10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                to                             

Commission File No. 1-2189

ABBOTT LABORATORIES

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

100 Abbott Park Road

Abbott Park, Illinois 60064-6400

Telephone:  (847) 937-6l00

Indicate by check mark whether the registrant: (l) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of l934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large Accelerated Filer x	Accelerated Filer o
Non-Accelerated Filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No x

As of June 30, 2012, Abbott Laboratories had 1,569,333,729 common shares without par value outstanding.

PART I.  FINANCIAL INFORMATION

Abbott Laboratories and Subsidiaries

Condensed Consolidated Financial Statements

(Unaudited)

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

(Unaudited)

(dollars and shares in thousands except per share data)

	Three Months Ended						Six Months Ended
	June 30						June 30
	2012			2011			2012			2011
Net Sales	$	9,807,100		$	9,616,291		$	19,263,733		$	18,657,141
Cost of products sold	3,637,305			3,870,472			7,362,226			7,729,455
Research and development	1,010,882			1,037,780			2,016,564			1,968,180
Acquired in-process and collaborations research and development	110,000			172,500			260,000			272,500
Selling, general and administrative	2,944,492			2,762,086			5,944,800			5,612,404
Total Operating Cost and Expenses	7,702,679			7,842,838			15,583,590			15,582,539
Operating Earnings	2,104,421			1,773,453			3,680,143			3,074,602
Interest expense	127,191			134,129			254,057			279,716
Interest (income)	(20,461		)	(18,868		)	(37,898		)	(40,584		)
Net foreign exchange loss (gain)	(14,154		)	(10,796		)	10,608			(43,162		)
Other (income) expense, net	8,528			(5,568		)	(62,970		)	135,290
Earnings Before Taxes	2,003,317			1,674,556			3,516,346			2,743,342
Taxes on Earnings	278,705			(268,226		)	549,610			(63,258		)
Net Earnings	$	1,724,612		$	1,942,782		$	2,966,736		$	2,806,600
Basic Earnings Per Common Share	$	1.09		$	1.24		$	1.87		$	1.80
Diluted Earnings Per Common Share	$	1.08		$	1.23		$	1.85		$	1.79
Cash Dividends Declared Per Common Share	$	0.51		$	0.48		$	1.02		$	0.96
Average Number of Common Shares OutstandingUsed for Basic Earnings Per Common Share	1,572,099			1,556,869			1,572,681			1,554,097
Dilutive Common Stock Options and Awards	16,403			9,234			15,996			8,060
Average Number of Common Shares OutstandingPlus Dilutive Common Stock Options and Awards	1,588,502			1,566,103			1,588,677			1,562,157
Outstanding Common Stock Options Having No Dilutive Effect	1,166			60,653			1,166			60,653

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

2

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Comprehensive Income

(Unaudited)

(dollars thousands)

	Three Months Ended					Six Months Ended
	June 30					June 30
	2012			2011		2012			2011
Net Earnings	$	1,724,612		$	1,942,782	$	2,966,736		$	2,806,600
Foreign currency translation (loss) gain adjustments	(1,654,254		)	356,317		(995,237		)	1,973,288
Amortization of net actuarial losses and prior service cost and credits, net of taxes of $22,939 and $45,905 in 2012 and $12,782 and $29,659 in 2011	39,817			22,803		79,672			52,620
Unrealized gain on marketable equity securities, net of taxes of $6,123 and $6,010 in 2012 and $5,506 and $6,097 in 2011	10,597			9,537		10,401			10,561
Net adjustments for derivative instruments designated as cash flow hedges, net of taxes of $350 and $(10,296) in 2012 and $1,770 and $(22,960) in 2011	1,429			7,078		(41,182		)	(91,839		)
Other comprehensive (loss) income, net of tax	(1,602,411		)	395,735		(946,346		)	1,944,630
Comprehensive Income	$	122,201		$	2,338,517	$	2,020,390		$	4,751,230
						June 30 2012			December 31 2011
Supplemental Accumulated Other Comprehensive Income Information, net of tax:
Cumulative foreign currency translation loss adjustments						$	1,067,764		$	72,527
Net actuarial losses and prior service cost and credits						2,650,947			2,730,619
Cumulative unrealized (gains) on marketable equity securities						(48,830		)	(38,429		)
Cumulative (gains) on derivative instruments designated as cash flow hedges						(126,350		)	(167,532		)

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

3

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Cash Flows

(Unaudited)

(dollars in thousands)

	Six Months Ended June 30
	2012			2011
Cash Flow From (Used in) Operating Activities:
Net earnings	$	2,966,736		$	2,806,600
Adjustments to reconcile earnings to net cash from operating activities -
Depreciation	675,097			733,486
Amortization of intangibles	759,605			823,593
Share-based compensation	283,127			252,265
Acquired in-process and collaborations research and development	260,000			272,500
Trade receivables	743,512			515,888
Inventories	(379,478		)	49,979
Other, net	(1,016,840		)	(940,013		)
Net Cash From Operating Activities	4,291,759			4,514,298
Cash Flow From (Used in) Investing Activities:
Acquisitions of property and equipment	(878,446		)	(764,770		)
Acquisitions of businesses and technology	(780,849		)	(187,500		)
Purchases of investment securities, net	(2,677,257		)	(3,025,737		)
Release of restricted funds	—			1,870,000
Other	12,308			12,370
Net Cash (Used in) Investing Activities	(4,324,244		)	(2,095,637		)
Cash Flow From (Used in) Financing Activities:
Proceeds from issuance of short-term debt and other	2,696,769			1,174,730
Payment of long-term debt	(54,000		)	(2,006,679		)
Purchases of common shares	(1,722,114		)	(73,845		)
Proceeds from stock options exercised, including income tax benefit	1,046,318			269,655
Dividends paid	(1,565,532		)	(1,434,376		)
Net Cash From (Used in) Financing Activities	401,441			(2,070,515		)
Effect of exchange rate changes on cash and cash equivalents	(129,000		)	80,501
Net Increase in Cash and Cash Equivalents	239,956			428,647
Cash and Cash Equivalents, Beginning of Year	6,812,820			3,648,371
Cash and Cash Equivalents, End of Period	$	7,052,776		$	4,077,018

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

4

Abbott Laboratories and Subsidiaries

Condensed Consolidated Balance Sheet

(Unaudited)

(dollars in thousands)

	June 302012			December 31 2011
Assets
Current Assets:
Cash and cash equivalents	$	7,052,776		$	6,812,820
Investments, primarily time deposits and certificates of deposit	3,949,362			1,284,539
Trade receivables, less allowances of $375,211 in 2012 and $420,579 in 2011	6,767,952			7,683,920
Inventories:
Finished products	2,264,161			2,220,527
Work in process	503,273			432,358
Materials	751,018			631,364
Total inventories	3,518,452			3,284,249
Prepaid expenses, deferred income taxes, and other receivables	4,968,950			4,703,246
Total Current Assets	26,257,492			23,768,774
Investments	389,901			378,225
Property and Equipment, at Cost	18,210,082			18,016,565
Less: accumulated depreciation and amortization	10,378,810			10,142,610
Net Property and Equipment	7,831,272			7,873,955
Intangible Assets, net of amortization	8,983,552			9,989,636
Goodwill	15,356,921			15,705,380
Deferred Income Taxes and Other Assets	3,040,652			2,560,923
	$	61,859,790		$	60,276,893
Liabilities and Shareholders’ Investment
Current Liabilities:
Short-term borrowings	$	5,063,525		$	2,347,859
Trade accounts payable	1,519,460			1,721,127
Salaries, wages and commissions	1,225,048			1,260,121
Other accrued liabilities	7,015,129			7,854,994
Dividends payable	800,448			754,284
Income taxes payable	477,459			514,947
Current portion of long-term debt	1,019,398			1,026,896
Total Current Liabilities	17,120,467			15,480,228
Long-term Debt	12,004,092			12,039,822
Post-employment Obligations, Deferred Income Taxes and Other Long-term Liabilities	8,162,746			8,230,698
Commitments and Contingencies
Shareholders’ Investment:
Preferred shares, one dollar par valueAuthorized — 1,000,000 shares, none issued	—			—
Common shares, without par valueAuthorized - 2,400,000,000 sharesIssued at stated capital amount -Shares: 2012: 1,659,880,647; 2011: 1,638,870,201	10,815,177			9,817,134
Common shares held in treasury, at cost -Shares: 2012: 90,546,918; 2011: 68,491,382	(5,012,598		)	(3,687,478		)
Earnings employed in the business	22,227,912			20,907,362
Accumulated other comprehensive income (loss)	(3,543,531		)	(2,597,185		)
Total Abbott Shareholders’ Investment	24,486,960			24,439,833
Noncontrolling Interests in Subsidiaries	85,525			86,312
Total Shareholders’ Investment	24,572,485			24,526,145
	$	61,859,790		$	60,276,893

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

5

Abbott Laboratories and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2012

(Unaudited)

Note 1 — Basis of Presentation

The accompanying unaudited, condensed consolidated financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission and, therefore, do not include all information and footnote disclosures normally included in audited financial statements.  However, in the opinion of management, all adjustments (which include only normal adjustments) necessary to present fairly the results of operations, financial position and cash flows have been made.  It is suggested that these statements be read in conjunction with the financial statements included in Abbott’s Annual Report on Form 10-K for the year ended December 31, 2011.  The consolidated financial statements include the accounts of the parent company and subsidiaries, after elimination of intercompany transactions.

Effective January 1, 2011, the one month lag in the consolidation of the accounts of foreign subsidiaries was eliminated and the year-end of foreign subsidiaries was changed to December 31.  In accordance with applicable accounting literature, a change in subsidiaries’ year-end is treated as a change in accounting principle and requires retrospective application.  The impact of the change was not material to the results of operations for the previously reported annual and interim periods after January 1, 2009, and thus, those results have not been revised.  A charge of $137 million was recorded to Other (income) expense, net in the first three months of 2011 to recognize the cumulative immaterial impacts to 2009 and 2010.

Note 2 — Supplemental Financial Information

Unvested restricted stock 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 for the three months and six months ended June 30, 2012 were $1.711 billion and $2.943 billion, respectively, and net earnings allocated to common shares for the three months and six months ended June 30, 2011 were $1.934 billion and $2.796 billion, respectively.

Other (income) expense, net, for the six months ended June 30, 2012 includes income of approximately $60 million from the resolution of a contractual agreement.  Other, net in Net cash from operating activities for 2012 includes payments of approximately $800 million to settle certain government investigations and for 2011 includes the non-cash impact of the $519 million of tax benefits recorded in the second quarter of 2011 related to the favorable resolution of various tax positions pertaining to prior years.  Other, net in Net cash from operating activities for 2012 and 2011 includes the effects of contributions to defined benefit plans of $320 million in each period.

The components of long-term investments as of June 30, 2012 and December 31, 2011 are as follows:

	June 30		December 31
(dollars in millions)	2012		2011
Equity securities	$	329	$	317
Other	61		61
Total	$	390	$	378

The judgment entered by the U.S. District Court for the Eastern District of Texas against Abbott in its litigation with New York University and Centocor, Inc. required Abbott to secure the judgment in the event that its appeal to the Federal Circuit court was unsuccessful in overturning the district court’s decision.  In the first quarter of 2010, Abbott deposited $1.87 billion with an escrow agent and considered these assets to be restricted. On February 23, 2011, the Federal Circuit reversed the district court’s final judgment and found Centocor’s patent invalid.  In June 2011, the Federal Circuit denied Centocor’s petition to rehear or reconsider the decision and the restrictions on the funds were lifted.

6

Notes to Condensed Consolidated Financial Statements

June 30, 2012

(Unaudited), continued

Note 3 — Taxes on Earnings

Taxes on earnings reflect the estimated annual effective rates and include charges for interest and penalties.  The effective tax rates are less than the statutory U.S. federal income tax rate principally due to the benefit of lower statutory tax rates and tax exemptions in several foreign taxing jurisdictions.  In the second quarter of 2011, taxes on earnings reflect the recognition of $519 million of tax benefits as a result of the favorable resolution of various tax positions pertaining to prior years, which also decreased the gross amount of unrecognized tax benefits by approximately $1.2 billion.  In July 2012, Abbott resolved various tax positions pertaining to a prior year.  As a result, in the third quarter of 2012, Abbott expects to recognize approximately $340 to $350 million of tax benefits and the gross amount of unrecognized tax benefits will decrease by approximately $550 million.  Additional cash payments as a result of concluding these various tax matters beyond what is already on deposit with the tax authorities is not expected to be material.

Note 4 — 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 $3 million, and the aggregate cleanup exposure is not expected to exceed $15 million.

There are a number of patent disputes with third parties who claim Abbott’s products infringe their patents.  On February 21, 2012, the United States Supreme Court denied Centocor Inc.’s and New York University’s petition to review a February 2011 Federal Circuit Court of Appeals decision reversing a $1.67 billion judgment in favor of Centocor and New York University on a patent they claimed Abbott’s HUMIRA infringed. This decision concludes the case.

The United States Department of Justice, through the United States Attorney for the Western District of Virginia, and various state Attorneys General investigated Abbott’s sales and marketing activities for Depakote.  The government sought to determine whether any of these activities violated civil and/or criminal laws, including the Federal False Claims Act, the Food, Drug and Cosmetic Act, and the Anti-Kickback Statute in connection with Medicare and/or Medicaid reimbursement to third parties.  The state Attorneys General offices sought to determine whether any of these activities violated various state laws, including state consumer fraud/protection statutes.  Abbott recorded charges of $1.5 billion in the third quarter of 2011 and $100 million in the first quarter of 2012 related to civil and criminal claims arising from this matter.  In May 2012, Abbott reached resolution of all Depakote-related federal claims, Medicaid-related claims with 49 states and the District of Columbia, and consumer protection claims with 45 states and the District of Columbia.  The settlement of the federal claims is subject to approval by the United States District Court for the Western District of Virginia.  In the second quarter of 2012, Abbott paid approximately $800 million of the $1.6 billion settlement and expects to pay the remainder in the second half of 2012.  The payments are material to Abbott’s cash flows in 2012.

Excluding the settlement of Depakote-related claims, Abbott estimates the range of possible loss for its other legal proceedings and environmental exposures to be from approximately $90 million to $115 million.  The recorded accrual balance at June 30, 2012 for these other proceedings and exposures was approximately $95 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.

