Abbott Reports First-Quarter 2019 Results
ABBOTT PARK, Ill., April 17, 2019 /PRNewswire/ -- Abbott (NYSE: ABT) today announced financial results for the first quarter ended March 31, 2019.
-- First-quarter worldwide sales of $7.5 billion increased 2.0 percent on a
reported basis and 7.1 percent on an organic* basis.
-- Reported diluted EPS from continuing operations under GAAP was $0.38 in
the first quarter.
-- Adjusted diluted EPS from continuing operations, which excludes
specified items, was $0.63, above the previous guidance range.
-- Abbott projects full-year 2019 diluted EPS from continuing operations on
a GAAP basis of $1.95 to $2.05. Projected full-year adjusted diluted EPS
from continuing operations remains unchanged at $3.15 to $3.25,
reflecting double-digit growth at the mid-point.
-- During the quarter, Abbott received U.S. FDA approval for a new,
expanded indication for its market-leading MitraClip(®) device to treat
clinically significant secondary mitral regurgitation, a leaky heart
valve resulting from advanced heart failure.
-- In January, Abbott announced U.S. FDA approval of its TactiCath(®)
Contact Force Ablation Catheter, Sensor Enabled(TM), which is designed
to help physicians accurately and effectively treat atrial fibrillation,
a form of irregular heartbeat.
-- In March, Abbott obtained CE Mark for its Alinity(®) m (molecular)
diagnostics system and testing assays, providing market-leading speed
and accuracy to help laboratories meet the growing demand for infectious
disease testing.
"We're right on track with our expectations to start the year," said Miles D. White, chairman and chief executive officer, Abbott. "All of our key long-term growth drivers are performing well and we're targeting another year of strong sales and earnings growth."
* See note on organic
growth below.
FIRST-QUARTER BUSINESS OVERVIEW
Note: Management believes that measuring sales growth rates on an organic basis is an appropriate way for investors to best understand the underlying performance of the business.
Organic sales growth:
-- Excludes the prior year first-quarter results for a non-core business
within U.S. Adult Nutrition, which was discontinued during the third
quarter 2018; and
-- Excludes the impact of foreign exchange.
Following are sales by business segment and commentary for the first quarter:
Total Company
---
($ in millions)
% Change vs. 1Q18
Sales 1Q19 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total * 2,754 4,781 7,535 2.9 1.4 2.0 3.6 9.0 7.1
Nutrition 747 1,045 1,792 (1.5) 4.7 2.0 0.8 11.1 6.7
Diagnostics 724 1,117 1,841 3.3 (1.7) 0.2 3.3 5.1 4.4
Established Pharmaceuticals 992 992
n/a (4.9) (4.9)
n/a 5.4 5.4
Medical Devices 1,275 1,620 2,895 5.5 5.5 5.5 5.5 12.6 9.5
* Total Q1 2019 Abbott sales
from continuing operations
include Other sales of $15
million.
n/a = Not Applicable.
Note: In order to compute
results excluding the impact
of exchange rates, current
year U.S. dollar sales are
multiplied or divided, as
appropriate, by the current
year average foreign exchange
rates and then those amounts
are multiplied or divided, as
appropriate, by the prior year
average foreign exchange
rates.
First-quarter 2019 worldwide sales of $7.5 billion increased 2.0 percent on a reported basis. On an organic basis, worldwide sales increased 7.1 percent. Refer to table titled "Non-GAAP Reconciliation of Adjusted Historical Revenue" for a reconciliation of adjusted historical revenue.
Nutrition
---
($ in millions)
% Change vs. 1Q18
Sales 1Q19 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 747 1,045 1,792 (1.5) 4.7 2.0 0.8 11.1 6.7
Pediatric 453 576 1,029 1.2 5.4 3.5 1.2 11.2 6.7
Adult 294 469 763 (5.5) 3.9 0.1 0.2 11.1 6.8
Worldwide Nutrition sales increased 2.0 percent on a reported basis in the first quarter. On an organic basis, sales increased 6.7 percent. Refer to table titled "Non-GAAP Reconciliation of Adjusted Historical Revenue" for a reconciliation of adjusted historical revenue.
