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Supplemental Financial Information

9 Months Ended

Sep. 30, 2020

Note 4 — Supplemental Financial Information

Shares of 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. Earnings from Continuing Operations allocated to common shares for the three months ended September 30, 2020 and 2019 were $1.226 billion and $954 million, respectively, and for the nine months ended September 30, 2020 and 2019 were $2.302 billion and $2.622 billion, respectively. Net earnings allocated to common shares for the three months ended September 30, 2020 and 2019 were $1.226 billion and $954 million, respectively, and for the nine months ended September 30, 2020 and 2019 were $2.322 billion and $2.622 billion, respectively.

Earnings from discontinued operations, net of tax, in the first nine months of 2020 include the recognition of $20 million of tax benefits as a result of the resolution of various tax positions related to the previous sale of a business that was reported as a discontinued operation.

Other, net in Net cash from operating activities in the Condensed Consolidated Statement of Cash Flows for the first nine months of 2020 includes $350 million of pension contributions and the payment of cash taxes of approximately $700 million. The first nine months of 2019 includes $337 million of pension contributions and the payment of cash taxes of approximately $775 million.

The following summarizes the activity for the first nine months of 2020 related to the allowance for doubtful accounts as of September 30, 2020:


(in millions)
Allowance for Doubtful Accounts
Balance at December 31, 2019	$	228
Impact of adopting ASU 2016-13		7
Provisions/charges to income		63
Amounts charged off and other deductions		(14)
Balance at September 30, 2020	$	284

The allowance for doubtful accounts reflects the current estimate of credit losses expected to be incurred over the life of the accounts receivable. Abbott considers various factors in establishing, monitoring, and adjusting its allowance for doubtful accounts, including the aging of the accounts and aging trends, the historical level of charge-offs, and specific exposures related to particular customers. Abbott also monitors other risk factors and forward-looking information, such as country risk, when determining credit limits for customers and establishing adequate allowances.

The components of long-term investments as of September 30, 2020 and December 31, 2019 are as follows:


	September 30,		December 31,
(in millions)	2020		2019
Long-term Investments
Equity securities	$	755	$	836
Other		48		47
Total	$	803	$	883

Abbott’s long-term investments as of September 30, 2020 declined versus the balance as of December 31, 2019 due to investment impairments totaling approximately $110 million, recorded in Other (income) expense, net within the Condensed Consolidated Statement of Earnings, which was partially offset by approximately $30 million of additional investments during the first nine months of 2020.

Abbott's equity securities as of September 30, 2020 include approximately $336 million of investments in mutual funds that are held in a rabbi trust and were acquired as part of the St. Jude Medical, Inc. (St. Jude Medical) business acquisition. These investments, which are specifically designated as available for the purpose of paying benefits under a deferred compensation plan, are not available for general corporate purposes and are subject to creditor claims in the event of insolvency.

Abbott also holds certain investments as of September 30, 2020 with a carrying value of approximately $292 million that are accounted for under the equity method of accounting and other equity investments with a carrying value of approximately $112 million that do not have a readily determinable fair value. The $112 million carrying value is net of an approximately $60 million impairment of an investment in the second quarter of 2020 for which Abbott had previously recorded an unrealized gain of approximately $50 million in 2018.

In the first quarter of 2019, in conjunction with the acquisition of Cephea Valve Technologies, Inc., Abbott acquired a research & development (R&D) asset valued at $102 million, which was immediately expensed. The $102 million of expense was recorded in the R&D line of Abbott's Condensed Consolidated Statement of Earnings.