ABBOTT LABORATORIES ABBOTT PARK, Ill., Jan. 25, 2017 /PRNewswire/ -- Abbott (NYSE: ABT) today announced financial results for the fourth quarter ended Dec. 31, 2016.
-- Reported diluted EPS from continuing operations under GAAP was $0.51 in
the fourth quarter. Excluding specified items, adjusted diluted EPS from
continuing operations was $0.65 in the fourth quarter, in-line with the
previous guidance range.
-- Fourth-quarter worldwide sales of $5.3 billion increased 2.8 percent on
a reported basis and 3.8 percent on an operational basis.
-- Full-year worldwide sales increased 2.2 percent on a reported basis and
4.8 percent on an operational basis.
-- Abbott issues full-year 2017 guidance range for diluted EPS from
continuing operations under GAAP of $0.92 to $1.02, including intangible
amortization and integration expenses related to the acquisition of St.
Jude Medical. Excluding specified items, projected full-year 2017
adjusted diluted EPS from continuing operations is $2.40 to $2.50.
-- In the fourth quarter, Abbott obtained CE Mark for four new major
diagnostics systems, including "Alinity(TM) s" for blood and plasma
screening, "Alinity i" for immunoassay diagnostics, "Alinity c" for
clinical chemistry diagnostics and "i-STAT(®) Alinity" for point of
care blood testing. Abbott's Alinity family of solutions are designed to
be more efficient - running more tests in less space, generating test
results faster and minimizing human errors - while continuing to provide
quality results.
-- On Jan. 4, 2017, Abbott completed the acquisition of St. Jude Medical,
establishing the company as a leader in the broad medical device arena
and providing expanded opportunities for future growth. With the
acquisition, Abbott now competes in nearly every area of the $30 billion
cardiovascular device market and holds No. 1 or 2 positions across
several large and high-growth cardiovascular device areas.
"2016 was a very important year for Abbott," said Miles D. White, chairman and chief executive officer, Abbott. "We achieved our financial commitments, advanced our internal pipeline, and took important strategic steps to shape the company for balance and growth."
FOURTH-QUARTER BUSINESS OVERVIEW
Following are sales by business segment and commentary for the fourth quarter and the full year:
Total Company
($ in millions)
% Change vs. 4Q15
-----------------
Sales 4Q16 Int'l Total
---------- ----- -----
U.S. Int'l Total U.S. Reported Operational Reported Operational
---- ----- ----- ---- -------- ----------- -------- -----------
Total * 1,655 3,678 5,333 3.2 2.6 4.1 2.8 3.8
----- ----- ----- --- --- --- --- ---
Nutrition 745 988 1,733 2.7 (8.1) (6.3) (3.7) (2.6)
Diagnostics 375 881 1,256 2.0 3.3 4.8 2.9 3.9
Established
Pharmaceuticals -- 979 979 n/a 10.6 12.6 10.6 12.6
Medical Devices 527 827 1,354 4.7 4.2 4.7 4.4 4.7
* Total Abbott Sales from continuing operations include Other Sales of $11 million.
% Change vs. 12M15
------------------
Sales 12M16 Int'l Total
----------- ----- -----
U.S. Int'l Total U.S. Reported Operational Reported Operational
---- ----- ----- ---- -------- ----------- -------- -----------
Total * 6,486 14,367 20,853 3.4 1.6 5.4 2.2 4.8
----- ------ ------ --- --- --- --- ---
Nutrition 2,969 3,930 6,899 3.5 (4.3) (0.5) (1.1) 1.2
Diagnostics 1,437 3,376 4,813 3.2 3.8 6.5 3.6 5.5
Established
Pharmaceuticals -- 3,859 3,859 n/a 3.7 10.5 3.7 10.5
Medical Devices 2,047 3,186 5,233 3.2 4.1 5.4 3.8 4.5
* Total Abbott Sales from
continuing operations include
Other Sales of $49 million.
n/a = Not Applicable.
