Segment and Geographic Area Information

3 Months Ended

Mar. 31, 2022

Segment Information

Segment and Geographic Area Information

Note 13 — 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, physicians’ 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, Heart Failure, Vascular, Structural Heart, Neuromodulation 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.

Note 13 — Segment Information (Continued)

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 condensed consolidated financial statements.

	Three Months Ended March 31
	Net Sales to				Operating
	External Customers				Earnings
(in millions)	2022		2021		2022		2021
Established Pharmaceutical Products	$	1,147	$	1,070	$	242	$	169
Nutritional Products		1,894		2,036		251		467
Diagnostic Products		5,286		4,014		2,569		1,701
Medical Devices		3,565		3,320		1,078		1,007
Total Reportable Segments		11,892		10,440		4,140		3,344
Other		3		16
Net sales	$	11,895	$	10,456
Corporate functions and benefit plans costs						(114)		(114)
Net interest expense						(117)		(124)
Share-based compensation (a)						(305)		(288)
Amortization of intangible assets						(512)		(509)
Other, net (b)						(216)		(266)
Earnings before taxes					$	2,876	$	2,043

(a) Approximately 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 for the three months ended March 31, 2022 includes $120 million of charges related to a voluntary recall within the Nutritional Products segment. Other, net for the three months ended March 31, 2021 includes net costs related to certain litigation. Other, net for the three months ended March 31, 2022 and 2021 also includes integration costs associated with the acquisitions of St. Jude Medical and Alere Inc., and restructuring charges.