7

Notes to Condensed Consolidated Financial Statements

June 30, 2012

(Unaudited), continued

Note 5 — Post-Employment Benefits

Retirement plans consist of defined benefit, defined contribution, and medical and dental plans.  Net cost for the three and six months ended June 30 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
	Three Months						Six Months						Three Months						Six Months
	Ended June 30						Ended June 30						Ended June 30						Ended June 30
(dollars in millions)	2012			2011			2012			2011			2012			2011			2012			2011
Service cost — benefits earned during the period	$	97		$	77		$	194		$	157		$	15		$	13		$	30		$	28
Interest cost on projected benefit obligations	113			106			226			219			21			20			41			44
Expected return on plans’ assets	(153		)	(151		)	(307		)	(300		)	(9		)	(8		)	(17		)	(17		)
Net amortization	62			38			124			82			(2		)	(4		)	(4		)	(2		)
Net Cost	$	119		$	70		$	237		$	158		$	25		$	21		$	50		$	53

Abbott funds its domestic defined benefit plans according to IRS funding limitations.  International pension plans are funded according to similar regulations.  In the first six months of 2012 and 2011, $320 million was contributed to defined benefit plans and $40 million was contributed to the post-employment medical and dental benefit plans in each period.

Note 6 — Segment 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.  Effective January 1, 2012, certain international operations were transferred from the Established Pharmaceutical Products segment to the Proprietary Pharmaceutical Products segment.  The segment information below has been adjusted to reflect this reorganization.  Abbott’s reportable segments are as follows:

Proprietary Pharmaceutical Products — Worldwide sales of a broad line of proprietary pharmaceutical products.

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 Laboratories Diagnostics, Molecular Diagnostics, Point of Care and Ibis diagnostic divisions are aggregated and reported as the Diagnostic Products segment.

Vascular Products — Worldwide sales of coronary, endovascular, structural heart, vessel closure and other medical device products.

Non-reportable segments include the Diabetes Care and Medical Optics segments.

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.  Intersegment transfers of inventory are recorded at standard cost and are not a measure of segment operating earnings.  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.  For acquisitions prior to 2006, substantially all intangible assets and related amortization are not allocated to segments.  In addition, no intangible assets or related amortization are allocated to the Established Pharmaceutical Products segment.  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.

8

Notes to Condensed Consolidated Financial Statements

June 30, 2012

(Unaudited), continued

	Net Sales to External Customers								Operating Earnings
	Three Months				Six Months				Three Months						Six Months
	Ended June 30				Ended June 30				Ended June 30						Ended June 30
(dollars in millions)	2012		2011		2012		2011		2012			2011			2012			2011
Proprietary Pharmaceutical Products	$	4,380	$	4,174	$	8,452	$	7,975	$	1,929		$	1,705		$	3,489		$	3,066
Established Pharmaceutical Products	1,246		1,327		2,503		2,604		269			306			562			597
Nutritional Products	1,584		1,490		3,150		2,914		216			181			476			335
Diagnostic Products	1,078		1,038		2,120		2,021		230			186			422			356
Vascular Products	766		835		1,569		1,679		221			217			454			443
Total Reportable Segments	9,054		8,864		17,794		17,193		2,865			2,595			5,403			4,797
Other	753		752		1,470		1,464
Net Sales	$	9,807	$	9,616	$	19,264	$	18,657
Corporate functions and benefit plans costs									(166		)	(102		)	(309		)	(235		)
Non-reportable segments									101			77			231			135
Net interest expense									(107		)	(115		)	(216		)	(239		)
Acquired in-process and collaborations research and development									(110		)	(173		)	(260		)	(273		)
Share-based compensation (a)									(86		)	(76		)	(283		)	(252		)
Other, net									(494		)	(531		)	(1,050		)	(1,190		)
Consolidated Earnings Before Taxes									$	2,003		$	1,675		$	3,516		$	2,743

(a)Approximately 40 to 45 percent of the annual net cost of share-based awards will typically be recognized in the first quarter due to the timing of the granting of share-based awards.

Note 7 — Incentive Stock Programs

In the first six months of 2012, Abbott granted 1,931,213 stock options, 579,351 replacement stock options, 1,000,925 restricted stock awards and 6,791,842 restricted stock units under these programs.  At June 30, 2012, approximately 156 million shares were reserved for future grants.  Information regarding the number of options outstanding and exercisable at June 30, 2012 is as follows:

	Outstanding		Exercisable
Number of shares	64,955,371		60,720,230
Weighted average remaining life (years)	4.8		4.5
Weighted average exercise price	$	51.07	$	50.88
Aggregate intrinsic value (in millions)	$	896	$	851

The total unrecognized share-based compensation cost at June 30, 2012 amounted to approximately $390 million which is expected to be recognized over the next three years.

9

Notes to Condensed Consolidated Financial Statements

June 30, 2012

(Unaudited), continued

Note 8 — Business Combinations and Technology Acquisitions

In the second quarter of 2012, Abbott recorded a charge to acquired in-process and collaborations research and development of $110 million as a result of the acquisition of AP214, a drug under development for the prevention of acute kidney injury associated with major cardiac surgery in patients at increased risk.   In the first quarter of 2012, Abbott recorded a charge to acquired in-process and collaborations research and development of $150 million as a result of entering into a global collaboration to develop and commercialize an oral, next-generation JAK1 inhibitor in Phase II development with the potential to treat multiple autoimmune diseases.  Additional payments of approximately $1.2 billion could be required for the achievement of certain development, regulatory and commercial milestones under this agreement.  In the fourth quarter of 2011, Abbott entered into a collaboration for the joint development and commercialization of second-generation oral antioxidant inflammation modulators resulting in a charge to acquired in-process and collaborations research and development of $400 million which was paid in the first quarter of 2012.  In connection with the acquisition of Solvay Pharmaceuticals, the achievement of a certain sales milestone resulted in a payment of approximately $134 million in the first quarter of 2012 for which a liability was previously established.

In 2010, Abbott entered into an agreement to acquire licensing rights outside the U.S., excluding certain Asian markets, to a product in development for the treatment of chronic kidney disease.  In the first and second quarters of 2011, certain milestones were achieved and charges to acquired in-process and collaborations research and development of $100 million and $88 million were recorded.  In the first quarter of 2012, $50 million of research and development expense was recorded related to the achievement of a clinical development milestone under this agreement.   In addition, in the second quarter of 2011, Abbott entered into an agreement to develop and commercialize a treatment of rheumatoid arthritis and psoriasis resulting in a charge to acquired in-process and collaborations research and development of $85 million.

Note 9 — 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 for anticipated intercompany purchases by those subsidiaries whose functional currencies are not the U.S. dollar.  These contracts, totaling $398 million and $1.6 billion at June 30, 2012 and December 31, 2011, respectively, 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 June 30, 2012 will be included in Cost of products sold at the time the products are sold, generally through the next twelve months.  The amount of hedge ineffectiveness was not significant in 2012 and 2011.

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 and Japanese yen, in exchange for primarily U.S. dollars and other European currencies.  For intercompany and trade payables and receivables, the currency exposures are primarily the U.S. dollar, European currencies and Japanese yen.  At June 30, 2012 and December 31, 2011, Abbott held $16.7 billion and $15.7 billion, respectively, of such foreign currency forward exchange contracts.

Abbott has designated foreign denominated short-term debt as a hedge of the net investment in a foreign subsidiary of approximately $670 million and approximately $680 million as of June 30, 2012 and December 31, 2011, respectively.  Accordingly, changes in the fair value of this debt due to changes in exchange rates are recorded in Accumulated other comprehensive income (loss), net of tax.

Abbott is a party to interest rate swap contracts totaling $6.8 billion at June 30, 2012 and at December 31, 2011 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.  No hedge ineffectiveness was recorded in income in 2012 or 2011 for these hedges.

10

Notes to Condensed Consolidated Financial Statements

June 30, 2012

(Unaudited), continued

The following table summarizes the amounts and location of certain derivative financial instruments as of June 30, 2012 and December 31, 2011:

	Fair Value - Assets					Fair Value - Liabilities
(dollars in millions)	June 302012		Dec. 312011		Balance Sheet Caption	June 302012		Dec. 312011		Balance Sheet Caption
Interest rate swaps designated as fair value hedges	$	681	$	598	Deferred income taxes and other assets	$	—	$	—	n/a
Foreign currency forward exchange contracts —
Hedging instruments	34		115		Prepaid expenses, deferred income taxes, and other receivables	—		2		Other accrued liabilities
Others not designated ashedges	99		165			118		179
Debt designated as a hedge of net investment in a foreign subsidiary	—		—		n/a	670		680		Short-term borrowings
	$	814	$	878		$	788	$	861

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 the amounts and location of income (expense) and gain (loss) reclassified into income in the second quarter and first six months of 2012 and 2011 and for certain other derivative financial instruments.  The amount of hedge ineffectiveness was not significant in 2012 and 2011 for these hedges.

	Gain (loss) Recognized in Other Comprehensive Income (loss)												Income (expense) and Gain (loss)Reclassified into Income
	Three Months Ended June 30						Six MonthsEnded June 30						Three Months Ended June 30					Six MonthsEnded June 30					Income Statement
(dollars in millions)	2012			2011			2012			2011			2012		2011			2012		2011			Caption
Foreign currency forward exchange contracts designated as cash flow hedges	$	40		$	(54	)	$	(4	)	$	(76	)	$	33	$	(14	)	$	48	$	43		Cost of products sold
Debt designated as a hedge of net investment in a foreign subsidiary	(25		)	(20		)	10			(10		)	n/a		n/a			n/a		n/a			n/a
Interest rate swaps designated as fair value hedges	n/a			n/a			n/a			n/a			93		127			83		91			Interest expense
Foreign currency forward exchange contracts not designated as hedges	n/a			n/a			n/a			n/a			101		11			117		(90		)	Net foreign exchange loss (gain)

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.

11

Notes to Condensed Consolidated Financial Statements

June 30, 2012

(Unaudited), continued

The carrying values and fair values of certain financial instruments as of June 30, 2012 and December 31, 2011 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.

	June 30 2012						December 31 2011
(dollars in millions)	CarryingValue			FairValue			CarryingValue			FairValue
Long-term Investment Securities:
Equity securities	$	329		$	329		$	317		$	317
Other	61			47			61			42
Total Long-term Debt	(13,023		)	(15,328		)	(13,067		)	(15,129		)
Foreign Currency Forward Exchange Contracts:
Receivable position	133			133			280			280
(Payable) position	(118		)	(118		)	(181		)	(181		)
Interest Rate Hedge Contracts	681			681			598			598

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
(dollars in millions)	Outstanding Balances		Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
June 30, 2012:
Equity securities	$	106	$	106	$	—	$	—
Interest rate swap derivative financial instruments	681		—		681		—
Foreign currency forward exchange contracts	133		—		133		—
Total Assets	$	920	$	106	$	814	$	—
Fair value of hedged long-term debt	$	7,452	$	—	$	7,452	$	—
Foreign currency forward exchange contracts	118		—		118		—
Contingent consideration related to business combinations	301		—		—		301
Total Liabilities	$	7,871	$	—	$	7,570	$	301
December 31, 2011:
Equity securities	$	93	$	93	$	—	$	—
Interest rate swap derivative financial instruments	598		—		598		—
Foreign currency forward exchange contracts	280		—		280		—
Total Assets	$	971	$	93	$	878	$	—
Fair value of hedged long-term debt	$	7,427	$	—	$	7,427	$	—
Foreign currency forward exchange contracts	181		—		181		—
Contingent consideration related to business combinations	423		—		—		423
Total Liabilities	$	8,031	$	—	$	7,608	$	423

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.  The fair value of the contingent consideration was determined based on an independent appraisal adjusted for the time value of money, exchange, payments and other changes in fair value.

12

Notes to Condensed Consolidated Financial Statements

June 30, 2012

(Unaudited), continued

Note 10 — Goodwill and Intangible Assets

Foreign currency translation adjustments decreased goodwill in the first six months of 2012 by approximately $350 million and increased goodwill in the first six months of 2011 by approximately $830 million. The amount of goodwill related to reportable segments at June 30, 2012 was $6.1 billion for the Proprietary Pharmaceutical Products segment, $2.9 billion for the Established Pharmaceutical Products segment, $207 million for the Nutritional Products segment, $384 million for the Diagnostic Products segment, and $2.6 billion for the Vascular Products segment.  There were no reductions of goodwill relating to impairments or disposal of all or a portion of a business.

The gross amount of amortizable intangible assets, primarily product rights and technology was $17.3 billion as of June 30, 2012 and $17.5 billion as of December 31, 2011, and accumulated amortization was $9.1 billion as of June 30, 2012 and $8.3 billion as of December 31, 2011. Indefinite-lived intangible assets, which relate to in-process research and development acquired in a business combination, was approximately $779 million at June 30, 2012 and $814 million at December 31, 2011. The estimated annual amortization expense for intangible assets is approximately $1.5 billion in 2012, $1.3 billion in 2013, $915 million in 2014, $800 million in 2015 and $765 million in 2016.  Intangible asset amortization is included in Cost of products sold in the condensed consolidated statement of earnings.  Amortizable intangible assets are amortized over 2 to 30 years (average 11 years).

Note 11 — Restructuring Plans

In 2011 and prior years, Abbott management approved plans to realign its worldwide pharmaceutical and vascular manufacturing operations and selected domestic and international commercial and research and development operations in order to reduce costs.  In the first three months of 2011, Abbott recorded $49 million to Cost of products sold, $18 million to Research and development and $49 million to Selling, general and administrative.  The following summarizes the activity for these restructurings: (dollars in millions)

	2012			2011
Accrued balance at January 1	$	177		$	77
Restructuring charges	—			116
Payments and other adjustments	(6		)	(49		)
Accrued balance at June 30	$	171		$	144

Additional charges of $53 million and $7 million were recorded in the first six months of 2012 and 2011, respectively, relating to these restructurings, primarily for accelerated depreciation.

In 2010, Abbott management approved a restructuring plan primarily related to the acquisition of Solvay Pharmaceuticals.  This plan streamlines operations, improves efficiencies and reduces costs in certain Solvay sites and functions as well as in certain Abbott and Solvay commercial organizations in various countries.  The following summarizes the activity for this restructuring: (dollars in millions)

	2012			2011
Accrued balance at January 1	$	108		$	410
Payments and other adjustments	(90		)	(117		)
Accrued balance at June 30	$	18		$	293

Additional charges of approximately $14 million and $65 million were recorded in the first six months of 2012 and 2011, respectively, relating to this restructuring, primarily for accelerated depreciation and employee severance.

13

Notes to Condensed Consolidated Financial Statements

June 30, 2012

(Unaudited), continued

In 2011 and 2008, Abbott management approved a plan to streamline global manufacturing operations, reduce overall costs, and improve efficiencies in Abbott’s core diagnostic business.  The following summarizes the activity for this restructuring: (dollars in millions)

	2012			2011
Accrued balance at January 1	$	79		$	88
Payments and other adjustments	(17		)	(17		)
Accrued balance at June 30	$	62		$	71

Additional charges of approximately $8 million and $18 million were recorded in the first sixth months of 2012 and 2011, respectively, relating to this restructuring, primarily for accelerated depreciation and product transfer costs.  Additional charges will occur through 2012 as a result of product re-registration timelines required under manufacturing regulations in a number of countries and product transition timelines.