Note: Operational growth
reflects percentage change
over the prior year excluding
the impact of exchange rates.
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.
Fourth-quarter 2016 worldwide sales of $5.3 billion increased 2.8 percent on a reported basis, including an unfavorable 1.0 percent effect of foreign exchange, and increased 3.8 percent on an operational basis.
Full-year 2016 worldwide sales increased 2.2 percent on a reported basis and 4.8 percent on an operational basis.
Nutrition
($ in millions)
% Change vs. 4Q15
-----------------
Sales 4Q16 Int'l Total
---------- ----- -----
U.S. Int'l Total U.S. Reported Operational Reported Operational
---- ----- ----- ---- -------- ----------- -------- -----------
Total 745 988 1,733 2.7 (8.1) (6.3) (3.7) (2.6)
--- --- ----- --- ---- ---- ---- ----
Pediatric 435 542 977 6.2 (13.1) (11.2) (5.4) (4.3)
Adult 310 446 756 (1.8) (1.2) 0.6 (1.4) (0.4)
% Change vs. 12M15
------------------
Sales 12M16 Int'l Total
----------- ----- -----
U.S. Int'l Total U.S. Reported Operational Reported Operational
---- ----- ----- ---- -------- ----------- -------- -----------
Total 2,969 3,930 6,899 3.5 (4.3) (0.5) (1.1) 1.2
----- ----- ----- --- ---- ---- ---- ---
Pediatric 1,677 2,206 3,883 5.3 (7.2) (3.5) (2.2) --
Adult 1,292 1,724 3,016 1.3 (0.4) 3.7 0.3 2.7
Worldwide Nutrition sales decreased 3.7 percent on a reported basis in the fourth quarter, including an unfavorable 1.1 percent effect of foreign exchange, and decreased 2.6 percent on an operational basis.
Worldwide Pediatric Nutrition sales decreased 5.4 percent on a reported basis in the fourth quarter, including an unfavorable 1.1 percent effect of foreign exchange, and decreased 4.3 percent on an operational basis. In the U.S., above-market sales growth was led by Abbott's PediaSure(®) toddler brand as well as continued uptake of several recently launched infant formula products, including the first formulas in the U.S. with a human milk oligosaccharide that offers a unique immune-nourishing prebiotic. International sales declined 13.1 percent on a reported basis and 11.2 percent on an operational basis. Challenging market conditions in China and market softness in Saudi offset continued strong performance in Latin America and Southeast Asia.
Worldwide Adult Nutrition sales decreased 1.4 percent on a reported basis in the fourth quarter, including an unfavorable 1.0 percent effect of foreign exchange, and decreased 0.4 percent on an operational basis. In the quarter, worldwide growth of Ensure(®) was offset primarily by a difficult comparison to fourth quarter 2015, which included new product distributions in the U.S. and China.
Diagnostics
($ in millions)
% Change vs. 4Q15
-----------------
Sales 4Q16 Int'l Total
---------- ----- -----
U.S. Int'l Total U.S. Reported Operational Reported Operational
---- ----- ----- ---- -------- ----------- -------- -----------
Total 375 881 1,256 2.0 3.3 4.8 2.9 3.9
--- --- ----- --- --- --- --- ---
Core
Laboratory 225 779 1,004 3.7 3.6 5.2 3.6 4.8
Molecular 44 73 117 (5.6) (8.8) (7.7) (7.6) (6.9)
Point of Care 106 29 135 2.0 37.6 37.2 8.1 8.0
% Change vs. 12M15
------------------
Sales 12M16 Int'l Total
----------- ----- -----
U.S. Int'l Total U.S. Reported Operational Reported Operational
---- ----- ----- ---- -------- ----------- -------- -----------
Total 1,437 3,376 4,813 3.2 3.8 6.5 3.6 5.5
----- ----- ----- --- --- --- --- ---
Core
Laboratory 841 3,003 3,844 3.5 3.8 6.6 3.7 5.9
Molecular 184 272 456 (3.9) (1.2) 1.4 (2.3) (0.8)
Point of Care 412 101 513 6.1 19.4 19.6 8.5 8.5
Worldwide Diagnostics sales increased 2.9 percent on a reported basis in the fourth quarter, including an unfavorable 1.0 percent effect of foreign exchange, and increased 3.9 percent on an operational basis.