Worldwide Pediatric Nutrition sales increased 3.5 percent on a reported basis in the first quarter, including an unfavorable 3.2 percent effect of foreign exchange, and increased 6.7 percent on an organic basis. International Pediatric Nutrition sales increased 5.4 percent on a reported basis and 11.2 percent on an organic basis in the first quarter. Sales performance in the quarter was led by strong growth in Asia and Latin America, including broad-based growth across Abbott's portfolio of infant and toddler brands.
Worldwide Adult Nutrition sales increased 0.1 percent on a reported basis in the first quarter, and increased 6.8 percent on an organic basis. International Adult Nutrition sales increased 3.9 percent on a reported basis and 11.1 percent on an organic basis in the first quarter. Sales performance in the quarter was led by strong growth of Ensure(®), Abbott's market-leading complete and balanced nutrition brand, and Glucerna(®), Abbott's market-leading diabetes-specific nutrition brand.
Diagnostics
---
($ in millions)
% Change vs. 1Q18
Sales 1Q19 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 724 1,117 1,841 3.3 (1.7) 0.2 3.3 5.1 4.4
Core Laboratory 249 812 1,061 9.3 2.7 4.1 9.3 10.0 9.9
Molecular 40 68 108 4.2 (14.5) (8.4) 4.2 (9.7) (5.1)
Point of Care 109 26 135 (1.7) (16.0) (4.8) (1.7) (13.1) (4.2)
Rapid Diagnostics 326 211 537 0.6 (10.3) (4.0) 0.6 (4.2) (1.4)
Worldwide Diagnostics sales increased 0.2 percent on a reported basis in the first quarter, including an unfavorable 4.2 percent effect of foreign exchange, and increased 4.4 percent on an organic basis.
Core Laboratory Diagnostics sales increased 4.1 percent on a reported basis and 9.9 percent on an organic basis in the first quarter. Sales performance in the quarter was led by above-market growth in the U.S. and internationally, where Abbott is achieving continued strong adoption of its Alinity family of innovative and highly differentiated diagnostic instruments.
Molecular Diagnostics sales decreased 8.4 percent on a reported basis in the first quarter, including an unfavorable 3.3 percent effect of foreign exchange, and decreased 5.1 percent on an organic basis. International sales growth in Molecular and Rapid Diagnostics was negatively impacted in the quarter by certain non-governmental organization (NGO) purchasing patterns in Africa. During the quarter, Abbott obtained CE Mark for its Alinity m (molecular) diagnostics system and several testing assays, providing market-leading speed and accuracy to help laboratories meet the growing demand for infectious disease testing.
Point of Care Diagnostics sales decreased 4.8 percent on a reported basis in the first quarter, including an unfavorable 0.6 percent effect of foreign exchange, and decreased 4.2 percent on an organic basis.
Rapid Diagnostics sales decreased 4.0 percent on a reported basis in the first quarter, including an unfavorable 2.6 percent effect of foreign exchange, and decreased 1.4 percent on an organic basis. Strong sales growth in several areas of the business, including cardio-metabolic testing and Abbott's ID-NOW( TM) infectious disease testing platform, was offset by a difficult comparison versus the first-quarter of 2018 when sales were abnormally high due to a strong flu season.
Established Pharmaceuticals
---
($ in millions)
% Change vs. 1Q18
Sales 1Q19 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 992 992
n/a (4.9) (4.9)
n/a 5.4 5.4
Key Emerging
Markets 752 752
n/a (5.2) (5.2)
n/a 7.3 7.3
Other 240 240
n/a (4.2) (4.2)
n/a (0.9) (0.9)
Established Pharmaceuticals sales decreased 4.9 percent on a reported basis in the first quarter, including an unfavorable 10.3 percent effect of foreign exchange, and increased 5.4 percent on an organic basis.
Key Emerging Markets include India, Brazil, Russia and China along with several additional emerging countries that represent the most attractive long-term growth opportunities for Abbott's branded generics product portfolio. Sales in these geographies decreased 5.2 percent on a reported basis in the first quarter, including an unfavorable 12.5 percent effect of foreign exchange, and increased 7.3 percent on an organic basis led by growth in several markets.
