Jan 27, 2021 SOURCE: PR NewsWire
Abbott Reports Fourth-Quarter 2020 Results; Issues Strong Double-Digit Growth Forecast for 2021
ABBOTT PARK, Ill., Jan. 27, 2021 /PRNewswire/ -- Abbott (NYSE: ABT) today announced financial results for the fourth quarter and full year ended Dec. 31, 2020, and issued its financial outlook for 2021.
-- Fourth-quarter sales of $10.7 billion increased 28.7 percent on a
reported basis and 28.4 percent on an organic basis, which excludes the
impact of foreign exchange.
-- Fourth-quarter GAAP diluted EPS was $1.20 and adjusted diluted EPS,
which excludes specified items, was $1.45, reflecting 52.6 percent
growth versus the prior year.(1)
-- Full-year 2020 GAAP diluted EPS from continuing operations was $2.49 and
adjusted diluted EPS from continuing operations was $3.65, at the
upper-end of guidance range issued in January 2020.(2)
-- Abbott issues full-year 2021 guidance for diluted EPS from continuing
operations on a GAAP basis of at least $3.74 and full-year adjusted
diluted EPS from continuing operations of at least $5.00, reflecting
growth of more than 35 percent versus the prior year.(3)
-- In the fourth quarter, global COVID-19 testing-related sales were $2.4
billion, led by combined sales of $1.9 billion from Abbott's
BinaxNOW((TM)), Panbio((TM)) and ID NOW((TM)) rapid testing platforms.
-- R&D pipeline continued to be highly productive in 2020: U.S. approval of
FreeStyle(®) Libre 2 and CE Mark of FreeStyle Libre 3 and Libre Sense
Glucose Sport Biosensor; CE Mark of MitraClip(®) G4, TriClip((TM)) and
Tendyne((TM)) heart valve devices; U.S. approval of Gallant((TM))
cardiac rhythm devices; CE Mark of EnSite((TM)) X 3D cardiac mapping
system; portfolio expansions in Nutrition and Established
Pharmaceuticals.
"Despite challenging conditions, we achieved double-digit EPS growth, delivered ground-breaking innovation and advanced our new product pipeline in 2020," said Robert B. Ford, president and chief executive officer, Abbott. "We exited the year with a lot of momentum and are forecasting EPS growth of more than 35 percent in 2021."
FOURTH-QUARTER BUSINESS OVERVIEW
Note: Management believes that measuring sales growth rates on an organic basis is an appropriate way for investors to best understand the underlying performance of the business. Organic sales growth excludes the impact of foreign exchange.
Following are sales by business segment and commentary for the fourth quarter 2020:
Total Company
($ in millions)
% Change vs. 4Q19
Sales 4Q20
Reported
Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total * 4,199 6,502 10,701 41.8 21.4 28.7 41.8 20.9 28.4
Nutrition 841 1,095 1,936 6.5 1.4 3.6 6.5 2.9 4.4
Diagnostics 1,981 2,364 4,345 158.5 83.0 111.1 158.5 79.6 108.9
Established
Pharmaceuticals 1,147 1,147
n/a (2.3) (2.3)
n/a 3.4 3.4
Medical Devices 1,369 1,888 3,257 (2.5) 4.9 1.7 (2.5) 1.2 (0.4)
* Total Q4 2020 Abbott sales from continuing operations include Other Sales of approximately $16 million.
% Change vs. 12M19
Sales 12M20 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total * 13,022 21,586 34,608 14.2 5.3 8.5 14.2 7.3 9.8
Nutrition 3,279 4,368 7,647 5.4 1.6 3.2 5.4 4.2 4.7
Diagnostics 4,774 6,031 10,805 65.3 25.0 40.1 65.3 25.8 40.6
Established Pharmaceuticals 4,303 4,303
n/a (4.1) (4.1)
n/a 1.9 1.9
Medical Devices 4,931 6,856 11,787 (8.2) (0.1) (3.7) (8.2) (0.3) (3.8)
* Total 12M 2020 Abbott sales from
continuing operations include
Other Sales of approximately $66
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.