Core Laboratory Diagnostics sales increased 3.6 percent on a reported basis in the fourth quarter, including an unfavorable 1.2 percent effect of foreign exchange, and increased 4.8 percent on an operational basis. During the quarter, Abbott obtained CE Mark for several Alinity core laboratory systems, including "Alinity s" for blood and plasma screening, "Alinity c" for clinical chemistry, and "Alinity i" for immunoassay diagnostics. These instruments belong to Abbott's new Alinity family of harmonized systems, which were designed to be more efficient - running more tests in less space, generating test results faster and minimizing human errors - while continuing to provide quality results.
Molecular Diagnostics sales decreased 7.6 percent on a reported basis in the fourth quarter, including an unfavorable 0.7 percent effect of foreign exchange, and decreased 6.9 percent on an operational basis. As expected, the planned scale down of the genetics business offset growth in the infectious disease testing business.
Point of Care Diagnostics sales increased 8.1 percent on a reported basis in the fourth quarter, including a favorable 0.1 percent effect of foreign exchange, and increased 8.0 percent on an operational basis. Sales growth in the quarter was led by continued adoption of Abbott's i-STAT handheld system in the U.S. and ongoing international market expansion. During the quarter, Abbott obtained CE Mark for its i-STAT Alinity handheld portable blood testing system. By delivering results in ten minutes or less using only two to three drops of blood, i-STAT Alinity provides healthcare professionals the information needed to make fast and accurate medical decisions without ever leaving their patient's side.
Established Pharmaceuticals
($ in millions)
% Change vs. 4Q15
-----------------
Sales 4Q16 Int'l Total
---------- ----- -----
U.S. Int'l Total U.S. Reported Operational Reported Operational
---- ----- ----- ---- -------- ----------- -------- -----------
Total -- 979 979 n/a 10.6 12.6 10.6 12.6
--- --- --- --- ---- ---- ---- ----
Key
Emerging
Markets -- 777 777 n/a 10.6 13.0 10.6 13.0
Other -- 202 202 n/a 10.8 10.6 10.8 10.6
% Change vs. 12M15
------------------
Sales 12M16 Int'l Total
----------- ----- -----
U.S. Int'l Total U.S. Reported Operational Reported Operational
---- ----- ----- ---- -------- ----------- -------- -----------
Total -- 3,859 3,859 n/a 3.7 10.5 3.7 10.5
--- ----- ----- --- --- ---- --- ----
Key
Emerging
Markets -- 2,912 2,912 n/a 4.7 13.3 4.7 13.3
Other -- 947 947 n/a 0.9 2.0 0.9 2.0
Established Pharmaceuticals sales increased 10.6 percent on a reported basis in the fourth quarter, including an unfavorable 2.0 percent effect of foreign exchange, and increased 12.6 percent on an operational basis.
Key Emerging Markets include Brazil, Russia, India and China (BRIC), along with several additional emerging markets that represent the most attractive long-term growth opportunities for Abbott's branded generics product portfolio. Sales in these key geographies increased 10.6 percent on a reported basis and 13.0 percent on an operational basis in the fourth quarter. Operational sales growth was led by double-digit growth in BRIC, which comprises approximately 45 percent of Abbott's Established Pharmaceuticals sales, as well as strong growth in several countries throughout Latin America, including Colombia, Mexico, Peru and Argentina.
