First-quarter reported sales growth of 16.7 percent; GAAP EPS from continuing operations of $0.23
ABBOTT PARK, Ill., April 18, 2018 /PRNewswire/ -- Abbott (NYSE: ABT) today announced financial results for the first quarter ended March 31, 2018.
- First-quarter worldwide sales of $7.4 billion increased 16.7 percent on a reported basis and 6.9 percent on an organic* basis.
- Reported diluted EPS from continuing operations under GAAP was $0.23 in the first quarter.
- Adjusted diluted EPS from continuing operations, which excludes specified items, was $0.59, at the upper end of Abbott's previous guidance range.
- Abbott projects full-year 2018 diluted EPS from continuing operations of $1.23 to $1.33 on a GAAP basis1. Projected full-year adjusted diluted EPS from continuing operations remains $2.80 to $2.90, reflecting 14.0 percent growth at the midpoint.
- In January, Abbott announced U.S. FDA approval for magnetic resonance (MR)-conditional labeling for its Quadra AssuraTM and Quadra Assura MPTM cardiac resynchronization therapy defibrillator (CRT-D) devices and its Fortify AssuraTM implantable cardioverter defibrillator (ICD). With these approvals, Abbott has MR-conditional labeling for its suite of pacemaker, ICD and CRT-D devices.
- In January, Abbott announced that FreeStyle® Libre, Abbott's revolutionary sensor-based continuous glucose monitoring system, is now available and approved for coverage by the U.S. Center for Medicare and Medicaid Services.
- In March, Abbott announced clinical trial data from the MOMENTUM 3 study, which demonstrated that its HeartMate 3TM left ventricular assist device (LVAD) improved survival and clinical outcomes at two years for patients with advanced heart failure. The trial data will be submitted to the U.S. FDA to support consideration to expand the current HeartMate 3 indication to include long-term use.
"We're off to a strong start to the year as we forecasted," said Miles D. White, chairman and chief executive officer, Abbott. "We're particularly pleased with the continued strong growth in Medical Devices and improving performance in our Nutrition business."
* See note on organic growth below.
FIRST-QUARTER BUSINESS OVERVIEW
Note: Management believes that measuring sales growth rates on an organic basis is an appropriate way for investors to best understand the underlying performance of the business.
Organic sales growth:
- Excludes prior year results for the Abbott Medical Optics (AMO) and St. Jude Medical vascular closure businesses, which were divested during the first quarter 2017;
- Excludes the current and prior year results for Rapid Diagnostics, which reflect results for Alere Inc., which was acquired on Oct. 3, 2017; and
- Excludes the impact of foreign exchange.
Following are sales by business segment and commentary for the first quarter:
Total Company
-------------
($ in millions)
% Change vs. 1Q17
-----------------
Sales 1Q18 Reported Organic
---------- -------- -------
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
---- ----- ----- ----- ----- ----- -----
Total * 2,675 4,715 7,390 15.1 17.6 16.7 5.0 8.0 6.9
----- ----- ----- ---- ---- ---- --- --- ---
Nutrition 758 998 1,756 3.8 9.5 7.0 3.8 5.5 4.7
Diagnostics 700 1,137 1,837 89.2 44.3 58.7 1.8 7.3 5.5
Established Pharmaceuticals -- 1,044 1,044 n/a 9.9 9.9 n/a 6.8 6.8
Medical Devices 1,209 1,535 2,744 6.4 22.0 14.6 6.9 11.7 9.4
* Total 2018 Abbott sales from
continuing operations include
Other Sales of $9 million.
n/a = Not Applicable.
Note: In order to compute
results excluding the impact
of exchange rates, current
year U.S. dollar sales are
multiplied or divided, as
appropriate, by the current
year average foreign exchange
rates and then those amounts
are multiplied or divided, as
appropriate, by the prior year
average foreign exchange
rates.
First-quarter 2018 worldwide sales of $7.4 billion increased 16.7 percent on a reported basis. On an organic basis, worldwide sales increased 6.9 percent. Refer to tables titled "Non-GAAP Reconciliation of Adjusted Historical Revenue" for a reconciliation of adjusted historical revenue.