Note 12 — Separation of Abbott’s Proprietary Pharmaceuticals Business

In October 2011, Abbott announced a plan to separate into two publicly traded companies, one in diversified medical products and the other in research-based pharmaceuticals.  To accomplish the separation, Abbott plans to create a new company for its research-based pharmaceuticals business which will include Abbott’s Proprietary Pharmaceutical Products segment.  The transaction is expected to take the form of a tax-free distribution to Abbott shareholders of the stock of the newly created research-based pharmaceutical company.  Abbott expects to be ready to separate the company by the end of the year subject to obtaining the required approvals.  Subsequent to the separation, the historical results of the research-based pharmaceuticals business will be presented as discontinued operations.  Annual net sales for the new research-based pharmaceuticals business were approximately $17.4 billion in 2011.

14

FINANCIAL REVIEW

Results of Operations

The following table details sales by reportable segment for the three months and six months ended June 30.  Percent changes are versus the prior year and are based on unrounded numbers.

	Net Sales to External Customers
	Three Months Ended June 30							Six Months Ended June 30
(dollars in millions)	2012		Percent Change		2011		Percent Change	2012		Percent Change		2011		Percent Change
Proprietary Pharmaceutical Products	$	4,380	4.9		$	4,174	13.0	$	8,452	6.0		$	7,975	12.4
Established Pharmaceutical Products	1,246		(6.0	)	1,327		10.4	2,503		(3.9	)	2,604		37.0
Nutritional Products	1,584		6.3		1,490		5.4	3,150		8.1		2,914		6.5
Diagnostic Products	1,078		3.8		1,038		9.6	2,120		4.9		2,021		8.5
Vascular Products	766		(8.3	)	835		—	1,569		(6.6	)	1,679		6.2
Total Reportable Segments	9,054		2.1		8,864		9.5	17,794		3.5		17,193		13.3
Other	753		0.1		752		2.5	1,470		0.3		1,464		8.5
Net Sales	$	9,807	2.0		$	9,616	9.0	$	19,264	3.3		$	18,657	12.9
Total U.S.	$	4,178	6.1		$	3,938	3.9	$	7,901	6.0		$	7,455	5.8
Total International	$	5,629	(0.9	)	$	5,678	12.8	$	11,363	1.4		$	11,202	18.2

The net sales growth for the second quarter and first six months of 2012 reflects unit growth, partially offset by unfavorable exchange.  Excluding 4.7 percent and 3.0 percent of unfavorable exchange for the second quarter and first six months of 2012, net sales increased 6.7 percent and 6.3 percent, respectively.  The relatively stronger U.S. dollar decreased second quarter 2012 Total International sales by 7.9 percent, decreased Proprietary Pharmaceutical Products segment sales by 4.4 percent, decreased Established Pharmaceutical Products segment sales by 9.8 percent, decreased Nutritional Product segment sales by 2.0 percent, decreased Diagnostic Products segment sales by 4.9 percent and decreased Vascular Products segment sales by 3.6 percent over the second quarter of 2011.  The relatively stronger U.S. dollar decreased the first six months 2012 Total International sales by 5.1 percent, decreased Proprietary Pharmaceutical Products segment sales by 2.9 percent, decreased Established Pharmaceutical Products segment sales by 6.7 percent, decreased Nutritional Product segment sales by 1.2 percent, decreased Diagnostic Products segment sales by 3.2 percent and decreased Vascular Products segment sales by 2.0 percent over the first six months of 2011.  In addition to unfavorable exchange, the decrease in 2012 Vascular Products sales is due to the winding down of royalty and supply agreements related to certain third-party products, including Promus.  Excluding this royalty and supply agreement revenue in both periods and the unfavorable effect of exchange, Vascular Products sales increased 4.6 percent and 4.5 percent in the second quarter and first six months of 2012, respectively.

The net sales growth for the second quarter and first six months of 2011 reflects unit growth, the acquisition of Piramal Healthcare Limited’s Healthcare Solution business in September 2010 and the effect of exchange.  The net sales growth for the first six months of 2011 also reflects the acquisition of Solvay’s pharmaceuticals business in February 2010.  Excluding 4.6 percent and 3.1 percent of favorable exchange for the second quarter and first six months of 2011, net sales increased 4.4 percent and 9.8 percent, respectively.  The relatively weaker U.S. dollar increased second quarter 2011 Total International sales by 8.1 percent, increased Proprietary Pharmaceutical Products segment sales by 4.1 percent, increased Established Pharmaceutical Products segment sales by 7.2 percent, increased Nutritional Product segment sales by 2.8 percent, increased Diagnostic Products segment sales by 6.0 percent and increased Vascular Products segment sales by 4.4 percent over the second quarter of 2010.  The relatively weaker U.S. dollar increased the first six months 2011 Total International sales by 5.3 percent, increased Proprietary Pharmaceutical Products segment sales by 2.4 percent, increased Established Pharmaceutical Products segment sales by 5.6 percent, increased Nutritional Product segment sales by 2.4 percent, increased Diagnostic Products segment sales by 3.6 percent and increased Vascular Products segment sales by 3.1 percent over the first six months of 2010.  Sales growth in the Proprietary Pharmaceutical Products segment was impacted by the acquisition of Solvay Pharmaceuticals in February 2010.  Sales growth in the Established Pharmaceutical Products segment and in Total International sales was impacted by the acquisition of Solvay Pharmaceuticals in February 2010 and Piramal Healthcare Limited’s Healthcare solutions business in September 2010.

15

FINANCIAL REVIEW

(continued)

A comparison of significant product group sales for the six months ended June 30 is as follows.  Percent changes are versus the prior year and are based on unrounded numbers.

(dollars in millions)	2012		Percent Change		2011		Percent Change
Proprietary Pharmaceuticals —
Total U.S. Proprietary sales	$	4,538	7		$	4,229	11
HUMIRA	1,828		26		1,455		18
TRILIPIX/TriCor	565		(8	)	617		4
Niaspan	402		(15	)	473		14
AndroGel	508		25		407		68
Lupron	282		11		255		11
Synthroid	252		(2	)	257		28
Kaletra	125		(14	)	144		(12	)
Total International Proprietary sales	3,914		4		3,746		15
HUMIRA	2,431		11		2,188		25
Synagis	410		8		378		(13	)
Kaletra	371		(16	)	441		4
Lupron	118		(12	)	135		3
Total Established Pharmaceutical Products sales —	2,503		(4	)	2,604		37
Clarithromycin	256		(7	)	276		2
TriCor and Lipanthyl (fenofibrate)	152		(9	)	167		n/m
Creon	152		9		139		n/m
Serc	107		(13	)	123		n/m
Duphaston	127		1		125		n/m
Synthroid	52		4		50		9
Nutritionals —
U.S. Pediatric Nutritionals	731		20		608		(5	)
International Pediatric Nutritionals	992		7		926		13
U.S. Adult Nutritionals	710		5		675		4
International Adult Nutritionals	710		2		695		17
Diagnostics —
Immunochemistry	1,630		5		1,547		7
Vascular Products (1) —
Xience	804		4		770		19
Other Coronary Products	302		(2	)	308		9
Endovascular	228		1		225		10
n/m — Percent change is not meaningful

(1) Other Coronary Products include primarily guidewires and balloon catheters.  Endovascular includes vessel closure, carotid stents and other peripheral products.

Excluding the negative effect of exchange, Total International Proprietary sales increased 10.6 percent in 2012.  Total Established Pharmaceutical Products sales decreased in 2012 due to the negative effect of exchange and decreased sales of Clarithromycin and Serc due to, in part, pricing pressures in Europe, partially offset by growth in emerging markets.  Excluding the effect of exchange, Total Established Pharmaceutical Products sales increased 2.8 percent.  U.S. Pediatric Nutritional sales in 2012 reflect market share gains for Similac and unit growth for PediaSure while 2011 sales were affected by the voluntary recall of certain Similac-brand powder infant formulas, primarily in the U.S. in September 2010.  The increase in 2012 U.S. Adult Nutritional sales reflects unit growth for the Ensure and Glucerna products.  International Pediatric and Adult Nutritionals sales increased in 2012 and 2011 due primarily to volume growth in developing countries. The relatively weaker U.S. dollar increased International Pediatric sales and International Adult Nutritional sales in 2011 by 4.1 percent and 5.6 percent, respectively. In addition to the product increases listed above, the 2011 growth in U.S. Proprietary product sales is due to the acquisition of Solvay Pharmaceuticals in February 2010.

16

FINANCIAL REVIEW

(continued)

The gross profit margin was 62.9 percent for the second quarter of 2012 compared to 59.8 percent in 2011.  First six months 2012 gross profit margin was 61.8 percent compared to 58.6 percent for the first six months 2011.  Gross profit margins in 2012 were impacted by favorable product mix, improved gross margins across all reportable segments as a result of cost reduction initiatives and the impact of exchange.

Research and development expenses decreased 2.6 percent in the second quarter 2012 and increased 2.5 percent for the first six months 2012 over comparable 2011 periods.  The decrease in the second quarter 2012 reflects the impairment of certain in-process research and development intangible assets in the second quarter of 2011.  Excluding the impairment charge, research and development expenses increased 10.7 percent and 9.4 percent for the three months and six months ended June 30, 2012.  These increases reflect continued pipeline spending, including programs in biologics, chronic kidney disease, hepatitis C and diagnostics.  The majority of research and development expenditures are concentrated on pharmaceutical products. $1.3 billion of Abbott’s research and development expenses for the six months ended June 30, 2012 related to Abbott’s pharmaceutical products, of which $1.1 billion was directly allocated to the Proprietary Pharmaceutical Products segment.  For the first six months ended June 30, 2012, research and development expenditures totaled $191 million for the Vascular Products segment, $175 million for the Diagnostics Products segment, $133 million for the Established Pharmaceutical Products segment and $89 million for the Nutritional Products segment.

Selling, general and administrative expenses for the second quarter and first six months 2012 increased 6.6 percent and 5.9 percent, respectively, over the comparable 2011 periods.  Excluding any charges relating to acquisition integration, litigation, separation and restructuring in both periods, selling, general and administrative expenses for the second quarter and first six months of 2012 increased 5.1 percent and 6.1 percent, respectively over comparable 2011 periods.  The increases reflect increased selling and marketing support for new and existing products, including spending for HUMIRA and inflation.

Business Combinations and Technology Acquisitions

In the second quarter of 2012, Abbott recorded a charge to acquired in-process and collaborations research and development of $110 million as a result of the acquisition of AP214, a drug under development for the prevention of acute kidney injury associated with major cardiac surgery in patients at increased risk.   In the first quarter of 2012, Abbott recorded a charge to acquired in-process and collaborations research and development of $150 million as a result of entering into a global collaboration to develop and commercialize an oral, next-generation JAK1 inhibitor in Phase II development with the potential to treat multiple autoimmune diseases.  Additional payments of approximately $1.2 billion could be required for the achievement of certain development, regulatory and commercial milestones under this agreement.  In the fourth quarter of 2011, Abbott entered into a collaboration for the joint development and commercialization of second-generation oral antioxidant inflammation modulators resulting in a charge to acquired in-process and collaborations research and development of $400 million which was paid in the first quarter of 2012.  In connection with the acquisition of Solvay Pharmaceuticals, the achievement of a certain sales milestone resulted in a payment of approximately $134 million in the first quarter of 2012 for which a liability was previously established.

In 2010, Abbott entered into an agreement to acquire licensing rights outside the U.S., excluding certain Asian markets, to a product in development for the treatment of chronic kidney disease.  In the first and second quarters of 2011, certain milestones were achieved and charges to acquired in-process and collaborations research and development of $100 million and $88 million were recorded.  In the first quarter of 2012, $50 million of research and development expense was recorded related to the achievement of a clinical development milestone under this agreement.   In addition, in the second quarter of 2011, Abbott entered into an agreement to develop and commercialize a treatment of rheumatoid arthritis and psoriasis resulting in a charge to acquired in-process and collaborations research and development of $85 million.

Restructuring Plans

In 2011 and prior years, Abbott management approved plans to realign its worldwide pharmaceutical and vascular manufacturing operations and selected domestic and international commercial and research and development operations in order to reduce costs.  In the first three months of 2011, Abbott recorded $49 million to Cost of products sold, $18 million to Research and development and $49 million to Selling, general and administrative.  The following summarizes the activity for these restructurings: (dollars in millions)

17

FINANCIAL REVIEW

(continued)

	2012			2011
Accrued balance at January 1	$	177		$	77
Restructuring charges	—			116
Payments and other adjustments	(6		)	(49		)
Accrued balance at June 30	$	171		$	144

Additional charges of $53 million and $7 million were recorded in the first six months of 2012 and 2011, respectively, relating to these restructurings, primarily for accelerated depreciation.

In 2010, Abbott management approved a restructuring plan primarily related to the acquisition of Solvay Pharmaceuticals.  This plan streamlines operations, improves efficiencies and reduces costs in certain Solvay sites and functions as well as in certain Abbott and Solvay commercial organizations in various countries. The following summarizes the activity for this restructuring: (dollars in millions)

	2012			2011
Accrued balance at January 1	$	108		$	410
Payments and other adjustments	(90		)	(117		)
Accrued balance at June 30	$	18		$	293

Additional charges of approximately $14 million and $65 million were recorded in the first six months of 2012 and 2011, respectively, relating to this restructuring, primarily for accelerated depreciation and employee severance.

In 2011 and 2008, Abbott management approved a plan to streamline global manufacturing operations, reduce overall costs, and improve efficiencies in Abbott’s core diagnostic business.  The following summarizes the activity for this restructuring: (dollars in millions)

	2012			2011
Accrued balance at January 1	$	79		$	88
Payments and other adjustments	(17		)	(17		)
Accrued balance at June 30	$	62		$	71

Additional charges of approximately $8 million and $18 million were recorded in the first sixth months of 2012 and 2011, respectively, relating to this restructuring, primarily for accelerated depreciation and product transfer costs.  Additional charges will occur through 2012 as a result of product re-registration timelines required under manufacturing regulations in a number of countries and product transition timelines.

Interest Expense (Income)

Interest expense decreased in the second quarter and first six months 2012 compared to 2011 due to a lower level of borrowings.  Interest income increased in the second quarter of 2012 compared to 2011 primarily as a result of higher investment levels.