Medical Devices
($ in millions)
% Change vs. 4Q15
-----------------
Sales 4Q16 Int'l Total
---------- ----- -----
U.S. Int'l Total U.S. Reported Operational Reported Operational
---- ----- ----- ---- -------- ----------- -------- -----------
Total 527 827 1,354 4.7 4.2 4.7 4.4 4.7
--- --- ----- --- --- --- --- ---
Vascular 307 414 721 6.9 0.1 0.6 2.9 3.2
Diabetes Care 87 223 310 (14.1) 14.1 16.3 4.5 6.0
Medical Optics 133 190 323 15.4 2.9 1.5 7.7 6.9
Vascular Product Lines:
Coronary Devicesa) 202 348 550 2.6 (1.4) (1.0) -- 0.3
Endovascularb) 77 65 142 7.1 8.9 10.3 8.0 8.6
a)Includes DES / BVS product portfolio, structural heart, guidewires, balloon catheters and other coronary products.
b)Includes vessel closure, carotid stents and other peripheral products.
% Change vs. 12M15
------------------
Sales 12M16 Int'l Total
----------- ----- -----
U.S. Int'l Total U.S. Reported Operational Reported Operational
---- ----- ----- ---- -------- ----------- -------- -----------
Total 2,047 3,186 5,233 3.2 4.1 5.4 3.8 4.5
----- ----- ----- --- --- --- --- ---
Vascular 1,247 1,649 2,896 8.8 0.1 1.5 3.7 4.5
Diabetes Care 325 817 1,142 (17.4) 13.0 15.9 2.3 4.1
Medical Optics 475 720 1,195 7.2 4.4 3.7 5.5 5.1
Vascular Product Lines:
Coronary Devicesa) 799 1,387 2,186 4.0 (1.5) (0.2) 0.5 1.3
Endovascularb) 303 259 562 7.4 9.0 11.3 8.1 9.2
a)Includes DES / BVS product portfolio, structural heart, guidewires, balloon catheters and other coronary products.
b)Includes vessel closure, carotid stents and other peripheral products.
Worldwide Medical Devices sales increased 4.4 percent on a reported basis in the fourth quarter, including an unfavorable 0.3 percent effect of foreign exchange, and increased 4.7 percent on an operational basis.
Worldwide sales of Vascular products increased 2.9 percent on a reported basis in the fourth quarter, including an unfavorable 0.3 percent effect of foreign exchange, and increased 3.2 percent on an operational basis. Sales growth in Vascular products was led by double-digit growth of MitraClip(®), Abbott's device for the treatment of mitral regurgitation, as Abbott continues to build the market for this first-in-class device. Strong sales growth in Abbott's Endovascular business was driven by vessel closure products and Supera(®), Abbott's unique stent for the treatment of blockages in the leg.
Worldwide Diabetes Care sales increased 4.5 percent on a reported basis in the fourth quarter, including an unfavorable 1.5 percent effect of foreign exchange, and increased 6.0 percent on an operational basis. Double-digit international sales growth was driven by continued consumer uptake of FreeStyle(®) Libre, Abbott's revolutionary continuous glucose monitoring system that eliminates the need for finger-sticks.
Worldwide Medical Optics sales increased 7.7 percent on a reported basis in the fourth quarter, including a favorable 0.8 percent effect of foreign exchange, and increased 6.9 percent on an operational basis. Operational sales growth was driven by the recent U.S. launch of the TECNIS(®) Symfony intraocular lenses, the first and only lenses in the U.S. that provide a full range of continuous high-quality vision following cataract surgery.
ABBOTT ISSUES EARNINGS-PER-SHARE OUTLOOK FOR 2017
Abbott is issuing full-year 2017 guidance for diluted earnings per share from continuing operations under Generally Accepted Accounting Principles (GAAP) of $0.92 to $1.02, including amortization and integration expenses related to the acquisition of St. Jude Medical.