Nutrition
---------
($ in millions)
% Change vs. 1Q17
-----------------
Sales 1Q18 Reported Organic
---------- -------- -------
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
---- ----- ----- ----- ----- ----- -----
Total 758 998 1,756 3.8 9.5 7.0 3.8 5.5 4.7
--- --- ----- --- --- --- --- --- ---
Pediatric 448 546 994 3.7 10.5 7.3 3.7 6.3 5.1
Adult 310 452 762 4.0 8.4 6.6 4.0 4.4 4.3
Worldwide Nutrition sales increased 7.0 percent on a reported basis in the first quarter, including a favorable 2.3 percent effect of foreign exchange, and increased 4.7 percent on an organic basis.
Worldwide Pediatric Nutrition sales increased 7.3 percent on a reported basis in the first quarter, including a favorable 2.2 percent effect of foreign exchange, and increased 5.1 percent on an organic basis. International sales increased 10.5 percent on a reported basis, including a favorable 4.2 percent effect of foreign exchange, and increased 6.3 percent on an organic basis, which was led by strong growth across several countries in Asia, including Greater China. In the U.S., continued above-market growth was led by market share gains in the infant nutrition category.
Worldwide Adult Nutrition sales increased 6.6 percent on a reported basis in the first quarter, including a favorable 2.3 percent effect of foreign exchange, and increased 4.3 percent on an organic basis. Worldwide sales growth was led by Ensure®, Abbott's market-leading complete and balanced nutrition brand, and Glucerna®, Abbott's market-leading diabetes-specific nutrition brand.
Diagnostics
-----------
($ in millions)
% Change vs. 1Q17
-----------------
Sales 1Q18 Reported Organic
---------- -------- -------
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
---- ----- ----- ----- ----- ----- -----
Total * 700 1,137 1,837 89.2 44.3 58.7 1.8 7.3 5.5
--- ----- ----- ---- ---- ---- --- --- ---
Core Laboratory 228 791 1,019 5.6 13.8 11.9 5.6 6.5 6.3
Molecular 39 79 118 (13.8) 17.5 5.0 (13.8) 11.4 1.3
Point of Care 110 31 141 0.6 23.0 4.8 0.6 18.6 4.0
Rapid Diagnostics * 323 236 559 n/m n/m n/m n/m n/m n/m
* Rapid Diagnostics reflects
sales from Alere Inc., which
was acquired on Oct. 3, 2017.
Organic growth rates above
exclude results from the
Rapid Diagnostics business.
n/m = Percent change is not
meaningful.
Worldwide Diagnostics sales increased 58.7 percent on a reported basis in the first quarter. On an organic basis, sales increased 5.5 percent. Refer to tables titled "Non-GAAP Reconciliation of Adjusted Historical Revenue" for a reconciliation of adjusted historical revenue.
Core Laboratory Diagnostics sales increased 11.9 percent on a reported basis in the first quarter, including a favorable 5.6 percent effect of foreign exchange, and increased 6.3 percent on an organic basis, reflecting continued above-market growth driven by share gains in the U.S. and internationally.
Molecular Diagnostics sales increased 5.0 percent on a reported basis in the first quarter, including a favorable 3.7 percent effect of foreign exchange, and increased 1.3 percent on an organic basis. As expected, strong growth in infectious disease testing, Abbott's core area of focus in the molecular diagnostics market, was partially offset by a planned scale down in other testing areas, primarily in the U.S.
Point of Care Diagnostics sales increased 4.8 percent on a reported basis in the first quarter, including a favorable 0.8 percent effect of foreign exchange, and increased 4.0 percent on an organic basis, led by strong international growth of Abbott's i-STAT® handheld system.
Rapid Diagnostics worldwide sales of $559 million were led by infectious disease testing, including strong flu and strep testing volumes in the U.S.
Established Pharmaceuticals
---------------------------
($ in millions)
% Change vs. 1Q17
-----------------
Sales 1Q18 Reported Organic
---------- -------- -------
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
---- ----- ----- ----- ----- ----- -----
Total -- 1,044 1,044 n/a 9.9 9.9 n/a 6.8 6.8
--- ----- ----- ---- --- --- ---- --- ---
Key Emerging
Markets -- 793 793 n/a 8.7 8.7 n/a 6.8 6.8
Other -- 251 251 n/a 13.9 13.9 n/a 6.6 6.6
Established Pharmaceuticals sales increased 9.9 percent on a reported basis in the first quarter, including a favorable 3.1 percent effect of foreign exchange, and increased 6.8 percent on an organic basis.
