v2.4.0.8
Segment Information
 6 Months Ended
Jun. 30, 2014
Segment Information  
Segment 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 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.  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 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

 

(in millions)

 

2014

 

2013

 

2014

 

2013

 

2014

 

2013

 

2014

 

2013

 

Established Pharmaceutical Products

 

$

1,216

 

$

1,218

 

$

2,367

 

$

2,450

 

$

245

 

$

258

 

$

475

 

$

543

 

Nutritional Products

 

1,731

 

1,704

 

3,362

 

3,404

 

302

 

313

 

585

 

655

 

Diagnostic Products

 

1,189

 

1,135

 

2,306

 

2,223

 

279

 

242

 

501

 

503

 

Vascular Products

 

765

 

751

 

1,503

 

1,492

 

303

 

221

 

524

 

408

 

Total Reportable Segments

 

4,901

 

4,808

 

9,538

 

9,569

 

1,129

 

1,034

 

2,085

 

2,109

 

Other

 

650

 

638

 

1,257

 

1,255

 

 

 

 

 

 

 

 

 

Net Sales

 

$

5,551

 

$

5,446

 

$

10,795

 

$

10,824

 

 

 

 

 

 

 

 

 

Corporate functions and benefit plans costs

 

 

 

 

 

 

 

 

 

(103

)

(127

)

(161

)

(247

)

Non-reportable segments

 

 

 

 

 

 

 

 

 

105

 

99

 

168

 

187

 

Net interest expense

 

 

 

 

 

 

 

 

 

(20

)

(23

)

(43

)

(49

)

Share-based compensation (a)

 

 

 

 

 

 

 

 

 

(49

)

(52

)

(168

)

(177

)

Amortization of intangible assets

 

 

 

 

 

 

 

 

 

(161

)

(197

)

(335

)

(396

)

Other, net (b)

 

 

 

 

 

 

 

 

 

(164

)

(133

)

(386

)

(272

)

Consolidated Earnings from Continuing Operations Before Taxes

 

 

 

 

 

 

 

 

 

$

737

 

$

601

 

$

1,160

 

$

1,155

 

 

 

(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)         The increase in expense from 2013 to 2014 primarily reflects higher charges for cost reduction initiatives.