Segment Information

6 Months Ended

Jun. 30, 2013

Segment Information

Segment Information

Note 8 — 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.  As a result of the separation of AbbVie, Abbott no longer has a Proprietary Pharmaceutical Products segment and this business has been removed from the 2012 historical information presented below.  Abbott’s reportable segments are as follows:

Established Pharmaceutical Products — International sales of a broad line of branded generic pharmaceutical products.

Nutritional Products — Worldwide sales of a broad line of adult and pediatric nutritional products.

Diagnostic Products — Worldwide sales of diagnostic systems and tests for blood banks, hospitals, commercial laboratories and alternate-care testing sites.  For segment reporting purposes, the Core Laboratories Diagnostics, Molecular Diagnostics, Point of Care and Ibis diagnostic divisions are aggregated and reported as the Diagnostic Products segment.

VascularProducts — 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.  The cost of some corporate functions and the cost of certain employee benefits are charged to segments at predetermined rates that approximate cost.  Remaining costs, if any, are not allocated to segments.  In addition, effective January 1, 2013, intangible asset amortization is not allocated to operating segments, and intangible assets and goodwill are not included in the measure of each segment’s assets.  After removal of intangible assets and goodwill from the measure of segment assets, the assets of the Established Pharmaceutical Products and the Vascular Products segments totaled $2.5 billion and $1.7 billion, respectively, as of June 30, 2013. The segment information below for 2012 has been adjusted to exclude intangible asset amortization.  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)	2013		2012		2013		2012		2013			2012			2013			2012
Established Pharmaceutical Products	$	1,218	$	1,246	$	2,450	$	2,503	$	258		$	269		$	543		$	562
Nutritional Products	1,704		1,580		3,404		3,142		313			214			655			474
Diagnostic Products	1,135		1,078		2,223		2,120		242			233			503			427
Vascular Products	751		766		1,492		1,569		221			249			408			516
Total Reportable Segments	4,808		4,670		9,569		9,334		1,034			965			2,109			1,979
Other	638		643		1,255		1,263
Net Sales	$	5,446	$	5,313	$	10,824	$	10,597
Corporate functions and benefit plans costs									(127		)	(184		)	(247		)	(343		)
Non-reportable segments									99			105			187			186
Net interest expense									(24		)	(64		)	(49		)	(130		)
Share-based compensation (a)									(52		)	(57		)	(177		)	(185		)
Amortization of intangible assets									(197		)	(195		)	(396		)	(404		)
Other, net (b)									(132		)	(40		)	(272		)	(110		)
Consolidated Earnings from Continuing Operations Before Taxes									$	601		$	530		$	1,155		$	993

(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.

(b) Other, net includes the Net foreign exchange loss (gain) in the Condensed Consolidated Statement of Earnings, expenses associated with restructuring programs and other costs.  For the six months ended June 30, 2012, it also includes income from the resolution of a contractual agreement.