Segment and Geographic Area Information

12 Months Ended

Dec. 31, 2020

Segment and Geographic Area Information

Segment and Geographic Area Information

Note 16 — Segment and Geographic Area 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 and alternate-care testing sites.  For segment reporting purposes, the Core Laboratories Diagnostics, Rapid Diagnostics, Molecular Diagnostics and Point of Care 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.  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 are not presented in accordance with generally accepted accounting principles applied to the consolidated financial statements.

	Net Sales to External Customers (a)						Operating Earnings (a)
(in millions)	2020		2019		2018		2020		2019		2018
Established Pharmaceutical Products	$	4,303	$	4,486	$	4,422	$	794	$	904	$	894
Nutritional Products		7,647		7,409		7,229		1,751		1,705		1,652
Diagnostic Products		10,805		7,713		7,495		3,725		1,912		1,868
Medical Devices		11,787		12,239		11,370		3,038		3,769		3,500
Total Reportable Segments		34,542		31,847		30,516	$	9,308	$	8,290	$	7,914
Other		66		57		62
Total	$	34,608	$	31,904	$	30,578

(a) Net sales and operating earnings were unfavorably affected by the impact of foreign exchange in 2020, 2019 and 2018.

Note 16 — Segment and Geographic Area Information (Continued)

(in millions)	2020		2019		2018
Total Reportable Segment Operating Earnings	$	9,308	$	8,290	$	7,914
Corporate functions and benefit plan costs		(518)		(468)		(618)
Net interest expense		(500)		(576)		(721)
Loss on extinguishment of debt		—		(63)		(167)
Share-based compensation		(546)		(519)		(477)
Amortization of intangible assets		(2,132)		(1,936)		(2,178)
Other, net (b)		(644)		(651)		(880)
Earnings from Continuing Operations Before Taxes	$	4,968	$	4,077	$	2,873

(b) Other, net includes integration costs associated with the acquisition of St. Jude Medical and Alere and restructuring charges in 2020, 2019 and 2018.  Other, net in 2020 also includes costs related to asset impairments, partially offset by income from the settlement of litigation. Other, net in 2018 also includes inventory step-up amortization associated with the acquisition of Alere. Charges for restructuring actions and other cost reduction initiatives were approximately $125 million in 2020, $215 million in 2019 and $153 million in 2018.

							Additions to
	Depreciation						Property and Equipment						Total Assets
(in millions)	2020		2019		2018		2020		2019		2018		2020		2019		2018
Established Pharmaceuticals	$	88	$	98	$	92	$	109	$	109	$	131	$	2,888	$	2,858	$	2,664
Nutritionals		143		139		150		201		141		86		3,478		3,274		3,071
Diagnostics		488		403		397		1,263		726		609		7,696		5,235		4,464
Medical Devices		281		266		294		402		532		408		6,893		6,640		5,886
Total Reportable Segments		1,000		906		933		1,975		1,508		1,234	$	20,955	$	18,007	$	16,085
Other		195		172		167		218		160		160
Total	$	1,195	$	1,078	$	1,100	$	2,193	$	1,668	$	1,394

(in millions)	2020		2019		2018
Total Reportable Segment Assets	$	20,955	$	18,007	$	16,085
Cash and investments		7,969		5,023		4,983
Goodwill and intangible assets		38,528		40,220		42,196
All other		5,096		4,637		3,909
Total Assets	$	72,548	$	67,887	$	67,173

Note 16 — Segment and Geographic Area Information (Continued)

	Net Sales to External
	Customers (c)
(in millions)	2020		2019		2018
United States	$	13,022	$	11,398	$	10,839
Germany		2,108		1,751		1,619
China		1,965		2,346		2,311
Japan		1,386		1,435		1,326
India		1,323		1,397		1,333
Switzerland		1,140		1,068		1,005
The Netherlands		1,084		975		930
All Other Countries		12,580		11,534		11,215
Consolidated	$	34,608	$	31,904	$	30,578

(c)Sales by country are based on the country that sold the product.

Long-lived assets on a geographic basis primarily include property and equipment. It excludes goodwill, intangible assets, deferred tax assets, and financial instruments. At December 31, 2020 and 2019, long-lived assets totaled $11.7 billion and $10.2 billion, respectively, and in the United States such assets totaled $6.1 billion and $5.1 billion, respectively. Long-lived asset balances associated with other countries were not material on an individual country basis in either of the two years.