Segment Information

9 Months Ended

Sep. 30, 2020

Segment Information

Segment Information

Note 14 — 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.

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, physician offices and alternate-care testing sites. For segment reporting purposes, the Core Laboratory Diagnostics, Rapid Diagnostics, Molecular Diagnostics and Point of Care Diagnostics divisions are aggregated and reported as the Diagnostic Products segment.

Medical Devices — Worldwide sales of rhythm management, electrophysiology, heart failure, vascular, structural heart, neuromodulation and diabetes care products.  For segment reporting purposes, the Cardiac Rhythm Management, Electrophysiology and Heart Failure, Vascular, Neuromodulation, Structural Heart and Diabetes Care divisions are aggregated and reported as the Medical Devices segment.

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.  In addition, 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.

The following segment information has been prepared in accordance with the internal accounting policies of Abbott, as described above, and is not presented in accordance with generally accepted accounting principles applied to the consolidated financial statements.

	Net Sales to External Customers								Operating Earnings
	Three Months				Nine Months				Three Months				Nine Months
	Ended September 30				Ended September 30				Ended September 30				Ended September 30
(in millions)	2020		2019		2020		2019		2020		2019		2020		2019
Established Pharmaceutical Products	$	1,099	$	1,212	$	3,156	$	3,312	$	201	$	281	$	588	$	654
Nutritional Products		1,924		1,874		5,711		5,541		394		414		1,327		1,241
Diagnostic Products		2,640		1,909		6,460		5,655		875		456		1,802		1,356
Medical Devices		3,170		3,065		8,530		9,035		928		958		2,122		2,722
Total Reportable Segments		8,833		8,060		23,857		23,543		2,398		2,109		5,839		5,973
Other		20		16		50		47
Net sales	$	8,853	$	8,076	$	23,907	$	23,590
Corporate functions and benefit plan costs										(129)		(131)		(367)		(332)
Net interest expense										(127)		(143)		(373)		(437)
Share-based compensation (a)										(100)		(94)		(448)		(434)
Amortization of intangible assets										(510)		(484)		(1,624)		(1,453)
Other, net (b)										(111)		(154)		(447)		(480)
Earnings from continuing operations before taxes									$	1,421	$	1,103	$	2,580	$	2,837

(a) Approximately 50 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 for the three and nine months ended September 30, 2020 and 2019 includes integration costs associated with the acquisition of St. Jude Medical and Alere, and restructuring charges.  Other, net for the three and nine months ended September 30, 2020 also includes costs related to asset impairments, partially offset by income from the settlement of litigation.  Other, net for the nine months ended September 30, 2019 includes charges associated with R&D assets acquired and immediately expensed.