Other sales decreased 4.2 percent on a reported basis in the first quarter, including an unfavorable 3.3 percent effect of foreign exchange, and decreased 0.9 percent on an organic basis. As expected, Other sales growth was negatively impacted in the quarter by the recent discontinuation of a non-core, low-margin supply agreement.
Medical Devices
---
($ in millions)
% Change vs. 1Q18
Sales 1Q19 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 1,275 1,620 2,895 5.5 5.5 5.5 5.5 12.6 9.5
Cardiovascular and Neuromodulation 1,123 1,206 2,329 0.1 0.4 0.2 0.1 6.9 3.6
Rhythm Management 233 257 490 (11.6) (5.5) (8.5) (11.6) 1.0 (5.2)
Electrophysiology 193 236 429 5.7 13.3 9.8 5.7 19.5 13.1
Heart Failure 143 41 184 26.1 5.7 20.9 26.1 12.4 22.6
Vascular 266 443 709 (6.9) (2.3) (4.1) (6.9) 3.7 (0.4)
Structural Heart 136 188 324 24.8 1.8 10.3 24.8 9.3 15.0
Neuromodulation 152 41 193 (9.6) (6.1) (8.9) (9.6) 2.1 (7.1)
Diabetes Care 152 414 566 76.5 23.7 34.4 76.5 33.1 42.0
Vascular Product Lines:
Coronary and Endovasculara) 235 440 675 (2.7) (2.1) (2.3) (2.7) 3.8 1.6
a) Includes drug-eluting stents, balloon
catheters, guidewires, vascular imaging/
diagnostics products, vessel closure, carotid
and other coronary and peripheral products.
Worldwide Medical Devices sales increased 5.5 percent on a reported basis in the first quarter and increased 9.5 percent on an organic basis, led by double-digit growth in Electrophysiology, Heart Failure, Structural Heart and Diabetes Care.
In Electrophysiology, in January, Abbott announced U.S. FDA approval of its TactiCath Contact Force Ablation Catheter, Sensor Enabled, which is designed to help physicians accurately and effectively treat atrial fibrillation, a form of irregular heartbeat.
In Heart Failure, growth was driven by rapid U.S. market adoption of Abbott's HeartMate 3(®) left ventricular assist device following FDA approval as a destination (long-term use) therapy in late-2018. In March, Abbott announced data from its MOMENTUM 3 clinical study, the largest randomized controlled trial to assess outcomes in patients receiving a heart pump to treat advanced heart failure, which demonstrated HeartMate 3 improved survival and clinical outcomes in this patient population.
Growth in Structural Heart was broad-based across several areas of the business, including MitraClip, Abbott's market-leading device for the minimally invasive treatment of mitral regurgitation (MR), a leaky heart valve. During the quarter, Abbott received U.S. FDA approval for a new, expanded indication for MitraClip to treat clinically significant secondary MR as a result of underlying heart failure. This new indication significantly expands the number of people with MR that can be treated with the MitraClip device.
In Diabetes Care, sales increased 34.4 percent on a reported basis and 42.0 percent on an organic basis in the first quarter. Sales growth in the quarter was led by FreeStyle(®) Libre(®), Abbott's revolutionary continuous glucose monitoring system, with worldwide sales of $379 million, an increase of 70.2 percent on a reported basis and 80.1 percent on an organic basis versus the prior year. During the quarter, Abbott released real-world data from nearly 500,000 users that shows higher rates of scanning with its FreeStyle Libre system improves glucose control for people living with diabetes.
ABBOTT'S EARNINGS-PER-SHARE GUIDANCE
Abbott projects 2019 diluted earnings per share from continuing operations under Generally Accepted Accounting Principles (GAAP) of $1.95 to $2.05. Abbott forecasts net specified items for the full year 2019 of $1.20 per share. Specified items include intangible amortization expense, acquisition-related expenses, charges associated with cost reduction initiatives and other expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $3.15 to $3.25 for the full year 2019.
Abbott is issuing second-quarter 2019 guidance for diluted earnings per share from continuing operations under GAAP of $0.47 to $0.49. Abbott forecasts specified items for the second quarter 2019 of $0.32 per share primarily related to intangible amortization, acquisition-related expenses, cost reduction initiatives and other expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $0.79 to $0.81 for the second quarter.