Key Emerging Markets comprise several countries that represent the most attractive long-term growth opportunities for Abbott's branded generics product portfolio. Sales in these geographies increased 8.7 percent on a reported basis in the first quarter, including a favorable 1.9 percent effect of foreign exchange, and increased 6.8 percent on an organic basis. Sales growth was led by double-digit growth across several geographies, including India, China and Brazil.
Medical Devices
---------------
($ in millions)
% Change vs. 1Q17
-----------------
Sales 1Q18 Reported Organic
---------- -------- -------
U.S. Int'l Total U.S. Int'l Total U.S. Int'l Total
---- ----- ----- ----- ----- ----- -----
Total 1,209 1,535 2,744 6.4 22.0 14.6 6.9 11.7 9.4
----- ----- ----- --- ---- ---- --- ---- ---
Cardiovascular and Neuromodulation 1,123 1,200 2,323 5.8 15.2 10.5 6.4 6.0 6.2
Rhythm Management 264 271 535 1.3 8.3 4.7 1.3 (1.2) -
Electrophysiology 182 209 391 25.8 22.1 23.8 25.8 12.5 18.6
Heart Failure 114 39 153 4.3 17.0 7.3 4.3 6.7 4.8
Vascular 286 453 739 (6.0) 13.7 5.2 (4.1) 5.9 1.6
Structural Heart 109 184 293 1.9 23.4 14.5 1.9 11.5 7.5
Neuromodulation 168 44 212 23.6 13.0 21.3 23.6 2.0 18.8
Diabetes Care 86 335 421 14.5 54.5 44.2 14.5 39.2 32.9
Worldwide Medical Devices sales increased 14.6 percent on a reported basis in the first quarter. On an organic basis, sales increased 9.4 percent. Refer to tables titled "Non-GAAP Reconciliation of Adjusted Historical Revenue" for a reconciliation of adjusted historical revenue.
In Cardiovascular and Neuromodulation, worldwide sales growth in the first quarter was led by double-digit growth in Electrophysiology and Neuromodulation. Growth in Electrophysiology includes share gains from the recent U.S. launch of Abbott's Confirm RxTM Insertable Cardiac Monitor (ICM), the world's first and only smartphone-compatible ICM designed to help physicians remotely identify cardiac arrhythmias. In Heart Failure, sales growth was led by market uptake of Abbott's HeartMate 3 system. In the quarter, Abbott announced clinical trial data from the MOMENTUM 3 study demonstrating that its HeartMate 3 LVAD improved survival and clinical outcomes at 2 years for patients with advanced heart failure. The trial data will be submitted to the U.S. FDA to support consideration to expand the current HeartMate 3 indication to include long-term use. Growth in Structural Heart was driven by MitraClip®, Abbott's market-leading device for the minimally-invasive treatment of mitral regurgitation. In March, Abbott announced MitraClip was granted national reimbursement in Japan, which enables greater access for patients to this life-altering therapy. In Neuromodulation, strong double-digit growth was led by a portfolio of recently launched products for the treatment of chronic pain and movement disorders.
In Diabetes Care, worldwide sales increased 44.2 percent on a reported basis in the first quarter, including a favorable 11.3 percent effect of foreign exchange, and increased 32.9 percent on an organic basis. Strong double-digit growth was led by FreeStyle Libre, Abbott's revolutionary sensor-based continuous glucose monitoring (CGM) system, which removes the need for routine fingersticks2 for people with diabetes. During the quarter, Abbott announced that the FreeStyle LibreLink3,4 app is available in Europe for use with compatible smartphones, which allows people to access glucose data directly from their phones and eliminates the need to carry a separate scanning device.
ABBOTT'S FULL-YEAR EARNINGS-PER-SHARE GUIDANCE
Abbott projects 2018 diluted earnings per share from continuing operations under Generally Accepted Accounting Principles (GAAP) of $1.23 to $1.33.
Abbott forecasts net specified items for the full year 2018 of approximately $1.57 per share. Specified items include intangible amortization expense, acquisition-related expenses, charges associated with cost reduction initiatives and other expenses.
Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $2.80 to $2.90 for the full year 2018.
Abbott is issuing second-quarter 2018 guidance for diluted earnings per share from continuing operations under GAAP of $0.33 to $0.35. Abbott forecasts specified items for the second quarter 2018 of $0.37 primarily related to intangible amortization, acquisition-related expenses, cost reduction initiatives and other expenses. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $0.70 to $0.72 for the second quarter.
ABBOTT DECLARES 377TH CONSECUTIVE QUARTERLY DIVIDEND
On Feb. 16, 2018, the board of directors of Abbott declared the company's quarterly dividend of $0.28 per share. Abbott's cash dividend is payable May 15, 2018, to shareholders of record at the close of business on April 13, 2018.
Abbott has increased its dividend payout for 46 consecutive years and is a member of the S&P 500 Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.
About Abbott:
Abbott is a global healthcare company devoted to improving life through the development of products and technologies that span the breadth of healthcare. With a portfolio of leading, science-based offerings in diagnostics, medical devices, nutritionals and branded generic pharmaceuticals, Abbott serves people in more than 150 countries and employs approximately 99,000 people.
Visit Abbott at www.abbott.com and connect with us on Twitter at @AbbottNews.
Abbott will webcast its live first-quarter earnings conference call through its Investor Relations website at www.abbottinvestor.com at 8 a.m. Central time today. An archived edition of the webcast will be available later that day.
-- Private Securities Litigation Reform Act of 1995 --
A Caution Concerning Forward-Looking Statements
Some statements in this news release may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Abbott cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Economic, competitive, governmental, technological and other factors that may affect Abbott's operations are discussed in Item 1A, "Risk Factors'' to our Annual Report on Securities and Exchange Commission Form 10-K for the year ended Dec. 31, 2017, and are incorporated by reference. Abbott undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.
(1) Full-year 2018 guidance for
diluted EPS from continuing
operations on a GAAP basis
represents 540.0 percent
growth at the midpoint of the
range.
(2) Fingersticks are required for
treatment decisions when you
see Check Blood Glucose
symbol, when symptoms do not
match system readings, when
you suspect readings may be
inaccurate, or when you
experience symptoms that may
be due to high or low blood
glucose.
(3) Use of the FreeStyle LibreLink
app requires registration with
LibreView, a service provided
by Abbott and Newyu, Inc.
4 The FreeStyle LibreLink app is
compatible with NFC enabled
phones running Android OS 5.0
or higher and with iPhone 7
and later running iOS 11 and
later.
Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Earnings
First Quarter Ended March 31, 2018 and 2017
(in millions, except per share data)
(unaudited)
1Q18 1Q17 %
Change
------
Net Sales $7,390 $6,335 16.7
Cost of products sold,
excluding amortization
expense 3,067 3,062 0.1
Amortization of intangible
assets 584 522 12.0
Research and development 589 553 6.4
Selling, general, and
administrative 2,542 2,440 4.2
Total Operating Cost and
Expenses 6,782 6,577 3.1
----- -----
Operating earnings (loss) 608 (242) n/m 1)
Interest expense, net 199 204 (2.1)
Net foreign exchange (gain)
loss (3) (16) (79.9)
Debt extinguishment costs 14 -- n/m
Other (income) expense, net (33) (1,166) (97.1) 1) 2)
--- ------
Earnings from Continuing
Operations before taxes 431 736 (41.5)
Tax expense on Earnings from
Continuing Operations 22 350 (93.8) 3)
Earnings from Continuing
Operations 409 386 6.1
Earnings from Discontinued
Operations, net of taxes 9 33 (74.7) 4)
--- ---
Net Earnings $418 $419 (0.4)
==== ====
Earnings from Continuing
Operations, excluding
Specified Items, as described
below $1,050 $843 24.5 5)
====== ====
Diluted Earnings per Common
Share from:
Continuing Operations $0.23 $0.22 4.5
Discontinued Operations -- 0.02 n/m 4)
--- ----
Total $0.23 $0.24 (4.2)
===== =====
Diluted Earnings per Common
Share from Continuing
Operations, excluding
Specified Items, as described
below $0.59 $0.48 22.9 5)
===== =====
Average Number of Common
Shares Outstanding
Plus Dilutive Common Stock
Options 1,765 1,735
NOTES:
See tables below for an
explanation of certain non-
GAAP financial information.
n/m = Percent change is not
meaningful.