Abbott forecasts net specified items for the full year 2017 of approximately $1.48 per share. Specified items include acquisition-related expenses, intangible amortization expense, charges associated with cost reduction initiatives and other expenses, partially offset by a gain on the sale of the Abbott Medical Optics business (AMO).
Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $2.40 to $2.50 for the full year 2017.
Abbott is issuing first-quarter 2017 guidance for diluted earnings per share from continuing operations under GAAP of $0.19 to $0.21. Abbott forecasts specified items for the first quarter 2017 of $0.23 related to the same items discussed above for the full year 2017. Excluding specified items, projected adjusted diluted earnings per share from continuing operations would be $0.42 to $0.44 for the first quarter.
ABBOTT ANNOUNCES INCREASE IN QUARTERLY DIVIDEND
On Dec. 9, 2016, the board of directors of Abbott increased the company's quarterly dividend to $0.265 per share from $0.260 per share. Abbott's cash dividend is payable Feb. 15, 2017, to shareholders of record at the close of business on Jan. 13, 2017. This marks the 372(nd) consecutive quarterly dividend paid by Abbott.
Abbott has increased its dividend payout for 45 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 94,000 people.
Visit Abbott at www.abbott.com and connect with us on Twitter at @AbbottNews.
Abbott will webcast its live fourth-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 call 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, 2015, and St. Jude Medical's Annual Report on Form 10-K for the fiscal year ended Jan. 2, 2016, respectively, and under the heading "Risk Factors" in Abbott's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, and St. Jude Medical's Quarterly Report on Form 10-Q for the fiscal quarter ended April 2, 2016, which 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.
Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Earnings
Fourth Quarter Ended December 31, 2016 and 2015
(in millions, except per share data)
(unaudited)
4Q16 4Q15 % Change
---- ---- --------
Net Sales $5,333 $5,188 2.8
Cost of products sold,
excluding amortization
expense 2,312 2,206 4.8
Amortization of intangible
assets 121 143 (15.0)
Research and development 343 369 (7.3)
Selling, general, and
administrative 1,609 1,655 (2.8)
Total Operating Cost and
Expenses 4,385 4,373 0.3
----- -----
Operating earnings 948 815 16.3
Interest expense, net 129 9 n/m 1)
Net foreign exchange (gain)
loss (2) (30) (94.0)
Other (income) expense, net (54) 6 n/m
--- ---
Earnings from Continuing
Operations before taxes 875 830 5.4
Taxes on Earnings from
Continuing Operations 110 135 (17.9)
Earnings from Continuing
Operations 765 695 9.9
Earnings from Discontinued
Operations, net of taxes 33 72 (54.4) 2)
--- ---
Net Earnings $798 $767 3.9
==== ====
Net Earnings from Continuing
Operations, excluding
Specified Items, as
described below $971 $932 4.2 3)
==== ====
Diluted Earnings per Common
Share from:
Continuing Operations $0.51 $0.46 10.9
Discontinued Operations 0.02 0.05 (60.0)
---- ----
Total $0.53 $0.51 3.9
===== =====
Diluted Earnings per Common
Share from Continuing
Operations, excluding
Specified Items, as
described below $0.65 $0.62 4.8 3)
===== =====
Average Number of Common
Shares Outstanding
Plus Dilutive Common Stock
Options 1,483 1,498
NOTES:
See tables below for an
explanation of certain non-
GAAP financial information.
n/m = Percent change is not
meaningful.
See footnotes below.
1) 2016 Interest expense, net
includes amortization expense
associated with bridge facility
fees and interest expense
associated with $15.1 billion
of debt issued in November
2016.
2) 2016 and 2015 Earnings and
Diluted Earnings per Common
Share from Discontinued
Operations primarily reflect
net favorable adjustments to
tax expense as a result of the
resolution of various tax
positions from previous years
related to discontinued
operations.