Fourth-quarter 2020 worldwide sales of $10.7 billion increased 28.7 percent on a reported basis and 28.4 percent on an organic basis.
Nutrition
($ in millions)
% Change vs. 4Q19
Sales 4Q20 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 841 1,095 1,936 6.5 1.4 3.6 6.5 2.9 4.4
Pediatric 497 511 1,008 5.2 (9.5) (2.8) 5.2 (8.4) (2.2)
Adult 344 584 928 8.4 13.4 11.5 8.4 15.3 12.7
% Change vs. 12M19
Sales 12M20 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 3,279 4,368 7,647 5.4 1.6 3.2 5.4 4.2 4.7
Pediatric 1,987 2,140 4,127 5.8 (6.2) (0.8) 5.8 (4.1) 0.3
Adult 1,292 2,228 3,520 4.9 10.5 8.4 4.9 13.6 10.3
Worldwide Nutrition sales increased 3.6 percent on a reported basis and 4.4 percent on an organic basis in the fourth quarter. Strong performance of Ensure(®), Abbott's market-leading complete and balanced nutrition brand, and Glucerna(®), Abbott's market-leading diabetes nutrition brand, led to global Adult Nutrition sales growth of 11.5 percent on a reported basis and 12.7 percent on an organic basis. In Pediatric Nutrition, U.S. sales growth of 5.2 percent was led by share growth of Similac(®), Abbott's infant formula brand, which was offset by challenging conditions in Greater China.
Diagnostics
($ in millions)
% Change vs. 4Q19
Sales 4Q20 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 1,981 2,364 4,345 158.5 83.0 111.1 158.5 79.6 108.9
Core Laboratory 326 997 1,323 10.9 4.3 5.9 10.9 3.3 5.1
Molecular 192 290 482 427.0 263.1 314.5 427.0 254.2 308.3
Point of Care 91 38 129 (11.9) 14.2 (5.5) (11.9) 12.3 (6.0)
Rapid Diagnostics 1,372 1,039 2,411 312.2 366.2 333.9 312.2 354.0 329.0
% Change vs. 12M19
Sales 12M20 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 4,774 6,031 10,805 65.3 25.0 40.1 65.3 25.8 40.6
Core Laboratory 1,166 3,309 4,475 7.3 (7.3) (3.9) 7.3 (5.9) (2.8)
Molecular 621 817 1,438 315.5 178.8 224.9 315.5 179.9 225.7
Point of Care 369 147 516 (15.9) 20.2 (8.0) (15.9) 20.6 (7.9)
Rapid Diagnostics 2,618 1,758 4,376 115.7 109.2 113.0 115.7 107.4 112.3
Worldwide Diagnostics sales increased 111.1 percent on a reported basis in the fourth quarter and increased 108.9 percent on an organic basis. Strong growth in the quarter was driven by demand for Abbott's portfolio of COVID-19 diagnostics tests across its rapid and lab-based platforms. Global COVID-19 testing-related sales were $2.4 billion in the fourth quarter, led by combined sales of $1.9 billion from Abbott's BinaxNOW, Panbio and ID NOW rapid testing platforms.
During 2020, Abbott mobilized its teams across multiple fronts to develop and launch multiple diagnostic tests for COVID-19:
-- U.S. Emergency Use Authorization (EUA) of BinaxNOW COVID-19 Ag Card
test, a portable, lateral flow rapid antigen test to detect COVID-19.
-- CE Mark and World Health Organization emergency use listing of Panbio
rapid antigen test to detect COVID-19.
-- U.S. EUA of molecular test to detect COVID-19 on its ID NOW rapid
point-of-care platform.
-- U.S. EUA and CE Mark of molecular test on its m2000((TM)) RealTime
lab-based platform to detect COVID-19.
-- U.S. EUA and CE Mark of molecular test on its Alinity((TM)) m system to
detect COVID-19.
-- U.S. EUA and CE Mark of IgG (Immunoglobulin G) lab-based serology blood
test on its ARCHITECT(®) i1000SR and i2000SR laboratory instruments for
the detection of an antibody to determine if someone was previously
infected with the virus.