Change in Accounting Principle and Other (income) expense, net

Effective January 1, 2011, the one month lag in the consolidation of the accounts of foreign subsidiaries was eliminated and the year-end of foreign subsidiaries was changed to December 31.  In accordance with applicable accounting literature, a change in subsidiaries’ year-end is treated as a change in accounting principle and requires retrospective application.  The impact of the change was not material to the results of operations for the previously reported annual and interim periods after January 1, 2009, and thus, those results have not been revised.  A charge of $137 million was recorded to Other (income) expense, net in the first three months of 2011 to recognize the cumulative immaterial impacts to 2009 and 2010.  Other (income) expense, net, for the six months ended June 30, 2012 includes income of approximately $60 million from the resolution of a contractual agreement.

18

FINANCIAL REVIEW

(continued)

Taxes on Earnings

Taxes on earnings reflect the estimated annual effective rates and include charges for interest and penalties.  The effective tax rates are less than the statutory U.S. federal income tax rate principally due to the benefit of lower statutory tax rates and tax exemptions in several foreign taxing jurisdictions.  In the second quarter of 2011, taxes on earnings reflect the recognition of $519 million of tax benefits as a result of the favorable resolution of various tax positions pertaining to prior years, which also decreased the gross amount of unrecognized tax benefits by approximately $1.2 billion.  In July 2012, Abbott resolved various tax positions pertaining to a prior year.  As a result, in the third quarter of 2012, Abbott expects to recognize approximately $340 to $350 million of tax benefits and the gross amount of unrecognized tax benefits will decrease by approximately $550 million.  Additional cash payments as a result of concluding these various tax matters beyond what is already on deposit with the tax authorities is not expected to be material.

Liquidity and Capital Resources June 30, 2012 Compared with December 31, 2011

Net cash from operating activities for the first six months 2012 totaled approximately $4.3 billion.  Other, net in Net cash from operating activities for 2012 includes payments of approximately $800 million to settle certain government investigations described below.  Other, net in Net cash from operating activities for 2011 includes the non-cash impact of $519 million of tax benefits recorded in the second quarter of 2011 related to the favorable resolution of various tax positions pertaining to prior years. In addition, Other, net in Net cash from operating activities for 2012 and 2011 includes the effects of contributions of $320 million and $40 million in each period to defined benefit plans and post-employment medical and dental plans, respectively.  Abbott expects annual cash flow from operating activities to continue to exceed Abbott’s capital expenditures and cash dividends.

The United States Department of Justice, through the United States Attorney for the Western District of Virginia, and various state Attorneys General investigated Abbott’s sales and marketing activities for Depakote. Abbott recorded non-cash charges of $1.5 billion in the third quarter of 2011 and $100 million in the first quarter of 2012.  In May 2012, Abbott reached resolution of all of the Depakote-related federal claims, Medicaid-related claims with 49 states and the District of Columbia, and consumer protection claims with 45 states and the District of Columbia.  The settlement of the federal claims is subject to approval by the United States District Court for the Western District of Virginia.  In addition to the payments of approximately $800 million in the second quarter of 2012, the remaining $800 million of the settlement is expected to be paid in the second half of 2012.  The payments are not expected to materially affect Abbott’s liquidity as other cash flow from operations is expected to be sufficient to fund these payments.

Working capital was $9.1 billion at June 30, 2012 and $8.3 billion at December 31, 2011.  Substantially all of Abbott’s trade receivables in Italy, Spain, Portugal, and Greece are with governmental health systems.  Outstanding net governmental receivables in these countries at June 30, 2012 were:  (dollars in millions)

	Net Receivables		Percentage OverOne Year Past Due
Italy	$	673	20.4
Spain	261		1.5
Portugal	190		35.6
Greece	68		23.3

Abbott closely monitors economic conditions and budgetary and other fiscal developments in these countries.  Abbott regularly communicates with its customers regarding the status of receivable balances, including their payment plans and obtains positive confirmation of the validity of the receivables.  Abbott also monitors the potential for and periodically has utilized factoring arrangements to mitigate risk although such arrangements were not material in the first six months of 2012.

At June 30, 2012, Abbott’s long-term debt rating was AA by Standard & Poor’s Corporation and A1 by Moody’s Investors Service.  Abbott has readily available financial resources.  In July 2012, Abbott replaced unused lines of credit of $3.0 billion and $3.7 billion that were to expire in October 2012 and in 2013, respectively, with two five-year credit facilities totaling $7.0 billion that support commercial paper borrowing arrangements.  A $7.5 billion 364-day bridge facility is also in place to support the separation of Abbott into two companies.  Abbott repaid $1.5 billion and $500 million of long-term notes that were due in May and March of 2011, respectively, using primarily short-term borrowings.

19

FINANCIAL REVIEW

(continued)

In October 2008, the board of directors authorized the purchase of up to $5 billion of Abbott’s common shares from time to time and 27.2 million shares were purchased in the first six months of 2012 under this authorization at a cost of approximately $1.6 billion.  No shares were purchased under this authorization in the first six months of 2011.

Legislative Issues

In 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act (collectively referred to herein as “health care reform legislation”) were signed into law in the U.S.  Health care reform legislation included an increase in the basic Medicaid rebate rate from 15.1 percent to 23.1 percent and extended the rebate to drugs provided through Medicaid managed care organizations. These Medicaid rebate changes will continue to have a negative effect on the gross profit margin of the Proprietary Pharmaceutical Products segment in future years.

In 2011, Abbott began recording the annual fee imposed by health care reform legislation on companies that sell branded prescription drugs to specified government programs.  The amount of the annual fee, which totaled approximately $100 million in 2011, is based on the ratio of certain of Abbott’s sales as compared to the total such sales of all covered entities multiplied by a fixed dollar amount specified in the legislation by year.  In 2011, Abbott began incurring additional rebates related to the Medicare Part D coverage gap “donut hole.”  Beginning in 2013, Abbott will record the 2.3 percent excise tax imposed by health care reform legislation on the sale of certain medical devices in the U.S.

Abbott’s primary markets are highly competitive and subject to substantial government regulations throughout the world.  Abbott expects debate to continue over the availability, method of delivery, and payment for health care products and services.  It is not possible to predict the extent to which Abbott or the health care industry in general might be adversely affected by these factors in the future.  A more complete discussion of these factors is contained in Item 1, Business, and Item 1A, Risk Factors, in the 2011 Annual Report on Form 10-K.

Private Securities Litigation Reform Act of 1995 — A Caution Concerning Forward-Looking Statements

Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Abbott cautions investors that any forward-looking statements or projections made by Abbott, including those made in this document, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Economic, competitive, governmental, technological and other factors that may affect Abbott’s operations are discussed in Item 1A, Risk Factors, in the 2011 Annual Report on Form 10-K and in Item 1A, Risk Factors, in the quarterly report for the quarter ended June 30, 2012.

20

PART I.FINANCIAL INFORMATION

Item 4.Controls and Procedures

(a)Evaluation of disclosure controls and procedures.  The Chief Executive Officer, Miles D. White, and Chief Financial Officer, Thomas C. Freyman, evaluated the effectiveness of Abbott Laboratories’ disclosure controls and procedures as of the end of the period covered by this report, and concluded that Abbott Laboratories’ disclosure controls and procedures were effective to ensure that information Abbott is required to disclose in the reports that it files or submits with the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and to ensure that information required to be disclosed by Abbott in the reports that it files or submits under the Exchange Act is accumulated and communicated to Abbott’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b)Changes in internal control over financial reporting.  During the quarter ended June 30, 2012, there were no changes in Abbott’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, Abbott’s internal control over financial reporting, except as noted below.

During the quarter, Abbott implemented a new global financial consolidation system. The system leverages a common platform for consolidation and reporting, standardizes various processes, and provides additional analytic capabilities.  In connection with this implementation and related financial reporting process changes, Abbott replaced multiple internal controls that were previously considered effective with new or modified controls that are also expected to be effective.

PART II.OTHER INFORMATION

Item 1.Legal Proceedings

Abbott is involved in various claims, legal proceedings and investigations, including (as of June 30, 2012, except where noted below) those described below.  Payment of the settlement discussed in the third paragraph of Note 4 to Abbott’s financial statements is material to Abbott’s cash flows in 2012.  While it is not feasible to predict the outcome of other pending claims, proceedings and investigations with certainty, management is of the opinion that their ultimate resolution should not have a material adverse effect on Abbott’s financial position, cash flows, or results of operations.

21

In its 2011 Form 10-K, Abbott reported that several lawsuits filed against Unimed Pharmaceuticals, Inc., Solvay Pharmaceuticals, Inc. (a company Abbott acquired in February 2010) et al. have been consolidated for pre-trial purposes in the United States District Court for the Northern District of Georgia under the Multi District Litigation Rules as In re AndroGel Antitrust Litigation, MDL No. 2084.  In May 2012, the Eleventh Circuit affirmed the judgment of the district court dismissing the FTC’s complaint.  In July 2012, the Eleventh Circuit denied the FTC’s petition seeking rehearing en banc.

In its 2011 Form 10-K, Abbott reported that in January 2008, Cordis Corporation and Wyeth filed suit against Abbott in the United States District Court for the District of New Jersey alleging the Xience V stent infringes three patents and seeking an injunction, damages, and a determination of willful infringement.  Cordis and Wyeth withdrew one patent from the case and in June 2012 appealed the District Court’s January 2012 order invalidating the remaining patents and dismissing the case against Abbott.

In its 2011 Form 10-K, Abbott reported that the High Court of Justice in the United Kingdom found that Abbott’s stent systems do not infringe three Medinol Limited (Medinol) European stent design patents and that one of those patents is invalid.  The appeals filed by both parties were not pursued and the court’s findings are now final.  In its 2011 Form 10-K, Abbott also reported that the High Court of Ireland found that Medinol’s European stent design patent is not infringed by any of Abbott’s stent systems and that the patent is invalid.  Neither party appealed these findings and they are now final.

In its 2011 Form 10-K, Abbott reported that it is seeking to enforce its patent rights relating to niacin extended release tablets (a drug Abbott sells under the trademark Niaspan®). In a case filed in the United States District Court for the District of Delaware in June 2012, Abbott alleges that Kremers Urban Pharmaceuticals Inc.’s proposed generic product infringes Abbott’s patents and seeks declaratory and injunctive relief.

In its Form 10-Q for the quarter ended March 31, 2012, Abbott reported that it is seeking to enforce its patent rights relating to ritonavir tablets (a drug Abbott sells under the trademark Norvir®). In April 2012, the United States District Court for the Southern District of Ohio denied Abbott’s motion to dismiss Roxane Laboratories, Inc.’s declaratory judgment action or, in the alternative, transfer it to the United States District Court for the District of Delaware.

In its 2011 Form 10-K, Abbott reported that litigation is pending in the United States District Court for the District of Massachusetts in which Abbott alleges that Centocor Inc.’s product Simponi® infringes Abbott’s patents and seeks damages and injunctive relief.  The case was stayed while the parties arbitrated issues related to Centocor’s license defenses.  Following the arbitrator’s May 2012 ruling, the Court lifted the stay in June 2012 and the patent infringement case is proceeding.

22

Item 1A.Risk Factors

There have been no material changes in our risk factors from those disclosed in Abbott’s 2011 Form 10-K, except for the following:

Abbott depends on sophisticated information technology systems to operate its business and a cyber attack or other breach of these systems could have a material adverse effect on Abbott’s results of operations.

Similar to other large multi-national companies, the size and complexity of Abbott’s information technology systems makes them vulnerable to a cyber attack, malicious intrusion, breakdown, destruction, loss of data privacy, or other significant disruption.  Abbott’s systems have been and are expected to continue to be the target of malware and other cyber attacks.  Abbott has invested in its systems and the protection of its data to reduce the risk of an invasion or interruption and monitors its systems on an ongoing basis for any current or potential threats.  There can be no assurance that these measures and efforts will prevent future interruptions or breakdowns that could have a significant effect on Abbott’s business.

23

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

(c)  Issuer Purchases of Equity Securities

Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
April 1, 2012 – April 30, 2012	3,160,290	(1)	$	61.278	3,075,000	$	2,335,387,977	(2)
May 1, 2012 – May 31, 2012	8,861,366	(1)	$	62.208	8,732,568	$	1,792,179,707	(2)
June 1, 2012 – June 30, 2012	114,561	(1)	$	62.028	0	$	1,792,179,707	(2)
Total	12,136,217	(1)	$	61.965	11,807,568	$	1,792,179,707	(2)

1.These shares include:

(i)the shares deemed surrendered to Abbott to pay the exercise price in connection with the exercise of employee stock options — 85,290 in April, 105,798 in May, and 114,561 in June; and

(ii)the shares purchased on the open market for the benefit of participants in the Abbott Laboratories, Limited Employee Stock Purchase Plan — 0 in April, 23,000 in May, and 0 in June.

These shares do not include the shares surrendered to Abbott to satisfy tax withholding obligations in connection with the vesting of restricted stock or restricted stock units.

2.On October 13, 2008, Abbott announced that its board of directors approved the purchase of up to $5 billion of its common shares, from time to time.

24

Item 6.Exhibits

Incorporated by reference to the Exhibit Index included herewith.

25

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ABBOTT LABORATORIES
	By:	/s/ Thomas C. Freyman
		Thomas C. Freyman
		Executive Vice President,
		Finance and Chief Financial Officer
Date: August 7, 2012

26

EXHIBIT INDEX

Exhibit No.	Exhibit
12	Statement re: computation of ratio of earnings to fixed charges.
31.1	Certification of Chief Executive Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).
31.2	Certification of Chief Financial Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).
Exhibits 32.1 and 32.2 are furnished herewith and should not be deemed to be “filed” under the Securities Exchange Act of 1934.
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial statements and notes from the Abbott Laboratories Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, filed on August 7, 2012, formatted in XBRL: (i)  Condensed Consolidated Statement of Earnings; (ii) Condensed Consolidated Statement of Cash Flows; (iii) Condensed Consolidated Balance Sheet; and (iv) the notes to the condensed consolidated financial statements.

27

EX-12

Exhibit 12

Abbott Laboratories

Computation of Ratio of Earnings to Fixed Charges

(Unaudited)

(dollars in millions)

	Six Months Ended
	June 30, 2012
Net Earnings	$	2,967
Add (deduct):
Taxes on earnings	550
Capitalized interest cost, net of amortization	10
Noncontrolling interests	5
Earnings from Operations, as adjusted	3,532
Fixed Charges:
Interest on long-term and short-term debt	254
Capitalized interest cost	12
Rental expense representative of an interest factor	63
Total Fixed Charges	329
Total adjusted earnings available for payment of fixed charges	$	3,861
Ratio of earnings to fixed charges	11.7

NOTE:For the purpose of calculating this ratio, (i) earnings have been calculated by adjusting earnings for taxes on earnings; interest expense; capitalized interest cost, net of amortization; noncontrolling interests; and the portion of rentals representative of the interest factor, (ii) Abbott considers one-third of rental expense to be the amount representing return on capital, and (iii) fixed charges comprise total interest expense, including capitalized interest and such portion of rentals.