3) 2016 Net Earnings from
Continuing Operations,
excluding Specified Items,
excludes net after-tax charges
of $206 million, or $0.14 per
share, for intangible
amortization expense, expenses
primarily associated with
acquisitions, including bridge
facility fees and other debt
related costs, charges related
to cost reduction initiatives
and other expenses.
2015 Net Earnings from
Continuing Operations,
excluding Specified Items,
excludes net after-tax charges
of $237 million, or $0.16 per
share, for intangible
amortization expense, expenses
associated with cost reduction
initiatives and other expenses
related to acquisitions.
Abbott Laboratories and Subsidiaries
Condensed Consolidated Statement of Earnings
Fiscal Year Ended December 31, 2016 and 2015
(in millions, except per share data)
(unaudited)
12M16 12M15 % Change
----- ----- --------
Net Sales $20,853 $20,405 2.2
Cost of products sold,
excluding amortization
expense 9,024 8,747 3.2
Amortization of intangible
assets 550 601 (8.4)
Research and development 1,422 1,405 1.2
Selling, general, and
administrative 6,672 6,785 (1.7)
Total Operating Cost and
Expenses 17,668 17,538 0.7
------ ------
Operating earnings 3,185 2,867 11.1
Interest expense, net 332 58 n/m 1)
Net foreign exchange (gain)
loss 495 (93) n/m 2)
Other (income) expense, net 945 (281) n/m 3)
--- ----
Earnings from Continuing
Operations before taxes 1,413 3,183 (55.6)
Taxes on Earnings from
Continuing Operations 350 577 (39.2) 4)
Earnings from Continuing
Operations 1,063 2,606 (59.2)
Earnings from Discontinued
Operations, net of taxes 321 65 n/m
Gain on Sale of Discontinued
Operations, net of taxes 16 1,752 (99.1)
--- -----
Net Earnings from
Discontinued Operations,
net of taxes 337 1,817 (81.4) 5)
--- -----
Net Earnings $1,400 $4,423 (68.4)
====== ======
Net Earnings from Continuing
Operations, excluding
Specified Items, as
described below $3,281 $3,258 0.7 6)
====== ======
Diluted Earnings per Common
Share from:
Continuing Operations $0.71 $1.72 (58.7)
Discontinued Operations 0.23 1.20 (80.8) 5)
---- ----
Total $0.94 $2.92 (67.8)
===== =====
Diluted Earnings per Common
Share from Continuing
Operations, excluding
Specified Items, as
described below $2.20 $2.15 2.3 6)
===== =====
Average Number of Common
Shares Outstanding
Plus Dilutive Common Stock
Options 1,483 1,506
NOTES:
See tables below for an
explanation of certain non-
GAAP financial information.
n/m = Percent change is not
meaningful.
See footnotes below.
1) 2016 Interest expense, net includes
amortization expense primarily
associated with bridge facility fees.
2) 2016 Net foreign exchange (gain) loss
includes a loss of $480 million
related to the revaluation of Abbott's
net monetary assets in Venezuela using
the Dicom exchange rate, which is the
Venezuelan government's official
floating exchange rate.
3) 2016 Other (income) expense, net
includes a charge of $947 million
related to an adjustment of Abbott's
holdings of Mylan N.V. ordinary shares
to reflect the share price as of Sept.
30, 2016.
2015 Other (income) expense, net
includes a gain on the sale of a
portion of Abbott's position in Mylan
stock and a decrease in the fair value
of contingent consideration related to
a business acquisition, both reported
as specified items.
4) 2016 Tax expense on Earnings from
Continuing Operations includes the
impact of a net tax benefit of
approximately $225 million, primarily
as a result of the resolution of
various tax positions from prior
years, partially offset by the
unfavorable impact of non-deductible
foreign exchange losses related to
Venezuela and an adjustment to the
equity investment in Mylan and the
recognition of deferred taxes
associated with the pending sale of
AMO.
5) 2016 Earnings, net of taxes and Diluted
Earnings per Common Share from
Discontinued Operations primarily
reflect the impact of a net tax
benefit of $325 million as a result of
the resolution of various tax
positions from prior years.