-- U.S. EUA and CE Mark of SARS-CoV-2 IgG lab-based serology blood test on
its Alinity i system.
-- Lateral flow COVID-19 rapid antibody test on its Panbio system in select
countries for the detection of an antibody to determine if someone was
previously infected with the virus.
-- U.S. EUA and CE Mark of AdviseDx SARS-CoV-2 IgM (Immunoglobulin M)
lab-based serology test for use on its ARCHITECT and Alinity platforms.
-- CE Mark of IgG (Immunoglobulin G) quantitative lab-based serology test
for use on its ARCHITECT and Alinity platforms.
-- CE Mark of multiplex molecular tests on its Alinity m system to detect
COVID-19, Flu A/B and RSV.
Established Pharmaceuticals
($ in millions)
% Change vs. 4Q19
Sales 4Q20 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 1,147 1,147
n/a (2.3) (2.3)
n/a 3.4 3.4
Key Emerging
Markets 833 833
n/a (7.1) (7.1)
n/a 1.1 1.1
Other 314 314
n/a 13.0 13.0
n/a 10.8 10.8
% Change vs. 12M19
Sales 12M20 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 4,303 4,303
n/a (4.1) (4.1)
n/a 1.9 1.9
Key Emerging
Markets 3,209 3,209
n/a (5.4) (5.4)
n/a 2.6 2.6
Other 1,094 1,094
n/a
n/a (0.5) (0.5)
Established Pharmaceuticals sales decreased 2.3 percent on a reported basis in the fourth quarter and increased 3.4 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 7.1 percent on a reported basis in the quarter and increased 1.1 percent on an organic basis. Organic sales growth in India, Russia and Brazil was partially offset by market softness across several countries as a result of COVID-19.
Other sales increased 13.0 percent on a reported basis in the quarter and increased 10.8 percent on an organic basis, led by strong sales of Influvac(®).
Medical Devices
($ in millions)
% Change vs. 4Q19
Sales 4Q20 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 1,369 1,888 3,257 (2.5) 4.9 1.7 (2.5) 1.2 (0.4)
Rhythm Management 248 284 532 (6.8) 2.1 (2.3) (6.8) (1.7) (4.2)
Electrophysiology 184 266 450 (4.5) 0.1 (1.9) (4.5) (3.6) (4.0)
Heart Failure 136 53 189 (6.7) 0.4 (4.8) (6.7) (2.3) (5.5)
Vascular 225 378 603 (14.0) (16.6) (15.6) (14.0) (19.0) (17.1)
Structural Heart 154 199 353 (9.1) (3.3) (5.9) (9.1) (7.0) (7.9)
Neuromodulation 172 41 213 (1.6) (12.7) (4.0) (1.6) (15.7) (4.6)
Diabetes Care 250 667 917 29.3 34.1 32.7 29.3 29.1 29.2
Vascular Product Lines:
Coronary and Endovasculara) 210 377 587 (12.3) (16.4) (15.0) (12.3) (18.8) (16.5)
Includes drug-
eluting stents,
balloon
catheters,
guidewires,
vascular imaging/
diagnostics
products, vessel
closure, carotid
and other
coronary and
peripheral
products.
a)
% Change vs. 12M19
Sales 12M20 Reported Organic
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
Total 4,931 6,856 11,787 (8.2) (0.1) (3.7) (8.2) (0.3) (3.8)
Rhythm Management 903 1,011 1,914 (14.5) (7.1) (10.7) (14.5) (7.2) (10.8)
Electrophysiology 660 918 1,578 (11.0) (6.2) (8.3) (11.0) (6.8) (8.6)
Heart Failure 547 193 740 (4.7) (1.3) (3.9) (4.7) (1.3) (3.9)
Vascular 853 1,486 2,339 (18.6) (17.6) (18.0) (18.6) (17.4) (17.8)
Structural Heart 540 707 1,247 (12.2) (9.9) (10.9) (12.2) (10.3) (11.2)
Neuromodulation 564 138 702 (14.6) (19.2) (15.5) (14.6) (19.0) (15.5)
Diabetes Care 864 2,403 3,267 27.4 30.2 29.5 27.4 30.1 29.4
Vascular Product Lines:
Coronary and Endovasculara) 785 1,478 2,263 (17.1) (17.5) (17.4) (17.1) (17.3) (17.3)
Includes drug-
eluting stents,
balloon
catheters,
guidewires,
vascular imaging/
diagnostics
products, vessel
closure, carotid
and other
coronary and
peripheral
products.