See footnotes below.
1) Effective January 1, 2018, Abbott
adopted Accounting Standards Update
2017-07, Compensation - Retirement
Benefits (Topic 715): Improving the
Presentation of Net Periodic Pension
Cost and Net Periodic Postretirement
Benefit Cost, which resulted in a
retrospective reclassification of
$40 million of net pension-related
income from Operating earnings
(loss) to Other (income) expense,
net for the first quarter of 2017.
2) 2017 Other (income) expense, net
includes a pretax gain of $1.151
billion from the sale of the AMO
business.
3) 2018 Tax expense on Earnings from
Continuing Operations includes the
impact of approximately $65 million
in excess tax benefits associated
with share-based compensation.
2017 Tax expense on Earnings from
Continuing Operations includes the
tax associated with a $1.151
billion pretax gain on the sale of
the AMO business.
4) 2018 and 2017 Earnings and Diluted
Earnings per Common Share from
Discontinued Operations, net of
taxes reflect the impact of net tax
benefits of $9 million and $33
million, respectively, as a result
of the resolution of various tax
positions from prior years.
5) 2018 Net Earnings and Diluted
Earnings per Common Share from
Continuing Operations, excluding
Specified Items, excludes net
after-tax charges of $641 million,
or $0.36 per share, for intangible
amortization expense and other
expenses primarily associated with
acquisitions and restructuring
actions.
2017 Net Earnings and Diluted
Earnings per Common Share from
Continuing Operations, excluding
Specified Items, excludes net
after-tax charges of $457 million,
or $0.26 per share, for intangible
amortization expense and other
expenses primarily associated with
acquisitions and restructuring
actions, partially offset by a gain
on the sale of the AMO business.
Abbott Laboratories and Subsidiaries
Non-GAAP Reconciliation of Financial Information From Continuing Operations
First Quarter Ended March 31, 2018 and 2017
(in millions, except per share data)
(unaudited)
1Q18
----
As Specified As % to
Reported Items Adjusted Sales
(GAAP)
-----
Intangible Amortization $584 $(584) --
Gross Margin 3,739 647 $4,386 59.3%
R&D 589 (43) 546 7.4%
SG&A 2,542 (90) 2,452 33.2%
Net foreign exchange (gain) loss (3) (1) (4)
Debt extinguishment costs 14 (14) --
Other (income) expense, net (33) (2) (35)
Earnings from Continuing Operations
before taxes 431 797 1,228
Tax expense on Earnings from
Continuing Operations 22 156 178
Earnings from Continuing Operations 409 641 1,050
Diluted Earnings per Share from
Continuing Operations $0.23 $0.36 $0.59
Specified items reflect intangible amortization expense of $584 million and other expenses of $213 million, primarily associated with acquisitions, restructuring actions and other expenses. See tables titled "Details of Specified Items" for additional details regarding specified items.
1Q17
----
As Specified As % to
Reported Items Adjusted Sales
(GAAP)
-----
Intangible
Amortization $522 $(522) --
Gross
Margin 2,751 984 $3,735 59.0%
R&D 553 (40) 513 8.1%
SG&A 2,440 (367) 2,073 32.7%
Interest
expense,
net 204 (17) 187
Other
(income)
expense,
net (1,166) 1,134 (32)
Earnings
from
Continuing
Operations
before
taxes 736 274 1,010
Tax
expense
on
Earnings
from
Continuing
Operations 350 (183) 167
Earnings
from
Continuing
Operations 386 457 843
Diluted
Earnings
per
Share
from
Continuing
Operations $0.22 $0.26 $0.48
Note: The As Reported and As
Adjusted amounts reflect the
impact of adopting the new
accounting rules related to the
recognition of retirement
benefits - See Footnote 1 on
table titled "Condensed
Consolidated Statement of
Earnings" for additional
information.
Specified items reflect intangible amortization expense of $522 million and other expenses of $903 million, primarily associated with acquisitions, including approximately $390 million of inventory step-up amortization related to St. Jude Medical, charges related to restructuring actions and other expenses, partially offset by a gain of $1.151 billion from the sale of the AMO business. See tables titled "Details of Specified Items" for additional details regarding specified items.