2015 Earnings, net of taxes and Diluted
Earnings per Common Share from
Discontinued Operations reflect the
after-tax gain of $1.752 billion on
the sale of the developed markets
branded generics pharmaceuticals and
animal health businesses to Mylan on
Feb. 27, 2015 and Zoetis on Feb. 10,
2015, respectively; the first-quarter
financial results from these
businesses up to the date of sale; and
a favorable adjustment to tax expense
as a result of the resolution of
various tax positions from previous
years related to discontinued
operations.
6) 2016 Net Earnings from Continuing
Operations, excluding Specified Items,
excludes net after-tax charges of
$2.218 billion, or $1.49 per share,
for intangible amortization expense,
the foreign exchange loss related to
Venezuela, an adjustment to the equity
investment in Mylan, expenses
associated with acquisitions,
including bridge facility fees, other
charges related to cost reduction
initiatives and other expenses and the
recognition of deferred taxes
associated with the pending sale of
AMO, partially offset by the favorable
impact of a net tax benefit as a
result of the resolution of various
tax positions from prior years.
2015 Net Earnings from Continuing
Operations, excluding Specified Items,
excludes net after-tax charges of
$652 million, or $0.43 per share, for
intangible amortization expense,
expenses associated with cost
reduction initiatives and other
expenses related to acquisitions,
partially offset by a gain on the sale
of a portion of Abbott's position in
Mylan stock and a decrease in the fair
value of contingent consideration
related to a business acquisition.
NON-GAAP RECONCILIATION OF FINANCIAL INFORMATION FROM CONTINUING OPERATIONS
Abbott Laboratories and Subsidiaries
Non-GAAP Reconciliation of Financial Information From Continuing Operations
Fourth Quarter Ended December 31, 2016 and 2015
(in millions, except per share data)
(unaudited)
4Q16
----
As Specified As % to
Reported Items Adjusted Sales
(GAAP)
-----
Intangible Amortization $121 $(121) --
Gross Margin 2,900 161 $3,061 57.4%
R&D 343 (9) 334 6.3%
SG&A 1,609 (99) 1,510 28.3%
Interest expense, net 129 (101) 28
Net foreign exchange (gain)
loss (2) 1 (1)
Other (income) expense, net (54) 52 (2)
Earnings from Continuing
Operations before taxes 875 317 1,192
Taxes on Earnings from
Continuing Operations 110 111 221
Net Earnings from Continuing
Operations 765 206 971
Diluted Earnings per Share
from Continuing Operations $0.51 $0.14 $0.65
Specified items reflect intangible amortization expense of $121 million and other expenses of $196 million, primarily associated with acquisitions, including bridge facility fees and other debt related costs, charges related to cost reduction initiatives and other expenses.
4Q15
----
As Specified As % to
Reported Items Adjusted Sales
(GAAP)
-----
Intangible
Amortization $143 $(143) --
Gross
Margin 2,839 178 $3,017 58.2%
R&D 369 (4) 365 7.0%
SG&A 1,655 (117) 1,538 29.6%
Other
(income)
expense,
net 6 (6) --
Earnings
from
Continuing
Operations
before
taxes 830 305 1,135
Taxes
on
Earnings
from
Continuing
Operations 135 68 203
Net
Earnings
from
Continuing
Operations 695 237 932
Diluted
Earnings
per
Share
from
Continuing
Operations $0.46 $0.16 $0.62
Specified items reflect intangible amortization expense of $143 million and other expenses of $162 million, primarily associated with cost reduction initiatives and acquisitions.
