,531 Cash and Cash Equivalents 314 16 — — 298 Other (i) 1,132 7 — — 1,125 $ 14,420 $ 4,952 $ 1,629 $ 1 $ 7,838 December 31, 2023 Equities: U.S. large cap (a) $ 3,425 $ 2,305 $ — $ — $ 1,120 U.S. mid and small cap (b) 814 807 — 1 6 International (c) 2,725 493 — — 2,232 Fixed income securities: U.S. government securities (d) 391 5 371 — 15 Corporate debt instruments (e) 1,519 125 1,055 — 339 Non-U.S. government securities (f) 586 36 3 — 547 Other (g) 863 322 106 — 435 Absolute return funds (h) 1,669 270 — — 1,399 Cash and Cash Equivalents 276 16 — — 260 Other (i) 1,105 5 — — 1,100 $ 13,373 $ 4,384 $ 1,535 $ 1 $ 7,453 67 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 14 — Post-Employment Benefits (Continued) ________________________________________________________ (a) A mix of index funds and actively managed equity accounts that are benchmarked to various large cap indices. (b) A mix of index funds and actively managed equity accounts that are benchmarked to various mid and small cap indices. (c) A mix of index funds and actively managed pooled investment funds that are benchmarked to various non-U.S. equity indices in both developed and emerging markets. (d) A mix of index funds and actively managed accounts that are benchmarked to various U.S. government bond indices. (e) A mix of index funds and actively managed accounts that are benchmarked to various corporate bond indices. (f) Primarily United Kingdom, Canada, Japan and Eurozone government bonds. (g) Primarily asset backed securities, bank loans, interest rate swap positions and diversified fixed income vehicles benchmarked to SOFR, Sterling Overnight Interbank Average (SONIA) or EURIBOR. (h) Primarily hedge funds and funds invested by managers that have a global mandate with the flexibility to allocate capital broadly across a wide range of asset classes and strategies including, but not limited to equities, fixed income, commodities, interest rate futures, currencies and other securities to outperform an agreed upon benchmark with specific return and volatility targets. (i) Primarily investments in private funds, such as private equity, private credit, private real estate and private energy funds. (j) Investments measured at fair value using the net asset value (NAV) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. Equities that are valued using quoted prices are valued at the published market prices. Equities in a common collective trust or a registered investment company are valued at the NAV provided by the fund administrator. The NAV is based on the value of the underlying assets owned by the fund minus its liabilities. For approximately half of these funds, investments may be redeemed once per week or month, with a required 2 to 30 day notice period. For the remaining funds, daily redemption of an investment is allowed. Fixed income securities that are valued using significant other observable inputs are valued at prices obtained from independent financial service industry recognized vendors. Abbott did no t have any unfunded commitments related to fixed income funds at December 31, 2024 and 2023. Fixed income securities in a common collective trust or a registered investment company are valued at the NAV provided by the fund administrator. For the majority of these funds, investments may be redeemed either weekly or monthly, with a required 2 to 60 day notice period. For the remaining funds, investments may be generally redeemed daily. Absolute return funds are valued at the NAV provided by the fund administrator. 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 $ 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. The estimate of the liquidation period for each fund ranges from 2025 to 2034. Abbott’s unfunded commitment in these funds was $ 540 million and $ 555 million as of December 31, 2024 and 2023, respectively. The investment mix of equity securities, fixed income and other asset allocation strategies is based upon achieving a desired return, as well as balancing higher return, more volatile equity securities with lower return, less volatile fixed income securities. Investment allocations are made across a range of markets, industry sectors, capitalization sizes, and in the case of fixed income securities, maturities and credit quality. The plans do not directly hold any securities of Abbott. There are no known significant concentrations of risk in the plans’ assets. Abbott’s medical and dental plans’ assets are invested in a similar mix as the pension plan assets. The actual asset allocation percentages at year end are consistent with the company’s targeted asset allocation percentages. 68 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 14 — Post-Employment Benefits (Continued) The plans’ expected return on assets, as shown above, is based on management’s expectations of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, management considers historical and expected returns for the asset classes in which the plans are invested, as well as current economic and capital market conditions. Abbott funds its domestic pension plans according to U.S. Internal Revenue Service (IRS) funding limitations. International pension plans are funded according to similar regulations. 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. Total benefit payments expected to be paid to participants, which includes payments funded from company assets, as well as paid from the plans, are as follows: (in millions) Defined Benefit Plans Medical and Dental Plans 2025 $ 412 $ 64 2026 431 69 2027 453 73 2028 475 78 2029 500 82 2030 to 2034 2,856 455 The Abbott Stock Retirement Plan is the principal defined contribution plan. Abbott’s contributions to this plan were $ 207 million in 2024, $ 199 million in 2023 and $ 190 million in 2022. Note 15 — Taxes on Earnings Taxes on earnings reflect the annual effective rates, including charges for interest and penalties. Deferred income taxes reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts. 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 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. income taxes. 