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Required by Rule 13a-14(a) (17 CFR 240.13a-14(a))

I, Miles D. White, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Abbott Laboratories;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Abbott as of, and for, the periods presented in this report;

4.Abbott’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Abbott and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Abbott, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)Evaluated the effectiveness of Abbott’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in Abbott’s internal control over financial reporting that occurred during Abbott’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Abbott’s internal control over financial reporting; and

5.Abbott’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Abbott’s auditors and the audit committee of Abbott’s board of directors:

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Abbott’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in Abbott’s internal control over financial reporting.

Date:  August 7, 2012	/s/ Miles D. White
	Miles D. White, Chairman of the Board and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Required by Rule 13a-14(a) (17 CFR 240.13a-14(a))

I, Thomas C. Freyman, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Abbott Laboratories;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of Abbott as of, and for, the periods presented in this report;

4.Abbott’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Abbott and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Abbott, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c)Evaluated the effectiveness of Abbott’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in Abbott’s internal control over financial reporting that occurred during Abbott’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, Abbott’s internal control over financial reporting; and

5.Abbott’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Abbott’s auditors and the audit committee of Abbott’s board of directors:

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Abbott’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in Abbott’s internal control over financial reporting.

Date: August 7, 2012	/s/ Thomas C. Freyman
	Thomas C. Freyman, Executive Vice President,
	Finance and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant To

18 U.S.C. Section 1350

As Adopted Pursuant To

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Abbott Laboratories (the “Company”) on Form 10-Q for the period ended June 30, 2012 as filed with the Securities and Exchange Commission (the “Report”), I, Miles D. White, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Miles D. White

Miles D. White

Chairman of the Board and

Chief Executive Officer

August 7, 2012

A signed original of this written statement required by Section 906 has been provided to Abbott Laboratories and will be retained by Abbott Laboratories and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification Pursuant To

18 U.S.C. Section 1350

As Adopted Pursuant To

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Abbott Laboratories (the “Company”) on Form 10-Q for the period ended June 30, 2012 as filed with the Securities and Exchange Commission (the “Report”), I, Thomas C. Freyman, Executive Vice President, Finance and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Thomas C. Freyman

Thomas C. Freyman

Executive Vice President, Finance

and Chief Financial Officer

August 7, 2012

A signed original of this written statement required by Section 906 has been provided to Abbott Laboratories and will be retained by Abbott Laboratories and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Goodwill and Intangible Assets (Details) (USD $)	6 Months Ended
	Jun. 30, 2012 Y	Jun. 30, 2011	Dec. 31, 2011
Goodwill and intangible assets information
Change in goodwill due to foreign currency translation and other adjustments	$ (350,000,000)	$ 830,000,000
Goodwill	15,356,921,000		15,705,380,000
Gross amount of amortizable intangible assets	17,300,000,000		17,500,000,000
Accumulated amortization of intangible assets	9,100,000,000		8,300,000,000
Indefinite-lived intangible assets related to in-process research and development acquired in a business combination	779,000,000		814,000,000
Estimated annual amortization expense, intangible assets, 2012	1,500,000,000
Estimated annual amortization expense, intangible assets, 2013	1,300,000,000
Estimated annual amortization expense, intangible assets, 2014	915,000,000
Estimated annual amortization expense, intangible assets, 2015	800,000,000
Estimated annual amortization expense, intangible assets, 2016	765,000,000
Minimum amortization period, intangible assets (in years)	2
Maximum amortization period, intangible assets (in years)	30
Average amortization period, intangible assets (in years)	11
Proprietary Pharmaceutical Products
Goodwill and intangible assets information
Goodwill	6,100,000,000
Established Pharmaceutical Products
Goodwill and intangible assets information
Goodwill	2,900,000,000
Nutritional Products
Goodwill and intangible assets information
Goodwill	207,000,000
Diagnostic Products
Goodwill and intangible assets information
Goodwill	384,000,000
Vascular Products
Goodwill and intangible assets information
Goodwill	$ 2,600,000,000

XML

Incentive Stock Programs (Details) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2012 Y
Share-based Compensation Arrangement by Share-based Payment Award
Incentive stock programs, shares reserved for future grants	156,000,000
Total unrecognized compensation cost	$ 390
Total unrecognized compensation cost, recognition period (in years)	3
Stock options
Share-based Compensation Arrangement by Share-based Payment Award
Grants in period, stock options (in shares)	1,931,213
Replacement stock options
Share-based Compensation Arrangement by Share-based Payment Award
Grants in period, stock options (in shares)	579,351
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award
Grants in period, stock options (in shares)	1,000,925
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award
Grants in period, stock options (in shares)	6,791,842
Stock option plan
Share-based Compensation Arrangement by Share-based Payment Award
Stock options outstanding, number of shares	64,955,371
Exercisable options, number of shares	60,720,230
Stock options outstanding, weighted-average remaining life (in years)	4.8
Exercisable options, weighted-average remaining life (in years)	4.5
Stock options outstanding, weighted-average exercise price (in dollars per share)	$ 51.07
Exercisable options, weighted-average exercise price (in dollars per share)	$ 50.88
Aggregate intrinsic value of options outstanding	896
Aggregate intrinsic value of options exercisable	$ 851

XML

Restructuring Plans (Tables)

6 Months Ended

Jun. 30, 2012

Restructuring Plan 2011 and Prior Years

Restructuring costs

Schedule of restructuring activity

	2012			2011
Accrued balance at January 1	$	177		$	77
Restructuring charges	—			116
Payments and other adjustments	(6		)	(49		)
Accrued balance at June 30	$	171		$	144

Restructuring Plan 2010

Restructuring costs

Schedule of restructuring activity

	2012			2011
Accrued balance at January 1	$	108		$	410
Payments and other adjustments	(90		)	(117		)
Accrued balance at June 30	$	18		$	293

Restructuring Plan 2011 and 2008

Restructuring costs

Schedule of restructuring activity

	2012			2011
Accrued balance at January 1	$	79		$	88
Payments and other adjustments	(17		)	(17		)
Accrued balance at June 30	$	62		$	71

XML

Financial Instruments, Derivatives and Fair Value Measures (Details 3) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Fair value, asset and liability measures
Long-term Investment Securities	$ 389,901,000	$ 378,225,000
Equity securities
Fair value, asset and liability measures
Long-term Investment Securities	329,000,000	317,000,000
Carrying value
Fair value, asset and liability measures
Total long-term debt	(13,023,000,000)	(13,067,000,000)
Foreign currency forward exchange contracts, assets	133,000,000	280,000,000
Foreign currency forward exchange contracts, liabilities	(118,000,000)	(181,000,000)
Interest rate swap derivative financial instruments, assets	681,000,000	598,000,000
Carrying value | Equity securities
Fair value, asset and liability measures
Long-term Investment Securities	329,000,000	317,000,000
Carrying value | Other
Fair value, asset and liability measures
Long-term Investment Securities	61,000,000	61,000,000
Fair value
Fair value, asset and liability measures
Total long-term debt	(15,328,000,000)	(15,129,000,000)
Foreign currency forward exchange contracts, assets	133,000,000	280,000,000
Foreign currency forward exchange contracts, liabilities	(118,000,000)	(181,000,000)
Interest rate swap derivative financial instruments, assets	681,000,000	598,000,000
Fair value | Equity securities
Fair value, asset and liability measures
Long-term Investment Securities	329,000,000	317,000,000
Fair value | Other
Fair value, asset and liability measures
Long-term Investment Securities	$ 47,000,000	$ 42,000,000

XML

Supplemental Financial Information

6 Months Ended

Jun. 30, 2012

Supplemental Financial Information

Supplemental Financial Information

Note 2 — Supplemental Financial Information

Unvested restricted stock 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 for the three months and six months ended June 30, 2012 were $1.711 billion and $2.943 billion, respectively, and net earnings allocated to common shares for the three months and six months ended June 30, 2011 were $1.934 billion and $2.796 billion, respectively.

Other (income) expense, net, for the six months ended June 30, 2012 includes income of approximately $60 million from the resolution of a contractual agreement.  Other, net in Net cash from operating activities for 2012 includes payments of approximately $800 million to settle certain government investigations and for 2011 includes the non-cash impact of the $519 million of tax benefits recorded in the second quarter of 2011 related to the favorable resolution of various tax positions pertaining to prior years.  Other, net in Net cash from operating activities for 2012 and 2011 includes the effects of contributions to defined benefit plans of $320 million in each period.

The components of long-term investments as of June 30, 2012 and December 31, 2011 are as follows:

	June 30		December 31
(dollars in millions)	2012		2011
Equity securities	$	329	$	317
Other	61		61
Total	$	390	$	378

The judgment entered by the U.S. District Court for the Eastern District of Texas against Abbott in its litigation with New York University and Centocor, Inc. required Abbott to secure the judgment in the event that its appeal to the Federal Circuit court was unsuccessful in overturning the district court’s decision.  In the first quarter of 2010, Abbott deposited $1.87 billion with an escrow agent and considered these assets to be restricted. On February 23, 2011, the Federal Circuit reversed the district court’s final judgment and found Centocor’s patent invalid.  In June 2011, the Federal Circuit denied Centocor’s petition to rehear or reconsider the decision and the restrictions on the funds were lifted.

XML

Litigation and Environmental Matters (Details) (USD $)		1 Months Ended		3 Months Ended
	Jun. 30, 2012	Feb. 29, 2012 HUMIRA patent infringement claim, NYU and Centocor	May 31, 2012 Depakote state	Jun. 30, 2012 Depakote	Mar. 31, 2012 Depakote	Sep. 30, 2011 Depakote	Jun. 30, 2012 Other legal proceedings and environmental exposures
Loss Contingencies
Maximum expected cleanup exposure for individual site	$ 3,000,000
Maximum expected cleanup exposure in aggregate	15,000,000
Damage award reversed		1,670,000,000
Charge recorded related to Depakote during the period					100,000,000	1,500,000,000
Number of states with whom Medicaid-related claims were resolved			49
Number of states with whom consumer protection claims were resolved			45
Settlement amount paid				800,000,000
Settlement amount				1,600,000,000
Other legal proceedings or environmental exposure, minimum							90,000,000
Other legal proceedings or environmental exposure, maximum							115,000,000
Recorded reserve balance for legal proceedings and exposures							$ 95,000,000

XML

Taxes on Earnings (Details) (USD $)	3 Months Ended
	Jun. 30, 2011	Jul. 31, 2012
Taxes on Earnings
Impact of various tax matters on gross unrecognized tax benefits		$ 550,000,000
Estimated tax benefit, minimum		340,000,000
Estimated tax benefit, maximum		350,000,000
Reconciliation of Unrecognized Tax Benefits
Increase due to prior year tax positions	519,000,000
Decrease due to prior year tax positions	$ 1,200,000,000

XML

Post-Employment Benefits (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Defined Benefit Plans
Defined benefit plan net periodic benefit cost
Service cost - benefits earned during the period	$ 97	$ 77	$ 194	$ 157
Interest cost on projected benefit obligations	113	106	226	219
Expected return on plans' assets	(153)	(151)	(307)	(300)
Net amortization	62	38	124	82
Net cost	119	70	237	158
Benefit plan contributions by employer			320	320
Medical and Dental Plans
Defined benefit plan net periodic benefit cost
Service cost - benefits earned during the period	15	13	30	28
Interest cost on projected benefit obligations	21	20	41	44
Expected return on plans' assets	(9)	(8)	(17)	(17)
Net amortization	(2)	(4)	(4)	(2)
Net cost	25	21	50	53
Benefit plan contributions by employer			$ 40	$ 40

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Segment Information (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Segment Reporting Information
Net Sales to External Customers	$ 9,807,100,000	$ 9,616,291,000	$ 19,263,733,000	$ 18,657,141,000
Operating Earnings	2,003,000,000	1,675,000,000	3,516,000,000	2,743,000,000
Total Reportable Segments
Segment Reporting Information
Net Sales to External Customers	9,054,000,000	8,864,000,000	17,794,000,000	17,193,000,000
Operating Earnings	2,865,000,000	2,595,000,000	5,403,000,000	4,797,000,000
Proprietary Pharmaceutical Products
Segment Reporting Information
Net Sales to External Customers	4,380,000,000	4,174,000,000	8,452,000,000	7,975,000,000
Operating Earnings	1,929,000,000	1,705,000,000	3,489,000,000	3,066,000,000
Established Pharmaceutical Products
Segment Reporting Information
Net Sales to External Customers	1,246,000,000	1,327,000,000	2,503,000,000	2,604,000,000
Operating Earnings	269,000,000	306,000,000	562,000,000	597,000,000
Nutritional Products
Segment Reporting Information
Net Sales to External Customers	1,584,000,000	1,490,000,000	3,150,000,000	2,914,000,000
Operating Earnings	216,000,000	181,000,000	476,000,000	335,000,000
Diagnostic Products
Segment Reporting Information
Net Sales to External Customers	1,078,000,000	1,038,000,000	2,120,000,000	2,021,000,000
Operating Earnings	230,000,000	186,000,000	422,000,000	356,000,000
Vascular Products
Segment Reporting Information
Net Sales to External Customers	766,000,000	835,000,000	1,569,000,000	1,679,000,000
Operating Earnings	221,000,000	217,000,000	454,000,000	443,000,000
Other
Segment Reporting Information
Net Sales to External Customers	$ 753,000,000	$ 752,000,000	$ 1,470,000,000	$ 1,464,000,000

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Basis of Presentation

6 Months Ended

Jun. 30, 2012

Basis of Presentation

Basis of Presentation

Note 1 — Basis of Presentation

The accompanying unaudited, condensed consolidated financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission and, therefore, do not include all information and footnote disclosures normally included in audited financial statements.  However, in the opinion of management, all adjustments (which include only normal adjustments) necessary to present fairly the results of operations, financial position and cash flows have been made.  It is suggested that these statements be read in conjunction with the financial statements included in Abbott’s Annual Report on Form 10-K for the year ended December 31, 2011.  The consolidated financial statements include the accounts of the parent company and subsidiaries, after elimination of intercompany transactions.

Effective January 1, 2011, the one month lag in the consolidation of the accounts of foreign subsidiaries was eliminated and the year-end of foreign subsidiaries was changed to December 31.  In accordance with applicable accounting literature, a change in subsidiaries’ year-end is treated as a change in accounting principle and requires retrospective application.  The impact of the change was not material to the results of operations for the previously reported annual and interim periods after January 1, 2009, and thus, those results have not been revised.  A charge of $137 million was recorded to Other (income) expense, net in the first three months of 2011 to recognize the cumulative immaterial impacts to 2009 and 2010.