Abbott Laboratories and Subsidiaries
Non-GAAP Reconciliation of Financial Information From Continuing Operations
Fiscal Year Ended December 31, 2016 and 2015
(in millions, except per share data)
(unaudited)
12M16
-----
As Specified As % to
Reported Items Adjusted Sales
(GAAP)
-----
Intangible Amortization $550 $(550) --
Gross Margin 11,279 661 $11,940 57.3%
R&D 1,422 (77) 1,345 6.5%
SG&A 6,672 (249) 6,423 30.8%
Interest expense, net 332 (240) 92
Net foreign exchange (gain)
loss 495 (480) 15
Other (income) expense, net 945 (910) 35
Earnings from Continuing
Operations before taxes 1,413 2,617 4,030
Taxes on Earnings from
Continuing Operations 350 399 749
Net Earnings from Continuing
Operations 1,063 2,218 3,281
Diluted Earnings per Share
from Continuing Operations $0.71 $1.49 $2.20
Specified items reflect intangible amortization expense of $550 million, an adjustment to the equity investment in Mylan of $947 million, the impact of the foreign exchange loss in Venezuela of $480 million, and other expenses of $640 million, primarily associated with acquisitions, including bridge facility fees, and charges related to cost reduction initiatives and other expenses and the recognition of approximately $70 million of deferred taxes associated with the pending sale of AMO, partially offset by a net tax benefit of approximately $225 million, primarily as a result of the resolution of various tax positions from prior years.
12M15
-----
As Specified As % to
Reported Items Adjusted Sales
(GAAP)
-----
Intangible
Amortization $601 $(601) --
Gross
Margin 11,057 755 $11,812 57.9%
R&D 1,405 (85) 1,320 6.5%
SG&A 6,785 (272) 6,513 31.9%
Other
(income)
expense,
net (281) 288 7
Earnings
from
Continuing
Operations
before
taxes 3,183 824 4,007
Taxes
on
Earnings
from
Continuing
Operations 577 172 749
Net
Earnings
from
Continuing
Operations 2,606 652 3,258
Diluted
Earnings
per
Share
from
Continuing
Operations $1.72 $0.43 $2.15
Specified items reflect intangible amortization expense of $601 million and other expenses of $510 million, primarily associated with cost reduction initiatives and acquisitions, partially offset by a gain on the sale of a portion of Abbott's position in Mylan stock of $207 million and a decrease in the fair value of contingent consideration related to a business acquisition.
RECONCILIATION OF TAX RATE FOR CONTINUING OPERATIONS
A reconciliation of the fourth-quarter tax rates for continuing operations for 2016 and 2015 is shown below:
4Q16
----
($ in millions) Pre-Tax Taxes on Tax
Income Earnings Rate
------ -------- ----
As reported (GAAP) $875 $110 12.7%
Specified items 317 111
--- ---
Excluding specified items $1,192 $221 18.6%
4Q15
----
($ in millions) Pre-Tax Taxes on Tax
Income Earnings Rate
------ -------- ----
As reported (GAAP) $830 $135 16.3%
Specified items 305 68
--- ---
Excluding specified items $1,135 $203 17.9% 1)
1) Fourth-quarter 2015 tax
rate includes the year-
to-date impact of U.S.
tax legislation passed in
Dec. 2015, including the
R&D tax credit.
A reconciliation of the full-year tax rates for continuing operations for 2016 and 2015 is shown below:
12M16
-----
($ in millions) Pre-Tax Taxes on Tax
Income Earnings Rate
------ -------- ----
As reported (GAAP) $1,413 $350 24.8%
Specified items 2,617 399
----- ---
Excluding specified items $4,030 $749 18.6%
12M15
-----
($ in millions) Pre-Tax Taxes on Tax
Income Earnings Rate
------ -------- ----
As reported (GAAP) $3,183 $577 18.1%
Specified items 824 172
--- ---
Excluding specified items $4,007 $749 18.7% 2)
2) Full-year 2015 tax rate
includes the impact of
U.S. tax legislation
passed in Dec. 2015,
including the R&D tax
credit.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/abbott-reports-fourth-quarter-2016-results-300396427.html
SOURCE Abbott
