Abbott Laboratories ABT · USD

Segment and Geographic Area InformationAbbott’s principal business is the discovery, development, manufacture, and sale of a broad line of healthcare products. Abbott’s products are generally sold directly to retailers, wholesalers, hospitals, healthcare 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 Laboratory, Rapid Diagnostics, Molecular, and Point of Care businesses 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 Rhythm Management, Electrophysiology, Heart Failure, Vascular, Structural Heart, Neuromodulation, and Diabetes Care businesses 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 chief operating decision maker (CODM) at Abbott is the Chief Executive Officer. The CODM primarily considers sales and operating margin to assess the performance of segments and to allocate resources, where segment operating margin profitability includes cost of products sold and operating expenses. 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.

RevenueAbbott’s revenues are derived primarily from the sale of a broad line of healthcare products under short-term receivable arrangements. Patent protection and licenses, technological and performance features, and inclusion of Abbott’s products under a contract, most impact which products are sold; price controls, competition and rebates most impact the net selling prices of products; and foreign currency translation impacts the measurement of net sales and costs. Abbott’s products are generally sold directly to retailers, wholesalers, distributors, hospitals, healthcare facilities, laboratories, physicians’ offices, and government agencies throughout the world. Abbott has four reportable segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices.The following tables provide detail by sales category:202520242023(in millions)U.S. Int’lTotalU.S.Int’lTotalU.S.Int’lTotalEstablished Pharmaceutical Products — Key Emerging Markets$— $4,167 $4,167 $— $3,858 $3,858 $— $3,807 $3,807 Other— 1,369 1,369 — 1,336 1,336 — 1,259 1,259 Total— 5,536 5,536 — 5,194 5,194 — 5,066 5,066 Nutritional Products —Pediatric Nutritionals2,158 1,816 3,974 2,208 1,815 4,023 1,977 1,957 3,934 Adult Nutritionals1,448 3,029 4,477 1,481 2,909 4,390 1,436 2,784 4,220 Total3,606 4,845 8,451 3,689 4,724 8,413 3,413 4,741 8,154 Diagnostic Products — Core Laboratory1,425 3,935 5,360 1,332 3,903 5,235 1,243 3,916 5,159 Molecular150 367 517 150 371 521 172 402 574 Point of Care422 184 606 408 180 588 396 169 565 Rapid Diagnostics1,538 916 2,454 1,940 1,057 2,997 2,518 1,172 3,690 Total3,535 5,402 8,937 3,830 5,511 9,341 4,329 5,659 9,988 Medical Devices —Rhythm Management1,334 1,315 2,649 1,154 1,236 2,390 1,085 1,170 2,255 Electrophysiology1,283 1,481 2,764 1,141 1,326 2,467 1,008 1,187 2,195 Heart Failure1,107 341 1,448 986 293 1,279 888 273 1,161 Vascular1,118 1,877 2,995 1,056 1,781 2,837 978 1,703 2,681 Structural Heart1,172 1,351 2,523 1,051 1,195 2,246 883 1,061 1,944 Neuromodulation773 237 1,010 767 195 962 725 165 890 Diabetes Care 3,181 4,817 7,998 2,633 4,172 6,805 2,129 3,632 5,761 Total9,968 11,419 21,387 8,788 10,198 18,986 7,696 9,191 16,887 Other17 — 17 16 — 16 14 — 14 Total$17,126 $27,202 $44,328 $16,323 $25,627 $41,950 $15,452 $24,657 $40,109 Products sold by the Diagnostics segment include various types of diagnostic tests to detect COVID-19.

Debt and Lines of CreditThe following is a summary of long-term debt at December 31:(in millions)202520242.95% Notes, due 2025$— $1,000 3.875% Notes, due 2025— 500 1.50% Notes, due 20261,344 1,188 3.75% Notes, due 20261,700 1,700 0.375% Notes, due 2027695 615 1.15% Notes, due 2028650 650 5-year term loan due 2029589 583 1.40% Notes, due 2030650 650 4.75% Notes, due 20361,650 1,650 6.15% Notes, due 2037547 547 6.00% Notes, due 2039515 515 5.30% Notes, due 2040694 694 4.75% Notes, due 2043700 700 4.90% Notes, due 20463,250 3,250 Unamortized debt issuance costs(47)(53)Other, including fair value adjustments relating to interest rate hedge contracts designated as fair value hedges(8)(64)Total carrying amount of long-term debt12,929 14,125 Less: Current portion3,033 1,500 Total long-term portion$9,896 $12,625 On November 19, 2025, Abbott obtained a commitment for a 364-day senior unsecured bridge term loan facility for an amount not to exceed $20.0 billion in conjunction with its pending acquisition of Exact Sciences. While Abbott plans to fund this transaction with cash on hand and borrowings, the bridge facility will provide back-up financing.On September 15, 2025, Abbott repaid the $500 million outstanding principal amount of its 3.875% Notes upon maturity. On March 17, 2025, Abbott repaid the $1.0 billion outstanding principal amount of its 2.95% Notes upon maturity. On November 19, 2024, Abbott repaid the €590 million outstanding principal amount of its 0.10% Notes upon maturity. The repayment equated to approximately $640 million. On November 30, 2023, Abbott repaid the $1.05 billion outstanding principal amount of its 3.40% Notes upon maturity. On September 27, 2023, Abbott repaid the €1.14 billion outstanding principal amount of its 0.875% Notes upon maturity. The repayment equated to approximately $1.2 billion. In September 2023, Abbott repaid approximately $197 million of debt assumed as part of a recent business acquisition. In 2024, Abbott modified its existing, yen-denominated 5-year term loan scheduled to mature in November 2024. The amended terms included a net increase in principal debt from ¥59.8 billion to ¥92.0 billion, with a new maturity date in June 2029. The modified, 5-year term loan bears interest at the Tokyo Interbank Offered Rate (TIBOR) plus a fixed spread, and the interest rate is reset quarterly. The net proceeds equated to approximately $201 million.