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Segment Information (Details 2) (USD $)	3 Months Ended		6 Months Ended		3 Months Ended				6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Mar. 31, 2012 Minimum	Mar. 31, 2012 Maximum	Jun. 30, 2012 Total Reportable Segments	Jun. 30, 2011 Total Reportable Segments	Jun. 30, 2012 Total Reportable Segments	Jun. 30, 2011 Total Reportable Segments	Jun. 30, 2012 Non-reportable segments	Jun. 30, 2011 Non-reportable segments	Jun. 30, 2012 Non-reportable segments	Jun. 30, 2011 Non-reportable segments	Jun. 30, 2012 Unallocated amount	Jun. 30, 2011 Unallocated amount	Jun. 30, 2012 Unallocated amount	Jun. 30, 2011 Unallocated amount
Segment Reporting Information
Operating Earnings	$ 2,104,421,000	$ 1,773,453,000	$ 3,680,143,000	$ 3,074,602,000							$ 101,000,000	$ 77,000,000	$ 231,000,000	$ 135,000,000
Corporate functions and benefit plans costs															(166,000,000)	(102,000,000)	(309,000,000)	(235,000,000)
Net interest expense															(107,000,000)	(115,000,000)	(216,000,000)	(239,000,000)
Acquired in-process and collaborations research and development															(110,000,000)	(173,000,000)	(260,000,000)	(273,000,000)
Share-based compensation															(86,000,000)	(76,000,000)	(283,000,000)	(252,000,000)
Other, net															(494,000,000)	(531,000,000)	(1,050,000,000)	(1,190,000,000)
Earnings Before Taxes	$ 2,003,000,000	$ 1,675,000,000	$ 3,516,000,000	$ 2,743,000,000			$ 2,865,000,000	$ 2,595,000,000	$ 5,403,000,000	$ 4,797,000,000
Annual share-based awards recognized in first quarter (as a percent)					40.00%	45.00%

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Restructuring Plans (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Mar. 31, 2011	Jun. 30, 2012	Jun. 30, 2011
Restructuring Plan 2011 and Prior Years
Restructuring costs
Restructuring charges recorded to Cost of products sold	$ 49
Restructuring charges Recorded to Research and Development	18
Restructuring charges recorded to Selling, General and Administrative	49
Restructuring reserve activity
Restructuring reserve, beginning balance of the period	77	177	77
Restructuring charges			116
Payments and other adjustments		(6)	(49)
Restructuring reserve, ending balance of the period		171	144
Accelerated depreciation in restructuring charges		53	7
Restructuring Plan 2010
Restructuring reserve activity
Restructuring reserve, beginning balance of the period	410	108	410
Payments and other adjustments		(90)	(117)
Restructuring reserve, ending balance of the period		18	293
Accelerated depreciation and employee severance		14	65
Restructuring Plan 2011 and 2008
Restructuring reserve activity
Restructuring reserve, beginning balance of the period	88	79	88
Payments and other adjustments		(17)	(17)
Restructuring reserve, ending balance of the period		62	71
Accelerated depreciation in restructuring charges		$ 8	$ 18

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Condensed Consolidated Statement of Earnings (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net Sales	$ 9,807,100	$ 9,616,291	$ 19,263,733	$ 18,657,141
Cost of products sold	3,637,305	3,870,472	7,362,226	7,729,455
Research and development	1,010,882	1,037,780	2,016,564	1,968,180
Acquired in-process and collaborations research and development	110,000	172,500	260,000	272,500
Selling, general and administrative	2,944,492	2,762,086	5,944,800	5,612,404
Total Operating Cost and Expenses	7,702,679	7,842,838	15,583,590	15,582,539
Operating Earnings	2,104,421	1,773,453	3,680,143	3,074,602
Interest expense	127,191	134,129	254,057	279,716
Interest (income)	(20,461)	(18,868)	(37,898)	(40,584)
Net foreign exchange loss (gain)	(14,154)	(10,796)	10,608	(43,162)
Other (income) expense, net	8,528	(5,568)	(62,970)	135,290
Earnings Before Taxes	2,003,317	1,674,556	3,516,346	2,743,342
Taxes on Earnings	278,705	(268,226)	549,610	(63,258)
Net Earnings	$ 1,724,612	$ 1,942,782	$ 2,966,736	$ 2,806,600
Basic Earnings Per Common Share (in dollars per share)	$ 1.09	$ 1.24	$ 1.87	$ 1.8
Diluted Earnings Per Common Share (in dollars per share)	$ 1.08	$ 1.23	$ 1.85	$ 1.79
Cash Dividends Declared Per Common Share (in dollars per share)	$ 0.51	$ 0.48	$ 1.02	$ 0.96
Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share (in shares)	1,572,099	1,556,869	1,572,681	1,554,097
Dilutive Common Stock Options and Awards (in shares)	16,403	9,234	15,996	8,060
Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options and Awards (in shares)	1,588,502	1,566,103	1,588,677	1,562,157
Outstanding Common Stock Options Having No Dilutive Effect (in shares)	1,166	60,653	1,166	60,653

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Condensed Consolidated Balance Sheet (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current Assets:
Cash and cash equivalents	$ 7,052,776	$ 6,812,820
Investments, primarily time deposits and certificates of deposit	3,949,362	1,284,539
Trade receivables, less allowances of $375,211 in 2012 and $420,579 in 2011	6,767,952	7,683,920
Inventories:
Finished products	2,264,161	2,220,527
Work in process	503,273	432,358
Materials	751,018	631,364
Total inventories	3,518,452	3,284,249
Prepaid expenses, deferred income taxes, and other receivables	4,968,950	4,703,246
Total Current Assets	26,257,492	23,768,774
Investments	389,901	378,225
Property and Equipment, at Cost	18,210,082	18,016,565
Less: accumulated depreciation and amortization	10,378,810	10,142,610
Net Property and Equipment	7,831,272	7,873,955
Intangible Assets, net of amortization	8,983,552	9,989,636
Goodwill	15,356,921	15,705,380
Deferred Income Taxes and Other Assets	3,040,652	2,560,923
Total Assets	61,859,790	60,276,893
Current Liabilities:
Short-term borrowings	5,063,525	2,347,859
Trade accounts payable	1,519,460	1,721,127
Salaries, wages and commissions	1,225,048	1,260,121
Other accrued liabilities	7,015,129	7,854,994
Dividends payable	800,448	754,284
Income taxes payable	477,459	514,947
Current portion of long-term debt	1,019,398	1,026,896
Total Current Liabilities	17,120,467	15,480,228
Long-term Debt	12,004,092	12,039,822
Post-employment Obligations, Deferred Income Taxes and Other Long-term Liabilities	8,162,746	8,230,698
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: 2012: 1,659,880,647; 2011: 1,638,870,201	10,815,177	9,817,134
Common shares held in treasury, at cost - Shares: 2012: 90,546,918; 2011: 68,491,382	(5,012,598)	(3,687,478)
Earnings employed in the business	22,227,912	20,907,362
Accumulated other comprehensive income (loss)	(3,543,531)	(2,597,185)
Total Abbott Shareholders' Investment	24,486,960	24,439,833
Noncontrolling Interests in Subsidiaries	85,525	86,312
Total Shareholders' Investment	24,572,485	24,526,145
Total Liabilities and Shareholders' Investment	$ 61,859,790	$ 60,276,893

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Financial Instruments, Derivatives and Fair Value Measures (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Derivative instruments, notional amount and fair value
Fair Value - Assets	$ 814	$ 878
Fair Value - Liabilities	788	861
Designated as hedging instrument | Net investment hedges
Derivative instruments, notional amount and fair value
Notional amount of cash flow hedge instruments	670	680
Designated as hedging instrument | Short-term borrowings | Net investment hedges
Derivative instruments, notional amount and fair value
Fair Value - Liabilities	670	680
Designated as hedging instrument | Interest rate swaps | Fair value hedges
Derivative instruments, notional amount and fair value
Notional amount of cash flow hedge instruments	6,800	6,800
Designated as hedging instrument | Interest rate swaps | Deferred income taxes and other assets | Fair value hedges
Derivative instruments, notional amount and fair value
Fair Value - Assets	681	598
Designated as hedging instrument | Foreign currency forward exchange contracts | Cash flow hedges
Derivative instruments, notional amount and fair value
Notional amount of cash flow hedge instruments	398	1,600
Approximate length of time over which accumulated gains and losses will be recognized in Cost of products sold (in months)	12 months
Designated as hedging instrument | Foreign currency forward exchange contracts | Prepaid expenses, deferred income taxes, and other receivables
Derivative instruments, notional amount and fair value
Fair Value - Assets	34	115
Designated as hedging instrument | Foreign currency forward exchange contracts | Other accrued liabilities
Derivative instruments, notional amount and fair value
Fair Value - Liabilities		2
Not designated as hedging instrument | Foreign currency forward exchange contracts
Derivative instruments, notional amount and fair value
Notional amount of cash flow hedge instruments	16,700	15,700
Not designated as hedging instrument | Foreign currency forward exchange contracts | Prepaid expenses, deferred income taxes, and other receivables
Derivative instruments, notional amount and fair value
Fair Value - Assets	99	165
Not designated as hedging instrument | Foreign currency forward exchange contracts | Other accrued liabilities
Derivative instruments, notional amount and fair value
Fair Value - Liabilities	$ 118	$ 179

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2012

Segment Information

Schedule of segment and geographic area information

	Net Sales to External Customers								Operating Earnings
	Three Months				Six Months				Three Months						Six Months
	Ended June 30				Ended June 30				Ended June 30						Ended June 30
(dollars in millions)	2012		2011		2012		2011		2012			2011			2012			2011
Proprietary Pharmaceutical Products	$	4,380	$	4,174	$	8,452	$	7,975	$	1,929		$	1,705		$	3,489		$	3,066
Established Pharmaceutical Products	1,246		1,327		2,503		2,604		269			306			562			597
Nutritional Products	1,584		1,490		3,150		2,914		216			181			476			335
Diagnostic Products	1,078		1,038		2,120		2,021		230			186			422			356
Vascular Products	766		835		1,569		1,679		221			217			454			443
Total Reportable Segments	9,054		8,864		17,794		17,193		2,865			2,595			5,403			4,797
Other	753		752		1,470		1,464
Net Sales	$	9,807	$	9,616	$	19,264	$	18,657
Corporate functions and benefit plans costs									(166		)	(102		)	(309		)	(235		)
Non-reportable segments									101			77			231			135
Net interest expense									(107		)	(115		)	(216		)	(239		)
Acquired in-process and collaborations research and development									(110		)	(173		)	(260		)	(273		)
Share-based compensation (a)									(86		)	(76		)	(283		)	(252		)
Other, net									(494		)	(531		)	(1,050		)	(1,190		)
Consolidated Earnings Before Taxes									$	2,003		$	1,675		$	3,516		$	2,743

(a)Approximately 40 to 45 percent of the annual net cost of share-based awards will typically be recognized in the first quarter due to the timing of the granting of share-based awards.

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Financial Instruments, Derivatives and Fair Value Measures (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net investment hedges
Gain (loss) on derivatives
Gain (loss) Recognized in Other Comprehensive Income (loss)	$ (25)	$ (20)	$ 10	$ (10)
Interest rate swaps | Fair value hedges
Gain (loss) on derivatives
Income (expense)	93	127	83	91
Foreign currency forward exchange contracts | Not designated as hedging instrument
Gain (loss) on derivatives
Income (expense)	101	11	117	(90)
Foreign currency forward exchange contracts | Cash flow hedges
Gain (loss) on derivatives
Gain (loss) Recognized in Other Comprehensive Income (loss)	40	(54)	(4)	(76)
Gain (loss) Reclassified into Income	$ 33	$ (14)	$ 48	$ 43

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Financial Instruments, Derivatives and Fair Value Measures (Tables)

6 Months Ended

Jun. 30, 2012

Financial Instruments, Derivatives and Fair Value Measures

Summary of the amounts and location of certain derivative financial instruments

	Fair Value - Assets					Fair Value - Liabilities
(dollars in millions)	June 30 2012		Dec. 31 2011		Balance Sheet Caption	June 30 2012		Dec. 31 2011		Balance Sheet Caption
Interest rate swaps designated as fair value hedges	$	681	$	598	Deferred income taxes and other assets	$	—	$	—	n/a
Foreign currency forward exchange contracts —
Hedging instruments	34		115		Prepaid expenses, deferred income taxes, and other receivables	—		2		Other accrued liabilities
Others not designated as hedges	99		165			118		179
Debt designated as a hedge of net investment in a foreign subsidiary	—		—		n/a	670		680		Short-term borrowings
	$	814	$	878		$	788	$	861

Schedule of derivatives gain (loss) in OCI and earnings

	Gain (loss) Recognized in Other Comprehensive Income (loss)												Income (expense) and Gain (loss) Reclassified into Income
	Three Months Ended June 30						Six Months Ended June 30						Three Months Ended June 30					Six Months Ended June 30					Income Statement
(dollars in millions)	2012			2011			2012			2011			2012		2011			2012		2011			Caption
Foreign currency forward exchange contracts designated as cash flow hedges	$	40		$	(54	)	$	(4	)	$	(76	)	$	33	$	(14	)	$	48	$	43		Cost of products sold
Debt designated as a hedge of net investment in a foreign subsidiary	(25		)	(20		)	10			(10		)	n/a		n/a			n/a		n/a			n/a
Interest rate swaps designated as fair value hedges	n/a			n/a			n/a			n/a			93		127			83		91			Interest expense
Foreign currency forward exchange contracts not designated as hedges	n/a			n/a			n/a			n/a			101		11			117		(90		)	Net foreign exchange loss (gain)

Schedule of carrying values and fair values of certain financial instruments

	June 30 2012						December 31 2011
(dollars in millions)	Carrying Value			Fair Value			Carrying Value			Fair Value
Long-term Investment Securities:
Equity securities	$	329		$	329		$	317		$	317
Other	61			47			61			42
Total Long-term Debt	(13,023		)	(15,328		)	(13,067		)	(15,129		)
Foreign Currency Forward Exchange Contracts:
Receivable position	133			133			280			280
(Payable) position	(118		)	(118		)	(181		)	(181		)
Interest Rate Hedge Contracts	681			681			598			598

Schedule of assets and liabilities measured at fair value on a recurring basis

			Basis of Fair Value Measurement
(dollars in millions)	Outstanding Balances		Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
June 30, 2012:
Equity securities	$	106	$	106	$	—	$	—
Interest rate swap derivative financial instruments	681		—		681		—
Foreign currency forward exchange contracts	133		—		133		—
Total Assets	$	920	$	106	$	814	$	—
Fair value of hedged long-term debt	$	7,452	$	—	$	7,452	$	—
Foreign currency forward exchange contracts	118		—		118		—
Contingent consideration related to business combinations	301		—		—		301
Total Liabilities	$	7,871	$	—	$	7,570	$	301
December 31, 2011:
Equity securities	$	93	$	93	$	—	$	—
Interest rate swap derivative financial instruments	598		—		598		—
Foreign currency forward exchange contracts	280		—		280		—
Total Assets	$	971	$	93	$	878	$	—
Fair value of hedged long-term debt	$	7,427	$	—	$	7,427	$	—
Foreign currency forward exchange contracts	181		—		181		—
Contingent consideration related to business combinations	423		—		—		423
Total Liabilities	$	8,031	$	—	$	7,608	$	423