a)
Worldwide Medical Devices sales increased 1.7 percent on a reported basis in the fourth quarter and decreased 0.4 percent on an organic basis. Strong growth in Diabetes Care, led by FreeStyle Libre, was offset by reduced cardiovascular and neuromodulation procedure volumes due to the COVID-19 pandemic and lower Vascular sales in China, as a result of a new national tender program in that country. Excluding Vascular sales in China, global Vascular sales decreased 10.4 percent on an organic basis, and Medical Devices sales increased 1.4 percent on an organic basis in the fourth quarter.
In Diabetes Care, strong growth in the quarter was led by FreeStyle Libre, which grew 41.3 percent on a reported basis and 37.1 percent on an organic basis. For the full year, FreeStyle Libre grew 43.1 percent on a reported basis and 42.6 percent on an organic basis.
Abbott continues to strengthen its Medical Devices portfolio, with several key product approvals in 2020, including:
-- U.S. FDA clearance of FreeStyle Libre 2 as an integrated continuous
glucose monitoring (iCGM) system for adults and children ages 4 and
older with diabetes, achieving the highest level of accuracy and
performance standards.(4)
-- CE Mark of FreeStyle Libre 3, which automatically delivers
up-to-the-minute glucose readings, unsurpassed 14-day accuracy(5) and
real-time glucose alarms in the world's smallest and thinnest(6)
wearable glucose sensor.
-- CE Mark of Libre Sense Glucose Sport Biosensor, a small wearable sensor
that helps athletes better understand the efficacy of their nutritional
choices on training and athletic performance.
-- CE Mark of MitraClip G4, Abbott's next-generation MitraClip heart
system, the leading minimally invasive mitral heart valve repair device
in the world.
-- CE Mark of TriClip, the world's first minimally invasive, clip-based
device for repair of a leaky tricuspid heart valve.
-- CE Mark of Tendyne, a first-of-its-kind technology to replace a faulty
mitral heart valve.
-- U.S. approval of Gallant implantable cardioverter defibrillator (ICD)
and cardiac resynchronization therapy defibrillator (CRT-D) devices,
which include Bluetooth technology and a new patient smartphone app for
improved remote monitoring and enhanced patient-physician engagement to
help manage heart rhythm disorders.
-- CE Mark of EnSite X EP System, a next-generation 3D cardiac mapping
platform used for ablation therapy to treat abnormal heart rhythms.
-- U.S. FDA clearance and CE Mark of the IonicRF((TM)) Generator, a
non-surgical, minimally invasive device that uses heat to target
specific nerves for the management of chronic pain.
ABBOTT ISSUES GUIDANCE FOR 2021
Abbott projects full-year 2021 diluted earnings per share from continuing operations under GAAP of at least $3.74. Abbott forecasts specified items for the full-year 2021 of $1.26 primarily related to intangible amortization, expenses associated with acquisitions, restructuring and cost reduction initiatives and other net expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be at least $5.00 for full-year 2021.
ABBOTT DECLARES 388(TH) CONSECUTIVE QUARTERLY DIVIDEND
On Dec. 11, 2020, the board of directors of Abbott increased the company's quarterly dividend to $0.45 per share from $0.36 per share, an increase of 25 percent. Abbott's cash dividend is payable Feb. 16, 2021, to shareholders of record at the close of business on Jan. 15, 2021.
Abbott has increased its dividend payout for 49 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 109,000 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.