LeasesLeases where Abbott is the LesseeAbbott has entered into operating leases as the lessee for office space, manufacturing facilities, R&D laboratories, warehouses, vehicles, and equipment. Finance leases are not significant. Abbott’s operating leases generally have remaining lease terms of 1 to 10 years. Some leases include options to extend beyond the original lease term, generally up to 10 years and some include options to terminate early. These options have been included in the determination of the lease liability when it is reasonably certain that the option will be exercised.For all of its asset classes, Abbott elected the practical expedient allowed under FASB ASC No. 842, “Leases” to account for each lease component (e.g., the right to use office space) and the associated non-lease components (e.g., maintenance services) as a single lease component. Abbott also elected the short-term lease accounting policy for all asset classes; therefore, Abbott is not recognizing a lease liability or right of use (ROU) asset for any lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that Abbott is reasonably certain to exercise.As Abbott’s leases typically do not provide an implicit rate, the interest rate used to determine the present value of the payments under each lease typically reflects Abbott’s incremental borrowing rate based on information available at the lease commencement date. The following table provides information related to Abbott’s operating leases:(in millions, except weighted averages)202520242023Operating lease cost (a)$391 $366 $356 Cash paid for amounts included in the measurement of operating lease liabilities315 300 276 ROU assets arising from entering into new operating lease obligations300 253 253 Weighted average remaining lease term at December 31 (in years)777Weighted average discount rate at December 313.9 %3.6 %3.4 %________________________________________________________(a)Includes short-term lease expense and variable lease costs, which were immaterial in the years ended December 31, 2025, 2024, and 2023.

Business Acquisitions On November 19, 2025, Abbott entered into a definitive agreement to acquire Exact Sciences Corporation (Exact Sciences), which is expected to enable Abbott to enter the cancer diagnostics market. The acquisition is subject to customary closing conditions, including the approval of Exact Sciences shareholders, and obtaining the required regulatory clearances. Under the terms of the agreement, Abbott will pay $105 per common share in cash at the completion of the transaction, representing a total equity value of approximately $21 billion and an estimated enterprise value of $23 billion. Abbott's financing contemplates absorption of Exact Sciences' estimated $1.8 billion of net debt.On November 19, 2025, Abbott obtained a commitment for a 364-day senior unsecured bridge term loan facility for an amount not to exceed $20.0 billion in conjunction with its pending acquisition of Exact Sciences. While Abbott plans to fund this transaction with cash on hand and borrowings, the bridge facility will provide back-up financing.On September 22, 2023, Abbott completed the acquisition of Bigfoot Biomedical, Inc. (Bigfoot), which furthers Abbott's efforts to develop connected solutions for making diabetes management more personal and precise. The purchase price, the final allocation of acquired assets and liabilities, and the revenue and net income contributed by Bigfoot since the date of acquisition are not material to Abbott's consolidated financial statements. On April 27, 2023, Abbott completed the acquisition of Cardiovascular Systems, Inc. (CSI) for $20 per common share, which equated to a purchase price of $851 million. The transaction was funded with cash on hand and accounted for as a business combination. CSI's atherectomy system, which is used in treating peripheral and coronary artery disease, adds complementary technologies to Abbott's portfolio of vascular device offerings.The final allocation of the purchase price of the CSI acquisition resulted in the recording of two non-deductible developed technology intangible assets totaling $305 million; a non-deductible IPR&D asset of $15 million, which will be accounted for as an indefinite-lived intangible asset until regulatory approval or discontinuation; non-deductible goodwill of $369 million; net deferred tax assets of $46 million and other net assets of $116 million.