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, 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. 69 Table of Contents 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 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. entities and its foreign affiliates. Abbott believes that the income reallocation adjustments proposed in the SNOD are without merit, in part because certain adjustments contradict methods that were agreed to with the IRS in prior audit periods. The SNOD also contains other proposed adjustments that Abbott believes are erroneous and unsupported. Abbott filed a petition with the U.S. 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. tax law. 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 reserves for uncertain tax positions related to unresolved matters with the IRS and other taxing authorities. Abbott continues to believe that its reserves for uncertain tax positions are appropriate. There are numerous other income tax jurisdictions for which tax returns are not yet settled, none of which Abbott expects to be individually significant. Reserves for interest and penalties are not significant. The Organization for Economic Cooperation & Development (OECD) has proposed a two-pillared plan for a revised international tax system. Pillar 1 proposes to reallocate taxing rights among the jurisdictions in which in-scope multinational corporations operate. Abbott is continuing to analyze the Pillar 1 proposal. 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. 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. 70 Table of Contents 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: (in millions) 2024 2023 2022 Earnings Before Taxes: Domestic $ 947 $ 1,192 $ 3,732 Foreign 6,066 5,472 4,574 Total $ 7,013 $ 6,664 $ 8,306 (in millions) 2024 2023 2022 Taxes on Earnings: Current: Domestic $ 497 $ 528 $ 1,309 Foreign 1,075 874 723 Total current 1,572 1,402 2,032 Deferred: Domestic ( 459 ) ( 382 ) ( 610 ) Foreign ( 7,502 ) ( 79 ) ( 49 ) Total deferred ( 7,961 ) ( 461 ) ( 659 ) Total $ ( 6,389 ) $ 941 $ 1,373 Differences between the effective income tax rate and the U.S. statutory tax rate were as follows: 2024 2023 2022 Statutory tax rate on earnings 21.0 % 21.0 % 21.0 % Impact of foreign operations ( 1.8 ) ( 3.6 ) ( 2.5 ) Foreign-derived intangible income benefit ( 2.3 ) ( 2.2 ) ( 2.0 ) Valuation allowance adjustments ( 107.1 ) — — Excess tax benefits related to stock compensation ( 0.7 ) ( 0.3 ) ( 0.5 ) Research tax credit ( 1.0 ) ( 1.1 ) ( 0.9 ) Resolution of certain tax positions pertaining to prior years 0.4 1.2 0.2 Intercompany restructurings and integration 0.2 ( 1.4 ) — State taxes, net of federal benefit 0.3 0.5 0.7 All other, net ( 0.1 ) — 0.5 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. 71 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 15 — Taxes on Earnings (Continued) The tax effect of the differences that give rise to deferred tax assets and liabilities were as follows: (in millions) 2024 2023 Deferred tax assets: Compensation and employee benefits $ — $ 89 Trade receivable reserves 230 221 Research and development costs 773 568 Inventory reserves 168 198 Lease liabilities 265 272 Deferred intercompany profit 284 283 NOLs, reserves not currently deductible, credit carryforwards and other 10,353 9,922 Total deferred tax assets before valuation allowance 12,073 11,553 Valuation allowance ( 1,664 ) ( 8,690 ) Total deferred tax assets 10,409 2,863 Deferred tax liabilities: Compensation and employee benefits ( 276 ) — Depreciation ( 408 ) ( 414 ) Right of Use lease assets ( 249 ) ( 258 ) Other, primarily the excess of book basis over tax basis of intangible assets ( 1,365 ) ( 1,777 ) Total deferred tax liabilities ( 2,298 ) ( 2,449 ) Total net deferred tax assets (liabilities) $ 8,111 $ 414 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: (in millions) 2024 2023 January 1 $ 3,323 $ 2,036 Increase due to current year tax positions 167 225 Increase due to prior year tax positions 174 1,338 Decrease due to prior year tax positions ( 50 ) ( 89 ) Settlements ( 13 ) ( 144 ) Lapse of statute ( 33 ) ( 43 ) December 31 $ 3,568 $ 3,323 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. 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 approximately $ 90 million, including cash adjustments, within the next twelve months as a result of concluding various domestic and international tax matters. 72 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 16 — Segment and Geographic Area Information Abbott’s principal business is the discovery, development, manufacture and sale of a broad line of health care products. Abbott’s products are generally sold directly to retailers, wholesalers, hospitals, health care facilities, laboratories, physicians’ offices and government agencies throughout the world. Abbott’s reportable segments are as follows: Established Pharmaceutical Products —International sales of a broad line of branded generic pharmaceutical products. Nutritional Products —Worldwide sales of a broad line of adult and pediatric nutritional products. Diagnostic Products —Worldwide sales of diagnostic systems and tests for blood banks, hospitals, commercial laboratories and alternate-care testing sites. For segment reporting purposes, the Core Laboratory Diagnostics, Rapid Diagnostics, Molecular Diagnostics and Point of Care Diagnostics businesses are aggregated and reported as the Diagnostic Products segment. Medical Devices —Worldwide sales of rhythm management, electrophysiology, heart failure, vascular, structural heart, neuromodulation and diabetes care products. For segment reporting purposes, the Cardiac Rhythm Management, Electrophysiology, Heart Failure, Vascular, Structural Heart, Neuromodulation and Diabetes Care divisions are aggregated and reported as the Medical Devices segment. Abbott’s underlying accounting records are maintained on a legal entity basis for government and public reporting requirements. 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. Remaining costs, if any, are not allocated to segments. 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. 