ABBOTT LABORATORIES | 2013 | FY | 3

Note 14 — 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. As a result of the separation of AbbVie, Abbott no longer has a Proprietary Pharmaceutical Products segment and this business has been removed from the 2012 and 2011 historical information presented below. 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.

        Vascular Products —  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. 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, effective January 1, 2013, 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 segment information below for 2012 and 2011 has been adjusted to exclude intangible asset amortization from operating earnings and intangible assets and goodwill from the total segment asset information. 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)
   2013   2012   2011   2013   2012   2011  

Established Pharmaceuticals

   $ 4,974   $ 5,121   $ 5,355   $ 1,182   $ 1,237   $ 1,254  

Nutritionals

     6,740     6,461     5,989     1,263     1,020     792  

Diagnostics

     4,545     4,292     4,126     1,008     825     794  

Vascular

     3,012     3,071     3,333     962     1,020     1,111  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Reportable Segments

     19,271     18,945     18,803   $ 4,415   $ 4,102   $ 3,951  
                                 
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                                 

Other

     2,577     2,549     2,604                    
                                 
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 21,848   $ 21,494   $ 21,407                    
                                 
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                                 
(a)
Net sales and operating earnings were unfavorably affected by the relatively stronger U.S. dollar in 2013 and 2012 and were favorably affected by the relatively weaker U.S. dollar in 2011.

 
   2013   2012   2011  
 
   (in millions)
  

Total Reportable Segment Operating Earnings

   $ 4,415   $ 4,102   $ 3,951  

Corporate functions and benefit plans costs

     (514 )   (598 )   (529 )

Non-reportable segments

     423     443     457  

Net interest expense

     (90 )   (288 )   (294 )

Net loss on extinguishment of debt

     —     (1,351 )   —  

Share-based compensation

     (262 )   (284 )   (256 )

Amortization of intangible assets

     (791 )   (795 )   (884 )

Other, net (b)

     (660 )   (924 )   (1,209 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Earnings from Continuing Operations before Taxes

   $ 2,521   $ 305   $ 1,236  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               
(b)
Other, net includes: charges for cost reduction initiatives of approximately $350 million in 2013 and $430 million in 2012; and charges of $240 million in 2011 for cost reduction initiatives and integration.

 
   Depreciation   Additions to
Long-term Assets		   Total Assets  
(in millions)
   2013   2012   2011   2013   2012   2011   2013   2012   2011  

Established Pharmaceuticals

   $ 84   $ 156   $ 169   $ 128   $ 237   $ 122   $ 2,637   $ 2,805   $ 4,348  

Nutritionals

     190     175     167     340     428     205     3,518     3,211     2,939  

Diagnostics

     368     295     313     394     349     394     3,312     3,286     3,218  

Vascular

     122     76     99     62     69     109     1,711     1,834     1,400  
                                       
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Reportable Segments

     764     702     748     924     1,083     830   $ 11,178   $ 11,136   $ 11,905  
                                                   
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                                                   

Other

     164     661     647     982     902     845                    
                                             
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total

   $ 928   $ 1,363   $ 1,395   $ 1,906   $ 1,985   $ 1,675                    
                                             
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                                             


 

 
   2013   2012   2011  
 
   (in millions)
  

Total Reportable Segment Assets

   $ 11,178   $ 11,136   $ 11,905  

Cash, investments and restricted funds (c)

     8,217     15,448     8,476  

Current deferred income taxes (c)

     2,528     2,986     2,701  

Non-reportable segments

     1,181     1,167     1,148  

Goodwill and intangible assets (c)

     15,507     24,362     25,695  

All other (c)

     4,342     12,136     10,352  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total Assets

   $ 42,953   $ 67,235   $ 60,277  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               
(c)
In 2012 and 2011, the reported amounts include assets associated with the businesses transferred to AbbVie as part of the separation.

 
   Net Sales to External
Customers (d)		   Long-term Assets (e)  
 
   2013   2012   2011   2013   2012   2011  
 
   (in millions)
  

United States

   $ 6,269   $ 6,349   $ 6,302   $ 7,884   $ 15,244   $ 15,867  

Japan

     1,442     1,723     1,726     902     1,169     1,225  

Germany

     1,070     984     1,058     1,040     6,173     5,909  

The Netherlands

     960     1,107     1,204     560     532     462  

China

     1,083     859     625     356     259     127  

India

     922     919     917     3,080     3,467     3,160  

Brazil

     470     448     470     216     200     186  

Switzerland

     792     693     591     1,117     1,214     1,045  

Canada

     734     753     652     368     352     237  

Italy

     726     719     761     100     222     229  

France

     680     667     781     213     220     214  

Russia

     525     485     427     30     37     21  

Spain

     413     417     447     326     314     293  

United Kingdom

     479     497     475     1,380     1,345     1,273  

All Other Countries

     5,283     4,874     4,971     6,133     5,164     6,260  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Consolidated

   $ 21,848   $ 21,494   $ 21,407   $ 23,705   $ 35,912   $ 36,508  
                           
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                           
(d)
Sales by country are based on the country that sold the product.

(e)
Amounts reported in 2012 and 2011 include assets associated with businesses transferred to AbbVie as part of the separation.

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