Abbott’s cybersecurity risk management process is designed to identify and assess internal and external cybersecurity threats and vulnerabilities to and within Abbott’s business and operations, and analyze and prioritize risks from cybersecurity threats to inform strategies and action plans aimed at mitigating and managing these risks.Abbott’s cybersecurity program utilizes a variety of technical and process controls that are designed to identify, protect against, detect, respond to, and recover from cybersecurity threats, including:•dedicated cybersecurity professionals who are responsible for analyzing cybersecurity threats, defining cybersecurity policy and requirements, implementing protections, and monitoring and responding to cybersecurity incidents;•periodic cybersecurity awareness training for relevant employees and contractors on Abbott policies and emerging cybersecurity threats, including phishing awareness training; •internal and third-party cybersecurity testing, including penetration testing of Abbott’s information systems and hardware;•cybersecurity risk assessments for Abbott’s systems and applications;•cybersecurity monitoring and response processes intended to identify, assess, escalate, investigate, contain, and remediate incidents; and•disaster recovery plans. In addition, risks from cybersecurity threats are integrated into Abbott’s enterprise risk management (ERM) program. The ERM program establishes a risk management framework that seeks to identify and assess risks that could materially impact Abbott’s business and operations. As part of Abbott’s cybersecurity program, Abbott regularly engages with assessors and third-party advisers to perform various services, including assessments of process design and operating effectiveness; security testing and attestation; periodic assessment of enterprise cybersecurity maturity; industry benchmarking; and thought leadership related to continuous improvement of processes, training, technology, and data. Abbott’s cybersecurity program also aims to identify and assess cybersecurity risks associated with its use of third-party service providers with access to Abbott’s systems and data, as well as such third-party service providers’ adherence to certain cybersecurity standards and processes. As appropriate, Abbott requires such third-party service providers to agree to be subject to cybersecurity evaluations by Abbott.

Taxes on Earnings Taxes on earnings reflect the annual effective rates, including charges for interest and penalties. Deferred income taxes reflect the tax consequences on future years of differences between the tax bases of assets and liabilities and their financial reporting amounts.Taxes on earnings included $92 million, $50 million, and $22 million in excess tax benefits associated with share-based compensation in 2025, 2024, and 2023, respectively. As a result of the resolution of various tax positions related to prior years, taxes on earnings in 2025, 2024, and 2023 also included approximately $70 million of net tax benefit, $25 million, and $80 million of net tax expense, respectively. In 2025, taxes on earnings included approximately $610 million of tax expense related to a deferred tax asset that was recognized as a significant non-cash tax benefit in a prior year. In 2024, taxes on earnings included $7.5 billion in non-cash valuation allowance adjustments resulting from the restructuring of certain foreign affiliates and the confirmation of certain tax filing positions. The restructuring improved profitability to several of Abbott’s affiliates and management concluded that the related preexisting deferred tax assets, which historically had a full valuation allowance, were more likely than not to be realizable in future periods. In particular, Abbott considered the likelihood of sustained ongoing profitability of the affiliates as a positive factor that outweighed all available negative evidence considered. Accordingly, Abbott released the full valuation allowance on such deferred tax assets and recorded the offset to taxes on earnings. The TCJA included a one-time transition tax that is based on Abbott’s total post-1986 earnings and profits (E&P) that were previously deferred from U.S. income taxes. The tax computation also required the determination of the amount of post-1986 E&P considered held in cash and other specified assets. As of December 31, 2025, the remaining balance of Abbott’s transition tax obligation related to the TCJA was approximately $205 million. The final installment will be paid in 2026 as allowed by the TCJA. Undistributed foreign earnings remain indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any remaining undistributed foreign earnings not subject to the transition tax and additional outside basis difference in its foreign entities is not practicable.

Restructuring PlansIn 2025, Abbott management approved plans to streamline operations in order to reduce costs and improve efficiencies in its Diagnostics, Nutritionals, Established Pharmaceuticals, and Medical Devices businesses. Abbott recorded employee related severance and other charges of $274 million, of which $109 million was recorded in Cost of products sold, $53 million was recorded in Research and development, and $112 million was recorded in Selling, general, and administrative expenses. Payments related to these actions totaled $94 million in 2025 and the remaining liabilities totaled $180 million at December 31, 2025. In addition, in 2025, Abbott recognized fixed asset impairment charges of $28 million related to these restructuring plans. In 2024, Abbott management approved plans to streamline certain operations in order to reduce costs and improve efficiencies in its Diagnostics, Medical Devices, Established Pharmaceuticals, and Nutritionals businesses, including the discontinuation of its ZonePerfect® product line. Abbott recorded employee related severance and other charges of $129 million, of which $62 million was recorded in Cost of products sold, $21 million was recorded in Research and development, and $46 million was recorded in Selling, general and administrative expenses. In addition, Abbott recognized inventory related charges of $34 million and fixed asset impairment charges of $12 million related to these restructuring plans.The following summarizes the activity related to the 2024 restructuring actions and the status of the related accruals as of December 31, 2025:(in millions)Restructuring charges in 2024$129 Payments and other adjustments(32)Accrued balance at December 31, 202497 Payments and other adjustments(70)Accrued balance at December 31, 2025$27 In 2023, Abbott management approved plans to restructure various operations in order to reduce costs in its Medical Devices, Diagnostics, and Established Pharmaceuticals businesses. Abbott recorded employee related severance and other charges of $144 million, of which $56 million was recorded in Cost of products sold, $22 million was recorded in Research and development, and $66 million was recorded in Selling, general and administrative expenses. In addition, Abbott recognized fixed asset impairment and inventory related charges of $31 million related to these restructuring plans.