A reconciliation of the first-quarter tax rates for continuing operations for 2018 and 2017 is shown below:
1Q18
----
($ in millions) Pre-Tax Taxes on Tax
Income Earnings Rate
------ -------- ----
As reported (GAAP) $431 $22 5.0% 1)
Specified items 797 156
--- ---
Excluding specified items $1,228 $178 14.5%
1Q17
----
($ in millions) Pre-Tax Taxes on Tax
Income Earnings Rate
------ -------- ----
As reported (GAAP) $736 $350 47.6% 2)
Specified items 274 (183)
--- ----
Excluding specified items $1,010 $167 16.5%
1) Reported tax rate on a GAAP basis
for 2018 includes the impact of
approximately $65 million in excess
tax benefits associated with share-
based compensation.
2) Reported tax rate on a GAAP basis
for 2017 includes the impact of
taxes associated with a $1.151
billion pretax gain on the sale of
the AMO business.
Abbott Laboratories and Subsidiaries
Non-GAAP Reconciliation of Adjusted Historical Revenue
First Quarter Ended March 31, 2018 and 2017
($ in millions) (unaudited)
1Q18 1Q17 % Change vs. 1Q17
---- ---- -----------------
Abbott Adjusted Abbott Divested Adjusted Non-GAAP
Reported Revenue Reported Businessesa) Revenue
-------- ------- -------- ----------- -------
Rapid Reported Reported Organicb)
Diagnostics
-----------
Total Company 7,390 (559) 6,831 6,335 (187) 6,148 16.7 11.1 6.9
U.S. 2,675 (323) 2,352 2,324 (84) 2,240 15.1 5.0 5.0
Int'l 4,715 (236) 4,479 4,011 (103) 3,908 17.6 14.6 8.0
Total Diagnostics 1,837 (559) 1,278 1,158 -- 1,158 58.7 10.4 5.5
U.S. 700 (323) 377 371 -- 371 89.2 1.8 1.8
Int'l 1,137 (236) 901 787 -- 787 44.3 14.4 7.3
Rapid Diagnostics 559 (559) -- -- -- -- n/m n/m n/m
U.S. 323 (323) -- -- -- -- n/m n/m n/m
Int'l 236 (236) -- -- -- -- n/m n/m n/m
Total Medical Devices 2,744 -- 2,744 2,395 (12) 2,383 14.6 15.1 9.4
U.S. 1,209 -- 1,209 1,136 (6) 1,130 6.4 6.9 6.9
Int'l 1,535 -- 1,535 1,259 (6) 1,253 22.0 22.6 11.7
Cardiovascular and
Neuromodulation 2,323 -- 2,323 2,103 (12) 2,091 10.5 11.1 6.2
U.S. 1,123 -- 1,123 1,061 (6) 1,055 5.8 6.4 6.4
Int'l 1,200 -- 1,200 1,042 (6) 1,036 15.2 15.9 6.0
Vascular 739 -- 739 703 (12) 691 5.2 6.9 1.6
U.S. 286 -- 286 304 (6) 298 (6.0) (4.1) (4.1)
Int'l 453 -- 453 399 (6) 393 13.7 15.3 5.9
a) Reflects sales related to
the AMO and St. Jude Medical
vascular closure businesses
prior to divesting in the
first quarter 2017.
b) In order to compute results
excluding the impact of
exchange rates, current year
U.S. dollar sales are
multiplied or divided, as
appropriate, by the current
year average foreign exchange
rates and then those amounts
are multiplied or divided, as
appropriate, by the prior year
average foreign exchange
rates.