Abbott will live webcast its fourth-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, including the impact of the COVID-19 pandemic on Abbott's operations and financial results, 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" in our Annual Report on Form 10-K for the year ended Dec. 31, 2019 and in Item 1A, "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, and are incorporated herein 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.
(1) Fourth-quarter 2020 diluted EPS from continuing operations on a GAAP basis reflects 103.4 percent growth.
(2) Full year 2020 diluted EPS from continuing operations on a GAAP basis exceeded the guidance range Abbott
issued in January 2020 of $2.35 to $2.45.
(3) Full year 2021 guidance for diluted EPS from continuing operations on a GAAP basis reflects growth of at least
50 percent versus the prior year.
4
Based on FDA iCGM special controls.
5 Alva Shridhara, Timothy Bailey, Ronald Brazg, Erwin S. Budiman, Kristin Castorino, Mark P. Christiansen,
Gregory Forlenza, Mark Kipnes, David R. Liljenquist, and Hanqing Liu. "Accuracy of a 14-Day Factory-
Calibrated Continuous Glucose Monitoring System With Advanced Algorithm in Pediatric and Adult Population
With Diabetes." Journal of Diabetes Science and Technology, (September 2020). https://doi.org/10.1177/
1932296820958754.
6
Among patient-applied sensors. Data on File, Abbott Diabetes Care.
Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Earnings
Fourth Quarter Ended December 31, 2020 and 2019
(in millions, except per share data)
(unaudited)
4Q20 4Q19 %
Change
Net Sales $10,701 $8,314 28.7
Cost of products sold, excluding amortization expense 4,493 3,434 30.8
Amortization of intangible assets 508 483 5.2
Research and development 698 595 17.5
Selling, general, and administrative 2,570 2,413 6.5
Total Operating Cost and Expenses 8,269 6,925 19.4
Operating Earnings 2,432 1,389 75.0
Interest expense, net 127 139 (8.3)
Net foreign exchange (gain) loss (5) (2)
n/m
Debt extinguishment costs 63
n/m
Other (income) expense, net (78) (51) 49.6
Earnings from Continuing Operations before taxes 2,388 1,240 92.4
Tax expense on Earnings from Continuing Operations 230 191 20.2 1)
Earnings from Continuing Operations 2,158 1,049 105.5
Earnings from Discontinued Operations, net of taxes 4
n/m
Net Earnings $2,162 $1,049 105.9
Earnings from Continuing Operations, excluding Specified Items, as described below $2,612 $1,705 53.2 2)
Diluted Earnings per Common Share from:
Continuing Operations $1.20 $0.59 103.4
Discontinued Operations
n/m
Total $1.20 $0.59 103.4
Diluted Earnings per Common Share from Continuing Operations, excluding Specified Items, as described below $1.45 $0.95 52.6 2)
Average Number of Common Shares Outstanding
Plus Dilutive Common Stock Options 1,789 1,781
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) 2020 Tax expense on Earnings from Continuing
Operations includes the recognition of
approximately $135 million of tax benefits
related to the impairment of certain assets,
approximately $25 million of net tax benefits as
a result of the resolution of various tax
positions related to prior years and
approximately $10 million in excess tax benefits
associated with share-based compensation.
2) 2020 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 and impairment expenses
and other net expenses primarily associated with
acquisitions and restructuring actions.
2019 Net Earnings and Diluted Earnings per Common
Share from Continuing Operations, excluding
Specified Items, excludes net after-tax charges
of $656 million, or $0.36 per share, for
intangible amortization expense and other
expenses primarily associated with acquisitions
and restructuring actions.
Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Earnings
Year Ended December 31, 2020 and 2019
(in millions, except per share data)
(unaudited)
12M20 12M19 %
Change
Net Sales $34,608 $31,904 8.5
Cost of products sold, excluding amortization
expense 15,003 13,231 13.4
Amortization of intangible assets 2,132 1,936 10.1
Research and development 2,420 2,440 (0.8) 1)
Selling, general, and administrative 9,696 9,765 (0.7)
Total Operating Cost and Expenses 29,251 27,372 6.9
Operating Earnings 5,357 4,532 18.2
Interest expense, net 500 576 (13.2)
Net foreign exchange (gain) loss (8) 7
n/m
Debt extinguishment costs 63
n/m
Other (income) expense, net (103) (191) (46.5)
Earnings from Continuing Operations before
taxes 4,968 4,077 21.8
Tax expense on Earnings from Continuing
Operations 497 390 27.3 2)
Earnings from Continuing Operations 4,471 3,687 21.2
Earnings from Discontinued Operations, net of
taxes 24
n/m
Net Earnings $4,495 $3,687 21.9
Earnings from Continuing Operations, excluding
Specified Items, as described below $6,552 $5,810 12.8 3)
Diluted Earnings per Common Share from:
Continuing Operations $2.49 $2.06 20.9
Discontinued Operations 0.01
n/m
Total $2.50 $2.06 21.4
Diluted Earnings per Common Share from
Continuing Operations, excluding Specified
Items, as described below $3.65 $3.24 12.7 3)
Average Number of Common Shares Outstanding
Plus Dilutive Common Stock Options 1,786 1,781
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 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) 2020 Tax expense on Earnings from
Continuing Operations includes the
recognition of approximately $170
million of tax benefits related to
the impairment of certain assets,
approximately $140 million of net
tax benefits as a result of the
resolution of various tax positions
related to prior years and
approximately $100 million in
excess tax benefits associated with
share-based compensation.
2019 Tax expense on Earnings from
Continuing Operations includes the
impact of a $86 million reduction
of the transition tax associated
with the Tax Cuts and Jobs Act
(TCJA) and approximately $100
million in excess tax benefits
associated with share-based
compensation.
3) 2020 Net Earnings and Diluted
Earnings per Common Share from
Continuing Operations, excluding
Specified Items, excludes net
after-tax charges of $2.081
billion, or $1.16 per share, for
intangible amortization expense,
impairment charges and other net
expense primarily associated with
acquisitions, restructuring actions
and income from a litigation
settlement.
2019 Net Earnings and Diluted
Earnings per Common Share from
Continuing Operations, excluding
Specified Items, excludes net
after-tax charges of $2.123
billion, or $1.18 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
Fourth Quarter Ended December 31, 2020 and 2019
(in millions, except per share data)
(unaudited)
4Q20
As Specified
As % to Sales
Reported Items Adjusted
(GAAP)
Intangible Amortization $508 $(508)
$ --
Gross Margin 5,700 557 6,257 58.5%
R&D 698 (61) 637 6.0%
SG&A 2,570 (56) 2,514 23.5%
Other (income) expense, net (78) 23 (55)
Earnings from Continuing
Operations before taxes 2,388 651 3,039
Tax expense on Earnings from
Continuing Operations 230 197 427
Earnings from Continuing
Operations 2,158 454 2,612
Diluted Earnings per Share
from Continuing Operations $1.20 $0.25 $1.45
Specified items reflect
intangible amortization expense
of $508 million and other net
expenses of $143 million,
primarily associated with
acquisitions, restructuring
actions and other expenses. See
tables titled "Details of
Specified Items" for additional
details regarding specified
items.
4Q19
As Specified
As % to Sales
Reported Items Adjusted
(GAAP)
Intangible Amortization $483 $(483)
$ --
Gross Margin 4,397 545 4,942 59.4%
R&D 595 (39) 556 6.7%
SG&A 2,413 (62) 2,351 28.3%
Debt extinguishment
costs 63 (63)
Other (income) expense,
net (51) (5) (56)
Earnings from Continuing
Operations before taxes 1,240 714 1,954
Tax expense on Earnings
from Continuing
Operations 191 58 249
Earnings from Continuing
Operations 1,049 656 1,705
Diluted Earnings per
Share from Continuing
Operations $0.59 $0.36 $0.95
Specified items reflect
intangible amortization expense
of $483 million and other
expenses of $231 million,
primarily associated with
acquisitions, restructuring
actions and other expenses. See
tables titled "Details of
Specified Items" for additional
details regarding specified
items.