ABBOTT DECLARES 381(ST) CONSECUTIVE QUARTERLY DIVIDEND
On Feb. 22, 2019, the board of directors of Abbott declared the company's quarterly dividend of $0.32 per share. Abbott's cash dividend is payable May 15, 2019, to shareholders of record at the close of business on April 15, 2019.
Abbott has increased its dividend payout for 47 consecutive years and is a member of the S&P 500 Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.
About Abbott:
Abbott is a global healthcare leader that helps people live more fully at all stages of life. Our portfolio of life-changing technologies spans the spectrum of healthcare, with leading businesses and products in diagnostics, medical devices, nutritionals and branded generic medicines. Our 103,000 colleagues serve people in more than 160 countries.
Connect with us at www.abbott.com, on LinkedIn at www.linkedin.com/company/abbott-/, on Facebook at www.facebook.com/Abbott and on Twitter @AbbottNews and @AbbottGlobal.
Abbott will webcast its live first-quarter earnings conference call through its Investor Relations website at www.abbottinvestor.com at 8 a.m. Central time today. An archived edition of the webcast will be available later that day.
-- Private Securities Litigation Reform Act of 1995 --
A Caution Concerning Forward-Looking Statements
Some statements in this news release may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Abbott's operations are discussed in Item 1A, "Risk Factors'' to our Annual Report on Securities and Exchange Commission Form 10-K for the year ended Dec. 31, 2018, and are incorporated by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.
Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Earnings
First Quarter Ended March 31, 2019 and 2018
(in millions, except per share data)
(unaudited)
1Q19 1Q18 % Change
Net Sales $7,535 $7,390 2.0
Cost of products sold,
excluding amortization expense 3,160 3,067 3.0
Amortization of intangible
assets 486 584 (16.8)
Research and development 672 589 14.2 1)
Selling, general, and
administrative 2,478 2,542 (2.6)
Total Operating Cost and
Expenses 6,796 6,782 0.2
Operating earnings 739 608 21.6
Interest expense, net 148 199 (26.2)
Net foreign exchange (gain)
loss 6 (3)
n/m
Debt extinguishment costs 14
n/m
Other (income) expense, net (47) (33) 38.0
Earnings from Continuing
Operations before taxes 632 431 46.8
Tax expense (benefit) on
Earnings from Continuing
Operations (40) 22
n/m 2)
Earnings from Continuing
Operations 672 409 64.3
Earnings from Discontinued
Operations, net of taxes 9
n/m
Net Earnings $672 $418 60.8
Earnings from Continuing
Operations, excluding
Specified Items, as described
below $1,126 $1,050 7.2 3)
Diluted Earnings per Common
Share from:
Continuing Operations $0.38 $0.23 65.2
Discontinued Operations
n/m
Total $0.38 $0.23 65.2
Diluted Earnings per Common
Share from Continuing
Operations, excluding Specified
Items, as described below $0.63 $0.59 6.8 3)
Average Number of Common Shares
Outstanding
Plus Dilutive Common Stock
Options 1,777 1,765
NOTES:
See tables titled "Non-GAAP Reconciliation of
Financial Information From Continuing
Operations" for an explanation of certain non-
GAAP financial information.
n/m = Percent change is not meaningful.
See footnotes below.
1) In the first quarter of 2019, in
conjunction with the acquisition of
Cephea Valve Technologies, Inc.,
Abbott acquired an R&D asset valued
at $102 million, which was
immediately expensed.
2) 2019 Tax expense on Earnings from
Continuing Operations includes the
impact of a $78 million reduction
of the transition tax associated
with the Tax Cuts and Jobs Act
(TCJA) and approximately $65
million in excess tax benefits
associated with share-based
compensation.
2018 Tax expense on Earnings from
Continuing Operations includes the
impact of approximately $65 million
in excess tax benefits associated
with share-based compensation.
3) 2019 Net Earnings and Diluted
Earnings per Common Share from
Continuing Operations, excluding
Specified Items, excludes net
after-tax charges of $454 million,
or $0.25 per share, for intangible
amortization expense and other
expenses primarily associated with
acquisitions and restructuring
actions.
2018 Net Earnings and Diluted
Earnings per Common Share from
Continuing Operations, excluding
Specified Items, excludes net
after-tax charges of $641 million,
or $0.36 per share, for intangible
amortization expense and other
expenses primarily associated with
acquisitions and restructuring
actions.