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Condensed Consolidated Balance Sheet (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheet
Trade receivables, allowances (in dollars)	$ 375,211	$ 420,579
Preferred shares, par value (in dollars per share)	$ 1	$ 1
Preferred shares, Authorized shares	1,000,000	1,000,000
Preferred shares, issued shares	0	0
Common shares, Authorized shares	2,400,000,000	2,400,000,000
Common shares, Issued shares	1,659,880,647	1,638,870,201
Common shares held in treasury, shares	90,546,918	68,491,382

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Condensed Consolidated Statement of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Net Earnings	$ 1,724,612	$ 1,942,782	$ 2,966,736	$ 2,806,600
Foreign currency translation (loss) gain adjustments	(1,654,254)	356,317	(995,237)	1,973,288
Amortization of net actuarial losses and prior service cost and credits, net of taxes of $22,939 and $45,905 in 2012 and $12,782 and $29,659 in 2011	39,817	22,803	79,672	52,620
Unrealized gain on marketable equity securities, net of taxes of $6,123 and $6,010 in 2012 and $5,506 and $6,097 in 2011	10,597	9,537	10,401	10,561
Net adjustments for derivative instruments designated as cash flow hedges, net of taxes of $350 and $(10,296) in 2012 and $1,770 and $(22,960) in 2011	1,429	7,078	(41,182)	(91,839)
Other comprehensive (loss) income, net of tax	(1,602,411)	395,735	(946,346)	1,944,630
Comprehensive Income	122,201	2,338,517	2,020,390	4,751,230
Supplemental Accumulated Other Comprehensive Income Information, net of tax:
Cumulative foreign currency translation loss adjustments	1,067,764		1,067,764		72,527
Net actuarial losses and prior service cost and credits	2,650,947		2,650,947		2,730,619
Cumulative unrealized (gains) on marketable equity securities	(48,830)		(48,830)		(38,429)
Cumulative (gains) on derivative instruments designated as cash flow hedges	$ (126,350)		$ (126,350)		$ (167,532)

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Goodwill and Intangible Assets

6 Months Ended

Jun. 30, 2012

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Note 10 — Goodwill and Intangible Assets

Foreign currency translation adjustments decreased goodwill in the first six months of 2012 by approximately $350 million and increased goodwill in the first six months of 2011 by approximately $830 million. The amount of goodwill related to reportable segments at June 30, 2012 was $6.1 billion for the Proprietary Pharmaceutical Products segment, $2.9 billion for the Established Pharmaceutical Products segment, $207 million for the Nutritional Products segment, $384 million for the Diagnostic Products segment, and $2.6 billion for the Vascular Products segment.  There were no reductions of goodwill relating to impairments or disposal of all or a portion of a business.

The gross amount of amortizable intangible assets, primarily product rights and technology was $17.3 billion as of June 30, 2012 and $17.5 billion as of December 31, 2011, and accumulated amortization was $9.1 billion as of June 30, 2012 and $8.3 billion as of December 31, 2011. Indefinite-lived intangible assets, which relate to in-process research and development acquired in a business combination, was approximately $779 million at June 30, 2012 and $814 million at December 31, 2011. The estimated annual amortization expense for intangible assets is approximately $1.5 billion in 2012, $1.3 billion in 2013, $915 million in 2014, $800 million in 2015 and $765 million in 2016.  Intangible asset amortization is included in Cost of products sold in the condensed consolidated statement of earnings.  Amortizable intangible assets are amortized over 2 to 30 years (average 11 years).

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012
Document and Entity Information
Entity Registrant Name	ABBOTT LABORATORIES
Entity Central Index Key	0000001800
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	1,569,333,729
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

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Restructuring Plans

6 Months Ended

Jun. 30, 2012

Restructuring Plans

Restructuring Plans

Note 11 — Restructuring Plans

In 2011 and prior years, Abbott management approved plans to realign its worldwide pharmaceutical and vascular manufacturing operations and selected domestic and international commercial and research and development operations in order to reduce costs.  In the first three months of 2011, Abbott recorded $49 million to Cost of products sold, $18 million to Research and development and $49 million to Selling, general and administrative.  The following summarizes the activity for these restructurings: (dollars in millions)

	2012			2011
Accrued balance at January 1	$	177		$	77
Restructuring charges	—			116
Payments and other adjustments	(6		)	(49		)
Accrued balance at June 30	$	171		$	144

Additional charges of $53 million and $7 million were recorded in the first six months of 2012 and 2011, respectively, relating to these restructurings, primarily for accelerated depreciation.

In 2010, Abbott management approved a restructuring plan primarily related to the acquisition of Solvay Pharmaceuticals.  This plan streamlines operations, improves efficiencies and reduces costs in certain Solvay sites and functions as well as in certain Abbott and Solvay commercial organizations in various countries.  The following summarizes the activity for this restructuring: (dollars in millions)

	2012			2011
Accrued balance at January 1	$	108		$	410
Payments and other adjustments	(90		)	(117		)
Accrued balance at June 30	$	18		$	293

Additional charges of approximately $14 million and $65 million were recorded in the first six months of 2012 and 2011, respectively, relating to this restructuring, primarily for accelerated depreciation and employee severance.

In 2011 and 2008, Abbott management approved a plan to streamline global manufacturing operations, reduce overall costs, and improve efficiencies in Abbott’s core diagnostic business.  The following summarizes the activity for this restructuring: (dollars in millions)

	2012			2011
Accrued balance at January 1	$	79		$	88
Payments and other adjustments	(17		)	(17		)
Accrued balance at June 30	$	62		$	71

Additional charges of approximately $8 million and $18 million were recorded in the first sixth months of 2012 and 2011, respectively, relating to this restructuring, primarily for accelerated depreciation and product transfer costs.  Additional charges will occur through 2012 as a result of product re-registration timelines required under manufacturing regulations in a number of countries and product transition timelines.

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Condensed Consolidated Statement of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Condensed Consolidated Statement of Comprehensive Income
Amortization of net actuarial losses and prior service cost and credits, taxes	$ 22,939	$ 12,782	$ 45,905	$ 29,659
Unrealized gain on marketable equity securities, taxes	6,123	5,506	6,010	6,097
Net adjustments for derivative instruments designated as cash flow hedges, taxes	$ 350	$ 1,770	$ (10,296)	$ (22,960)

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Post-Employment Benefits

6 Months Ended

Jun. 30, 2012

Post-Employment Benefits

Post-Employment Benefits

Note 5 — Post-Employment Benefits

Retirement plans consist of defined benefit, defined contribution, and medical and dental plans.  Net cost for the three and six months ended June 30 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
	Three Months						Six Months						Three Months						Six Months
	Ended June 30						Ended June 30						Ended June 30						Ended June 30
(dollars in millions)	2012			2011			2012			2011			2012			2011			2012			2011
Service cost — benefits earned during the period	$	97		$	77		$	194		$	157		$	15		$	13		$	30		$	28
Interest cost on projected benefit obligations	113			106			226			219			21			20			41			44
Expected return on plans’ assets	(153		)	(151		)	(307		)	(300		)	(9		)	(8		)	(17		)	(17		)
Net amortization	62			38			124			82			(2		)	(4		)	(4		)	(2		)
Net Cost	$	119		$	70		$	237		$	158		$	25		$	21		$	50		$	53

Abbott funds its domestic defined benefit plans according to IRS funding limitations.  International pension plans are funded according to similar regulations.  In the first six months of 2012 and 2011, $320 million was contributed to defined benefit plans and $40 million was contributed to the post-employment medical and dental benefit plans in each period.

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Litigation and Environmental Matters

6 Months Ended

Jun. 30, 2012

Litigation and Environmental Matters

Litigation and Environmental Matters

Note 4 — 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 $3 million, and the aggregate cleanup exposure is not expected to exceed $15 million.

There are a number of patent disputes with third parties who claim Abbott’s products infringe their patents.  On February 21, 2012, the United States Supreme Court denied Centocor Inc.’s and New York University’s petition to review a February 2011 Federal Circuit Court of Appeals decision reversing a $1.67 billion judgment in favor of Centocor and New York University on a patent they claimed Abbott’s HUMIRA infringed. This decision concludes the case.

The United States Department of Justice, through the United States Attorney for the Western District of Virginia, and various state Attorneys General investigated Abbott’s sales and marketing activities for Depakote.  The government sought to determine whether any of these activities violated civil and/or criminal laws, including the Federal False Claims Act, the Food, Drug and Cosmetic Act, and the Anti-Kickback Statute in connection with Medicare and/or Medicaid reimbursement to third parties.  The state Attorneys General offices sought to determine whether any of these activities violated various state laws, including state consumer fraud/protection statutes.  Abbott recorded charges of $1.5 billion in the third quarter of 2011 and $100 million in the first quarter of 2012 related to civil and criminal claims arising from this matter.  In May 2012, Abbott reached resolution of all Depakote-related federal claims, Medicaid-related claims with 49 states and the District of Columbia, and consumer protection claims with 45 states and the District of Columbia.  The settlement of the federal claims is subject to approval by the United States District Court for the Western District of Virginia.  In the second quarter of 2012, Abbott paid approximately $800 million of the $1.6 billion settlement and expects to pay the remainder in the second half of 2012.  The payments are material to Abbott’s cash flows in 2012.

Excluding the settlement of Depakote-related claims, Abbott estimates the range of possible loss for its other legal proceedings and environmental exposures to be from approximately $90 million to $115 million.  The recorded accrual balance at June 30, 2012 for these other proceedings and exposures was approximately $95 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.

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Incentive Stock Programs (Tables)

6 Months Ended

Jun. 30, 2012

Incentive Stock Programs

Options outstanding and exercisable

	Outstanding		Exercisable
Number of shares	64,955,371		60,720,230
Weighted average remaining life (years)	4.8		4.5
Weighted average exercise price	$	51.07	$	50.88
Aggregate intrinsic value (in millions)	$	896	$	851

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Separation of Abbott's Proprietary Pharmaceuticals Business

6 Months Ended

Jun. 30, 2012

Separation of Abbott's Proprietary Pharmaceuticals Business

Separation of Abbott's Proprietary Pharmaceuticals Business

Note 12 — Separation of Abbott’s Proprietary Pharmaceuticals Business

In October 2011, Abbott announced a plan to separate into two publicly traded companies, one in diversified medical products and the other in research-based pharmaceuticals.  To accomplish the separation, Abbott plans to create a new company for its research-based pharmaceuticals business which will include Abbott’s Proprietary Pharmaceutical Products segment.  The transaction is expected to take the form of a tax-free distribution to Abbott shareholders of the stock of the newly created research-based pharmaceutical company.  Abbott expects to be ready to separate the company by the end of the year subject to obtaining the required approvals.  Subsequent to the separation, the historical results of the research-based pharmaceuticals business will be presented as discontinued operations.  Annual net sales for the new research-based pharmaceuticals business were approximately $17.4 billion in 2011.

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Business Combinations and Technology Acquisitions

6 Months Ended

Jun. 30, 2012

Business Combinations and Technology Acquisitions

Business Combinations and Technology Acquisitions

Note 8 — Business Combinations and Technology Acquisitions

In the second quarter of 2012, Abbott recorded a charge to acquired in-process and collaborations research and development of $110 million as a result of the acquisition of AP214, a drug under development for the prevention of acute kidney injury associated with major cardiac surgery in patients at increased risk.   In the first quarter of 2012, Abbott recorded a charge to acquired in-process and collaborations research and development of $150 million as a result of entering into a global collaboration to develop and commercialize an oral, next-generation JAK1 inhibitor in Phase II development with the potential to treat multiple autoimmune diseases.  Additional payments of approximately $1.2 billion could be required for the achievement of certain development, regulatory and commercial milestones under this agreement.  In the fourth quarter of 2011, Abbott entered into a collaboration for the joint development and commercialization of second-generation oral antioxidant inflammation modulators resulting in a charge to acquired in-process and collaborations research and development of $400 million which was paid in the first quarter of 2012.  In connection with the acquisition of Solvay Pharmaceuticals, the achievement of a certain sales milestone resulted in a payment of approximately $134 million in the first quarter of 2012 for which a liability was previously established.

In 2010, Abbott entered into an agreement to acquire licensing rights outside the U.S., excluding certain Asian markets, to a product in development for the treatment of chronic kidney disease.  In the first and second quarters of 2011, certain milestones were achieved and charges to acquired in-process and collaborations research and development of $100 million and $88 million were recorded.  In the first quarter of 2012, $50 million of research and development expense was recorded related to the achievement of a clinical development milestone under this agreement.   In addition, in the second quarter of 2011, Abbott entered into an agreement to develop and commercialize a treatment of rheumatoid arthritis and psoriasis resulting in a charge to acquired in-process and collaborations research and development of $85 million.

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Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information

Segment Information

Note 6 — Segment 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.  Effective January 1, 2012, certain international operations were transferred from the Established Pharmaceutical Products segment to the Proprietary Pharmaceutical Products segment.  The segment information below has been adjusted to reflect this reorganization.  Abbott’s reportable segments are as follows:

Proprietary Pharmaceutical Products — Worldwide sales of a broad line of proprietary pharmaceutical products.

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 Laboratories Diagnostics, Molecular Diagnostics, Point of Care and Ibis diagnostic divisions are aggregated and reported as the Diagnostic Products segment.

Vascular Products — Worldwide sales of coronary, endovascular, structural heart, vessel closure and other medical device products.

Non-reportable segments include the Diabetes Care and Medical Optics segments.

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.  Intersegment transfers of inventory are recorded at standard cost and are not a measure of segment operating earnings.  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.  For acquisitions prior to 2006, substantially all intangible assets and related amortization are not allocated to segments.  In addition, no intangible assets or related amortization are allocated to the Established Pharmaceutical Products segment.  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								Operating Earnings
	Three Months				Six Months				Three Months						Six Months
	Ended June 30				Ended June 30				Ended June 30						Ended June 30
(dollars in millions)	2012		2011		2012		2011		2012			2011			2012			2011
Proprietary Pharmaceutical Products	$	4,380	$	4,174	$	8,452	$	7,975	$	1,929		$	1,705		$	3,489		$	3,066
Established Pharmaceutical Products	1,246		1,327		2,503		2,604		269			306			562			597
Nutritional Products	1,584		1,490		3,150		2,914		216			181			476			335
Diagnostic Products	1,078		1,038		2,120		2,021		230			186			422			356
Vascular Products	766		835		1,569		1,679		221			217			454			443
Total Reportable Segments	9,054		8,864		17,794		17,193		2,865			2,595			5,403			4,797
Other	753		752		1,470		1,464
Net Sales	$	9,807	$	9,616	$	19,264	$	18,657
Corporate functions and benefit plans costs									(166		)	(102		)	(309		)	(235		)
Non-reportable segments									101			77			231			135
Net interest expense									(107		)	(115		)	(216		)	(239		)
Acquired in-process and collaborations research and development									(110		)	(173		)	(260		)	(273		)
Share-based compensation (a)									(86		)	(76		)	(283		)	(252		)
Other, net									(494		)	(531		)	(1,050		)	(1,190		)
Consolidated Earnings Before Taxes									$	2,003		$	1,675		$	3,516		$	2,743

(a)Approximately 40 to 45 percent of the annual net cost of share-based awards will typically be recognized in the first quarter due to the timing of the granting of share-based awards.