Abbott Laboratories and Subsidiaries
Non-GAAP Reconciliation of Financial Information From Continuing Operations
Year Ended December 31, 2020 and 2019
(in millions, except per share data)
(unaudited)
12M20
As Specified
As % to
Reported Items Adjusted Sales
(GAAP)
Intangible Amortization $2,132 $(2,132)
$ --
Gross Margin 17,473 2,452 19,925 57.6%
R&D 2,420 (125) 2,295 6.6%
SG&A 9,696 (75) 9,621 27.8%
Other (income) expense, net (103) (88) (191)
Earnings from Continuing
Operations before taxes 4,968 2,740 7,708
Tax expense on Earnings from
Continuing Operations 497 659 1,156
Earnings from Continuing
Operations 4,471 2,081 6,552
Diluted Earnings per Share
from Continuing Operations $2.49 $1.16 $3.65
Specified items reflect
intangible amortization expense
of $2.132 billion and other net
expenses of $608 million,
primarily associated with
acquisitions, restructuring
actions, asset impairments,
other expenses and litigation
settlement income. See tables
titled "Details of Specified
Items" for additional details
regarding specified items.
12M19
As Specified
As % to Sales
Reported Items Adjusted
(GAAP)
Intangible Amortization $1,936 $(1,936)
$ --
Gross Margin 16,737 2,140 18,877 59.2%
R&D 2,440 (198) 2,242 7.0%
SG&A 9,765 (240) 9,525 29.9%
Debt extinguishment
costs 63 (63)
Other (income) expense,
net (191) (37) (228)
Earnings from Continuing
Operations before taxes 4,077 2,678 6,755
Tax expense on Earnings
from Continuing
Operations 390 555 945
Earnings from Continuing
Operations 3,687 2,123 5,810
Diluted Earnings per
Share from Continuing
Operations $2.06 $1.18 $3.24
Specified items reflect
intangible amortization expense
of $1.936 billion and other
expenses of $742 million,
primarily associated with
acquisitions, restructuring
actions and other expenses. See
tables titled "Details of
Specified Items" for additional
details regarding specified
items.
A reconciliation of the fourth-
quarter tax rates for continuing
operations for 2020 and 2019 is
shown below:
4Q20
($
in
millions) Pre-Tax Taxes on Tax
Income Earnings Rate
As
reported
(GAAP) $2,388 $230 9.6% 1)
Specified
items 651 197
Excluding
specified
items $3,039 $427 14.1%
4Q19
($
in
millions) Pre-Tax Taxes on Tax
Income Earnings Rate
As
reported
(GAAP) $1,240 $191 15.4%
Specified
items 714 58
Excluding
specified
items $1,954 $249 12.8%
1) 2020 Tax expense on Earnings from
Continuing Operations includes the
recognition of approximately $135
million of tax benefits related to
the impairment of certain assets,
approximately $25 million of net
tax benefits as a result of the
resolution of various tax positions
related to prior years and
approximately $10 million in excess
tax benefits associated with share-
based compensation.
A reconciliation of the year-to-
date tax rates for continuing
operations for 2020 and 2019 is
shown below:
12M20
($ in millions) Pre-Tax Taxes on Tax
Income Earnings Rate
As reported (GAAP) $4,968 $497 10.0% 2)
Specified items 2,740 659
Excluding specified items $7,708 $1,156 15.0%
12M19
($ in millions) Pre-Tax Taxes on Tax
Income Earnings Rate
As reported (GAAP) $4,077 $390 9.6% 3)
Specified items 2,678 555
Excluding specified items $6,755 $945 14.0%
2) 2020 Tax expense on Earnings from
Continuing Operations includes the
recognition of approximately $170
million of tax benefits related to
the impairment of certain assets,
approximately $140 million of net
tax benefits as a result of the
resolution of various tax positions
related to prior years and
approximately $100 million in
excess tax benefits associated with
share-based compensation.