Abbott Laboratories and Subsidiaries
Non-GAAP Reconciliation of Financial Information From Continuing Operations
First Quarter Ended March 31, 2019 and 2018
(in millions, except per share data)
(unaudited)
1Q19
As Specified
As % to
Reported Items Adjusted Sales
(GAAP)
Intangible Amortization $486 $(486)
Gross Margin 3,889 527 $4,416 58.6%
R&D 672 (115) 557 7.4%
SG&A 2,478 (45) 2,433 32.3%
Other (income) expense, net (47) (13) (60)
Earnings from Continuing
Operations before taxes 632 700 1,332
Tax expense (benefit) on
Earnings from Continuing
Operations (40) 246 206
Earnings from Continuing
Operations 672 454 1,126
Diluted Earnings per Share
from Continuing Operations $0.38 $0.25 $0.63
Specified items reflect intangible amortization expense of $486 million and other expenses of $214 million, primarily associated with acquisitions, restructuring actions and other expenses. See table titled "Details of Specified Items" for additional details regarding specified items.
1Q18
As Specified
As % to
Reported Items Adjusted Sales
(GAAP)
Intangible Amortization $584 $(584)
Gross Margin 3,739 647 $4,386 59.3%
R&D 589 (43) 546 7.4%
SG&A 2,542 (90) 2,452 33.2%
Net foreign exchange
(gain) loss (3) (1) (4)
Debt extinguishment
costs 14 (14)
Other (income) expense,
net (33) (2) (35)
Earnings from Continuing
Operations before taxes 431 797 1,228
Tax expense on Earnings
from Continuing
Operations 22 156 178
Earnings from Continuing
Operations 409 641 1,050
Diluted Earnings per
Share from Continuing
Operations $0.23 $0.36 $0.59
Specified items reflect intangible amortization expense of $584 million and other expenses of $213 million, primarily associated with acquisitions, restructuring actions and other expenses. See table titled "Details of Specified Items" for additional details regarding specified items.
A reconciliation of the first-quarter tax rates for continuing operations for 2019 and 2018 is shown below:
1Q19
($
in
millions) Pre-Tax Taxes on Tax
Income Earnings Rate
As
reported
(GAAP) $632 (40) (6.3%) 1)
Specified
items 700 246
Excluding
specified
items $1,332 $206 15.5%
1Q18
($
in
millions) Pre-Tax Taxes on Tax
Income Earnings Rate
As
reported
(GAAP) $431 $22 5.0% 2)
Specified
items 797 156
Excluding
specified
items $1,228 $178 14.5%
1) Reported tax rate on a GAAP basis
for the first quarter of 2019
includes the impact of a $78
million reduction of the transition
tax associated with the TCJA and
approximately $65 million in excess
tax benefits associated with share-
based compensation.
2) Reported tax rate on a GAAP basis
for 2018 includes the impact of
approximately $65 million in excess
tax benefits associated with share-
based compensation.
Abbott Laboratories and Subsidiaries
Non-GAAP Reconciliation of Adjusted Historical Revenue
First Quarter Ended March 31, 2019 and 2018
($ in millions) (unaudited)
1Q19
1Q18 % Change vs. 1Q18
Abbott Abbott Discontinued Adjusted Non-GAAP
Reported Reported Businessa) Revenue
Reported Reported Organicb)
Total Company 7,535 7,390 (17) 7,373 2.0 2.2 7.1
U.S. 2,754 2,675 (17) 2,658 2.9 3.6 3.6
Int'l 4,781 4,715 4,715 1.4 1.4 9.0
Total Nutrition 1,792 1,756 (17) 1,739 2.0 3.0 6.7
U.S. 747 758 (17) 741 (1.5) 0.8 0.8
Int'l 1,045 998 998 4.7 4.7 11.1
Adult 763 762 (17) 745 0.1 2.4 6.8
U.S. 294 310 (17) 293 (5.5) 0.2 0.2
Int'l 469 452 452 3.9 3.9 11.1
a) Reflects sales related to a non-
core product line within the
U.S. Adult Nutrition business,
which was discontinued during
the third quarter 2018.
b) In order to compute results
excluding the impact of
exchange rates, current year
U.S. dollar sales are
multiplied or divided, as
appropriate, by the current
year average foreign exchange
rates and then those amounts
are multiplied or divided, as
appropriate, by the prior year
average foreign exchange rates.