73 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 16 — Segment and Geographic Area Information (Continued) 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) 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 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 ) Share-based compensation ( 673 ) ( 644 ) ( 685 ) Amortization of Intangible assets ( 1,878 ) ( 1,966 ) ( 2,013 ) Other, net (c) ( 763 ) ( 444 ) ( 943 ) Earnings before Taxes $ 7,013 $ 6,664 $ 8,306 ________________________________________________________ (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 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. 74 Table of Contents Abbott Laboratories and Subsidiaries Notes to Consolidated Financial Statements (Continued) Note 16 — Segment and Geographic Area Information (Continued) Depreciation Additions to Property and Equipment (d) Total Assets (in millions) 2024 2023 2022 2024 2023 2022 2024 2023 2022 Established Pharmaceuticals $ 96 $ 104 $ 97 $ 183 $ 185 $ 175 $ 3,087 $ 3,118 $ 2,883 Nutritionals 159 155 155 382 457 251 4,404 4,270 3,625 Diagnostics 521 499 494 758 750 832 7,678 7,767 7,985 Medical Devices 343 315 311 630 604 335 9,472 9,029 7,844 Total Reportable Segments 1,119 1,073 1,057 1,953 1,996 1,593 $ 24,641 $ 24,184 $ 22,337 Other 221 204 197 292 213 182 Total $ 1,340 $ 1,277 $ 1,254 $ 2,245 $ 2,209 $ 1,775 (in millions) 2024 2023 Total Reportable Segment Assets $ 24,641 $ 24,184 Cash and investments 8,853 8,078 Goodwill and intangible assets 29,755 32,494 All other (e) 18,165 8,458 Total Assets $ 81,414 $ 73,214 ________________________________________________________ (d) Amounts exclude property, plant and equipment acquired through business acquisitions. (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. 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 Customers (f) (in millions) 2024 2023 2022 United States $ 16,323 $ 15,452 $ 18,142 Germany 2,539 2,345 2,340 China 2,113 2,253 2,133 India 1,817 1,750 1,649 Switzerland 1,747 1,638 1,336 Japan 1,441 1,513 1,932 Netherlands 1,124 1,074 1,111 All Other Countries 14,846 14,084 15,010 Consolidated $ 41,950 $ 40,109 $ 43,653 ________________________________________________________ (f) Sales by country are based on the country that sold the product. Long-lived assets on a geographic basis primarily include property and equipment. It excludes goodwill, intangible assets, deferred tax assets, and financial instruments. At December 31, 2024 and 2023, long-lived assets totaled $ 18.5 billion and $ 16.2 billion, respectively, and in the United States such assets totaled $ 10.3 billion and $ 8.9 billion, respectively. Long-lived asset balances associated with other countries were not material on an individual country basis in either of the two years. 75 Table of Contents Management Report on Internal Control Over Financial Reporting The management of Abbott Laboratories is responsible for establishing and maintaining adequate internal control over financial reporting. Abbott’s internal control system was designed to provide reasonable assurance to the company’s management and board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Abbott’s management assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2024. In making this assessment, it used the criteria set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment, we believe that, as of December 31, 2024, the company’s internal control over financial reporting was effective based on those criteria. Abbott’s independent registered public accounting firm has issued an audit report on their assessment of the effectiveness of the company’s internal control over financial reporting. This report appears on page 79. Robert B. Ford Chairman of the Board and Chief Executive Officer Philip P. Boudreau Executive Vice President, Finance and Chief Financial Officer John A. McCoy, Jr. Vice President, Finance and Controller February 21, 2025 76 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Abbott Laboratories Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Abbott Laboratories and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of earnings, comprehensive income, shareholders’ investment and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 21, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 77 Table of Contents Income taxes – Unrecognized tax benefits Description of the Matter As described in Note 15 to the consolidated financial statements, unrecognized tax benefits were approximately $3.6 billion at December 31, 2024. Unrecognized tax benefits are assessed by management quarterly for identification and measurement, or more frequently if there are any indicators suggesting a change in unrecognized tax benefits. Assessing tax positions involves judgment including interpreting tax laws of multiple jurisdictions and assumptions relevant to the measurement of an unrecognized tax benefit, including the estimated amount of tax liability that may be incurred should the tax position not be sustained upon inspection by a tax authority. These judgments and assumptions can significantly affect unrecognized tax benefits. How We Addressed the Matter in our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s identification and measurement of unrecognized tax benefits, as well as its process for the assessment of events that may indicate a change in unrecognized tax benefits is warranted. 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 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. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2013. Chicago, Illinois February 21, 2025 78 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Abbott Laboratories Opinion on Internal Control over Financial Reporting We have audited Abbott Laboratories and subsidiaries’ internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Abbott Laboratories and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of earnings, comprehensive income, shareholders' investment and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 21, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Chicago, Illinois February 21, 2025 79 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.