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Incentive Stock Programs

6 Months Ended

Jun. 30, 2012

Incentive Stock Programs

Incentive Stock Programs

Note 7 — Incentive Stock Programs

In the first six months of 2012, Abbott granted 1,931,213 stock options, 579,351 replacement stock options, 1,000,925 restricted stock awards and 6,791,842 restricted stock units under these programs.  At June 30, 2012, approximately 156 million shares were reserved for future grants.  Information regarding the number of options outstanding and exercisable at June 30, 2012 is as follows:

	Outstanding		Exercisable
Number of shares	64,955,371		60,720,230
Weighted average remaining life (years)	4.8		4.5
Weighted average exercise price	$	51.07	$	50.88
Aggregate intrinsic value (in millions)	$	896	$	851

The total unrecognized share-based compensation cost at June 30, 2012 amounted to approximately $390 million which is expected to be recognized over the next three years.

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Financial Instruments, Derivatives and Fair Value Measures

6 Months Ended

Jun. 30, 2012

Financial Instruments, Derivatives and Fair Value Measures

Financial Instruments, Derivatives and Fair Value Measures

Note 9 — 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 for anticipated intercompany purchases by those subsidiaries whose functional currencies are not the U.S. dollar.  These contracts, totaling $398 million and $1.6 billion at June 30, 2012 and December 31, 2011, respectively, 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 June 30, 2012 will be included in Cost of products sold at the time the products are sold, generally through the next twelve months.  The amount of hedge ineffectiveness was not significant in 2012 and 2011.

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 and Japanese yen, in exchange for primarily U.S. dollars and other European currencies.  For intercompany and trade payables and receivables, the currency exposures are primarily the U.S. dollar, European currencies and Japanese yen.  At June 30, 2012 and December 31, 2011, Abbott held $16.7 billion and $15.7 billion, respectively, of such foreign currency forward exchange contracts.

Abbott has designated foreign denominated short-term debt as a hedge of the net investment in a foreign subsidiary of approximately $670 million and approximately $680 million as of June 30, 2012 and December 31, 2011, respectively.  Accordingly, changes in the fair value of this debt due to changes in exchange rates are recorded in Accumulated other comprehensive income (loss), net of tax.

Abbott is a party to interest rate swap contracts totaling $6.8 billion at June 30, 2012 and at December 31, 2011 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.  No hedge ineffectiveness was recorded in income in 2012 or 2011 for these hedges.

The following table summarizes the amounts and location of certain derivative financial instruments as of June 30, 2012 and December 31, 2011:

	Fair Value - Assets					Fair Value - Liabilities
(dollars in millions)	June 30 2012		Dec. 31 2011		Balance Sheet Caption	June 30 2012		Dec. 31 2011		Balance Sheet Caption
Interest rate swaps designated as fair value hedges	$	681	$	598	Deferred income taxes and other assets	$	—	$	—	n/a
Foreign currency forward exchange contracts —
Hedging instruments	34		115		Prepaid expenses, deferred income taxes, and other receivables	—		2		Other accrued liabilities
Others not designated as hedges	99		165			118		179
Debt designated as a hedge of net investment in a foreign subsidiary	—		—		n/a	670		680		Short-term borrowings
	$	814	$	878		$	788	$	861

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 the amounts and location of income (expense) and gain (loss) reclassified into income in the second quarter and first six months of 2012 and 2011 and for certain other derivative financial instruments.  The amount of hedge ineffectiveness was not significant in 2012 and 2011 for these hedges.

	Gain (loss) Recognized in Other Comprehensive Income (loss)												Income (expense) and Gain (loss) Reclassified into Income
	Three Months Ended June 30						Six Months Ended June 30						Three Months Ended June 30					Six Months Ended June 30					Income Statement
(dollars in millions)	2012			2011			2012			2011			2012		2011			2012		2011			Caption
Foreign currency forward exchange contracts designated as cash flow hedges	$	40		$	(54	)	$	(4	)	$	(76	)	$	33	$	(14	)	$	48	$	43		Cost of products sold
Debt designated as a hedge of net investment in a foreign subsidiary	(25		)	(20		)	10			(10		)	n/a		n/a			n/a		n/a			n/a
Interest rate swaps designated as fair value hedges	n/a			n/a			n/a			n/a			93		127			83		91			Interest expense
Foreign currency forward exchange contracts not designated as hedges	n/a			n/a			n/a			n/a			101		11			117		(90		)	Net foreign exchange loss (gain)

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 June 30, 2012 and December 31, 2011 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.

	June 30 2012						December 31 2011
(dollars in millions)	Carrying Value			Fair Value			Carrying Value			Fair Value
Long-term Investment Securities:
Equity securities	$	329		$	329		$	317		$	317
Other	61			47			61			42
Total Long-term Debt	(13,023		)	(15,328		)	(13,067		)	(15,129		)
Foreign Currency Forward Exchange Contracts:
Receivable position	133			133			280			280
(Payable) position	(118		)	(118		)	(181		)	(181		)
Interest Rate Hedge Contracts	681			681			598			598

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
(dollars in millions)	Outstanding Balances		Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
June 30, 2012:
Equity securities	$	106	$	106	$	—	$	—
Interest rate swap derivative financial instruments	681		—		681		—
Foreign currency forward exchange contracts	133		—		133		—
Total Assets	$	920	$	106	$	814	$	—
Fair value of hedged long-term debt	$	7,452	$	—	$	7,452	$	—
Foreign currency forward exchange contracts	118		—		118		—
Contingent consideration related to business combinations	301		—		—		301
Total Liabilities	$	7,871	$	—	$	7,570	$	301
December 31, 2011:
Equity securities	$	93	$	93	$	—	$	—
Interest rate swap derivative financial instruments	598		—		598		—
Foreign currency forward exchange contracts	280		—		280		—
Total Assets	$	971	$	93	$	878	$	—
Fair value of hedged long-term debt	$	7,427	$	—	$	7,427	$	—
Foreign currency forward exchange contracts	181		—		181		—
Contingent consideration related to business combinations	423		—		—		423
Total Liabilities	$	8,031	$	—	$	7,608	$	423

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.  The fair value of the contingent consideration was determined based on an independent appraisal adjusted for the time value of money, exchange, payments and other changes in fair value.

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Business Combinations and Technology Acquisitions (Details) (USD $)	3 Months Ended			6 Months Ended		3 Months Ended	6 Months Ended	3 Months Ended
	Jun. 30, 2012	Mar. 31, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Mar. 31, 2012 Collaboration agreement	Jun. 30, 2011 Agreement to develop and commercialize a product for the treatment of Rheumatoid arthritis and psoriasis	Mar. 31, 2012 Solvay Pharmaceuticals	Jun. 30, 2011 Agreement to acquire licensing rights outside the U.S. to a product in development for the treatment of chronic kidney disease	Mar. 31, 2011 Agreement to acquire licensing rights outside the U.S. to a product in development for the treatment of chronic kidney disease
Allocation of purchase price
Payment made for achievement of sales milestone								$ 134,000,000
Acquired in-process and collaborations research and development	110,000,000	150,000,000	172,500,000	260,000,000	272,500,000	400,000,000	85,000,000		88,000,000	100,000,000
Payments for achievement of certain milestones under an agreement		1,200,000,000
Research and development expense		$ 50,000,000

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Post-Employment Benefits (Tables)

6 Months Ended

Jun. 30, 2012

Post-Employment Benefits

Net cost for the entity's major defined benefit plans and post-employment medical and dental benefit plans

	Defined Benefit Plans												Medical and Dental Plans
	Three Months						Six Months						Three Months						Six Months
	Ended June 30						Ended June 30						Ended June 30						Ended June 30
(dollars in millions)	2012			2011			2012			2011			2012			2011			2012			2011
Service cost — benefits earned during the period	$	97		$	77		$	194		$	157		$	15		$	13		$	30		$	28
Interest cost on projected benefit obligations	113			106			226			219			21			20			41			44
Expected return on plans’ assets	(153		)	(151		)	(307		)	(300		)	(9		)	(8		)	(17		)	(17		)
Net amortization	62			38			124			82			(2		)	(4		)	(4		)	(2		)
Net Cost	$	119		$	70		$	237		$	158		$	25		$	21		$	50		$	53

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Basis of Presentation (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended
	Jan. 31, 2011	Mar. 31, 2011
Basis of Presentation
Reporting period lag for consolidation of financial results (in months)	P1M
Charge recorded to other (income) expense		$ 137

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Separation of Abbott's Proprietary Pharmaceuticals Business (Details) (USD $) In Billions, unless otherwise specified	1 Months Ended	12 Months Ended
	Oct. 31, 2011 entity	Dec. 31, 2011 Proprietary Pharmaceuticals Business
Separation of Abbott's Proprietary Pharmaceuticals Business
Number of public companies after spin-off	2
Spin-off of Abbott's Proprietary Pharmaceuticals Business
Annual net sales		$ 17.4

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Condensed Consolidated Statement of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash Flow From (Used in) Operating Activities:
Net earnings	$ 2,966,736	$ 2,806,600
Adjustments to reconcile earnings to net cash from operating activities -
Depreciation	675,097	733,486
Amortization of intangibles	759,605	823,593
Share-based compensation	283,127	252,265
Acquired in-process and collaborations research and development	260,000	272,500
Trade receivables	743,512	515,888
Inventories	(379,478)	49,979
Other, net	(1,016,840)	(940,013)
Net Cash From Operating Activities	4,291,759	4,514,298
Cash Flow From (Used in) Investing Activities:
Acquisitions of property and equipment	(878,446)	(764,770)
Acquisitions of businesses and technology	(780,849)	(187,500)
Purchases of investment securities, net	(2,677,257)	(3,025,737)
Release of restricted funds		1,870,000
Other	12,308	12,370
Net Cash (Used in) Investing Activities	(4,324,244)	(2,095,637)
Cash Flow From (Used in) Financing Activities:
Proceeds from issuance of short-term debt and other	2,696,769	1,174,730
Payment of long-term debt	(54,000)	(2,006,679)
Purchases of common shares	(1,722,114)	(73,845)
Proceeds from stock options exercised, including income tax benefit	1,046,318	269,655
Dividends paid	(1,565,532)	(1,434,376)
Net Cash From (Used in) Financing Activities	401,441	(2,070,515)
Effect of exchange rate changes on cash and cash equivalents	(129,000)	80,501
Net Increase in Cash and Cash Equivalents	239,956	428,647
Cash and Cash Equivalents, Beginning of Year	6,812,820	3,648,371
Cash and Cash Equivalents, End of Period	$ 7,052,776	$ 4,077,018

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Taxes on Earnings

6 Months Ended

Jun. 30, 2012

Taxes on Earnings

Taxes on Earnings

Note 3 — Taxes on Earnings

Taxes on earnings reflect the estimated annual effective rates and include charges for interest and penalties.  The effective tax rates are less than the statutory U.S. federal income tax rate principally due to the benefit of lower statutory tax rates and tax exemptions in several foreign taxing jurisdictions.  In the second quarter of 2011, taxes on earnings reflect the recognition of $519 million of tax benefits as a result of the favorable resolution of various tax positions pertaining to prior years, which also decreased the gross amount of unrecognized tax benefits by approximately $1.2 billion.  In July 2012, Abbott resolved various tax positions pertaining to a prior year.  As a result, in the third quarter of 2012, Abbott expects to recognize approximately $340 to $350 million of tax benefits and the gross amount of unrecognized tax benefits will decrease by approximately $550 million.  Additional cash payments as a result of concluding these various tax matters beyond what is already on deposit with the tax authorities is not expected to be material.

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Supplemental Financial Information (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Mar. 31, 2010
Supplemental Financial Information
Net earnings allocated to common shares	$ 1,711,000,000	$ 1,934,000,000	$ 2,943,000,000	$ 2,796,000,000
Income from resolution of contractual agreement			60,000,000
Payments for settlement of certain government investigations			800,000,000
Component of long-term investment
Long-term Investment Securities	389,901,000		389,901,000		378,225,000
Non-cash impact of tax benefits related to prior period tax positions		519,000,000
Restricted assets, escrow deposit from litigation						1,870,000,000
Equity securities
Component of long-term investment
Long-term Investment Securities	329,000,000		329,000,000		317,000,000
Other
Component of long-term investment
Long-term Investment Securities	61,000,000		61,000,000		61,000,000
Defined Benefit Plans
Component of long-term investment
Benefit plan contributions by employer			320,000,000	320,000,000
Medical and Dental Plans
Component of long-term investment
Benefit plan contributions by employer			$ 40,000,000	$ 40,000,000

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Financial Instruments, Derivatives and Fair Value Measures (Details 4) (Recurring, USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair value
Fair value, asset and liability measures
Equity securities	$ 106	$ 93
Interest rate swap derivative financial instruments, assets	681	598
Foreign currency forward exchange contracts, assets	133	280
Total Assets	920	971
Fair value of hedged long-term debt	7,452	7,427
Foreign currency forward exchange contracts, liabilities	118	181
Contingent consideration related to business combinations	301	423
Total Liabilities	7,871	8,031
Quoted Prices in Active Markets
Fair value, asset and liability measures
Equity securities	106	93
Total Assets	106	93
Significant Other Observable Inputs
Fair value, asset and liability measures
Interest rate swap derivative financial instruments, assets	681	598
Foreign currency forward exchange contracts, assets	133	280
Total Assets	814	878
Fair value of hedged long-term debt	7,452	7,427
Foreign currency forward exchange contracts, liabilities	118	181
Total Liabilities	7,570	7,608
Significant Unobservable Inputs
Fair value, asset and liability measures
Contingent consideration related to business combinations	301	423
Total Liabilities	$ 301	$ 423

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Supplemental Financial Information (Tables)

6 Months Ended

Jun. 30, 2012

Supplemental Financial Information

Components of long-term investments

	June 30		December 31
(dollars in millions)	2012		2011
Equity securities	$	329	$	317
Other	61		61
Total	$	390	$	378