Abbott Laboratories and Subsidiaries
Details of Specified Items
First Quarter Ended March 31, 2019
(in millions, except per share data)
(unaudited)
Acquisition or
Restructuring
Intangible
Other (c)
Total
Divestiture- and Cost Amortization Specifieds
related (a) Reduction
Initiatives (b)
Gross Margin $19 $22 $486
$ -- $527
R&D (7) (5) (103) (115)
SG&A (43) (2) (45)
Other (income) expense,
net (3) (10) (13)
Earnings from
Continuing Operations
before taxes $72 $29 $486 $113 700
Tax expense on Earnings from Continuing Operations (d) 246
Earnings from
Continuing Operations $454
Diluted Earnings per Share from Continuing Operations $0.25
The table above provides additional details
regarding the specified items described on
tables titled "Non-GAAP Reconciliation of
Financial Information From Continuing
Operations".
a) Acquisition-related expenses
include costs for tax and other
services related to business
acquisitions, integration costs
which represent incremental costs
directly related to integrating the
acquired businesses and include
expenditures for retention,
severance, and the integration of
systems, processes and business
activities, and fair value
adjustments to contingent
consideration related to a business
acquisition.
b) Restructuring and cost reduction
initiative expenses include
severance, outplacement, inventory
write-downs, asset impairments,
accelerated depreciation, and other
direct costs associated with
specific restructuring plans and
cost reduction initiatives.
Restructuring and cost reduction
plans consist of distinct
initiatives to streamline
operations including the
consolidation and rationalization
of business activities and
facilities, workforce reductions,
the transfer of product lines
between manufacturing facilities,
and the transfer of other business
activities between sites.
c) Other expense relates to the
acquisition of an R&D asset and
charges related to the impairment
of certain assets.
d) Reflects the net tax benefit
associated with the specified
items, a reduction in the
transition tax associated with the
TCJA and excess tax benefits
associated with share-based
compensation.
Abbott Laboratories and Subsidiaries
Details of Specified Items
First Quarter Ended March 31, 2018
(in millions, except per share data)
(unaudited)
Acquisition or
Restructuring
Intangible
Other (c)
Total
Divestiture- and Cost Amortization Specifieds
related (a) Reduction
Initiatives (b)
Gross Margin $45 $18 $584
$ -- $647
R&D (16) (2) (25) (43)
SG&A (86) (4) (90)
Net foreign exchange (gain)
loss (1) (1)
Debt extinguishment costs (14) (14)
Other (income) expense, net (2) (2)
Earnings from Continuing
Operations before taxes $149 $25 $584 $39 797
Tax expense on Earnings from Continuing Operations (d) 156
Earnings from Continuing
Operations $641
Diluted Earnings per Share from Continuing Operations $0.36
The table above provides additional details
regarding the specified items described on
tables titled "Non-GAAP Reconciliation of
Financial Information From Continuing
Operations".
a) Acquisition-related expenses include
costs for legal, accounting, tax,
and other services related to
business acquisitions, integration
costs which represent incremental
costs directly related to
integrating the acquired businesses
and include expenditures for
consulting, retention, severance,
and the integration of systems,
processes and business activities,
fair value adjustments to contingent
consideration related to a business
acquisition, and inventory step-up
amortization.
b) Restructuring and cost reduction
initiative expenses include
severance, outplacement, inventory
write-downs, asset impairments,
accelerated depreciation, and other
direct costs associated with
specific restructuring plans and
cost reduction initiatives.
Restructuring and cost reduction
plans consist of distinct
initiatives to streamline operations
including the consolidation and
rationalization of business
activities and facilities, workforce
reductions, the transfer of product
lines between manufacturing
facilities, and the transfer of
other business activities between
sites.
c) Other expense relates to the
acquisition of an R&D asset and the
cost associated with the early
extinguishment of debt.
d) Reflects the net tax benefit
associated with the specified items
and excess tax benefits associated
with share-based compensation.
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SOURCE Abbott