3) Reported tax rate on a GAAP basis
for 2019 includes the impact of a
$86 million reduction of the
transition tax associated with the
TCJA and approximately $100 million
in excess tax benefits associated
with share-based compensation.
Abbott Laboratories and Subsidiaries
Details of Specified Items
Fourth Quarter Ended December 31, 2020
(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 $23 $23 $508 $3 $557
R&D (2) 6 (65) (61)
SG&A (25) (4) (27) (56)
Other (income) expense,
net 24 (1) 23
Earnings from
Continuing Operations
before taxes $26 $21 $508 $96 651
Tax expense on Earnings
from Continuing
Operations (d) 197
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
integration costs, which represent
incremental costs directly related
to integrating the acquired
businesses and include expenditures
for retention and the integration of
systems, processes and business
activities.
b) Restructuring and cost reduction
initiative expenses include
severance, outplacement, 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 primarily relates to the
impairment of an intangible asset
and the net costs related to certain
litigation.
d) Reflects the net tax benefit
associated with the specified items
and excess tax benefits associated
with share-based compensation.
Abbott Laboratories and Subsidiaries
Details of Specified Items
Fourth Quarter Ended December 31, 2019
(in millions, except per share data)
(unaudited)
Acquisition or
Restructuring and
Intangible
Other (c)
Total
Divestiture- Cost Reduction Amortization Specifieds
related (a) Initiatives (b)
Gross Margin $34 $28 $483
$ -- $545
R&D (15) (22) (2) (39)
SG&A (39) (23) (62)
Debt extinguishment costs (63) (63)
Other (income) expense, net (5) (5)
Earnings from Continuing
Operations before taxes $93 $73 $483 $65 714
Tax expense on Earnings from
Continuing Operations (d) 58
Earnings from Continuing
Operations $656
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 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.
b) Restructuring and cost reduction
initiative expenses include
severance, outplacement, asset
impairments, 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 primarily relates to costs
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.
Abbott Laboratories and Subsidiaries
Details of Specified Items
Year Ended December 31, 2020
(in millions, except per share data)
(unaudited)
Acquisition or
Restructuring and
Intangible
Other (c)
Total
Divestiture- Cost Reduction Amortization Specifieds
related (a) Initiatives (b)
Gross Margin $84 $80 $2,132 $156 $2,452
R&D (10) (3) (112) (125)
SG&A (108) (40) 73 (75)
Other (income) expense,
net 21 (109) (88)
Earnings from
Continuing Operations
before taxes $181 $123 $2,132 $304 2,740
Tax expense on Earnings
from Continuing
Operations (d) 659
Earnings from
Continuing Operations $2,081
Diluted Earnings per
Share from Continuing
Operations $1.16
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 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.
b) Restructuring and cost reduction
initiative expenses include
severance, outplacement, 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 primarily relates to
impairment charges related to
certain assets and the costs to
acquire R&D assets, partially
offset by income from the
settlement of litigation.
d) Reflects the net tax benefit
associated with the specified
items, the resolution of prior
years' tax positions and excess tax
benefits associated with share-
based compensation.
Abbott Laboratories and Subsidiaries
Details of Specified Items
Year Ended December 31, 2019
(in millions, except per share data)
(unaudited)
Acquisition or
Restructuring and
Intangible
Other (c)
Total
Divestiture- Cost Reduction Amortization Specifieds
related (a) Initiatives (b)
Gross Margin $103 $101 $1,936
$ -- $2,140
R&D (38) (44) (116) (198)
SG&A (153) (70) (17) (240)
Debt extinguishment costs (63) (63)
Other (income) expense, net (15) (22) (37)
Earnings from Continuing
Operations before taxes $309 $215 $1,936 $218 2,678
Tax expense on Earnings from
Continuing Operations (d) 555
Earnings from Continuing
Operations $2,123
Diluted Earnings per Share from
Continuing Operations $1.18
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, asset
impairments, 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 primarily relates to the
acquisition of R&D assets, costs
associated with the early
extinguishment of debt, charges
related to the impairment of certain
assets, and expenses related to
certain litigation settlements.
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.
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SOURCE Abbott