Abbott Laboratories and Subsidiaries
Details of Specified Items
First Quarter Ended March 31, 2018
(in millions, except per share data)
(unaudited)
Acquisition or Restructuring Intangible Other (c) Total
Divestiture- and Cost Amortization Specifieds
related (a) Reduction
Initiatives (b)
--------------
Gross Margin $45 $18 $584 $ -- $647
R&D (16) (2) -- (25) (43)
SG&A (86) (4) -- -- (90)
Net foreign exchange (gain)
loss -- (1) -- -- (1)
Debt extinguishment costs -- -- -- (14) (14)
Other (income) expense, net (2) -- -- -- (2)
--- --- --- --- ---
Earnings from Continuing
Operations before taxes $149 $25 $584 $39 797
---- --- ---- ---
Tax expense on Earnings from Continuing Operations (d) 156
---
Earnings from Continuing
Operations $641
====
Diluted Earnings per Share from Continuing Operations $0.36
=====
The table above provides additional details
regarding the specified items described on
tables titled "Non-GAAP Reconciliation of
Financial Information From Continuing
Operations."
a) Acquisition-
related
expenses
include costs
for legal,
accounting,
tax, and other
services
related to
business
acquisitions,
integration
costs which
represent
incremental
costs directly
related to
integrating
the acquired
businesses and
include
expenditures
for
consulting,
retention,
severance, and
the
integration of
systems,
processes and
business
activities,
fair value
adjustments to
contingent
consideration
related to a
business
acquisition,
and inventory
step-up
amortization.
b) Restructuring
and cost
reduction
initiative
expenses
include
severance,
outplacement,
inventory
write-downs,
asset
impairments,
accelerated
depreciation,
and other
direct costs
associated
with specific
restructuring
plans and cost
reduction
initiatives.
Restructuring
and cost
reduction
plans consist
of distinct
initiatives to
streamline
operations
including the
consolidation
and
rationalization
of business
activities and
facilities,
workforce
reductions,
the transfer
of product
lines between
manufacturing
facilities,
and the
transfer of
other business
activities
between sites.
c) Other expense
relates to the
acquisition of
an R&D asset
and the cost
associated
with the early
extinguishment
of debt.
d) Reflects the
net tax
benefit
associated
with the
specified
items and
excess tax
benefits
associated
with share-
based
compensation.
Abbott Laboratories and Subsidiaries
Details of Specified Items
First Quarter Ended March 31, 2017
(in millions, except per share data)
(unaudited)
Acquisition or Restructuring Intangible Total
Divestiture- and Cost Amortization Specifieds
related (a) Reduction
Initiatives (b)
--------------
Gross Margin $406 $56 $522 $984
R&D (14) (26) -- (40)
SG&A (352) (15) -- (367)
Interest expense, net (17) -- -- (17)
Other (income)
expense, net 1,168 (34) -- 1,134
----- --- --- -----
Earnings from
Continuing Operations
before taxes $(379) $131 $522 274
----- ---- ----
Tax expense on Earnings from Continuing Operations (c) (183)
----
Earnings from
Continuing Operations $457
====
Diluted Earnings per Share from Continuing Operations $0.26
=====
The table above provides additional details
regarding the specified items described on
tables titled "Non-GAAP Reconciliation of
Financial Information From Continuing
Operations."
a) Acquisition-related expenses
include bankers' fees and costs for
legal, accounting, tax, and other
services related to business
acquisitions, integration costs
which represent incremental costs
directly related to integrating the
acquired businesses and include
expenditures for consulting,
retention, severance, and the
integration of systems, processes
and business activities, fair value
adjustments to contingent
consideration related to a business
acquisition, and inventory step-up
amortization. The specified items
in interest expense include
amortization expense associated
with acquisition-related bridge
facility fees. Divestiture-related
expenses include incremental costs
to separate the divested businesses
as well as bankers' fees and costs
for legal, accounting, tax, and
other services related to the
divestitures.
b) Restructuring and cost reduction
initiative expenses include
severance, outplacement, inventory
write-downs, asset impairments,
accelerated depreciation, and other
direct costs associated with
specific restructuring plans and
cost reduction initiatives.
Restructuring and cost reduction
plans consist of distinct
initiatives to streamline
operations including the
consolidation and rationalization
of business activities and
facilities, workforce reductions,
the transfer of product lines
between manufacturing facilities,
and the transfer of other business
activities between sites. Any gains
related to the divestiture of a
facility as part of a restructuring
program are also included in this
category.
c) Reflects the net tax benefit
associated with the specified items
and excess tax benefits associated
with share-based compensation.
CONTACT: Abbott Financial: Scott Leinenweber, 224-668-0791, Michael Comilla, 224-668-1872; Abbott Media: Darcy Ross, 224-667-3655
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SOURCE Abbott
Company Codes: NYSE:ABT |
